10/07/2017 Asia Business Report

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

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

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

battle when it comes to personal hygiene products.

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

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

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

the world's biggest car manufacturers are paying attention.

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

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

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

Automotive analyst Bill Russo believes all carmakers will follow

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

years since the invention of the internal combustion engine and the

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

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

announcements of the past week in particular of Volvo putting in

electric motors in all their vehicles by 2019, dimer partnering

with Beijing auto, Tesla launching the model three and exploring

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

automotive industry recognising China is the market that will scale

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

will see both multinational and local companies participating. The

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

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

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

parroting of automobiles will come along with a reconfiguration of

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

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

local and multinational brands embracing both policies as well as

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

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

China becoming the principal manufacturing and production

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

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

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

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

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

is buying rival container shipping company for 6.3 billion US dollars

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

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

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

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

businessmen and martial artist ran on a populist platform promising

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

inherits a lagging economy suffering from lower commodity prices,

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

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

agency Fitch has upgraded their sovereign rating and outlook

following robust economic growth. They also recently lifted capital

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

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

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

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

about its economic health. On Tuesday Pep see reports

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

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

Malaysia and South Korean central banks will announce interest rate

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

we can expect. It will indicate the Chinese economy

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

significantly and there was a substantial boost to credit and

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

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

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

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

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

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

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

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

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

sales, consumer prices and industrial production. For Asian

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

equally important. China is especially important because it's

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

either. In India, a campaign against the new

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

Critics say the government should have weighed the tax, especially

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

stigma -- waved. Should female sanitary products be

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

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

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

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

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

women use menstrual hygiene products, the rest of the population

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

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

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

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

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

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

these are considered essential products for women, then so should

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

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

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

customers and make profits, these big companies have huge profit

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

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

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

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

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

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

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

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

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

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

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

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