15/02/2016

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:00:00. > :00:10.Now on BBC News, all the latest business news live from Singapore.

:00:11. > :00:19.More dismal numbers from Japan. The latest figures show the economy

:00:20. > :00:26.contracted 1.4% in the last quarter. The Chinese markets reopen after the

:00:27. > :00:34.week-long New Year holiday. Is it good news or will it bear a monkey

:00:35. > :00:41.on its back? Good morning, Asia. Glad you can join us for this Monday

:00:42. > :00:49.edition. We start with Japan. The latest growth figures are out,

:00:50. > :00:54.revealing the country's GDP has shrunk 1.4% in the fourth quarter

:00:55. > :00:57.compared with the year before. The figures are considered a measure of

:00:58. > :01:06.the effectiveness of government policy. What does it mean for the

:01:07. > :01:12.Prime Minister's reforms? Earlier I spoke with my correspondent. No one

:01:13. > :01:16.is talking about the death of Abenomics yet but we are three years

:01:17. > :01:21.into it and we are where we were three years ago in terms of where

:01:22. > :01:23.the economy is. Two things are happening, one is domestic

:01:24. > :01:28.consumption has not grown to waive Abenomics was supposed to make it.

:01:29. > :01:33.The other thing that has hit Japan hard, and why we have these figures

:01:34. > :01:37.today, is that exports have fallen as well. Over three years exports

:01:38. > :01:44.have done well but the world economy is slowing down and China is slowing

:01:45. > :01:49.down. In the last few weeks we have seen the appreciating yen which will

:01:50. > :01:52.hurt exports going forward. It is a pretty bad outlook for the Japanese

:01:53. > :01:58.economy at the beginning of the year. Exports has been the growth

:01:59. > :02:02.engine of the Japanese economy. That is affected by the global slowdown.

:02:03. > :02:09.Domestic consumption is not taking off. The population is growing old

:02:10. > :02:13.and shrinking. This is the conundrum that the Prime Minister and his team

:02:14. > :02:21.have - how do you get Japanese people to spend money again? The

:02:22. > :02:26.idea has been to engage in quantitative easing for the last

:02:27. > :02:29.three years but it has not have the desired effect because the

:02:30. > :02:34.fundamentals of the economy are driven by demographics. Japan is

:02:35. > :02:40.growing old and the population is shrinking. In 2020 it will be

:02:41. > :02:44.shrinking by 600,000 people a year. In that situation getting the

:02:45. > :02:49.economy to grow again is difficult. The fact that the economy is doing

:02:50. > :02:56.as well as it is some say it is not a bad result. It just shows how

:02:57. > :03:02.difficult it is when you have a shrinking population to keep growth

:03:03. > :03:05.going in your economy. Many economists are saying what the Prime

:03:06. > :03:10.Minister has two launch is the structural arrow to make the economy

:03:11. > :03:14.more productive but they have been slow to move things around --to

:03:15. > :03:20.launch. They have been very slow to move on structural reform. It is a

:03:21. > :03:24.difficult thing to do in an ageing society. Japan is a conservative

:03:25. > :03:30.country with a conservative culture. Many corporations are controlled by

:03:31. > :03:35.old managers. And this makes reform very hard. And the big one is

:03:36. > :03:40.immigration. The Japanese people, the government, don't want more

:03:41. > :03:45.immigration. Despite the poor fundamentals the Nikkei to divide is

:03:46. > :03:50.up 4% at this hour. Chinese sharemarket have opened after a

:03:51. > :04:00.week-long break because of the Chinese New Year period. The

:04:01. > :04:06.Shanghai Composite Index is down 2.6%. The Hang Seng index is going

:04:07. > :04:12.in the opposite direction, headed north, up 2.1%, about 400 points.

:04:13. > :04:18.Let's cross over now to the Hong Kong stock exchange. Why have we

:04:19. > :04:24.seen this diversification of the mainland and Hong Kong markets

:04:25. > :04:29.today? Well I think because China is just starting to open after a

:04:30. > :04:34.week-long holiday, playing catch up with the rest of the market. It has

:04:35. > :04:40.had a dismal week elsewhere in Asia. We have now seen a rebound. I think

:04:41. > :04:47.Shanghai is simply playing catch up. In Hong Kong the Hang Seng is up 2%

:04:48. > :04:53.after it fell 4% on the first day it opened on Thursday, and 1% later. I

:04:54. > :04:58.think it is a matter of Chinese markets catching up with the world.

:04:59. > :05:03.Over the weekend we heard that retail sales over the New Year

:05:04. > :05:07.holiday was relatively healthy, up 11% over the holiday period compared

:05:08. > :05:15.with last year. That will boost sentiment. We had the central bank

:05:16. > :05:18.speaking to a magazine ahead of the week-long opening, saying there is

:05:19. > :05:27.no basis for devaluation of the currency and hoping to boost Chinese

:05:28. > :05:31.and global markets. He says that the Chinese yuan will be stable but they

:05:32. > :05:38.will allow greater volatility against the dollar. And a big story

:05:39. > :05:42.over the last several hours, HSBC has decided to stay put in London.

:05:43. > :05:51.If you look at the share price, it is in positive territory. That is

:05:52. > :05:55.right. HSBC is up more than 3% at the moment, really in line with the

:05:56. > :05:59.rally that we are seeing here in Hong Kong. There was a reaction

:06:00. > :06:03.today from the head of the Hong Kong monetary authority, the de facto

:06:04. > :06:09.central bank of Hong Kong and a regulator. He said he respected the

:06:10. > :06:15.decision of the HSBC board, also recognising that Hong Kong is that

:06:16. > :06:18.Asian headquarters, and of course leadership at HSBC have said that

:06:19. > :06:22.they will stick to their so-called Asian pivot and will continue to

:06:23. > :06:33.pour money and investment into southern China, the river delta

:06:34. > :06:37.where Hong Kong river is --is located. Now to India, the

:06:38. > :06:47.fastest-growing market. Last year passengers jumped 20%, which has

:06:48. > :06:50.attracted companies like air bath -- Airbus and Boeing. What about India

:06:51. > :06:59.as a place to manufacture planes as well? Made in India for an American

:07:00. > :07:05.company. This factory has built up expertise in assembling helicopters

:07:06. > :07:11.for the US firm Bell and is part of a growing number of products for the

:07:12. > :07:15.aviation industry which is made locally. These components are the

:07:16. > :07:26.main product of the plant here in Bangalore, flat track beams used in

:07:27. > :07:30.the wings of all Airbus aircraft. Airbus has plans to make India a

:07:31. > :07:35.more important part of its global supply chain. As a market India is

:07:36. > :07:38.already importing for the company. But the planemaker no longer sees

:07:39. > :07:46.India as only a customer but a supply hub. Outsourcing product and

:07:47. > :07:50.services worth $400 million per year. Every commercial thing that

:07:51. > :07:54.comes out of our plans today has a piece of India in it. We are buying

:07:55. > :08:03.detail parts, components, subassemblies, complex stuff, doors

:08:04. > :08:10.that go on the A320 ARI need piece of engineering. Catering to the

:08:11. > :08:14.international firms, Indian companies are building huge

:08:15. > :08:20.industrial parks, like this one. Here is the biggest aerospace

:08:21. > :08:23.components maker, accessing the right technology from Europe -- A320

:08:24. > :08:27.are a. In a break from traditional plain building it now offers most of

:08:28. > :08:34.the services under one roof. It says it makes it cheaper and more

:08:35. > :08:38.attractive for customers. But some of India's smaller firms fear

:08:39. > :08:42.missing out on this growing industry. This company makes parts

:08:43. > :08:46.for aircraft used by the Indian air force. But its boss says it needs

:08:47. > :08:52.help if it is to have a chance of winning lucrative military

:08:53. > :08:54.contract. You need to train them, had told them and encourage them to

:08:55. > :09:01.understand the technology and intricacies of the business. And

:09:02. > :09:07.then, perhaps, increase the number of organisations to get in a group.

:09:08. > :09:10.Whether it is commercial aviation or defence, that is what manufacturers

:09:11. > :09:18.here are hoping. That the made in India ambition can help their

:09:19. > :09:24.businesses fly. Before we go, here is a look at the markets once again.

:09:25. > :09:29.And a relief rally for most Asia-Pacific stocks after US and

:09:30. > :09:32.European shares rebound it on Friday from recent weakness with reassuring

:09:33. > :09:38.US resale sales data, boosting sentiment, while in the US rallies

:09:39. > :09:45.after 12 year lows. Despite the worst unexpected GDP number for the

:09:46. > :09:52.quarter, the Nikkei to divide is up 4%, at 15,585, after the Nikkei two

:09:53. > :10:00.to five 1 to 12% last week. And the Hang Seng has rallied after falling

:10:01. > :10:05.last week, one 1.9%. However, we have seen catch up ball from the

:10:06. > :10:09.Chinese markets, especially Shanghai, down two -2.8% after

:10:10. > :10:14.closing with the week-long Chinese lunar New Year holiday -- Nikkei

:10:15. > :10:16.225. Thank you so much for investing your time with us. I am Rico Hizon.

:10:17. > :10:24.Bye for now. The top stories this hour: Turkey

:10:25. > :10:27.bombs Kurdish positions in northern Syria for a second day, dismissing

:10:28. > :10:31.calls for an end to the shelling. Pope Francis urges Mexicans to turn

:10:32. > :10:34.their country into a land