:00:00. > :00:00.landing? We have a bull and bear battle it out. We find out how he is
:00:00. > :00:12.getting it his swing back into the economy by making golf more
:00:13. > :00:18.affordable. Welcome to Asia Business Report. New numbers from China show
:00:19. > :00:22.activity in the manufacturing sector grew full a second month in a row
:00:23. > :00:38.but only just. The official purchasing manager index came in at
:00:39. > :00:46.50 points and that is down from 50 .2. How you view the slowdown may
:00:47. > :00:52.depend on whether you are an optimist or a pessimist. One
:00:53. > :00:57.well-known pessimist is Gordon Chang who is the author of the book, the
:00:58. > :01:05.coming collapse of China and I caught up with him recently in China
:01:06. > :01:12.as well as this gentleman. He's an optimist or a ball. I asked some way
:01:13. > :01:16.China was headed. I think it is going from a natural transition from
:01:17. > :01:22.an an economy that was overreliant on manufacturing, overreliant on an
:01:23. > :01:25.investment driven economy and one that is extra consumer driven,
:01:26. > :01:29.service orientated economy. So naturally you going to expect a
:01:30. > :01:35.slowdown. And you can't teach you to grow at 10%. This is exactly what
:01:36. > :01:39.the IMF and others have been telling them to do. We are seeing a
:01:40. > :01:44.slowdown. But that is going to be something that we expect them to get
:01:45. > :01:49.through over the coming years and come out the other side within an
:01:50. > :01:54.economy that is more resilient. And actually you don't agree with
:01:55. > :01:56.anything that he says. I don't think they can make this transition
:01:57. > :02:01.because there are significant opposition in Beijing. At the same
:02:02. > :02:08.time you have but showing dollars of net capital outflow, and when you
:02:09. > :02:16.look at all the debt, and you also have this infighting between the
:02:17. > :02:21.president. And that makes for a very difficult policy to implement. They
:02:22. > :02:24.are not going to make this transition that everybody wants them
:02:25. > :02:31.to. And although technically nothing is inevitable, a crash of some sort
:02:32. > :02:36.looks virtually certain. And you say a crash and you saw something like
:02:37. > :02:43.that with the stock markets and of course the policy response to that
:02:44. > :02:49.crash, so Mark, being the ball, are you optimistic that they can get
:02:50. > :02:52.past some of these problems? I am optimistic and you mention the stock
:02:53. > :02:56.market but it went up quite significantly before the. So yes it
:02:57. > :02:58.is comedown there is volatility and they are learning how to manage a
:02:59. > :03:07.market-driven economy. Is ultimately happens overnight. There is still a
:03:08. > :03:12.huge savings ratio in China and people save an enormous amount.
:03:13. > :03:18.There's a huge amount of reserves but the central bank and the state
:03:19. > :03:21.has. We think is enough firepower for them to manage this transition
:03:22. > :03:28.out the other side into three to five years from now. Gordon you have
:03:29. > :03:32.been predicting doom and gloom to China for years and so far you're
:03:33. > :03:37.been proven wrong so how can you be so sure what you are predicting is
:03:38. > :03:40.going to happen? This is not about me but when you look at this they
:03:41. > :03:48.don't have the reserves they have. And some of those reserves they have
:03:49. > :03:51.are illiquid. Most savings have been put into unproductive investment
:03:52. > :03:56.across-the-board BC con me is not as good as they say it is. Eventually
:03:57. > :03:59.they can of course postpone the laws of economics that they cannot avoid
:04:00. > :04:05.them altogether because they can't repeal them. Perhaps we'll go to
:04:06. > :04:09.mark, when you add his way China to start picking up again in which we
:04:10. > :04:16.stop worrying? I think between the next three to five years. I think
:04:17. > :04:21.they can come out of this then I think they will manage something
:04:22. > :04:24.that no one else has really done. No one has been able to do it because
:04:25. > :04:28.it is impossible. I think that is really the problem, especially when
:04:29. > :04:35.you look at the economy is and also the politics. They're going to kill
:04:36. > :04:38.it at the end of the day. And assess leave every year or 18 months and
:04:39. > :04:41.when you look at the amount of reserves in decline and the money
:04:42. > :04:48.coming out of China, no economic and not unwise because China can sustain
:04:49. > :04:56.outflows of that sort. That was Gordon Chang and Mark Austin.
:04:57. > :05:01.Austro's third-largest lender has reported a rise in profits. That is
:05:02. > :05:06.less than forecast with higher bad loans to blame. The bank says it
:05:07. > :05:10.institutional lending business was hit by significantly higher in pen
:05:11. > :05:16.and charges involving four major customers. Bed of the international
:05:17. > :05:22.agency says that oil prices may have bottomed out in February. It fell to
:05:23. > :05:26.a 12 year low of less than 30 dollars a barrel but prices have
:05:27. > :05:32.been rallying to being a high at $48 on Friday. The chief believes that
:05:33. > :05:35.the only direction from here is up but he stressed that it all hinges
:05:36. > :05:41.on the health of the global economy. And this week we will see
:05:42. > :05:46.the first party meeting in over 35 years in the most powerful
:05:47. > :05:50.institution in North Korea. The ruling workers party in North Korea
:05:51. > :05:55.controls the government and the military and whether citizens can
:05:56. > :06:02.trade in the growing private sector. He explains what we can expect. It
:06:03. > :06:05.is expected that the government will announce a major government
:06:06. > :06:13.restructuring, promoting middle rank of offices and declare a new
:06:14. > :06:21.economic development plan. Something very similar to what happened many
:06:22. > :06:27.years ago in the form of five-year multiyear plan. And finally, it can
:06:28. > :06:34.be expected that the government may announce a very bold leadership for
:06:35. > :06:41.the peaceful coexistence and released a moratorium of nuclear and
:06:42. > :06:43.missile issues in exchange for the world excepting North Korea's
:06:44. > :06:50.proposal for discussing potential signing of the peace treaty to put
:06:51. > :06:59.an end to the Korean war since 1953. Now, golf, is a sport that
:07:00. > :07:04.many would describe as elitist and certainly expensive. But now South
:07:05. > :07:08.Korea the government is trying to make it a lot more affordable and
:07:09. > :07:12.the aim is not to create a generation of new champions, rather
:07:13. > :07:17.by encouraging more people to play the game the government is hoping to
:07:18. > :07:31.boost spending in a sluggish economy is built on. Golf holds a special
:07:32. > :07:37.place in South Korea's sporting landscape. The country has produced
:07:38. > :07:43.six of the world's current female golf players. But sport is by toad
:07:44. > :07:47.and the government is hoping to encourage more people onto the
:07:48. > :07:52.fairway with the economy in the doldrums, a partially golf led
:07:53. > :07:57.economy is the ultimate aim. TRANSLATION: Golf has an elitist and
:07:58. > :08:02.extravagant image and it is very expensive. We feel it is right that
:08:03. > :08:05.we develop golf is a public sport. To ease some of the consumer 's
:08:06. > :08:10.burden, expand the sports -based and heightened the golf industry is
:08:11. > :08:17.international competitiveness. Right now, joining a private club costs
:08:18. > :08:23.180,000 US dollars. Even for a public cause it cost around $200 for
:08:24. > :08:28.a group of four. Plus fees for the caddie. The government is pushing
:08:29. > :08:32.the lower membership fees and was to relax the rules that requires
:08:33. > :08:37.players to use golf carts and carries. As well is in courage in
:08:38. > :08:40.private clubs to turn public with low interest loans. But not
:08:41. > :08:45.everybody is happy with the latest plans. The ebbing popularity of golf
:08:46. > :08:53.has left many private courses in financial straits. TRANSLATION: The
:08:54. > :09:01.government pushes policy to make golf a public sport, meanwhile,
:09:02. > :09:04.private clubs and lower taxes. Simply, private golf courses of
:09:05. > :09:07.focusing on how to make money. They on the opposite side of the
:09:08. > :09:11.governments policy. The these reasons there are a lot of
:09:12. > :09:16.complaints from private clubs. And the government 's initiative faces
:09:17. > :09:21.another challenge. The high cost to send many golf lovers off the greens
:09:22. > :09:26.and in front of screens. The artificial experience is booming and
:09:27. > :09:35.from less than 1000 screen golf lounges years ago there are now
:09:36. > :09:42.7000. And it only cost $26 to play. It may not prove easy to get the
:09:43. > :09:47.swing back into South Korean golf. Let us take a look at those markets
:09:48. > :09:55.because Japan's nick a has opened to huge losses. It takes an impact on
:09:56. > :10:00.exporters but we also have Japan's Golden week holidays heading into it
:10:01. > :10:04.this week on the market is a fairly quiet. That is it for the addition
:10:05. > :10:05.of Asia Business Report. Thank you for