05/03/2018 Asia Business Report

the UK. The athletics world has been

paying tribute to Sir Roger

Bannister, the first man to run a

mile in under four minutes. Now for

business news from Singapore.

China is set to make sweeping

changes that will give President Xi

Jinping more power and consolidate

control over its regular trip

policies. And one Indian carmaker

makes inroads into the US by

building a massive auto assembly

part in America's car capital. Good

morning and welcome to Asia Business

Report live from Singapore with me.

As we can see, China's National's

People's Congress has kicked off and

is well in Beijing. Leaders began by

setting 2018 GDP growth at 6.5% the

same as last year and an increase in

military spending of 8%. They are

also expected to rubberstamp several

sweeping pieces of legislation

including removing term women for

the President. Lawmakers are also

expected to create a powerful

anticorruption agency and approve a

major overhaul of its banking and

insurance sectors, putting them

under the supervision of one

government bureau. All this while

there is a transition in leadership

at the central bank and the People's

bank of China. These changes are

crucial to President Xi Jinping's

efforts to bring down debt levels in

Chinese companies while the economy

cools down. Growth has dropped from

10% in 2010 to just under 7% last

year and the International Monetary

Fund says that will slow down to

below 6% by 2020 to. Earlier I spoke

to an equities expert in Hong Kong

about what putting an end to

presidential term limits will move

the Chinese economy. Over the medium

term there is likely to be very

little impact. In some ways what it

does reduce the uncertainty that we

may have otherwise seen. From a

market perspective over the short to

medium term I don't think there is

an issue. There will be those who

say if the policies are not the way

that one would want over the longer

term, this may reduce the ability

for that to be changed in the

future. If we go back and look at

the US, around World War Two, we had

presidents was over two terms as

well. I think it comes down to the

policies and the individual

involved. Another massive issue is

that this anticorruption agency. How

is it different to the fact that the

government there has been cracking

down on corruption for several

years?

One of the things that we are

seeing at the moment is power being

centralised. If you think about some

of the policies we seen in China, be

it anti- graft or protecting the

environment, simplifying the

financial system, what we are seeing

is that being brought more and more

into more of a Beijing focused.

Historically we have seen that done

at a more provincial level. But is a

definite trend we have seen.

And is

the cooling economy and is a high

level of debt, are they a big

challenge for the President going

forward?

Every economy as it grows

and the Chinese economy has become

quite large now and as a result of

that, growth will slow down. From a

market perspective I think Beijing

is too focused on growth. We have

seen a correlation between stock

market return and growth, it is non-

existent. If you look at the US

market and its growth relative to

China, it is likely will expand. The

key here is what most people are

looking for is an improvement in a

type of growth. Not just about jobs

for the sake of jobs, it is about

better jobs, advancing the economy,

about bringing industry forward. I

think that will be a key focus.

Donald Trump has begun a local game

of tit-for-tat when he said the US

will slap a tariff on imported steel

and aluminium. The EU struck back

saying they would target products

like jeans, bourbon and

Harley-Davidson is. But what could

this mean for India? I'm joined now

by our correspondent. Will this

affect Indian steel producers?

Not

directly. Just 2% of Indian steel is

exported to the United States. What

is causing concern here is the

damping of cheap imports from

countries that would have sold to

the US market, countries like Korea,

Japan and Russia. The Indian

government last year introduced

anti-dumping charges, increased

tariffs on imports and that helped

Indian producers of steel. The

problem is that those charges have

now become lower than market rates,

because of the price of raw material

rising, so Indian producers are

still concerned that these tariffs

could affect them.

We heard from the

European Union, we heard from

Canada. What does the Indian

government say about this?

India's

steel Secretary says it is not an

immediate cause for concern.

However, as I mentioned, the

anti-dumping concerns that will

affect companies which rely on

export and also Tata steel which has

European operations secretary also

mentioned that the article Donald

Trump is using to justify these

tariffs is slightly stretched. That

is that the US has the right to

investigate any import that is a

threat to national security.

Thank

you so much for that update. As we

wait to see how steel and aluminium

tariffs will play out over the next

few days, Michigan in the American

midwest has long been the capital of

the US auto industry. After the

financial crisis, some of the

biggest car companies headquartered

there filed for the. Industry in the

area went on a downward spiral and

has only just started to recover.

This revival is being aided by an

Indian carmaker which has set up a

factory there and rolled out its

first set of cars last week.

The first new car factory to be

opened in the area in 25 years.

Billed as the torch bearer of the

resurgence of Detroit, it belongs to

an Indian company that has its eyes

set on the US market.

I want to be

part of the next generation of auto

development.

The industry is about

to be rocked. The American boss

tells me why the area was an obvious

choice for them.

If you put a centre

outside of your home country, the

best place is probably destroyed. --

Detroit. The EPA is here, there are

test labs and wind tunnels... It is

one stock shop to locate and

engineering centre in this area.

Lawmakers and politicians attended

the launch and were all keen to show

that this droid's worst is behind

it. This massive abandoned car

factory has long been a symbol of

the downfall of the droid's auto

industry. And where most of the US

manufacturers have headquartered

here have made a comeback, the city

itself is still a long way from the

boom time it wants experienced.

Still, many who have seen the twist

and turns and it does come in the

droid story are breathing easily.

For decades, this plant made car

seats sold to big auto makers in the

area. When some of those companies

purely bankrupt after the financial

crisis, this factory almost did not

make it.

I can very clearly recall

discussions back in 2007, 2008 about

whether we would be able to keep

this facility open, whether the heat

to the industry and the customer we

serve here was so severe that we

would not have sufficient business

volume to keep the operation in this

location.

Competition is stiff from

other parts of the US. However

nowhere is the success of the auto

industry more important than in this

town. Were almost everyone has a

personal connection to it.

In other business news, the Federal

police of India have made four more

arrests involving the state lender,

widening the investigation of the

biggest ranking fraud in the history

of the country. Over a dozen people

have been arrested by India's

Central bureau of investigations

since the fraud came to light in

January. A quick look at the week

ahead. On Tuesday we will see of

Austria's central bank keeps its

neutral is dance and holds interest

rates at a historic low of 1.5%. One

day later we will have an update on

the health of Australia's economy

when it releases its latest growth

figures. And Japan's central bank

will also hold its monetary policy

meeting at the end of the week. And

investors will be looking for signs

of inflation when the US reports its

latest payroll numbers. Having a

look at the markets before we go.

All Asian markets are lower.

Investors are still concerned about

the potential trade war. On Friday

we saw a sharp fall in Asian markets

although Wall Street did recover

somewhat on Friday. We will continue

to monitor that and in currencies

were watching the dollar and also

the bureau after result of exit

polls for Italy's elections. That is

it for this edition of Asia Business

Report. Thank you for watching.