25/03/2016 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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Billions at his fingertips. We speak to the man who will decide where the


Asian infrastructure investment bank will spend its money. And how the


slowdown in China is taking the wind out of the sales of the world's big


shipyards. Hello and welcome to this Friday edition of Asia Business


Report. The new Asian infrastructure investment bank has been described


as the big rival to the World Bank and the IMF. It is a new global


lender to give China more clout on the world stage and despite


criticism from the US, most countries have joined. We spoke to


the bank's president who has dismissed concerns about the bank's


independence and standards. Some people say, just because China is


the biggest shareholder, this will become the instrument of the Chinese


diplomacy. I'm sorry, let me ask you a question. The US is the biggest


shareholder of many institutions, do you think they are the instrument of


US diplomacy? Japan is a big shareholder also, do you think this


is Japan's bank? I would say no. So I think the biggest thing is to see


whether the biggest shareholder lives up to expectations placed on


it by other fellow members. Let's pick up on that point. There are


concerns the bank won't have the same standards on human rights,


corruption and environmental protection like other international


financial institutions. The World Bank for example. What would you say


for that? What is the ground for this kind of assumption? I think it


is not appropriate to make assumptions without looking at the


fact. We went through rounds and rounds of consultations with


shareholders, civil societies and NGOs and look at the governance


structure of this institution. So if people are familiar, if they have


acquired some knowledge about everything I mentioned, and if they


still think this bank will not have very good governance, what can I


say? The recent stock market volatility and the economic


slowdown, has it affected the ability of this bank to fund the


loans you have talked about in the past? 10-$15,000,000,000 as the


target of the next couple of years. No, we are not affected at all. We


are fully funded by the shareholders, $100 billion


registered capital traded him in five years time. -- in. He will have


payments. The volatility in the Asian market or the stock market


volatility will not affect our operations at all. Do you think it


is a mistake that the US hasn't joined? Does it risk being left out


of this new institution? The door has been opened and the door will


remain open. So why do they call this a mistake? It is simply, in my


view, a decision yet to be made. Today will be the very first day of


trading at Myanmar's new stock exchange. It was launched a few


months ago but nothing much has happened since then. No company has


been enlisted so zero trading on the ground floor. As of today, one


company will be trading. Let's hear about whether it is time to be


bullish or bearish. There has been something of a rush year in Myanmar


to get things finished before the new government takes office next


week, basically so the old guys can take the credit. That the stock


exchange has made it just in time. One type of stock will be traded on


the first day, a company called FM I which is one of the big Roman or its


-- conglomerates here, running an airline and some of the hot balloons


that run over the temples. But this place is not going to be like New


York or London, it is going to be sleepy. Very sleepy. Five more


companies are being lined up to join the stock exchange in the near


future and the hope is that this will prove an important source of


funding for an economy that looks set to grow strongly in the next few


years. In other business news, and earnings warning has been issued for


Sharp. The Japanese electronics giant says annual earnings could


fall short of the earlier predictions. Losses could be in


attendance to -- could be in the tens of millions of dollars.


Taiwan's central bank has lowered interest rates to 1.5% in order to


prop up its faltering economy, even though the bank expects growth to


pick up this year. Growth was expected earlier. The cost of living


in Japan remains completely flat as of February, well below the


government poll of 2%. Some believe prices could fall by as much as half


a percent by the end of the year which could put pressure on the


central bank in July. Revised figures from South Korea show its


economy rude to .6% last year which is the slowest pace since 2012 --


grew 2.6%. This presents a huge challenge for policymakers that it


reflects weakness in domestic demand and a downturn in exports. Our


correspondent says it is a wake-up call for South Korea. The growth


rate has been declining from wonderful historical rates of 8% and


more for over 40 years. We have now dropped below the world average and


are the losing side of the world economy. Korea needs to retool its


economy and it is about human capital, preparing people for new


challenges with better education and vocational skills which will allow


them to participate in the world of the future. A century ago, the


world's big shipyards were in Europe but now they are in East Asia,


China, Japan and South Korea. Falling global demand is now hitting


them hard. We just heard about how difficult the outlook is for Seoul.


Our correspondent went to the shipyards at the tip of South Korea


to find out more. Here is one way to save money. A robot welder. This


machine goes up and down the wall of the liquefied glass container inside


the ship. The laser spots microscopic gaps which are then


welded together. Highly skilled humans used to do this important


work. One error in these tanks would be explosive. A leak of gas would


blow the ship skyhigh. But these machines do the job and they don't


demand wages. We achieve the high quality and productivity we need and


we hope that our experts will carry on observing. Of the global


shipbuilding industry is in the doldrums. Slow growth in China means


that fewer new bigger vessels to carry iron ore and coal. Fewer


container ships are needed to carry Chinese goods to the world and the


rock-bottom oil price means fewer building of deep-sea ocean


exploration vessels. You notice it here in the towns around the yards.


This is a town on an island on the tip of South Korea. It was a magnet


for Western shipbuilding experts. The decline of Europe's yards and


the rise of Asia's brought them here. In this international sector,


the ex-pat ladies play cards. But they are worried. Projects are


coming to an end and their time may be up. Because of the downturn in


the oil industry, many families have left and many families have noticed


to leave. We have noticed the financial aspect of the community


has slowed down. We don't know what is going to happen with employment.


Shipbuilding is a global industry. People move where the work is and


they move out when the work isn't there. Their families and pets have


to make the best of it. Let's take a quick look at the markets. It is


fairly quiet as a number of markets are shut for Easter. But Japan and


Korea are trading and are currently flat. Japan has been underwhelmed by


the inflation numbers. That is all for this edition of Asia Business


Report, thank you for


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