:00:16. > :00:22.China's major banks report earnings this week. What will their balance
:00:23. > :00:35.sheets reveal? And we visit the region of Japan that is fighting for
:00:36. > :00:41.a bigger slice of the tourist pie. Welcome to Asia Business Report.
:00:42. > :00:44.Over the next two days, China's big four state-run banks are set to
:00:45. > :00:48.report their annual earnings, and it is not expected to be good news.
:00:49. > :00:52.Profits are forecast to be flat as a surge in bad loans continues against
:00:53. > :01:01.a backdrop of slower economic growth.
:01:02. > :01:09.Good to see you, the bank of China, China Construction Bank, and the
:01:10. > :01:14.Agricultural Bank, they are likely to report a subdued picture, aren't
:01:15. > :01:18.they? That is right. We have had a taster of what it might look like.
:01:19. > :01:25.We have heard from the fifth-largest bank, the Bank of Communications,
:01:26. > :01:31.which released its net profit last night, growing by 1%. It was the
:01:32. > :01:36.fourth consecutive year of slowing growth, and we are likely to see
:01:37. > :01:42.similar results at the big four state-owned banks. These are banks
:01:43. > :01:46.that are owned by the Chinese government and the main borrowers
:01:47. > :01:51.and customers are state-owned companies. They are sort of an
:01:52. > :01:57.extension of government policy, and in the past 18 months or so the
:01:58. > :02:01.Chinese government has cut interest rates by five times. That limits the
:02:02. > :02:06.amount they can make in terms of net profit. That squeezes their margins,
:02:07. > :02:13.but what about bad debts. They are meant to be at a ten year high, how
:02:14. > :02:17.much of the problem are they? There is a roaring debate going on over
:02:18. > :02:24.exactly the level of default among customers in China, exactly over
:02:25. > :02:29.what this means for the Chinese economy. We have heard officially
:02:30. > :02:34.from the Chinese banking regulator that non-performing loans stood at
:02:35. > :02:41.$195 million, that is the highest level in about ten years. And that
:02:42. > :02:49.implies an non-performing ratio of 1.7%. That seems to be below average
:02:50. > :02:53.by global standards, but it is important to note that China has
:02:54. > :03:00.different way of calculating defaults and calculating the ratio.
:03:01. > :03:05.And analysts say they have no real idea of how bad the defaults could
:03:06. > :03:11.be. Those who go through publicly filed listing papers of Chinese
:03:12. > :03:16.listed companies say the true figure could be as high as eight or 9%,
:03:17. > :03:22.which is quite high, and has implications on economic growth in
:03:23. > :03:27.future. Thank you for talking to us. In other business news, Japan's
:03:28. > :03:33.industrial outlet fell 2.6% in February, marking the biggest
:03:34. > :03:37.decline since March 2011. The devastating earthquake in Japan ten
:03:38. > :03:41.crippled the supply chain. The drop followed a 3.7% gain in January,
:03:42. > :03:48.which was the first increase in three months. Indian steel giant
:03:49. > :03:55.Tata steel has flagged up a shakeup of its subsidiaries, including a
:03:56. > :03:58.possible withdrawal from its loss-making UK operation. It could
:03:59. > :04:04.put thousands of jobs under threat. The news comes as Narendra Modi
:04:05. > :04:10.heads to Brussels to discuss and India/EU free trade deal. The UK is
:04:11. > :04:15.India's biggest trading partner in Europe, so it is likely that the
:04:16. > :04:19.referendum on EU membership will loom large. What impact could a
:04:20. > :04:23.British exit from the EU have on India?
:04:24. > :04:29.Finishing off garments headed for the UK high street. The textiles
:04:30. > :04:35.industry is India's second biggest employer. This firm alone employs
:04:36. > :04:40.nearly 100,000 people, and about a third of its business is with
:04:41. > :04:48.Britain. Its boss worry that if the UK exits the EU, the company could
:04:49. > :04:56.suffer. Everybody I know, they are quite afraid and anxious. They are
:04:57. > :05:07.very concerned. We have seen the UK like a rock. If the rock starts to
:05:08. > :05:11.move, whether go? He is not alone. One of India's largest industrial
:05:12. > :05:15.bodies has already said that the British exit from the EU could
:05:16. > :05:20.injure the flow of investment and people by diminishing Britain's role
:05:21. > :05:27.in providing access to Europe. Narendra Modi has said Britain is an
:05:28. > :05:33.entry point of the EU for many Indian companies. Marks Spencer
:05:34. > :05:39.has gone the other way. A famous British name now in India with 54
:05:40. > :05:45.stores, more than any other country outside the UK. The boss of its
:05:46. > :05:48.India joint-venture says the so-called Brexit is complex but
:05:49. > :05:56.thinks there may be benefits if the UK was free to negotiate its own
:05:57. > :05:59.trade agreements. Relationship Britain has that India has
:06:00. > :06:04.definitely been one factor that has helped us to grow our business. That
:06:05. > :06:09.will certainly continue to stand us in good stead going forward as well.
:06:10. > :06:12.The UK attracts more Indian investment in the rest of the EU put
:06:13. > :06:20.together, so would Brexit make a difference? India UK trade over the
:06:21. > :06:24.past few decades has stood apart anyway from the EU. It has largely
:06:25. > :06:29.occurred on trade and investment side, on a bilateral level. To a
:06:30. > :06:33.certain extent you could argue that it won't have a significant impact
:06:34. > :06:41.either way, because the relationship is already there. Whatever happens
:06:42. > :06:44.in late June, India, with its growing population and rising
:06:45. > :06:55.spending power is a country that vote the UK and the EU will be keen
:06:56. > :06:59.to do business with. If you were to drop on a train in Tokyo and travel
:07:00. > :07:05.for four-hour south-west, you would end up on a railway line like this.
:07:06. > :07:10.This place is on the coast and a fair way from the capital, but it
:07:11. > :07:13.has been chosen to play host to ministers from the seven major
:07:14. > :07:18.economies in the world, as the G7 rolls into this town in May.
:07:19. > :07:22.Attracting visitors is key to the growth of the area. We look at the
:07:23. > :07:26.role of tourism in helping to jumpstart Japan.
:07:27. > :07:32.Looking for delicacies that Mother Nature offers. They are the women of
:07:33. > :07:37.the sea, who have been doing this for thousands of years. But their
:07:38. > :07:44.number is shrinking, along with demand for the catch. In the late
:07:45. > :07:52.1940s, there were over 6000 of these divers in this area alone. Today
:07:53. > :07:55.there are fewer than 1000. This 64-year-old has been diving for
:07:56. > :08:08.nearly half a century. She runs at traditional inn where she serves the
:08:09. > :08:12.catch. TRANSLATION: You used to be able to make a living just diving.
:08:13. > :08:18.Now she relies on more visitors staying at home. For some, business
:08:19. > :08:26.is good. Carruthers, it is not. For us, it is bad. -- for others. Some
:08:27. > :08:38.divers are turning themselves into a tourist attraction in anticipation
:08:39. > :08:43.of more visitors from overseas. This has long been a popular tourist
:08:44. > :08:47.destination for Japanese visitors. Its shrine is the most important in
:08:48. > :08:52.the national religion of Japan, Shinto. Now, the government wants to
:08:53. > :08:56.put it on the international map. In two months, this region will play
:08:57. > :09:00.host leaders from the seven major economies of the world. Ahead of it,
:09:01. > :09:11.it is already seeing a sharp rise in foreign visitors. That is expected
:09:12. > :09:17.to give a huge boost to the economy. TRANSLATION: A local think tank has
:09:18. > :09:20.estimated it will bring in over $1 billion to the prefecture in the
:09:21. > :09:26.next five years. We are changing all the signs to English and other
:09:27. > :09:30.foreign languages. We hope to see a continuing boost to the economy not
:09:31. > :09:38.just from the summit, but also from the Olympics in 2020. Another dying
:09:39. > :09:45.profession that originates here is a Ninja, which has always fascinated
:09:46. > :09:52.international audiences. Today, only their tourism performance remains,
:09:53. > :09:58.and unless foreign visitors can truly benefit the entire community,
:09:59. > :10:04.not just big businesses, the divers could also become just another
:10:05. > :10:10.tourist attraction. Let's have a look at the markets.
:10:11. > :10:15.You can see the markets that are open in Asia, Japan and Australia.
:10:16. > :10:23.The Nikkei is down just over half a percent, and the All Ordinaries up
:10:24. > :10:26.half a percent. That is after US stocks moved into positive territory
:10:27. > :10:29.after Janet Yellen said a cautious approach was likely to more
:10:30. > :10:40.interest-rate hikes.