10/07/2017 Asia Business Report

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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.


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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