:00:00. > :00:12.Now on BBC News, all the latest business news live from Singapore.
:00:13. > :00:19.The world was in a two biggest economies need for an economic
:00:20. > :00:25.dialogue and tensions are high are the trade practices. -- world's. And
:00:26. > :00:31.drones are so popular they now have our own festival. We have a report
:00:32. > :00:33.from San Francisco. Good morning Asia. Hello, world. And welcome to
:00:34. > :00:41.Asia Business Report. Thank you for investing your time with us. It is
:00:42. > :00:47.considered one of the most senior bilateral talks between the US and
:00:48. > :00:54.China. John Kerry is in Beijing along with the secretary in China
:00:55. > :00:58.for a dialogue between the two biggest countries in the world. This
:00:59. > :01:03.is their last meeting under the Barack Obama administrations. They
:01:04. > :01:10.have previously covered trade and currencies and other topics. I spoke
:01:11. > :01:16.with a German of exports. -- chairman. He used to take part in
:01:17. > :01:22.these in the Bush Administration. You have a fair amount of
:01:23. > :01:25.continuity. There are a huge amount of concerns in China and the US
:01:26. > :01:32.about overcapacity. Production issues. Steel and other heavy
:01:33. > :01:34.industries with global impacts. The Chinese know they have to dial down
:01:35. > :01:40.that production to help reform in their country. We have the currency
:01:41. > :01:45.as well. For many years it has been a concern. This time, China has not
:01:46. > :01:50.been labelled a currency manipulator. The issue is still
:01:51. > :01:53.there. It is probably not as front and centre as other issues on the
:01:54. > :02:00.economic side. The political season means it will get more news coverage
:02:01. > :02:03.in the US than otherwise. What is interesting is tensions over the
:02:04. > :02:13.South China Sea. There are many sources that they want to get a hold
:02:14. > :02:16.of so be -- resources. I heard someone tell me that China would not
:02:17. > :02:21.abide by an international court ruling. That was brought in the
:02:22. > :02:29.Philippines against it. They have been adamantly resistant in falling
:02:30. > :02:33.into line in the South China Sea. China has no appetite to compromise
:02:34. > :02:37.or work out these disputed territory issues with its neighbours. It is in
:02:38. > :02:41.a moment of resolve and will continue to build on that. My view
:02:42. > :02:47.is they will be downward pressure on the relationship. Governing this is
:02:48. > :02:52.what both parties want to keep, they want a positive relationship. But
:02:53. > :02:56.there will be downward pressure in the discussions in the next three
:02:57. > :03:04.days. It is Obama's last, but it will be the first for whoever is the
:03:05. > :03:09.new president next year. How will relationships change. Hillary
:03:10. > :03:18.Clinton will focus on geopolitical issues. She is also... She has
:03:19. > :03:23.personal experience with China and working on those issues. Donald
:03:24. > :03:25.Trump will see less tension on the South China Sea but more issues on
:03:26. > :03:31.the currency issues and overproduction. Speaking to me
:03:32. > :03:35.earlier. Swiss voters have rejected a proposal to introduce a guaranteed
:03:36. > :03:43.basic income for all. Final results show that nearly 77% opposed it with
:03:44. > :03:46.only 23 backing it. They were calling for adults to be paid a
:03:47. > :03:54.monthly income regardless of whether they were working or not. It would
:03:55. > :03:58.be about 2500 US dollars per adult. It is the first country to hold such
:03:59. > :04:04.a vote. The soft bars of a drone flying overhead is becoming a more
:04:05. > :04:09.common sound across the world as the technology becomes cheaper and more
:04:10. > :04:12.affordable. -- buzz. And more amateurs are becoming enthusiastic
:04:13. > :04:18.about experimenting with these drone. But not everyone welcomes
:04:19. > :04:22.these. They are waiting nervously for new regulations that could have
:04:23. > :04:26.a big impact on the technology's future. We have more from San
:04:27. > :04:35.Francisco. It must surely be the most beautiful spot in the most
:04:36. > :04:40.beautiful city. The San Francisco Palace of Fine Arts was built in
:04:41. > :04:44.1915. It was a chance to show the latest of innovations. It was at
:04:45. > :04:49.this event that a phone call was made and Alexander Graham bell made
:04:50. > :04:54.a call from here to here is assistant in New York. -- Bell. --
:04:55. > :05:01.to New York. It is an industry which is growing massively. In 2013, sales
:05:02. > :05:07.of drones were worth over $250 million worldwide, but they had
:05:08. > :05:13.risen in 2015 to $1.6 billion. What could happen in 2016? All eyes are
:05:14. > :05:16.on the US government. They will announce regulations later this
:05:17. > :05:20.month and could open up new and legal ways to use them, especially
:05:21. > :05:24.in business cases. At the end of this month we will see a commercial
:05:25. > :05:29.roll-out which will allow free use of US technology for commercial
:05:30. > :05:33.purposes. There will be limits, but it is a first step in turning this
:05:34. > :05:38.incredible technology into a viable tool the industry. You can see the
:05:39. > :05:42.lights here signalling it is on. One company watching the US market
:05:43. > :05:48.closely will be a Chinese tech giant. Last month, this man went on
:05:49. > :05:55.Facebook to announce their own drone. The specifications are very
:05:56. > :06:02.high like most of his projects. The pricetag is considerably lower than
:06:03. > :06:04.its Western equivalents. There are further opportunities to be had in
:06:05. > :06:11.building software that makes use of drones. This is a Google street view
:06:12. > :06:15.in the sky. It maps out what is beneath it to provide better
:06:16. > :06:19.navigational data to drone pilots. It will take too long and that will
:06:20. > :06:25.slow the growth of the industry if we use old technology. What they are
:06:26. > :06:30.making smart decisions and are being methodical. It is just a matter of
:06:31. > :06:35.demonstrating to regulators and society as a whole that they are
:06:36. > :06:42.safe and they don't invade privacy. They are doing their best to shake
:06:43. > :06:47.off suspect safety. Sometimes, irresponsible flying. They want to
:06:48. > :06:51.move forward in what could be a multi- billion-dollar industry. San
:06:52. > :06:56.Francisco, BBC News. If you are looking to set up shop anywhere in
:06:57. > :07:00.the world, where do you think is the best place for your business to
:07:01. > :07:04.grow? According to a report, four out of the top five countries of
:07:05. > :07:11.retail investment are right here in Asia. My next guest is at the top of
:07:12. > :07:16.the list. We have more on the retail findings. We are joined from
:07:17. > :07:21.Shanghai. It is China. We looked at the top 30 countries and looked as
:07:22. > :07:29.economic factors and retail specific findings. With Asia we have four of
:07:30. > :07:32.the top five within Asia. It is about developing the middle-class
:07:33. > :07:38.and the continuing growth in China. Despite economic headwinds, it is
:07:39. > :07:41.growth of more than 8% in retail, larger than the GDP in all
:07:42. > :07:47.countries, just in China. China is topping the list despite the
:07:48. > :07:51.economic slowdown. India came in second. Despite the limits we saw
:07:52. > :07:56.placed on many foreign retailers to invest there in the past, and very
:07:57. > :08:02.surprisingly, Malaysia was third. Were these surprises? Were there
:08:03. > :08:10.others? Look at that. Malaysia and Indonesia coming in at fifth with
:08:11. > :08:14.Sri Lanka at 10th. Look at these. The development of the countries is
:08:15. > :08:19.a lot around the middle-class continuing to develop. Asia ranks
:08:20. > :08:24.very high. The government factors the support and the move towards
:08:25. > :08:29.e-commerce. Many factors are continuing to drive the retail
:08:30. > :08:33.sector. Malaysia, one of the questions that comes up is why
:08:34. > :08:37.Malaysia? It isn't a large population. But what it has is a
:08:38. > :08:44.very strong business readiness and friendliness components to it that
:08:45. > :08:49.makes it easy to come in, especially with the Proxima D2 Indonesia. --
:08:50. > :08:56.component. It is a good place to build your brand in the region. --
:08:57. > :09:01.proximity. We also have convenience stores and hypermarkets looking to
:09:02. > :09:06.roll-out from Indonesia to China. What are these trends you are
:09:07. > :09:10.picking up on? What are some others? The interesting trend is around the
:09:11. > :09:14.convenience stores. In China, look at the hypermarkets that have come
:09:15. > :09:24.in. Across the region you have seen them come in from Taiwan and from
:09:25. > :09:29.the US and Europe. But want to get past that initial footprint, Asia
:09:30. > :09:33.still operates in major components. As they move up into that
:09:34. > :09:38.middle-class spectrum, timing becomes more important, along with
:09:39. > :09:42.efficiency. People are looking to shop in a friendly way. The other
:09:43. > :09:46.factor coming into play across Asia and is typically in China is
:09:47. > :09:52.e-commerce. The e-commerce penetration rate in China is double
:09:53. > :09:57.what it is in North America. Over $1 billion in sales last year. If you
:09:58. > :10:02.are a retailer coming into Asia you better understand the e-commerce
:10:03. > :10:10.market. Let's look at the markets before we go. We had a dismal US
:10:11. > :10:14.jobs report. US stocks down. And the Nikkei is tanking at well over 1%.
:10:15. > :10:22.That is due to seeing the yen strengthened. That jobs report
:10:23. > :10:28.leading to expectations the Fed will not raise interest rates any time
:10:29. > :10:34.soon. And that is it for this issue of Asia Business Report. Thank you
:10:35. > :10:41.for in the thing your time with us. -- investing. Welcome back. You are
:10:42. > :10:45.watching BBC News. Let's bring you up-to-date with the headlines.