29/04/2016 Asia Business Report

Now on BBC News all the latest business news live from Singapore.

A 21st-century silk Road. More plans for a trade passage between Pakistan

and China. And, Qantas suffers under poor demand because of political

uncertainty. Welcome to Asia Business Report. A

new trade link between China and Pakistan is a step closer, with work

starting on the northern part of a 3000 kilometre corridor. Officials

are aiming to finish the project within four years. Beijing is

providing 90% of the funds for the network of roads, railway and

pipelines, which will give China direct access to the Indian Ocean.

The money China is planning to pour into Pakistan is more than twice the

amount of all foreign direct investment the country has received

since 2008. $46 billion they are planning to invest. Why other

Chinese doing this? Because when it has been completed, the corridor

will provide China with its shortest and most direct access to both

Africa and the Middle East, where thousands of Chinese companies are

operating. The hope of course is that it also makes Pakistan a

business hub for the region. Among other things, the corridor will

include energy projects. The real test, of course, is in the execution

of these plans. The corridor faces many challenges. Logistical

challenges, of corruption and lack of transparency. There has been a

political upheaval, with some politicians threatening to boycott

or oppose it if it does not pass through their constituencies. But

all of this aside, the biggest hurdle for this mammoth project is

security, because the corridor starts on the Pakistanis side from

the port city of wide-eyed. This area has been marred by violence and

years of separatism. It goes all the way up to Kashgar on the Chinese

side. This is home to the Muslim Uighur community, who the government

blames for the upsurge in recent violence. Between these two cities,

the corridor then passes into areas that are in close proximity to

Taliban militants, and the big question is whether Pakistani

security forces can make these troublesome areas safe enough to

operate in. The other big question is about job creation. Will the jobs

created by this corridor be beneficial to Pakistanis or will

they all go to Chinese workers? Austria's national carrier, Qantas,

has seen some tough times of late. Passenger demand is slowing at home

and markets in Asia are softening. Now with a national election likely

to be held in July, the company is warning of weaker demand ahead,

despite record recent products. -- profits. Whenever an election comes

around, there has always been an impact not just on aviation, but to

a whole raft of industries and businesses, as consumers tend to

keep their hands in their pockets for a short period of time. I think

what we were flagging is that we are seeing and we will see some impact

that over the few months to come. But aviation has been able to

respond to the domestic market by making sure we can keep our supply

in line with the demand, and balance the equation. If domestic demand is

slowing down, Werris Creek coming from? The weakening of the

Australian dollar has made Australia A more attractive place for inbound

tourism, and Asia for example is a great opportunity for us. And

digging down even further, China is a great opportunity. The growth that

is going to occur over the next few years in Chinese tourism is

significant. Australia still only gets a small piece about, and the

opportunities to grow, our share in the pie and the pie growing over

wall is significant. How is the slowing growth affecting your plans

for expansion? We have the instruments and relationships to be

able to grow in China in relation to the underlying growth in demand out

there. And to be able to shift and move around as we need to and

respond to changes in the economy. Fundamentally, the long-term trend

will be significant growth out of China. How are you managing

volatility in oil prices and how does it affect your business? We

have a very comprehensive but conservative hedging programme that

allows us to account for that. We know prices will move up or down,

and we know we have to build a resilient business that is able to

compete regardless of the environment. Getting the product

right is what we have been investing in. Qantas is not the only company

banking on tourism out of China. China Eastern has been expanding. It

has made a $10 billion deal, split between Boeing and Airbus. It will

allow China's second largest carrier to expand its long haul routes.

China's version of Google has been boosted by advertising money, but

profits from its core search engine business has fallen between February

and March. Shares in the e-commerce giant Amazon have soared in after

hours trading, after it reported quarterly profits and revenue far

beyond expectations. Revenue rose almost 30% to $29 billion in the

three months to March, helped by rising sales of its Kindle reading

devices and tablet computers. The trafficking of human labour is an

enormous issue in many parts of the world, including Asia. For business

it means knowing your supply chain inside and out. The International

Labour Organisation estimates forced labour in the private sector economy

generates some $150 billion in illegal profits every year. I spoke

to the legal head for an advocacy group earlier. They asked whether

companies are turning a blind eye or just do not understand their supply

chains. It is a combination of everything. It is an issue that has

come to the forefront and has gained a lot of interest recently. So

companies are now looking into their backyards, but they are so

complicated by their relationships, and you have to remember that

industries like agriculture and construction relied very heavily on

middlemen, on recruitment agencies and brokers, and on low and

unskilled labour and cheap labour. That basically means you have

complex relationships that sometimes spanned several different continents

before you have an end product. Technology has come a long way, and

there are huge technological advances companies can use to track

their product. It indeed, and that has been done. But this is a people

business, it will take a lot more than technology to fix some of these

issues. One of them is the will to do it. There was a suggestion from a

recent study that said a huge proportion of companies around the

world suspect there is some form of slavery in their supply chain. It is

about really committing to find out what the issues are, and following

the risk. So, the money is going somewhere, and it is being paid

somewhere. This money is not under people's mattresses, it is going

into our financial institutions. And as the focus switches to how we can

tackle trafficking, multinationals find themselves at the forefront of

the fight. Really, we need to find points at which these proceeds of

crime are made legitimate. What kind of due diligence is being done to

understand where the loans are going and what types of products they are

supporting. And they need to find out what the human rights impacts of

those are. We have all heard of Warren Buffett, we'll just like

every year, tens of thousands of shareholders will gather this

Saturday to cheer on yet another year of his unparalleled success.

But one question on the minds of investors is how much longer he will

continue. My sense is that a successor to Warren Buffett will

likely emerge from within the company. The other thing to consider

is that an argument could be made for breaking up the company, which

opens up a whole other list of speculations. Let's have a look at

the markets. You can see Japan is closed for the day, so investors get

a bit of a breather after yesterday's significant falls. The

All Ordinaries is open, down just 1%. The US markets were down

sharply.