10/07/2017 Asia Business Report


10/07/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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

:00:00.:00:17.

China paints a green path for electric car technology, is the rest

:00:18.:00:23.

of the world willing to follow? And women in India are fighting a taxing

:00:24.:00:27.

battle when it comes to personal hygiene products.

:00:28.:00:35.

Hello, Asia. Good morning, world! Glad you could join us for this

:00:36.:00:42.

edition of Asia Business Report, I'm Rico Hizon. China has a growing

:00:43.:00:46.

appetite for electric cars, sales there overtook the US last year and

:00:47.:00:51.

the world's biggest car manufacturers are paying attention.

:00:52.:00:55.

Of all though, owned by a Chinese company, announced last week it will

:00:56.:00:59.

only make fully electric or hybrid vehicles by 2019 -- Volvo. Tesla is

:01:00.:01:05.

close to locking in a deal to open its first factory on the mainland.

:01:06.:01:10.

Automotive analyst Bill Russo believes all carmakers will follow

:01:11.:01:11.

suit in the not too distant future. It's been a good run. It's been 130

:01:12.:01:20.

years since the invention of the internal combustion engine and the

:01:21.:01:24.

use of the automotive industry and we are about to see more change in

:01:25.:01:29.

the next decade than we've seen in the last 100 years and the

:01:30.:01:34.

announcements of the past week in particular of Volvo putting in

:01:35.:01:40.

electric motors in all their vehicles by 2019, dimer partnering

:01:41.:01:45.

with Beijing auto, Tesla launching the model three and exploring

:01:46.:01:50.

opportunities to localise in China, I think you've already seen the

:01:51.:01:54.

automotive industry recognising China is the market that will scale

:01:55.:01:58.

up and become the largest electric vehicle market in the world and you

:01:59.:02:03.

will see both multinational and local companies participating. The

:02:04.:02:07.

trend is growing in the butt will workers on assembly lines in Asia

:02:08.:02:14.

who make fuel vehicles be displaced because of the technology needed to

:02:15.:02:21.

make electric cars? The repowering of transportation and the re-

:02:22.:02:26.

parroting of automobiles will come along with a reconfiguration of

:02:27.:02:31.

production and supply chains. People's skills may need to be

:02:32.:02:35.

adapted to that new reality but we're already talking about both

:02:36.:02:41.

local and multinational brands embracing both policies as well as

:02:42.:02:47.

the up of production. Battery supply chains along with the manufacturing

:02:48.:02:52.

footprint, I think what we're about to see in the next few years is

:02:53.:02:56.

China becoming the principal manufacturing and production

:02:57.:03:02.

location for electric vehicles in the world. Has long founder Elon

:03:03.:03:06.

Musk has tweeted the first picture of their new Model three vehicle

:03:07.:03:13.

after it came off the assembly line. It is Tesla's first mass-market car

:03:14.:03:19.

and it will cost around 35,000 US dollars, almost half the price of

:03:20.:03:24.

Tesla's next cheapest model. In other business news, China's Costco

:03:25.:03:31.

is buying rival container shipping company for 6.3 billion US dollars

:03:32.:03:36.

in cash. The takeover will create a strong Asian competitor to the P2

:03:37.:03:40.

alliance of Denmark's Maersk line and ... They operate two of the

:03:41.:03:47.

world's largest container fleet is. The opposition candidate is now

:03:48.:03:53.

Mongolia's president after a contentious run-off election. The

:03:54.:03:58.

businessmen and martial artist ran on a populist platform promising

:03:59.:04:02.

government help for students in an aggressive stance towards China. He

:04:03.:04:08.

inherits a lagging economy suffering from lower commodity prices,

:04:09.:04:10.

especially on its main export, copper. It's taken a decade but it

:04:11.:04:16.

looks like ice land has recovered from its banking turmoil. Ratings

:04:17.:04:22.

agency Fitch has upgraded their sovereign rating and outlook

:04:23.:04:27.

following robust economic growth. They also recently lifted capital

:04:28.:04:31.

controls put in place after three of its biggest banks employed in 2008.

:04:32.:04:38.

Let's now turn our attention to a few things investors are on the

:04:39.:04:42.

lookout for this week. Later this morning China will update its

:04:43.:04:45.

inflation data for the month of June, which will give us more clues

:04:46.:04:50.

about its economic health. On Tuesday Pep see reports

:04:51.:04:53.

second-quarter earnings and the big question is, are the consumers

:04:54.:04:58.

losing their appetite fizzy drinks? More people are battling obesity.

:04:59.:05:03.

Malaysia and South Korean central banks will announce interest rate

:05:04.:05:07.

decisions mid week. Earlier I spoke with an economist who told us what

:05:08.:05:11.

we can expect. It will indicate the Chinese economy

:05:12.:05:16.

has stabilised in the first half of last year, it decelerated quite

:05:17.:05:19.

significantly and there was a substantial boost to credit and

:05:20.:05:23.

social financing in the second half of the year and into early this

:05:24.:05:26.

year, which helped stabilise the economy. Growth is just below 7%,

:05:27.:05:32.

exactly where China wants it. There is still this massive problem of bad

:05:33.:05:37.

debts, why isn't this impacting investor sentiment? It's a

:05:38.:05:42.

background issue of great concern to investors, China has had the biggest

:05:43.:05:46.

expansion over the last eight years, it has gone from $6.5 trillion to

:05:47.:05:51.

$24 trillion, a massive increase and that has resulted in big debts for

:05:52.:05:55.

the corporate sector, households, and it is a matter of growing

:05:56.:06:00.

concern. Apart from Chinese economic data you have US reports on retail

:06:01.:06:05.

sales, consumer prices and industrial production. For Asian

:06:06.:06:10.

investors, what's more important? China numbers? US data? Both are

:06:11.:06:15.

equally important. China is especially important because it's

:06:16.:06:19.

the single largest market for most Asian economies. In terms of

:06:20.:06:23.

exports. China's import growth this year has been very good, if that

:06:24.:06:28.

persists, 14 or 15% year-on-year growth in Chinese imports, that will

:06:29.:06:33.

help the rest of Asia seat in continued strength so that is

:06:34.:06:40.

important. -- C. What is good about the US is that payrolls over the

:06:41.:06:47.

weekend were very strong. The US economy is in fine fettle at the

:06:48.:06:52.

moment and that helps the world. Does this mean we could see an

:06:53.:06:56.

interest rate hike from the Fed, a third one, before the end of the

:06:57.:07:01.

year? Could this impact the monetary decisions of both South Korea and

:07:02.:07:06.

Malaysia? The Fed will hike later this year further, maybe once or

:07:07.:07:10.

perhaps more, because the economy is in fine health, despite the fact

:07:11.:07:14.

that disinflation has continued to occur, the labour market is in good

:07:15.:07:20.

shape and so the US will hike rates. In Malaysia, inflation was much

:07:21.:07:24.

higher in the last few months, it has moderated in the last month, so

:07:25.:07:28.

there's no real need for Malaysia to hike rates. If it had to it should

:07:29.:07:33.

have done it two months ago but it didn't, so there's no real need.

:07:34.:07:38.

Inflation is very tame in Korea and there's no need to hike rates there

:07:39.:07:41.

either. In India, a campaign against the new

:07:42.:07:49.

goods and services tax on feminine hygiene products is gathering steam.

:07:50.:07:53.

Critics say the government should have weighed the tax, especially

:07:54.:07:57.

since few women use these products in the first place because of social

:07:58.:07:59.

stigma -- waved. Should female sanitary products be

:08:00.:08:10.

taxed? It said topic hotly debated around the world and know the

:08:11.:08:14.

so-called tampon tax row has come to India. -- now. Campaigners here are

:08:15.:08:23.

calling in the blood tax. -- calling it. They say a new goods and

:08:24.:08:28.

services tax that just came into effect was an opportunity to make

:08:29.:08:32.

feminine products tax-free in India and so more affordable. Only 12% of

:08:33.:08:37.

women use menstrual hygiene products, the rest of the population

:08:38.:08:43.

use cloth, but sadly they don't just use that, they use sand, husk, dried

:08:44.:08:50.

leaves, plastic. Access to hygienic feminine products is a problem and

:08:51.:08:56.

cost is a big issue. As a result tens of thousands of girls drop out

:08:57.:09:00.

of school every year when they start their periods. Now, in a seemingly

:09:01.:09:06.

women friendly move the government has made these products, which a lot

:09:07.:09:12.

of Indian women apply on their forehead, tax-free, but they believe

:09:13.:09:16.

these are considered essential products for women, then so should

:09:17.:09:22.

sanitary pads. They are being taxed at 12% instead, a decision the

:09:23.:09:27.

government defends. TRANSLATION: If we reduce the tax on sanitary pads

:09:28.:09:32.

it shouldn't be the multinational companies don't pass it on to

:09:33.:09:38.

customers and make profits, these big companies have huge profit

:09:39.:09:42.

margins and so to make sanitary pads more affordable this should be the

:09:43.:09:47.

step forward. The government says cheaper sanitary pads made by small

:09:48.:09:52.

cooperatives will be taxed. For campaigners, it's not about who

:09:53.:09:56.

makes the products, but that the state treats them as a luxury rather

:09:57.:09:58.

than a necessity. Before we go, let's have a look at

:09:59.:10:07.

the Asian stock markets and currently it is mixed, the Nikkei

:10:08.:10:12.

225 up by 114 points due to the weaker yen against the US dollar,

:10:13.:10:17.

benefiting the export sector. The All Ordinaries down by 31 points due

:10:18.:10:23.

to a fall in oil prices. Chinese economic data will dictate the mood

:10:24.:10:24.

of the markets this week as well. Much for investing your time with

:10:25.:10:32.

us. I'm Rico Hizon, Sport Today is up next. -- thank you so much.

:10:33.:10:38.

Iraq's Prime Minister says Mosul has been liberated from the group

:10:39.:10:43.

Tens of thousands of people gather in Istanbul after a protest march

:10:44.:10:48.