03/11/2015 Asia Business Report

Now on BBC News all the latest business news live from Singapore.

China unveils its first home-grown passenger jet, how will it compete

globally? Desperate farmers in Indonesia try to end the drought the

old-fashioned way. Good morning, Asia. That you could join us for

Asia Business Report. I am Rico Hizon. China's first passenger

airliner has rolled off the assembly line. It is a narrow body jet that

can seat 168 passengers. It is similar in size to the Airbus A320

and the Boeing 737. It could still be several years until it enters

service but will it be able to compete with the European and

American rivals? Earlier, I asked these questions to a member of happy

knack flight Global. Right now, China purchases a large percentage

of American and European aircraft. This won't take a dent out of Boeing

and Airbus's books,... There will surely be room in the Chinese

industry, because this initiative is led by the Chinese government, so

they will be a signing these aircraft are the major carriers.

Yes, all the Chinese airlines will be running this aircraft, but the

question will be how efficient it will be, will it be as good as its

rivals? This will only be rolled out in 2019, and by that time, in terms

of tech ology and innovation, Airbus and Boeing will be way ahead of

them. Airbus and Boeing move incrementally as well, but they will

have very competitive product at that time. The 2019 date is also not

a fixed date, there are a lot of issues the Chinese will have to deal

with to get this off the ground. Systems integration, ensuring safety

and getting it certified. This is just the beginning, we are nowhere

near the end. In other business news, US regulators have found that

more Volkswagen made cars, including Porsche and Audi were fitted with

devices designed to cheat emissions tests. VW has already admitted that

the 11 million cars had the so-called defeat device. A US

investigation is under way and affecting at least 10,000 more cars

from 2015-2016. Search giant Google will be launching its own delivery

service in two years. Other online retailers like Amazon and Alibaba

are experimenting with this. Google has announced its plan to return to

China after leaving the market five years ago due to government

censorship. Austria's central bank holds the key interest rate meeting

today, and another carcass on the table. The reserve bank's last move

was in May, when it reduced the cash rate to 2%. It has been cautious

ever since, with inflation at key concern. How will that factor in

today's decision? I was speaking to a representative from HSBC in Sydney

saying there is a good chance the RBA would make a cut. The economic

regulator has looked reasonable, with great looking like it is

lifting into the third quarter this year. The RBA themselves have said

that they expect GDP to lift in the third quarter. The question is

whether there is enough rope in the economy to get the unemployment rate

falling, and whether we have enough growth to keep inflation on target.

On that front it is a little... It hasn't really started to fall,

unemployment, but it has not been falling. Last week, we were told

that inflation is running at a low level. We think on balance the RBA

will be more worried about inflation, potentially undershooting

their target even though growth is lifting. We think that means we will

see a cut. While financial analysts place their bets on whether the RBA

will cut interest rates today, the rest of the country will be getting

on the nation's best-known and most prestigious horse race, the

Melbourne happy knack cup. It is the biggest betting day in Australia. I

spoke to be CEO of one of the largest betting agencies in the

country. The Melbourne Cup close to 163 countries, and in Asia we will

see customers betting about 100 million Hong Kong dollars, we will

see Singapore also betting on the customers -- customers in Singapore

betting. A famous Japanese horse is running, so there will be a lot of

money that in Japan as well. Who are the favourites? Fame Game will be

hard to beat, but my money is on Are Trip to Paris. Heavy rain in some

parts of Indonesia has significantly reduced the number of peatland fires

that have enveloped much of South East Asia in a thick haze. But Rice

producing areas are still suffering from a severe drought. Farmers are

desperate for rain. Let us pray that rain comes and

washes our sorrows away, chunk of the women of this village in central

Java. After months of severe drought they are hoping the gods will be

moved by this rainmaking ritual. TRANSLATION: This is about

communicating with God in order for rain to be sent by God. After the

mock battle the community eats rice together. At this time of year they

should be planting their paddy fields. TRANSLATION: All the land in

the village is dry and uncultivated. We are waiting for the rain to come

then we will start to plant out paddy fields. Agriculture accounts

for nearly 40% of Indonesia's gross domestic product. More than half of

poor households in Indonesia live off the land. Due to the drought,

this man says he is thinking about selling his soil to make Rex.

TRANSLATION: This year, the dry season has been very long, we are

already preparing our rice seeds. These are the conditions we have

without water -- bricks. Where water is available, people wait in line to

get it. Relief is meant to be on its way with rain is predicted to fall

next month. But the World Bank says due to failed crops caused by this

drought, the price of rice could rise by 10%, hitting the poor the

hardest. This would put pressure on President Joko Widodo, who has made

poverty reduction a key target. In China, the so-called peer-to-peer

lending industry has grown substantially. It allows you to lend

directly to an individual and bid against others to establish the

interest rate. Companies that facilitate this are now in direct

competition with banks. So, why is one company seeking to expand with

backing from a major bank and how will regulators react? If you look

at what has been happening lately, not just in finance but with

companies like Uber, Airbnb, it is a concept of shared economy. Resources

are limited and we have to learn how to share. Peer-to-peer lending is

still in its infancy and is quite unregulated in China. If authorities

decide to tighten the screws, your company should face significant

challenges. We are often asked questions about what might happen,

and we try to tailor that to our ability. We try to limit the

business model... I think the best thing that could happen to our

industry is to have regulations. Essentially your company falls under

shadow finances? We fall under non- banking financial transactions. I

was discussing earlier how the word shadow means that the transactions

are not on the credit bill of China, but it does not mean they are

illegal. They are 100% legal. A bank, when it gets a customer it has

to register its actions, or guarantee companies won't be able to

tell. That is an industrywide problem, so we want to be able to

put our data on the register and access other people's data. That is

how we will all end up doing a good job in debt management. If you would

like to follow us on social media, we are on Twitter. Thank you for

investing your time with us, I'm Rico Hizon.

The Russian aviation authority says it's too early to speculate what

caused a plane to crash in Egypt on Saturday,