:00:00. > :00:14.Now on BBC News, all the latest business news live from Singapore.
:00:15. > :00:22.South Korea's economy continues to splutter. We will bring you the
:00:23. > :00:25.latest growth numbers. And big and bold. We look at what is hot in the
:00:26. > :00:42.world's biggest car market. Hello, and welcome to Asia Business
:00:43. > :00:45.Report. I am Sharanjit Leyl. South Korea's economic expansion is
:00:46. > :00:51.continuing to slow. From January to March the economy grew by only 0.4%,
:00:52. > :00:58.in comparison with the previous quarter. That is slightly behind
:00:59. > :01:03.expectations, and down from 0.7%. Our correspondent Stephen Evans is
:01:04. > :01:07.in Seoul and he says the figures are confirmation that South Korea is
:01:08. > :01:12.being affected by the slowdown in China, its largest trading partner.
:01:13. > :01:16.The global economy is slowing because of China, the transition of
:01:17. > :01:21.China from a factory economy to a factory economy and the spending
:01:22. > :01:25.economy. If you look at the figures for South Korea, on annualised
:01:26. > :01:29.rates, those are the rates that you will need to make sense of it, the
:01:30. > :01:34.economy on the latest figures is growing at 2.7%. This economy here
:01:35. > :01:40.in South Korea. At the end of last year it was growing at 3.1%. So the
:01:41. > :01:45.slowdown continues. There are some negative figures which don't bode
:01:46. > :01:52.well, within that slowdown. Manufacturing had a contraction, for
:01:53. > :01:56.example. Exports, a contraction. Imports, a large contraction. And
:01:57. > :02:01.that indicates partly that people here are starting to tighten their
:02:02. > :02:04.belts a bit. That is important because if people and companies
:02:05. > :02:11.continue to view the future ever more gloomily, that pessimism will
:02:12. > :02:15.create exactly what they fear. It will create even more of a slowdown.
:02:16. > :02:21.That is the worry with these figures. At what can the South
:02:22. > :02:26.Korean authorities, the central bank that, potentially do to try to
:02:27. > :02:30.alleviate this? The central bank is certainly not worried about
:02:31. > :02:34.inflation. Inflation is below the 2% target. Some central banks in some
:02:35. > :02:40.countries don't worry about inflation being too low. South Korea
:02:41. > :02:44.is not one of those countries. If inflation is below target, it thinks
:02:45. > :02:49.about lowering interest even more. But the big question for economists
:02:50. > :02:53.is Ken central banks do enough anyway? Is it really about
:02:54. > :03:04.government spending? Old-fashioned,", Keynesian spending.
:03:05. > :03:06.The truth is the South Korean economy cannot transform its
:03:07. > :03:12.situation on its own. It really needs China to stop contracting. We
:03:13. > :03:16.don't know what is going to happen in China. There were figures out
:03:17. > :03:20.recently for very high levels of debt. Not high levels of debt
:03:21. > :03:27.compared to the US, for example, in terms of in relation to GDP, at high
:03:28. > :03:32.for a developing country. If that debt leads to a crash then we are
:03:33. > :03:38.all in trouble. If it is merely a slowdown that comes back up, it is
:03:39. > :03:42.just what economies do. You heard him talk about China's slowing
:03:43. > :03:46.economy, it is certainly having an impact far beyond its own borders.
:03:47. > :03:53.It seems global carmakers are staying up beat despite its exit
:03:54. > :03:57.from the fast lane. Beijing's annual auto show has opened its doors with
:03:58. > :04:02.20 of optimism that this year will be a profitable one for the world's
:04:03. > :04:06.largest car market. Our correspondent went along for a look.
:04:07. > :04:11.China produces more cars than any other country, in order to serve the
:04:12. > :04:15.fastest growing market in the world. So when the capital turns on a motor
:04:16. > :04:21.vehicle exhibition it does so on quite a scale. Order companies who
:04:22. > :04:26.want to thrive or even just survive are focusing on the massive Chinese
:04:27. > :04:30.market. People here love their cars, and though they are clogging up the
:04:31. > :04:34.roads, they are buying them in record numbers. To give you an
:04:35. > :04:36.indication of how people are interested in vehicles here, you
:04:37. > :04:42.just have to look around at the crowds they get to the Beijing auto
:04:43. > :04:46.show. And in terms of the companies, their commitment to China can be
:04:47. > :04:50.seen by the seniority of the executives that they wheel out to
:04:51. > :04:55.comment. The secret of China, it is different to other world market but
:04:56. > :04:59.it is fascinating. We are here in China since more than 30 years.
:05:00. > :05:05.There is no growth pressure behind, we want to look for a qualitative
:05:06. > :05:08.approach, it is very important, and we are aiming for this growth. These
:05:09. > :05:14.days it is not hard to find somebody who is pessimistic about the slowing
:05:15. > :05:18.Chinese economy but the world's carmakers are pinning their hopes on
:05:19. > :05:22.domestic consumption really holding up here. There is a feeling that
:05:23. > :05:27.millions more people will move into the so-called middle-class. They
:05:28. > :05:32.will want newer, better cars and this is going to drive a hunger for
:05:33. > :05:37.vehicles into the future. I am absolutely convinced that China will
:05:38. > :05:44.stay the biggest single market in the developing world. There is still
:05:45. > :05:47.a lot of growth potential. And of course, after a year of
:05:48. > :05:51.consolidation in 2016, we will see further growth and we will also see
:05:52. > :05:59.that the Chinese market could turn rapidly into, let's say, the new
:06:00. > :06:03.energy vehicle strategy. There is a clear obligation that we would like
:06:04. > :06:07.to comply regarding emissions and therefore we need a structure
:06:08. > :06:12.involving hybrids or better electric vehicles, and this is where we are
:06:13. > :06:15.investing. The streets around the exhibition Centre have been
:06:16. > :06:20.gridlocked as people try and get in and out of the auto show. But the
:06:21. > :06:23.car companies say that this does not mean that their industry should be
:06:24. > :06:32.blamed for China's nightmare traffic jams. We will be following the
:06:33. > :06:38.Beijing auto show throughout the week so if you are into cars, stay
:06:39. > :06:41.tuned. In other news, Saudi Arabia has laid out plans to diversify its
:06:42. > :06:47.economy, moving away from its heavy reliance on the oil. 80% of its
:06:48. > :06:53.revenue currently comes from oil but it has been hit by falling prices in
:06:54. > :06:56.the past year. Under Vision 2030, shares in the state owned oil
:06:57. > :07:01.company will be sold to create a sovereign wealth fund. The cost of
:07:02. > :07:05.living in Singapore fell for a 17th month straight in March, that is the
:07:06. > :07:11.longest period of decline on record. Consumer prices dropped 1% from one
:07:12. > :07:17.year earlier in the latest sign of a spluttering economy and that
:07:18. > :07:24.compares with 0.4% -- zero .8% the previous period. Indonesia's
:07:25. > :07:31.environment policy has long caused controversy. Now the world's second
:07:32. > :07:35.largest palm oil company is promising greater transparency. It
:07:36. > :07:41.says that in four years it will be able to tell its buyers where all
:07:42. > :07:47.its palm oil comes from. They told our correspondent what is planned.
:07:48. > :07:55.We need to know exactly when we buy the oil. We know every step. This
:07:56. > :07:59.would include finding out if these plantations are compliant with
:08:00. > :08:07.Indonesian law in terms of the protection of key Indonesian peat
:08:08. > :08:11.land. It will come to that level of analysis. Only if we have that
:08:12. > :08:17.detailed information will we be able to analyse whether or not they are
:08:18. > :08:21.coming from a proper sources. This seems like a very basic thing to
:08:22. > :08:29.know. Why has it taken so long to find out where your product is
:08:30. > :08:32.coming from. -- from? We are one of the very few who started this effort
:08:33. > :08:39.has traditionally these mills operate with whatever product comes
:08:40. > :08:43.to their facility. When we ask them to do that, for them it is an extra
:08:44. > :08:50.effort. Some can do it with not much of a problem, but most of them will
:08:51. > :08:54.be a bit constrained, because it is not something that they are normally
:08:55. > :08:58.doing. But surely it is the responsibility of the company to
:08:59. > :09:02.make an effort to find out that information, to find out where your
:09:03. > :09:07.product is coming from. We know exactly where it is coming from,
:09:08. > :09:11.from those mills. But is your product coming from land that was
:09:12. > :09:14.illegally don't, illegally cleared, surely that is something that you
:09:15. > :09:20.should have been looking out from the very beginning. That is what we
:09:21. > :09:25.are asking them to do. But why now? Because it is a big population we
:09:26. > :09:29.are dealing with. So compared to the thousands of companies, our effort
:09:30. > :09:34.is still part of the pioneering of the sect. Are you being pushed to do
:09:35. > :09:39.this by consumers particularly in the European Union, who have been
:09:40. > :09:48.calling for a boycott of Indonesian palm oil of environmental concerns?
:09:49. > :09:52.Well, disk combination is also including requests from the buyers.
:09:53. > :09:56.The market is changing, and the demand has to be matched with the
:09:57. > :10:01.quality of products we are purchasing -- this combination.
:10:02. > :10:06.Let's take a quick look at those markets now, and where they are
:10:07. > :10:11.trading. In Asia they have opened weaker, as you can see, the Nikkei
:10:12. > :10:14.coming to a second date of profit taking, but this week a lot of
:10:15. > :10:20.caution setting in ahead of that Bank of Japan meeting where some
:10:21. > :10:24.stimulus is expected. We are also seeing Australia opening up after a
:10:25. > :10:26.public holiday for ANZAC Day yesterday and it is currently
:10:27. > :10:28.public holiday for ANZAC Day yesterday and it is currently flat
:10:29. > :10:30.at the moment. That is it for this edition of Asia Business Report.
:10:31. > :10:39.Thank you for watching. The top stories this hour:
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