0:00:00 > 0:00:00at all levels, as the prime cause of the problems.
0:00:00 > 0:00:07Now on BBC News, all the latest business news live from Singapore.
0:00:19 > 0:00:24India's ruling party sees its majority squeezed, after elections
0:00:24 > 0:00:29in Prime Minister Narendra Modi's home seat, as voters react to his
0:00:29 > 0:00:35economic policies. And Virgin's founder takes over a futuristic
0:00:35 > 0:00:45start-up and raises $50 million to keep it running. Good morning, Asia,
0:00:45 > 0:00:50hello, world. It is a Tuesday. Glad you could join us for another
0:00:50 > 0:00:54exciting edition of Asia Business Report, I'm Rico Hizon. We kick off
0:00:54 > 0:00:59the programme with India, where elections in Prime Minister Narendra
0:00:59 > 0:01:05Modi's home state of Gujarat have seen a dip in his majority. The
0:01:05 > 0:01:09optimism which brought him to power is beginning to fade. The Indian
0:01:09 > 0:01:14economy is beginning to slow due to de monetisation and the imposition
0:01:14 > 0:01:21of taxes. We spoke to our top guru and author who thinks the country
0:01:21 > 0:01:27will regain its glow in 2018.I think India will go back to 80%.
0:01:27 > 0:01:32India needs to grow between eight or 9% if it wants to enjoy the
0:01:32 > 0:01:39demographic dividend -- go back to 8%.It doesn't help when you see
0:01:39 > 0:01:42headlines that they are going to try and recapitalise state banks that
0:01:42 > 0:01:48have been failing for years. Overlent, and now having to deal
0:01:48 > 0:01:53with non-performing loans. Why are they still propping up unproductive
0:01:53 > 0:01:56industries?This is where I have fought with their Finance Minister.
0:01:56 > 0:02:05Personally I think that no country should have 70% of its assets
0:02:05 > 0:02:09controlled by the public sector. Nonetheless, we have seen a series
0:02:09 > 0:02:14of what many economists globally are calling errors, the move to de
0:02:14 > 0:02:21monetise, the sales tax recently enacted, how much impact has this
0:02:21 > 0:02:26had? We have seen it have some impact on India, but in terms of
0:02:26 > 0:02:31future growth?I think that Modi promised three things when he got
0:02:31 > 0:02:35elected. He said he would stop corruption, he would control
0:02:35 > 0:02:44inflation, and he would bring drop. Well, -- bring jobs. Well, inflation
0:02:44 > 0:02:49is under control. Of course, he has been helped by low oil prices around
0:02:49 > 0:02:56the world. The jobs agenda is unfulfilled. That is the key agenda
0:02:56 > 0:03:07for this government.President Trump is seeking to change the status quo
0:03:07 > 0:03:12with a new national security strategy. He named China and Russia
0:03:12 > 0:03:17as competitors, seeking to challenge the United States. It reflects
0:03:17 > 0:03:21President Trump's America first slogan which aims to protect the
0:03:21 > 0:03:25American people and promote asperity.We will attempt to build a
0:03:25 > 0:03:28great partnership with those and other countries, but in a manner
0:03:28 > 0:03:33that always protect our national interest.So how is it likely that
0:03:33 > 0:03:40the world's number one and number two economies may start a trade war?
0:03:40 > 0:03:48By posed that question.It is always hard to predict where things go at
0:03:48 > 0:03:52different points in time. It could be areas or sectors which could be
0:03:52 > 0:03:57impacted. People have been talking about the automobile side. But what
0:03:57 > 0:04:01we are looking at when we talk to companies on the ground is really
0:04:01 > 0:04:06looking at areas where there is real growth coming in from China's
0:04:06 > 0:04:10domestic economy. And that has been unleashed by its biggest trend,
0:04:10 > 0:04:14which is human capital. So 5 million engineering graduates which are
0:04:14 > 0:04:19working within China, and that is quite apparent when we talk to
0:04:19 > 0:04:23companies on the ground, and the government really allowing companies
0:04:23 > 0:04:26or pushing companies to innovate further. That is really what this
0:04:26 > 0:04:43whole shift towards Easter notation is.Easternisation is. In the East
0:04:43 > 0:04:47has been significantly outgrown by the West.When you look at us there
0:04:47 > 0:04:50is enough evidence to show that the powershift is happening, that
0:04:50 > 0:04:54western companies are also looking at companies in the east and looking
0:04:54 > 0:04:58at their business models. And when you look at Asia today, it is not
0:04:58 > 0:05:04just about being value added reduces, but importantly, Asia is
0:05:04 > 0:05:08also giving the world value added consumers. It is not just China, it
0:05:08 > 0:05:13is countries like India and Indonesia and we are excited about
0:05:13 > 0:05:18these opportunities on the ground. So online companies, for example,
0:05:18 > 0:05:26even some of the automakers for the Chinese market.Now to our year end
0:05:26 > 0:05:31special, and today we focus on Asia's second-biggest economy. It
0:05:31 > 0:05:37has not been a great year for the made in Japan brand, and some of its
0:05:37 > 0:05:41biggest brands made news headlines for all the wrong reasons. The
0:05:41 > 0:05:44infamous apology by Japanese executives became a familiar sight
0:05:44 > 0:05:51this year, thanks to this long list of corporate scandals, from Toshiba
0:05:51 > 0:05:55to Kobe steel, to yesterday when some of the biggest manufacturing
0:05:55 > 0:06:00firms were accused of bid rigging to win deals from Central Japan
0:06:00 > 0:06:05Railway. Is there a breakdown in how business is done in Japan? Our
0:06:05 > 0:06:10correspondent said absolutely not. It is a resurgence of the Japanese
0:06:10 > 0:06:15way of doing business. Top quality. You know, as the world gets more
0:06:15 > 0:06:20competitive, as China is emerging as a real competitor, Japan is upping
0:06:20 > 0:06:24the game. The control for super, super top quality, that is what this
0:06:24 > 0:06:29is all about. Japan is actually getting better as we move.So will
0:06:29 > 0:06:34these revelations and scandals further strengthen corporate
0:06:34 > 0:06:38governance in Japan?Absolutely, you are making a very important point.
0:06:38 > 0:06:43You will remember around 1.5 years ago Japan tightened its corporate
0:06:43 > 0:06:46governance standard, so managers for the first time really in the history
0:06:46 > 0:06:51of Japan are being held accountable to the very highest standards, both
0:06:51 > 0:06:55in terms of quality control, but also in terms of shareholder value
0:06:55 > 0:07:00creation. So you know, the fact that you do have management being held
0:07:00 > 0:07:05accountable is actually a great sign that corporate Japan is improving
0:07:05 > 0:07:10and getting ready for a more competitive world.So if this is a
0:07:10 > 0:07:14positive thing that is taking place, these scandals, will this lead to
0:07:14 > 0:07:22more revelations in 2018, more misdeeds being revealed?I think
0:07:22 > 0:07:26that, you know, you never know what is going to be coming down the pike
0:07:26 > 0:07:31here but the one thing that is for sure, you have in Japan, you know,
0:07:31 > 0:07:36the pressure and the accountability to being held to the very highest
0:07:36 > 0:07:44standard, to actually perform to the top 0.1% rather than the sort of...
0:07:44 > 0:07:48We can also do this kind of standard, that is what corporate
0:07:48 > 0:07:52Japan is focusing on, and that is really where Prime Minister Abe is
0:07:52 > 0:07:55tightening the screws, because he knows that in order to be a top tier
0:07:55 > 0:08:00country, to be a top tier country, you have got to have the highest
0:08:00 > 0:08:03standards, and the government plays its role in enforcing that those
0:08:03 > 0:08:13standards are being held.Transport start-up Virgin Hyperloop has
0:08:13 > 0:08:19appointed Richard Branson as its new chairman and started a new round of
0:08:19 > 0:08:23financing. I am joined by my colleague. Should we be surprised by
0:08:23 > 0:08:28Richard Branson's appointment?Not really, because Richard Ranson
0:08:28 > 0:08:35actually invented in Hyperloop back in October, so we had the Virgin
0:08:35 > 0:08:39name at the top of the company. Him being named chairman doesn't come as
0:08:39 > 0:08:42a huge surprise. He has this reputation for taking these big
0:08:42 > 0:08:49business risks, and Hyperloop completely fits that mould. It is a
0:08:49 > 0:08:52futuristic train company which is looking to cut the travel time
0:08:52 > 0:08:55between major cities. So in the future, once this is up and running,
0:08:55 > 0:09:00they are hoping it will only take 30 minutes between Washington, DC and
0:09:00 > 0:09:04New York City. So they just recently did another test run and they hit a
0:09:04 > 0:09:12new speed record of 240 mph at the test site in Las Vegas. So it has
0:09:12 > 0:09:17very exciting ambitions. It also means it is bleeding cash, so it
0:09:17 > 0:09:20managed to get a financial lifeline from two new companies, from a
0:09:20 > 0:09:25Russian firm as well as from a company in Dubai. They are all
0:09:25 > 0:09:30putting money into Virgin Hyperloop, which will keep these operations
0:09:30 > 0:09:34going.This is amazing technology and innovation at Richard Branson
0:09:34 > 0:09:45will be competing against Elon Musk. This is interesting, because it was
0:09:45 > 0:09:50actually conceived by Elon Musk, it was his idea, but also that of a man
0:09:50 > 0:09:55who is on leave after being accused of sexual misconduct, as well as
0:09:55 > 0:09:59another engineer. But they are dealing with not just programme but
0:09:59 > 0:10:03leadership issues. Hopefully Hyperloop can fix that.
0:10:03 > 0:10:04leadership issues. Hopefully Hyperloop can fix that.And before
0:10:04 > 0:10:11we go, here is a quick look at the markets and it is an up heat session
0:10:11 > 0:10:15right now for Asia. The Nikkei and Australia currently in positive
0:10:15 > 0:10:20territory, together with the South Korean index, after Wall Street rose
0:10:20 > 0:10:24to new milestones overnight as US Republican lawmakers moved closer to
0:10:24 > 0:10:30passing tax-cut legislation. And potentially there could be more.
0:10:30 > 0:10:30Thank