03/11/2015 Asia Business Report


Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.

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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,


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