30/09/2014 Asia Business Report

the Prime Minister of India meets Fortune 500 executives in the US, we

look at success of his US trip so far. Welcome to Asia Business Report

on BBC World News. I'm Rico Hizon. Hong Kong's stock market remained

weak as pro`democracy demonstrators continue to cap out in the central

business district. While the number of protesters have dropped for now

another surge expected on Wednesday. Hang Seng index has fallen for a

second straight day. It is now 300 points, 22,929. In the Hong Kong

dollar remained at six`month lows against the US dollar. Earlier I

spoke with the editorial director of Haymarket financial media about the

long`term impacts of these protest on Hong Kong's economy and its

reputation as a key Asian financial hub. If the protest lasts throughout

this week, then there is a resolution, it will be temporary.

Financial markets are functioning normally. People are working, some

retail shops are suffering. And some bank branches have to be closed. But

I think if this lasts for a week or ten days, the damage will be

compounded. `` contained. Remember a lot of this is happening over a lot

of public holidays. This is all about sustainability and the growing

crowds in the central business district. And like Thailand,

protests like this have had a major impact on the tourism, such as in

Bangkok. Were impact on tourism? A lot of the tourists in Hong Kong are

from mainland China. This week was a big, the Golden week holiday, that

has obviously been disrupted. There are some operators that will not be

too happy right now. But I think the broader test is, will middle`class

people who have come out in force ` will they come out tomorrow on the

public holiday? Will they support the students and the activists, or

will it remain a one`dimensional show of force? All right. Apart from

the issue of democracy, there is a lot of unhappiness in Hong Kong over

high housing prices. You also have a growing income gap, and an influx of

mainland visitors. Yes, and these are both seen as different aspects

of one country, two systems, not working out for a lot of people of

Hong Kong. And that is fuelling a lot of the unrest. The issue of

mainland visitors, people feel they are being democratically

overwhelmed. `` demographically overwhelmed. It is not just the

visitors but a lot of money goes into the flats here, driving up the

prices. There is investment nudges from the mainland, but all over the

place, it is squeezing out the middle class. We're now seeing a lot

of volatility the Hong Kong is `` Hong Kong stock market. Down 3% in

two trading days. Moving out other business News making headlines,

India's Prime Minister Narendra Modi has met President Barack Obama for

the first time on US soil. The leaders of the world two largest

democracies started with a private dinner before a formal meeting at

the Oval Office. Ahead of the talks, Narendra Modi spoke at America's

Council of foreign relations giving this commitment on negotiations for

a WTO trade agreement. TRANSLATION: We also recognise that we have to

work with the international community and the rest of the world

on the WTO agreement. I am personally against populist policies

or even economic approaches, at one must recognise that India has a very

large population of poor people whose requirements of food security

and availability cannot be ignored. As a result I have always agreed

that the agreement on food security and trade facilitation has to go

hand in hand together. Earlier I spoke with a representative from the

Singapore Indian chamber of commerce who says the trip has been a success

so far. The response has been more than excellent, and I think there

will be a lot of results coming from investment into India. And Narendra

Modi, before he left, has already announced made in India, to create

more jobs in his country. He has won the support of some US businessmen,

but others are questioning Mr Modi's reformist credentials, particularly

on the issue of global trade. They are saying India is playing

hardball, that is one aspect of it. True. But that is just one aspect of

it. But in his country he is making a lot of changes. The speed of

action is greater than before. From 27 processors, he has brought it

down to four or five. On the bigger projects he has taken personal

control and brought in the right people to push his agenda through,

where investment is concerned. Because a lot of US businesses are

complaining about India's unfair trade access, particularly raising

tariffs and imposing new testing requirements on medication products.

`` trade practices. He is tackling big problem, he is new in the

office. And I think he is first visiting the two big countries,

Japan and China. This has had a significant impact on the US. There

is a good strategic direction that the visit America. And it is the

first time an Indian leader has had overwhelming support, and President

Obama cannot ignore this. And one other issue that the leaders will

have to tackle is the ease of travel between the two countries? Yes, he

has said he will try and make it easier. Meanwhile China's bank

regulator has reportedly approved the launch of two privately owned

commercial banks, in an attempt to increase competition in the

state`dominated banking industry. One of those to benefit is an

affiliate of Alibaba, which has a licence to open a bank in the east.

Where its headquarters are based. New data out from Japan reveals

household spending will invite 4.7% in August compared to one year ago

levels. That represents a drop for a fifth straight month of sales tax

rise in April. Factory output also fell in August, down 1.5% compared

with a much earlier `` month earlier after edging up in July. There was

the worst monthly fall in South Korea since the 2008 global

financial crisis. But there was a pickup in the services sector with

the output index growing in August after a revised drop in July.

Thailand is due to reveal key economic data that will probably

confirm that industrial performers has fallen for the 17th month in a

row. That is in line with weaker than predicted exports and further

proof that the military agenda of Thailand faces an uphill battle. Our

correspondent reports. Thailand's military seized power in May saying

it would restore order after months of anti`government protests. But the

economy has continued to struggle since the Thai military took over in

May. A further fall is predicted. Trouble in the car`making industry

is helping to drive the decline, it has been selling since last year

following the scrapping of a state subsidy for people buying new cars.

`` it has been slowing. Some economists had forecast that the

economy may improve under the military. But so far recovery is

slower than expected. Tourism accounts for around 10% of the Thai

economy, and it has taken a big hit after many months of political

unrest. If I look across the world markets and throughout the world,

there is only one country that has not grown year on year. And that is

Thailand. Notwithstanding what I've just said, by Christmas Thailand

will be back where it was before. But not everyone is optimistic.

Exports account for more than 60% of the GDP of Thailand, but they fell

7.4% in August, the biggest percentage drop since the floods of

2011. Last week the central bank abandoned the forecast of 3% export

growth for this year, saying that it now expects no increase. High`end

watch company TAG Heuer has lowered its profit outlook. That is after a

slowing of demand for its luxury timepieces. Hong Kong represents

about 2% of the luxury watch sales for the company. `` 20%. Thank you

for investing your time with us. Goodbye for now. The top stories

this hour: Thousands of pro`democracy protestors in Hong

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in