01/02/2016 Asia Business Report

Myanmar prepares for its first democratically elected government in

five decades. What will this mean for the economy and investors?

Indonesia sees a surge in transport services catering exclusively for

women. Good morning, Asia, hello, world.

Glad you could join us for this Monday edition of Asia Business

Report, I'm Rico Hizon in Singapore. In Myanmar, the

south-east Asian economy's new parliament convenes for the first

time later today since the opposition party won a landslide

victory in November. As the economy emerges from decades of military

rule, companies from around the world have poured billions of

dollars into the country to get a foothold in one of Asia's last

untapped markets. China is the largest investor in the country with

more than 15 billion US dollars in cumulative investments. The next

biggest investor is Singapore with about 12 billion US dollars. And in

third is Thailand with 10.3 US dollars billion. But many investors

are worried. So what can we expect from the new parliament?

It is a feeling of anticipation and hope. We will have to see when the

new parliament convenes today. We don't know yet who will be in the

new cabinet. The only thing we do know is that the NLD, the National

League for Democracy of Aung San Suu Kyi will be the dominant force. We

don't know who she will appoint as ministers and who parliament will

elect as president. Could there be concern among investors and the

business community that Aung San Suu Kyi's party is inexperienced in

handling economic affairs? Absolutely. That's the big question,

will she be able to make the transition from opposition leader to

have having the ability to lead the country? Have they given a sense to

investors how they will manage the economy? Yes. The NLD has put out

the news that they want to continue the opening of the country. They

want to open it to foreign investors. Many foreign investors

have moved in, but quite a few have hung back over the last six months

to see how the elections would play out. But now we will be waiting to

see who is in the new cabinet. We will see new investors coming in. In

the meantime, Aung San Suu Kyi will really focus not only on bringing in

new investment but also the rule of law, the peace process with the

minorities, agriculture, education. What should be her priority in the

first 100 days in terms of economic reforms? What would be the top

three? What we are going to see is a cabinet that will manage the economy

and make the right decisions. Also in the past they have had some

left-leaning tendencies, even some former communists, so we want to see

that she is really keeping opening up the economy to the outside

world. That was Myanmar investment expert

Hans. In China there is more bad economic news, the latest government

numbers have revealed manufacturing in China slowed again in January

hitting its weakest level in more than three years. It is growing at

its slowest pace in a court of a century and $1 trillion has already

flowed out from the equity markets. But could the outlook get any

worse? One leading financial forecaster thinks so. He spoke to

our Asia business correspondent. The huge expansion of credit has

funded an enormous investment boom, some of which has left China with a

use for capital stock for the future but a significant amount has

probably been wasted on apartment blocks that will never be occupied

and things like that -- useful. It does mean there will be a major

problem of bad debts in the banking system. There are many loans that

have been extended to companies that are now loss-making and cannot repay

the debts. Essentially they are only repaying their existing debts by

borrowing more. How much of a problem is the credit boom that is

continuing to unwind in China going to be for the overall economy, can

the officials manage it? Overall the Chinese economy has two shift to a

consumer focused service sector economy and there are some signs

that is continuing to progress. The creation of urban jobs last year was

very positive at about 13 million. But in the industrial and

construction sectors for the economy, things like steel, cement,

glass, there is a major industrial slowdown occurring in China, in a

sense a hard landing already occurring. It's going to be very

difficult for the Chinese authorities to manage the

consequences of that on the financial system, but they still

have significant capacity in terms of the national balance sheet, the

actual national debt isn't that high. There's lots of things they

can do but it is still a big challenge. Are you confident they

have the ability and capability to be able to pull this off? Last year

was a bit of a shock because there's been schizophrenic policies, first

encouraging the equity market boom, then trying to control it, then

trying to control the bust. There's been an attitude towards creditors

claim were first they have said we have got to call a halt to credit

growth, we need hard discipline in the system and then when the system

has produced default they have bailed out wealth management

products and encouraged more credit. There's been schizophrenia

and a lack of consistency. That reflects the fact there are

different points of view within the government and this isn't a perfect

system for getting a clear way forward. Yes, there are lots of very

competent people thinking about these problems but it turns out this

system is human after all and its policy responses may be imperfect,

and that will produce some turbulence in the market reaction to

it. A slowdown in China affecting the

economy of South Korea as well, where exports to the mainland

tumbled more than 20% in the month of January. Exports to the US also

on the downside. Moving out to the automobile

industry and Japan's halting production at its domestic plans for

a week due to a steel shortage, following an explosion at a facility

operated by one of its affiliate is. The UK's biggest bank HSBC is

planning to impose a global freeze on pay and hiring in 2016. The

measures are part of their cost-cutting drive. It's already

announced thousands of job cuts. Falling oil prices continuing to

affect developing economies around the world and Nigeria has asked the

World Bank and the African development bank for a $3.5 billion

urgency loan. To Jakarta, which has seen a growing number of transport

services catering exclusively to women. The motorcycle taxis offer

better security and comfort in the world's largest Muslim country. And

some of the drivers are also women. Getting around Jakarta can be a

chore, but for many women the daily commute is a potentially harrowing

journey of sexual harassment or worse. TRANSLATION: In other forms

of public transport, like minivans, there are too many men in such a

tight space, which makes me feel very uncomfortable. However I feel

safe on the ladies transport because the bikers are also women. They are

capitalising on the safety concerns by running transport services

exclusively for women. Its drivers aren't difficult to spot, and they

say business is brisk. The other online motor taxi services are

convenient but there's no service to take care of the comfort of women.

This demand has been partly driven by the rape of a woman in a public

minivan, which sparked uproar in the city last year. TRANSLATION: The

government hasn't really done much. Even when there are passengers who

felt they had been harassed and reported it to authorities, the

police were often confused about how to tackle the problem. They should

take immediate action and there must be CCTV installed at unsafe public

spots in the city. Jakarta's traffic may not be any better, but perhaps

women can feel a little safer on their daily commute through this

congested city. And before we go, a quick look at

the markets and we start with the Schengen and Shanghai stock

markets. They are currently in negative territory because of the

bad news on the economic front, a three-year low for the manufacturing

centre. The Shanghai Composite index down by about a fifth of a percent,

the Schengen Zen down by about 0.35%. Japan in positive territory

because of the positive effect of the bank of Japan move unexpectedly

slashing interest rates into negative territory for the first

time. Also the Hang Seng up by Mauboy 4% and the warlords gaining

0.8%. Overall positive the regional markets. -- up by 0.4%. -- in the

regional markets. That's all for now for now, Cabaye.

Deputies in Myanmar from Aung San Suu Kyi's party get ready