25/03/2016 Asia Business Report


25/03/2016

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

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

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

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

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Report. The new Asian infrastructure investment bank has been described

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

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

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

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

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

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

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

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

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

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

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whether the biggest shareholder lives up to expectations placed on

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

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

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corruption and environmental protection like other international

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

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

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is not appropriate to make assumptions without looking at the

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fact. We went through rounds and rounds of consultations with

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shareholders, civil societies and NGOs and look at the governance

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

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acquired some knowledge about everything I mentioned, and if they

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

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say? The recent stock market volatility and the economic

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

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

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

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are fully funded by the shareholders, $100 billion

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

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

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

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

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

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

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

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

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

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

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

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

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to get things finished before the new government takes office next

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

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

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

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

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

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

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

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

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

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

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Sharp. The Japanese electronics giant says annual earnings could

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fall short of the earlier predictions. Losses could be in

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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challenges with better education and vocational skills which will allow

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

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

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

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

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

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

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

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the ship. The laser spots microscopic gaps which are then

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welded together. Highly skilled humans used to do this important

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Report, thank you for

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