14/08/2017 Asia Business Report


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


On the upward trend. Japan charts another quarterly growth for the


sixth time in a row. Is Abenomics finally working? And a tale of two


economies. We focus on India and Pakistan as they mark 70 years of


independence from the British Empire. Welcome to Asia Business


Report. Live from Singapore. Let's kick off with what is on the


business calendar this week. Japan just released its latest economic


data. The world's third biggest economy expanded at an annualised


rate of 4% between April and June. That is the sixth straight quarter


of growth, driven partly by private consumption. Mid week, the bank of


Thailand will be deciding on the cost of borrowing and later in the


week, on Thursday, a lot of focus will be on Alibaba as it releases


second-quarter earnings. Earlier I spoke to a representative from the


bank of Singapore and asked about the Japanese economy and whether


Abenomics is working through the system. It looks like growth will be


between 2% and 3%, which is where Europe has been in the second


quarter. So they seem to be doing quite well at the start of 2017,


yes. There have been lots of talks about whether Abenomics has failed,


but from all the data we are getting, is it actually succeeding,


in your view? I think from the growth numbers it is succeeding.


Labour markets are the best they have been in decades, so from that


perspective Abenomics has worked. Where it has worked as on the


structural side, raising the long-term growth rate, improving the


operational behaviour of companies, improving governance significantly.


So they have done well to stimulate growth and get things back to


normal. They haven't done much to change what normal represents, and


that has been the failure of Abenomics. What has been rattling


the region over the last few weeks has been growing tensions between


North Korea and the United states. We are starting to see a rush to


safe haven, in your view? Certainly some safe haven flows. Gold is doing


well, the Swiss franc, and rather strangely the Japanese currency went


well as well, which is strange as it is on the flight path and has a long


history of tension with North Korea. There is a bit of a bump, but


nothing to severe. And of course, China plays a significant role in


these growing tensions. There have been talks of President Trump


possibly signing executive orders restricting intellectual property.


What is your view on that? I think it is a real difficulty because when


you have a transactional approach to policy, there is no predict ability


or framework they are operating in. It is one of those things, if you


help us here we will help you there, so you can't see what they will try


to achieve. Obviously they have multiple goals but they are not


necessarily compatible. At the moment it looks like he wants to


bully china on trade with the hope they will help with North Korea.


That doesn't seem like a very realistic ambition to anyone in the


region. And briefly, before we let you go, we have significant figures


from the Chinese economy as well. What are you predicting? Industrial


production is tipped to grow about 7%. It has picked up in the last six


months or so. People are worried about slowdown in China, it is a


perpetual concern. So far the economy is doing fairly well heading


into big vertical events later in the year. In other business news,


the chief executive of the Commonwealth Bank of Australia says


he will retire in the wake of a scandal over allegations of money


laundering and terror financing allegations. He has been the head of


Australia's biggest bank since 2011 but recently it has been embroiled


in civil charges stemming from alleged breaches of financing rules


which wiped out the lives of dollars from its market capitalisation. He


is expected to step down in June 20 18. The price of Bitcoin has broken


past the $4000 mark for the first time in its nine-year history. The


value of the digital currency has more than quadrupled so far this


year. Joining me here in my studio is the BBC's business reporter. Yet


another record, but it has been rather volatile. That's right,


crypto currencies like Bitcoin have been on a rollercoaster ride, and


that is largely because it remains an unregulated market. So unlike


other currencies there is no central bank that controls though


currencies. They are also traded electronically, 24 hours a day and


seven days a week. With Bitcoin, the oldest and most valuable crypto


currency, we saw prices past $4000 on Sunday morning, he began a market


capitalisation of more than $60 billion. That is really large, more


than triple the price of gold. So now some people are questioning


whether crypto currencies like Bitcoin exist in a bubble, because


some claim that these currencies basically have no fundamentals, and


that they are being driven by people looking to make a quick buck. Thank


you for the update. We will continue to monitor the price. Back to Japan


and its rigid education system, where children are taught to follow


rules and strive for perfection. It is often blamed for the lack of


entrepreneurship in the country, but what if you drop out of the school


system? As part of our Jumpstarting Japan series, I caught up with a man


to find out how he found his own success. Meet the brainchild of Ken,


and his avatar. Ken created this avatar to address the loneliness he


felt as a child. TRANSLATION: For 3.5 years, from when I was ten, I


couldn't go to school because of illness. I felt so unbearably


lonely. I started to wonder if they had a healthy clone, could he make


good memories at school instead of me. That was the beginning of


wanting to create my own avatar. In a country which allows no room for


failure, even as a child, Kentaro could have been easily left out of


the system, but his teacher introduced. The idea is the robot


can be at places where its users cannot be.


So there are 120 units that have been rented out across Japan, and


they are thinking of exporting it as well. And his robot is helping those


with motor neurone diseases like ALS. This 30-year-old is learning


how to use it so he can continue participating in society.


TRANSLATION: I learn that even when I use all my muscles my eyeballs


will be able to move -- when I lose. So I want to prepare myself by


learning different tools to communicate. Kentaro 's innovation


has given bedbound people the power to be part of the workforce, and it


can be used by the elderly, or mothers with small children. From an


awkward child, Kentaro has regained his confidence and found his own


success. As we told you want Newsday, 70 years ago Britain pulled


out of India, marking the end of empire on the subcontinent. So what


has become of the economies of Pakistan and India? How do they


differ and how much do they rely on each other? Our correspondent


reports. Since partition, India and Pakistan have charted very different


economic parts. India's economy was bigger than Pakistan's right from


the start, because of the size of its population and the fact that it


inherited financial and government institutions. Today, India's economy


is almost eight times bigger than its neighbours. But what is


interesting is during the first 50 years both nations saw similar


economic growth. In fact, the average income per person in


Pakistan was higher than India during this period. But, since the


start of the 21st century, India's economy started to grow faster,


widening the gap. This is largely down to the economic reforms in


India in the 1990s when it opened up its markets for foreign and private


investments. Today, India and Pakistan are the largest economies


in East Asia, but they don't trade with each other much. Their trade is


less than what they trade with smaller neighbours like Bangladesh,


Sri Lanka and Nepal. Part of the reason is what Pakistan calls its


negative list, which bans the import of more than 1200 goods from India.


These goods range from toothbrushes and diapers to cars and even cricket


bats. India also levies taxes on goods imported from Pakistan. That


said, informal trade between the two countries is thriving, and it is


estimated to be close to $5 billion. That involves shipping goods to a


third country. Traders both in India and Pakistan used to buy two get


goods to each other -- use to buy. -- Duabai. The total trade between


the two countries could touch $10 billion every year. Checking the


markets, despite the fairly solid GDP figures, the Japanese Nikkei is


down because of the strong yen, which is seen as a safe haven


currency as tensions grow between the United States and North Korea.


Australia is also down by almost 1%. That is it for this edition of Asia


Business Report. Thank you for


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