13/07/2017 Asia Business Report

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

China or Japan takes the lead in reviving the ambitious Trans-Pacific

Partnership trade deal after the US pulls out.

And we look at why start-ups in India are hitting major roadblocks

and struggling to raise money. They are hoping to reach a new trade

arrangement. Japan is hosting them until Friday, but, without the US at

the negotiating table, is there still a point? Economist Martin

Schultz says yes. TPP was thought to be dead after the US was leaving,

but with the EU, Japan FTA, which has been signed and brought on track

to be going, there is some life still in free trade and getting

things going in terms of having trading platforms, and that is the

most important thing for Asia. Asia is a very attractive market. So

creating a platform, even without the US, makes the entire area more

attractive. Trade talks are keeping going. This is very helpful. But the

linchpin of this Trans-Pacific Partnership is the United States,

and it represents more than 60% of the initial members' GDP. Without

the US, the 11 remaining countries will not represent a whole lot.

Absolutely. It would be just 15% of world trade, and a lot of that is

already covered by existing FTAs. Within Asia most countries already

have that relationship, so that the question is, where is the value?

It's easy to see from the American side, Canada, Mexico down to per

room, they don't have these trade agreements and they are very

interested. The drivers are Australia and New Zealand who needs

of platform access to the Asian markets. Now Japan is getting

interested because China is so active in building trade ties, so a

platform without chiding that provides the potential for the US to

come back is really a political incentive -- a platform without

China. Do you think the Trans-Pacific Partnership will

really survive? The big question is, if they get the framework going so

it can exist for a while without the US, that is possible, and it will

probably be possible until November, and then it's really just something

that provides some good arguments for liberal US interests, or US in

-- industry, to say, guys, we need to get back into trade talks. That

would be really a big political positive point.

The United States has officially notified South Korea that it wants

to start talks next month on revising their Free Trade Agreement.

The two countries have a significant trade deficit and US President

Donald Trump has called the trade deal horrible. Earlier I asked an

employee of McQuarrie securities for his reaction. Yes, it is about 15%

of our exports, so the actual impact on negotiations would not be huge.

It depends - even though it depends on the actual negotiation between

Korea and the US. But obviously Trump and our government is trying

to lower the trade deficit against Korea, so it could have an impact

for a long time, but the actual impact on the economy would not be

huge. It may not be huge, but what particular industries and areas do

you think will be renegotiated by the United States with South Korea?

We have many exporting products to the US, but the main product for us

to sell to the US is cars, and steel products, so these two could be

affected in the future. In around 30 minutes' time, South Korea's Central

Bank is set to unveil their interest rate decision. The bank of Korea is

expected to keep its benchmark lending rate unchanged at 1.25%.

US stock and bond markets rallying overnight after the Fed chair Janet

Yellen indicated the US central bank won't rush to raise interest rates

further this year. In testimony to Congress, Janet Yellen said

inflation levels would be a key factor in their decision. Because

the neutral rate is currently quite low by historical standards, the

federal funds rate would not have the rise all that much further to

get to a neutral policy stance. Speaking of central banks, Canada's

currency is trading at its highest level in a year after policymakers

raised borrowing costs for the first time since 2010. Its central bank

raised the benchmark rate to 0.75% from 0.5% following strong economic

growth. The former head of my box says he

denies embezzling and wrongdoing at his trial this week. The company

went bust after losing nearly $500 million worth of bit coins. He

allegedly spent $3 billion of customers' money for his personal

use and altered the company's books. He was arrested in 2015 after the

company collapsed. In Hong Kong, many of the world's biggest

companies in start-ups have gathered for Rise. It's a turbulent time for

many of them after Trump Administration moved to disassemble

the start-up programme. It's certainly not a concern for the

United States, I don't think. In technology for a number of years now

I don't think the US is any longer seen as the capital or central

technology, certainly not silicon valley. Thomas Friedman wrote a book

quite some time ago saying the world is flat but the world is very much

tilted, and it has tilted in the direction of China and Asia, and I

think that's reflected in the fact that the number of American

start-ups here this week has more than doubled year over year. So Asia

will now be the linchpin for technology innovation going forward?

I think it's certainly more diversifies in the world. Chen Zen,

a long time ago, arguably became the hardware centre of the world, and

the number of start-ups coming out of Beijing every month is greater

than anywhere else in the world, and the amount of venture capital being

deployed in China alone is unprecedented. So all the indicators

are that the activity is switching. Paddy Cosgrave in Hong Kong.

India has become known as a good place but competition is tough and

many ventures have failed. Some companies are failing to raise money

and are laying off employees. What are the ramifications for industry?

When this woman set up her business, she fulfilled a lifelong dream. She

always wanted to work in education, and so, in 2013, she started Purple

Squirrel, a company that organise work experience trips for college

students. But despite a promising start, she was forced to shut shop

within three years. We were not generating enough profits to sustain

operations, and given that we did require funds, we didn't have as

many options as investors who truly understood the fabric of an

education industry. In 2015, Indian start-ups received more than $8

billion worth of investments. But last year that was down by more than

50%, and that's forced many ventures to shut down. In 2015, the figure

was 250, and it was more than 300 last year. The warning signs had

been around for a while with some of India's most well-known companies

taking drastic steps to cut costs. That has lead to uncertainty for

those working in the industry. People like this man. After five

years of working with start-ups, he chose to move back to the corporate

world. There's a lot of fear, there's a lot of insecurity in the

minds for people, because, when they join an organisation, they obviously

want to make a career out of it, but eventually when you see that the

organisation does not really treat them as a valuable resource, and

they basically leave them in a hire and fire kind of strategy, it really

puts them down. That hasn't put off these entrepreneurs. They've come to

this workshop to hear from fellow business founders about their

journey to success. But success in the start-up space will rely on

funding and, until the investment climate improves, it will be

difficult for the industry, which India is so well-known for, to fully

bounce back. Let's have a look now at the

markets. A positive start so far for the regional forces:

This is after the rallies are being led by the US gains overnight, and,

as Janet Yellen said, she foresees graduate rate hikes even as the US

economy grows stronger. On Wall Street, another record breaking day

for the Dow Jones industrial average, up by 123 points:

Thank you for investing your time with us. Sport Today is coming up

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