05/05/2017 Asia Business Report

Conservatives. Thank you so much. It is going to be a long night. Much

more for you anytime, of course, on the BBC website. Now on BBC News,

the latest business news live from Singapore.

China's first commercial aircraft is ready for takeoff, but can it

compete with Airbus and Boeing? And the challenges of doing business in

Myanmar. We speak to a regional boss. Good morning, Asia. Hello,

world. Welcome to another edition of Asia Business Report. Glad you could

join us. It's a Friday. The first made in China passenger jet will fly

for the first time this morning. It is called the C919, and it is built

by Komak. It will not be delivered to airlines until at least 2020, but

the industry buzz around the aeroplane is huge. It has been in

the works for nearly a decade as China tries to rely less on European

airlines like Boeing. We had a sneak preview. Made in China, those three

words now applied to commercial aircraft. This is the C919, China's

first home-made commercial aircraft. Actually, it is a mock-up, but they

hope to roll them off the production line next year. China hopes this

will be the chance for them to break into the global aviation market and

break the struggle hold of Boeing and Airbus that have long dominated

this industry. Let us have a look. It is home-made, but not in its

entirety. This is a large, the wing, the tower, all median China, but the

engines and systems are from foreign key factor is. -- tail. Let's go to

first class, and now the cockpit. The president, Xi Jinping, has sat

in this seat. That shows you how important it is for China and the

leadership that this works. It is a moment of huge national pride for

China. They have had a few problems in terms of hitting the high

standards demanded by regulators in the US. But they hope that the C191

will change all of that. Now, this will sell well here because domestic

airlines are on board. But will foreign air lines

buy it. They hope that someday you will fly on a home-made Chinese

commercial aircraft. Earlier, I spoke with an aviation analyst who

is the Asia managing editor at Flight Global. I asked him whether

it poses any commercial threat to Boeing or Airbus? For the time

being, very little threat. Boeing or Airbus have a solid Lockley and they

have support networks. -- duopoly. They have proven products and our

lines are comfortable working with them to be that said, the new plant

is hitting the toughest part of the market. -- That said, the new plane.

This is definitely going to get attention. So far, most of the

demand is coming from within China. Would there be any interest outside,

do you think? Potentially, long-term, you could see that. The

aircraft is going to have to develop a track record for reliability and

supportability in the field. Nothing to airlines hate more than AOG

situations. They want 99% reliable or better. If you are falling short

of that, airlines are going to be dubious about working with you.

Customer service is also crucial in this market. The global

infrastructure and support network is what they are going to have to

build if they want to compete with the big guys. It is a competitive

market and hard to make money. Is it safe to say that the government is

almost bankrolling this project? Yes. It is a huge upfront costs on

behalf of the Chinese government. I have been to their facilities and

their research and development facilities outside Shanghai. There

is enormous cost and resources going into this programme. But it is about

national prestige and high-value jobs. Long-term, it is about being

the third major player in the global aviation market. In other business

news, oil prices have hit five months lows with Brent Crude hitting

levels not seen since OPEC agreed to cut production by 1.2 billion

barrels a day in late November. Those cuts are likely to be

continued, though deeper cuts are unlikely, they said. Since most

international sanctions against Myanmar were lifted, companies have

been lining up to take advantage of the growing market. Unilever was

among the first. It just struck a joint-venture deal with a local

rival, Europe and Asia Commercial Company. What are the challenges of

doing business there? I asked the regional president about the tie up.

It is a great company. We have been talking to them for a while. The

country offers great potential. Macro economics are good. 55 million

people. A growing middle-class which is supposed to double by 2020. The

economics are very good. We are excited. By combining the two

companies, you are also, your manufacturing capacity will be

better. Would you consider exporting to the rest of the region for a

Myanmar? They have two facilities and we have one. We will produce

locally for the time being. Everything will be imported into

Myanmar today. But over time we see potential for exporting. I guess

Myanmar continues to make news headlines with human rights abuse,

political stability, so what are the challenges of doing business there?

It is a nascent economy. It is developing fast. We the business is

growing in double digits. Infrastructure has to develop,

obviously. -- we see. There are some electricity shortages, obviously.

But we are invested in the long-term and are committed to Myanmar. What

about the stability of the currency? It has fallen some 10% against the

dollar in the second half of last year. That is surely going to have

an impact on your business. Markets are always volatile. We are

investing for the long-term. It is a commitment we have for the country

in the next decade. We have been backing them since 2010. I am

absolutely convinced this investment will have great returns for the

long-term. In the coming days, the US will take China to the World

Trade Organisation. America accuses China of subsidising its aluminium

industry and says it is destroying jobs and companies on both sides of

the Atlantic. China denies that it has broken any rules. Joe Lynam

reports. From this day forward, is going to be only America first,

America first. -- it is. The new president could not have been

clearer that he will protect jobs lost to global competition. One of

his first tests could be aluminium. In the 15 years since China join the

WTO, it has gone from producing 10% to more than 50% of global

aluminium. At the same time, the US has gone from having 23 acting

smelters to just six. And with the closures have come job losses. They

are stealing our jobs. According to the China task force, Chinese

aluminium output has doubled since 2010, and that has dramatically

pushed down global prices, forcing out many European and American

producers. They have taken very cheap finance and have provided the

low interest loans to these companies. They have forgiven debts.

When these companies get into trouble, you may have heard the term

zombie companies. They have propped up these companies and allowed them

to keep reducing. It is unecomonic. We are not looking to protect

anything. We are seeking a fair market under WTO rules. In a

statement to the BBC, the Chinese government said this.

And as for the WTO, it says there is little it can do to bring about

rapid change. It is the members who monitor the situation themselves.

They talk to each other, they expressed their concerns to each

other, and the even propose ways of handling the situation for

themselves. The WTO is just there for for them to have conversations.

We tried to make it your try to facilitate those conversations.

Taking a case to the World Trade Organisation is time-consuming, just

ask Boeing or Airbus. It could take five years to get a decision. At

which point, consumers on both side of the Atlantic could be out of

business. We will show you the markets before we go. This is how

market in Asia have started trading. The Nikkei of Japan has closed for

the Golden Week holiday. That is it for this edition of Asia Business