15/12/2015 Asia Business Report

The Asian stock markets, is it ready for a strengthening dollar? The US

rate hike now looks unstoppable. We reveal exclusive footage from the

South China Sea. What does this mean for the most important shipping

routes in Asia? Good morning. I am Rico Hizon in Singapore. Officials

of the US bank and Federal Reserve said down for a two-day meeting. The

financial world will be on its toes. -- sit. They will be watching

for a long expected rise. Hywel ready is Asia for a rate hike? --

How. There is some nervousness. Quantitatively, it is different. You

have to think they have had a year's warning about this. It should

not have that much impact. What about the currency markets. Earlier

this year, we saw many of our Southeast Asian currencies falling

to levels not seen since the 1998 financial crisis. Could there still

be more pressure on regional currencies? Yeah, depending on the

signalled the Fed gives about how fast rates are going up. They are

anticipating a very slow pace of rate increases. You may see the

dollar head of another bout of strength. That could put pressure on

regional currencies. -- off on another. Indonesia, Malaysia, they

may be vulnerable. But outside of that they have big external

surpluses. They aren't too worried. It looks inevitable that the Fed

will raise the price of borrowing. But China was a factor when it

decided to keep rates on hold earlier. Will it be again? I don't

think so. That reference to China couple of meetings ago was a

mistake. It is fairly clear that China doesn't have much impact on

the American economy. The second thing is that over the past few

months China has showed signs of stabilising. The US will probably be

fairly comfortable China is not a big risk to them. Let's have a look

at US oil prices. They have bounced back overnight, briefly falling

below $35 per barrel, the lowest since 2009. This is where they stand

right now. Hopes of a reprieve for oil were dashed at the start of the

month when OPEC decided to maintain current production levels. In a sign

of how tough it has become for the energy industry, Shell says it will

cut three 800 jobs if the merger goes ahead. -- 2800. That comes on

top of another 7500 jobs later to be cut in July. The BBC has pictures of

the South China Sea islands. Showing attempts to turn reads into

artificial islands. They have the potential to further worsen

relationships with America. -- reefs. This is how Chinese naval

with it. -- dealt with it. -- the Chinese navy. So far, there has been

no disruption to trade, but America and China should do everything to

prevent a flare-up. The reality is that it is overwhelmingly in

everyone's interests for trade to continue to be smooth. If I look

around at the things worrying me most about the Asian economy in the

next few months it would not be the Chinese building on reefs, it is the

disappearing money from emerging markets, raising the interest rates

in the US, and so on... It will take a very foolish move by either

China, or possibly by a newly incumbent US resident, to create

real tension in the South China Sea. No one wants that. In the interest

of China, these trading routes are open and free. China depends on the

South China Sea for oil and everything else. China regards

smooth development, economic development, as a political

imperatives in order to maintain calm and stability at home. It will

not want to see any disruption in trade flows. So, no. But, if they

continue to build these man-made islands on reefs and expand them,

don't you think this could create more tensions going forward and this

could disrupt the trade and shipping? You have about

international law, many think the claims under the revival of ancient

claims, a nuts. The fact is... -- are. The political clout and trade

clout, there is nothing really that anyone can do about it. It doesn't

make sense to keep banging the drum. We need to adjust to a new and

assertive China. Rupert Wingfield-Hayes was on a civilian

aircraft and they passed over the reefs. They were threatened by

Chinese naval authority. If you say that the Chinese want these routes

open and free, why are they so sensitive about it? Because the

Chinese, as a result of decades of internal dialogue, they have a

particular mindset. It is the sea, much as the Romans called the

Mediterranean Our Sea. It belonged to them in the eyes. We have to

understand it from the China perspective. China see it that way.

There isn't much we can do about it. It is in our interest,

overwhelmingly, to accommodate them. We have to adjust to the new

reality. Be pasted the first drop in cargo traffic in nearly two years.

-- They posted. Global air cargo revenue would fall by nearly 3% in

pretty 16, despite expectations of a slight pickup. -- 2016. Fiorina,

behind luxury models like Ferrari, are undergoing a new deal. We have

small on this. -- more. They aren't the only one with lofty ambition.

The Australian Government is expected to reveal today how it will

pay to inspire a bolder entrepreneurial spirit that embraces

economic spirit. Tell Mercer has more. -- Phil. People are

shredded's rate is resourced. The Prime Minister believes that the

future depends on the ability to innovate. The mining boom continues

to fade. -- Australia's greatest resource. Roads are the driving

force behind the new start-up established by a mathematician. Kate

says there are too many empty trucks on the roads. She is helping firms

to buy and sell the capacity. She is excited by the Prime Minister's

plans. -- there. Were on the cusp of a huge change. It will be so much

better for people. -- We're. You will have a more sustainable and

exciting culture. Innovation is our strength. Some established companies

believe that Australia still has some way to go to create a smarter

economy. This engineering firm in Sydney at sport computer-controlled

machines that cart industrial textiles. -- exports. This person

says he is often frustrated with the government which needs to do more to

promote the spirit of creativity. We have a culture of innovation in

Australia but we don't have a country of funding innovation. We

will have a hard time because we will have two go through a period

where they are not enough people thinking innovation. -- to. Not

enough undergoing science courses. To become a more clever country,

they have to harness the brainpower of foreigners. Those with bright

ideas for the chance to live here permanently

and be a part of and innovation revolution. -- an. Before we go,

these are the market. A mixed picture. -- markets. I am Rico

Hizon. Goodbye for