:00:00. > :00:14.Now it's time for Asia Business Report.
:00:15. > :00:22.Low word expectations. The World Bank slashes outlook for world trade
:00:23. > :00:29.and investment. And the cost of climate change. This week's storms
:00:30. > :00:34.in Sydney, out they a sign of things to come? -- are they. Good morning,
:00:35. > :00:38.Asia. Hello, world. Welcome to Asia Business Report. Thank you for
:00:39. > :00:42.investing your time with us. The World Bank has downgraded its growth
:00:43. > :00:48.forecast for the global economy to 2.4%. Just six months ago it was
:00:49. > :00:53.expecting to expand by nearly 3%. One of the main reasons for this
:00:54. > :00:59.revision is a slowdown in global trade activity. Earlier, I spoke to
:01:00. > :01:02.The World Bank. One of the lead authors of the report. He told us
:01:03. > :01:10.what led to this downgrade. The downgrades focused on commodity
:01:11. > :01:15.exports economies. Given the low commodity prices we see weakness in
:01:16. > :01:21.exporters. Look around the world. You see weakness in global trade and
:01:22. > :01:28.financial flows. At to this, of course, depressed commodity prices
:01:29. > :01:34.biting growth and you end up with this outcome. And we have seen Japan
:01:35. > :01:38.and the US with massive downward revisions. Japan is the third
:01:39. > :01:45.biggest and the US is the largest economy. What pressure does that put
:01:46. > :01:50.on growth? The US and Japan count for a significant part of global
:01:51. > :01:56.output. When these two economies slow down they have effects on other
:01:57. > :02:01.countries because of the demand for goods produced from other countries
:02:02. > :02:05.declining. With the US, we saw weakness earlier in the year. For
:02:06. > :02:10.the rest of the year the economy will stabilise, we think. Japan, the
:02:11. > :02:18.economy is going through a low growth equilibrium. The recent
:02:19. > :02:26.earthquake did not help. That makes for dire reading. Doom and gloom.
:02:27. > :02:33.What are some bright spots? There are some. Look around the world. We
:02:34. > :02:39.see economy is that import have been resilient. -- economies. They have
:02:40. > :02:49.had benefits from the low import price. We expect them to grow around
:02:50. > :02:55.5.9% this year. This is very close to the long-term growth average. In
:02:56. > :02:59.the context of Asia, especially East Asia, you see countries like the
:03:00. > :03:04.Philippines, Vietnam, Myanmar, putting rather strong growth
:03:05. > :03:11.numbers. So there are some bright spots. The World Bank. Despite what
:03:12. > :03:13.he said about Japan, the country has just revised its growth figures from
:03:14. > :03:21.the first quarter to a slightly better figure. It came in at 1.9%,
:03:22. > :03:26.the GDP, compared to the initial estimate of 1.7%. But it still faces
:03:27. > :03:31.big challenges, especially from the strength of the currency. The
:03:32. > :03:35.managing director of an advisory firm explains what has been driving
:03:36. > :03:43.the yen higher. There was a little bit of damned if you do, damned if
:03:44. > :03:49.you don't. The main point is that the investors, foreign investors,
:03:50. > :03:55.were getting sceptical on Japan's commitment, as well as their ability
:03:56. > :03:59.to achieve the 2%. That is on the Japan side. The second factor is
:04:00. > :04:04.that I think there was money shifting back to Japan. Not just
:04:05. > :04:10.speculative money, but Japanese corporate is with overseas earnings
:04:11. > :04:20.going back to Japan so big -- corporates. They want to buy them at
:04:21. > :04:26.110 yen and it was 100. So they wanted to do that. And the third
:04:27. > :04:31.reason, in our recent research we looked at the past. We fed
:04:32. > :04:41.tightening cycles and how the yen behaved. In all those, what is
:04:42. > :04:46.common is that with exactly the same combination as today, in all three
:04:47. > :04:53.instances, the yen strengthened. In other news, Ralph Laurent is closing
:04:54. > :05:00.stores and slashing jobs to try to reverse its falling fortunes. Best
:05:01. > :05:08.known for its Polo shirts plans to shut more than 50 stores and will
:05:09. > :05:12.cut 8% of its 50,000 workforce. They expect to have savings of up to $220
:05:13. > :05:18.million a year. That is the first big move from the replacement for
:05:19. > :05:26.the company founder, rather rent, last year the bike -- Ralph Lauren.
:05:27. > :05:33.Recent floods could cost $160 billion in France. That is from the
:05:34. > :05:40.AFA. That is after floods devastated and affected some 150,000 people in
:05:41. > :05:47.France. And Australia has been hit by wild storms which prompted $28
:05:48. > :05:51.million in insurance claims just this week alone. But if climate
:05:52. > :05:55.change brings more wild weather like this, because in the long-term could
:05:56. > :06:00.be much greater. Coastal erosion could cost Australian home owners 65
:06:01. > :06:05.billion US dollars over coming decades. Just how big is the threat?
:06:06. > :06:12.Earlier, I spoke to a climate institute in Sydney. Australia is
:06:13. > :06:18.quite exposed to different effects of climate change. So, all of the
:06:19. > :06:25.hazards we are going to see, droughts, extreme temperatures, all
:06:26. > :06:30.that. We are also very coastal. Our society. We live within a few
:06:31. > :06:38.comment as of the coastline. Especially in the east. --
:06:39. > :06:46.kilometres. Lots of our housing and infrastructure is close to the sea.
:06:47. > :06:51.So, much of our housing is exposed to sea level rises and other perils
:06:52. > :06:56.related to that. You mentioned housing being an integral part of
:06:57. > :07:01.the economy of Australia. It accounts indirectly for one third of
:07:02. > :07:06.Australia's economy and mortgages account for 60% of the big four
:07:07. > :07:12.banks' assets. What can be done in the long-term? Can you defend the
:07:13. > :07:17.housing sector from this? It won't be easy. It will require all three
:07:18. > :07:22.levels of government. The insurance sector, the banking sector as well.
:07:23. > :07:27.And other sectors as well, like construction. We have set out a bit
:07:28. > :07:34.of a map of how it could proceed. There have been many policy reviews
:07:35. > :07:38.into this over the last decade. So far, very little has been done.
:07:39. > :07:44.Australia has had a housing construction boom in the last few
:07:45. > :07:48.years as well. In parts of the country, it is still not terrific
:07:49. > :07:53.levels of planning controls over, for example, how close you can build
:07:54. > :07:59.to the shore and provisions for flooding. Donald Trump and Hillary
:08:00. > :08:02.Clinton are all but certain to clinch the nomination is to be the
:08:03. > :08:09.presidential candidates for their parties. -- nominations. Donald
:08:10. > :08:11.Trump has extensive business interests but has taken intervention
:08:12. > :08:17.against free trade, especially with China. Mrs Clinton also opposes the
:08:18. > :08:24.Trans-Pacific Partnership trade deal. So how are they feeling? We
:08:25. > :08:30.have more from New York. There is a little bit of concern. It is mostly
:08:31. > :08:35.because, at the moment, when it comes to economic policy and Donald
:08:36. > :08:42.Trump, much is not known so far about what he wants to do. There is
:08:43. > :08:47.an understanding in terms of perhaps what he would want to do with
:08:48. > :08:53.corporate tax policy, all with the minimum wage, but more concrete
:08:54. > :08:57.issues are not exactly clear. -- or. That is what is happening now. Now
:08:58. > :09:04.we have seen that both the Democrats and Republicans are starting to
:09:05. > :09:07.coalesce around their candidate we will see more details emerge in
:09:08. > :09:13.terms of concrete ideas with regards to their economic policies. Of
:09:14. > :09:19.course, you were in New York, the capital of America, what does
:09:20. > :09:24.corporate America and businesses there want from the new president?
:09:25. > :09:31.They will want to see less regulation, less corporate taxes,
:09:32. > :09:33.and, you know, those are the things that really concern corporate
:09:34. > :09:41.America. Any being that would really hope to encourage more economic
:09:42. > :09:47.growth in the US. So, in that way, Donald Trump, some of the musings he
:09:48. > :09:54.has made with regards to that, I welcome news. He wants to see the
:09:55. > :09:57.loopholes fall corporate taxes closed. -- are welcome news. He also
:09:58. > :10:04.doesn't want to see a raised in corporate taxes. -- raise. Hillary
:10:05. > :10:14.Clinton also wants to close those loopholes but hasn't made any
:10:15. > :10:23.mentions of lowering the taxes. The Nikkei is flat, that is despite what
:10:24. > :10:27.I told you about the GDP being better. There are still ongoing
:10:28. > :10:35.concerns. Australia has been impacted by the strong dollar. That
:10:36. > :10:39.is it for now. Thank you for watching.