:00:00. > :00:00.moment of partition from India at the end of British colonial rule in
:00:00. > :00:00.1947. Now it is time for World Business
:00:00. > :00:17.Report with Ben Bland. Confounding the critics: Japan
:00:18. > :00:20.beats expectations as it records its fastest rate of growth
:00:21. > :00:27.in more than two years. 70 years of partition: We take
:00:28. > :00:31.a look at how the economies of India and Pakistan have diverged
:00:32. > :00:47.since the end of British rule. Hello and a very warm welcome to BBC
:00:48. > :00:50.News of World Business Report. I am Ben Bland.
:00:51. > :00:53.Japan has just released its latest set of growth figures,
:00:54. > :00:55.and there's been some good news for the world's
:00:56. > :00:59.Japan has exceeded all expectations by recording growth
:01:00. > :01:03.The numbers are an encouraging development for the government
:01:04. > :01:10.but don't solve the country's ongoing financial headaches.
:01:11. > :01:15.Japan's productivity per person per hour stands at $23.45
:01:16. > :01:18.that leaves it in 18th place in the world, well behind the US,
:01:19. > :01:21.on $33.41, and a host of others including Canada,
:01:22. > :01:36.The country's debt has also ballooned in recent years.
:01:37. > :01:40.At more than 250% of GDP it has the largest debt to output ratio
:01:41. > :01:42.in the world - by quite a comfortable margin.
:01:43. > :01:44.Long term the country also faces what's been described
:01:45. > :01:50.than 50 years almost 40% of the population could be aged
:01:51. > :02:02.Hiroshi Ugai is the chief economist at JP Morgan.
:02:03. > :02:17.Good to see you. I just wonder whether, with all this positive news
:02:18. > :02:21.coming out of Japan, if it is enough to deal with some of the long-term
:02:22. > :02:36.problems, or is it just a short-term thing? This was very strong, but
:02:37. > :02:39.should continue for longer. It is higher than our expectations, and
:02:40. > :02:46.high since the first quarter of 2015. This growth is above the
:02:47. > :02:55.expected growth rate, suggesting that growth is expanding. However,
:02:56. > :03:01.we think that is too strong for, you know, relative to our strengths, the
:03:02. > :03:06.underlying strength of the economy. Do we take this to mean, then, that
:03:07. > :03:20.Shinzo Abe's reforms, the policy of monetary easing, Abenomics, as it is
:03:21. > :03:29.called, is that working? Yes. This time, the GDP's search related to
:03:30. > :03:44.public works spending, reflecting the economic stimulus package
:03:45. > :03:49.enacted last year. And also stimulus related to the monetary easing
:03:50. > :03:55.environment. The consequences of this is considered us. For the time
:03:56. > :04:01.being, the economic growth will, you know, expand, but probably in the
:04:02. > :04:06.second half of this year, this second quarter, this will soften a
:04:07. > :04:11.little bit. We expect this to slow to 1.5%, but still far above the
:04:12. > :04:16.growth rate. So it works. Of course, this is good news, this growth,
:04:17. > :04:20.which is exceeded expectations. However, I just wonder if you feel
:04:21. > :04:25.enough is being done to tackle the longer term problems that I was
:04:26. > :04:30.talking about. That demographic time bomb that I was talk about, with the
:04:31. > :04:34.ageing population. Is it enough to tackle that? No. The current
:04:35. > :04:40.situation is good, but during this period, we have two, Japan has two
:04:41. > :04:48.tackle the structural issues to raise productivity growth in Japan.
:04:49. > :04:59.Otherwise, our underlying growth rate is 0.7%, we guess. We need to
:05:00. > :05:10.raise this more with structural reform to raise productivity, and
:05:11. > :05:14.also to try to raise outcomes in a long-term perspective. Otherwise it
:05:15. > :05:20.is limited for Japan to expand. Thank you for joining us Hiroshi
:05:21. > :05:23.Ugai from Tokyo. 70 years ago, Britain
:05:24. > :05:25.ended its rule over India and the country was divided
:05:26. > :05:28.into two separate states. Partition brought about the largest
:05:29. > :05:31.mass movement of people in history, but what has become of the economies
:05:32. > :05:39.of Pakistan and India? Since partition, India and Pakistan
:05:40. > :05:45.have charted different economic parts. India's economy was bigger
:05:46. > :05:51.right from the start, because of the size of its population and the fact
:05:52. > :05:54.that it inherited financial and government institutions. Today,
:05:55. > :06:01.India's economy is almost eight times bigger than its neighbour's.
:06:02. > :06:04.What is interesting is that in the first 50 years, both nations or
:06:05. > :06:09.similar economic growth. In fact, the average income per person in
:06:10. > :06:13.Pakistan was hired in India during this period. But since the start of
:06:14. > :06:18.the 21st century, India's economy started to grow faster, widening the
:06:19. > :06:23.gap. This is largely down to economic reforms in India in the
:06:24. > :06:26.1990s, when it opened up its markets for foreign and private investments.
:06:27. > :06:32.Today, India and Pakistan are the largest economies in South Asia.
:06:33. > :06:37.They still don't create very much. Bilaterals trade stood at just $2.2
:06:38. > :06:42.billion last year. This is less than what India creates with smaller
:06:43. > :06:48.neighbours like Sri Lanka, Bangladesh, and Nepal. This is
:06:49. > :06:55.largely due to the negative list, banning goods from India. This
:06:56. > :07:03.ranges from toothbrushes and diapers to cars and cricket bats. India
:07:04. > :07:06.levies taxes on goods from Pakistan. That said, informal trade between
:07:07. > :07:10.the two countries is thriving, and is estimated to be close to $5
:07:11. > :07:15.billion. That involves shipping goods through a third country.
:07:16. > :07:19.Traders both in India and Pakistan news Dubai to get goods to each
:07:20. > :07:23.other. Experts say that if history was formalised, then the total
:07:24. > :07:25.bilateral trade between the two countries could touch $10 billion
:07:26. > :07:27.every year. The New York Times is reporting that
:07:28. > :07:30.Facebook has discreetly launched a photo-sharing app
:07:31. > :07:32.for Chinese users. The social media platform
:07:33. > :07:34.is banned in mainland China, but Facebook has made
:07:35. > :07:37.clear its intentions to crack Let's cross over to our
:07:38. > :07:56.Asia Business hub where we can speak What more do we know about this
:07:57. > :08:03.latest move by Facebook? It is fascinating. It is called Colorful
:08:04. > :08:08.Balloons, and the company's brand is not attached to it, the brand
:08:09. > :08:13.Facebook. New York Times reported this, and Facebook has now confirmed
:08:14. > :08:17.this to several media outlets. It says that its focus is to help
:08:18. > :08:22.Chinese businesses expand outside China, using their platform. But as
:08:23. > :08:27.you mention, Facebook has been very keen to enter the mainland market
:08:28. > :08:33.since it was blocked in 2009. Its founder and chief executive Mark
:08:34. > :08:38.Zuckerberg made a high profile visit with leaders, learning Mandarin and
:08:39. > :08:43.making Keynote speeches that, as well. Facebook is not alone in train
:08:44. > :08:48.to work around China's very tightly controlled Internet. Google,
:08:49. > :08:51.YouTube, Instagram, a lot of silicon valley companies which have
:08:52. > :08:56.previously banned have been trained to work around that. It seems like
:08:57. > :08:58.Facebook might have found a way. Thank you for joining us, Marie
:08:59. > :09:04.Curie. -- Mariko Oi. the chief executive
:09:05. > :09:08.of Commonwealth Bank of Australia says he will retire
:09:09. > :09:10.following a scandal relating Ian Narev has been head
:09:11. > :09:14.of Australia's largest But recently, it's been embroiled
:09:15. > :09:17.in civil charges stemming from alleged breaches of financing
:09:18. > :09:20.rules that wiped out billions Narev is expected to step
:09:21. > :09:24.down in June 2018. After weeks of public disagreement,
:09:25. > :09:27.the UK's Finance Minister, Phillip Hammond, and the country's
:09:28. > :09:29.Trade Secretary, Liam Fox, wrote a joint article
:09:30. > :09:32.for the Sunday Telegraph, stating that Britain will need
:09:33. > :09:35.a transition deal when it leaves The pair say that any deal would be
:09:36. > :09:43."time-limited" and should not be viewed as a "back door"
:09:44. > :09:52.to staying in the EU. To forget you can reach me on
:09:53. > :09:54.Twitter. I am