13/07/2017 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 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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