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Now on BBC News all the latest business news live from Singapore. | :00:00. | :00:13. | |
It's Taiwan's new president set for an early clash with China? We | :00:14. | :00:22. | |
assessed the potential impact on the economy -- is. And why is Fujitsu | :00:23. | :00:27. | |
getting involved on the UK referendum on whether to stay in the | :00:28. | :00:29. | |
European Union? Good morning, Asia and hello, | :00:30. | :00:41. | |
world. It's Friday and glad you could join us for this edition of | :00:42. | :00:45. | |
Asia Business Report, I'm Rico Hizon. We start with Taiwan and the | :00:46. | :00:49. | |
new president Tsai Ing-wen steps into the country's top job today and | :00:50. | :00:54. | |
investors will be watching very closely as to how she will address | :00:55. | :00:58. | |
China in her inauguration speech. The mainland is the island's biggest | :00:59. | :01:05. | |
trading partner and the outgoing president was known to be friendly | :01:06. | :01:10. | |
towards Beijing but since Tsai Ing-wen won the elections in | :01:11. | :01:13. | |
January, cross trade relations have becoming greasing the tense. Earlier | :01:14. | :01:18. | |
I spoke to an economist in Taipei to ask him what investors are expecting | :01:19. | :01:23. | |
to hear from the new president. It seems the result of the January | :01:24. | :01:29. | |
election has meant we have seen the early signs of soft economic | :01:30. | :01:34. | |
sanctions. Or example the reduction of the Chinese tourists visiting | :01:35. | :01:40. | |
Taiwan -- for example. In some parts of China it has reduced by almost | :01:41. | :01:46. | |
40%. The visitors from China account for a significant part of Taiwan's | :01:47. | :01:51. | |
foreign visitors each year so the tourism sector in Taiwan is already | :01:52. | :01:56. | |
feeling the pressure. Should investors be concerned about these | :01:57. | :02:00. | |
early warning signs from Beijing and the tough stance of Tsai Ing-wen | :02:01. | :02:06. | |
with the mainland? The economic sanctions will continue to be in | :02:07. | :02:11. | |
place for the foreseeable future. I think regardless of what President | :02:12. | :02:19. | |
Tsai will say today in her speech, Beijing will be a bit disappointed | :02:20. | :02:26. | |
compared with what President Ma has been doing over the last few years. | :02:27. | :02:30. | |
In the short-term investors have a reason to be concerned. It might | :02:31. | :02:39. | |
bring the cross trade China Taiwan relationship to a more healthy and | :02:40. | :02:43. | |
sustainable point, though. The other big challenge for Tsai Ing-wen is | :02:44. | :02:49. | |
the retooling of the Taiwanese economy, with its worst performance | :02:50. | :02:55. | |
in six years in 2015, and a major trading partner of Taiwan is | :02:56. | :03:01. | |
mainland China. Yes, indeed. There are two Mac major structure issues | :03:02. | :03:06. | |
in Taiwan's exports. First is the market concentration as you mention, | :03:07. | :03:11. | |
30% of time on these trade goes through China and now the problem is | :03:12. | :03:16. | |
the product concentration because China's exports are concentrated on | :03:17. | :03:21. | |
ICT and flat panel display areas. All these areas are unfortunately | :03:22. | :03:28. | |
going to be confronted by China's so-called import substitution | :03:29. | :03:32. | |
policy. In the long run Taiwan's exports to China with or without | :03:33. | :03:38. | |
sanctions are going to reduce. They need policies to mitigate these | :03:39. | :03:41. | |
issues by Doug Lhasa diversifying the market and also by having new | :03:42. | :03:46. | |
areas of product -- by diversifying. Roy Chun Lee, an | :03:47. | :03:48. | |
economist based in Taipei. Age is BC will be closing down | :03:49. | :03:57. | |
branches in India following a strategic review showing customers | :03:58. | :04:01. | |
are increasingly choosing to do their banking online -- HSBC. It's | :04:02. | :04:05. | |
been on a massive cost-cutting drive and the lender has slashed more than | :04:06. | :04:12. | |
87,000 jobs overseas. That's over the past five years. | :04:13. | :04:17. | |
American clothing retailer Gap will be closing down 75 stores abroad as | :04:18. | :04:22. | |
they turn their focus to the North American market to revive fortunes. | :04:23. | :04:29. | |
The Cure at retail family includes Old Navy and Banana Republic, it | :04:30. | :04:36. | |
will include all 53 Old Navy outlets in Japan. It will help save 255 and | :04:37. | :04:43. | |
is. The chairman of Fujitsu has warned that if the UK leads the | :04:44. | :04:49. | |
European Union it would reconsider its investments. It's the biggest | :04:50. | :04:56. | |
Japanese employer in the UK. We were told by him in an interview to the | :04:57. | :04:59. | |
BBC that he thought Britain leaving the UK would be a threat to | :05:00. | :05:05. | |
investment stashed the EU. TRANSLATION: So far we believe the | :05:06. | :05:09. | |
UK is the centre of the European region and that's why for the last | :05:10. | :05:14. | |
decade we have made ?3 billion in investment. If there is any change, | :05:15. | :05:19. | |
with the UK remaining in the EU or not, we have to be careful about | :05:20. | :05:23. | |
watching the process, the outcome, then decide if we will make any | :05:24. | :05:31. | |
further investment or not. We have been making the most investment in | :05:32. | :05:34. | |
the UK within the European region and yes we believe that the UK is | :05:35. | :05:38. | |
going to remain at the centre of the EU. Where are we going to make | :05:39. | :05:44. | |
investment to? Well, we have data centre and cloud type services, we | :05:45. | :05:48. | |
have to really see what the issues are, what the challenges are in the | :05:49. | :05:52. | |
respective market and the respective region, then make the decision as to | :05:53. | :05:57. | |
how we are going to invest and in which area. We would like to see the | :05:58. | :06:01. | |
entire EU region as one single market. | :06:02. | :06:04. | |
Mr Yamamoto from Fujitsu. Plain packaging for tobacco products will | :06:05. | :06:10. | |
be introduced in the UK from today after a legal challenge against the | :06:11. | :06:13. | |
new law was dismissed by the High Court. The case was brought about by | :06:14. | :06:18. | |
four of the world's biggest tobacco companies including Philip Morris | :06:19. | :06:23. | |
international. Plain packaging means a ban on all marketing of tobacco | :06:24. | :06:27. | |
packages to make smoking less attractive, especially to young | :06:28. | :06:32. | |
people. Australia was the first country to make plain packaging | :06:33. | :06:34. | |
compulsory in 2012. Phil Mickelson will return nearly $1 | :06:35. | :06:41. | |
million in profits linked to an insider trading scheme. He said he | :06:42. | :06:44. | |
had no desire to benefit from training and stock that regulators | :06:45. | :06:51. | |
found questionable. The US market regulator alleged a friend of his | :06:52. | :06:54. | |
had passed on a trading tip to the golfer about Dean food stock that | :06:55. | :07:00. | |
came from the company's Chairman. China's food industry has been in | :07:01. | :07:07. | |
hot water lately with producers in Europe and the US accusing the | :07:08. | :07:10. | |
Chinese of flooding the market with cheap products. Beijing has set | :07:11. | :07:16. | |
aside over 4 billion US dollars to help local governments pay for | :07:17. | :07:19. | |
closures in the steel and coal sectors. The production by steel | :07:20. | :07:25. | |
mills is still picking up. Earlier I spoke with Anna-Lise Jefferies and I | :07:26. | :07:30. | |
asked her for her outlook on the Chinese steel sector. The Chinese | :07:31. | :07:33. | |
steel sector is doing very well right now, this year it is Tronc, we | :07:34. | :07:37. | |
have strong demand partly because of growth in the cities with properties | :07:38. | :07:41. | |
-- strong. That's unexpected because many thought these empty flats we | :07:42. | :07:45. | |
were hearing about would be a problem but we have seen a lot of | :07:46. | :07:51. | |
growth. Also the Chinese government is investing $750 billion in | :07:52. | :07:54. | |
infrastructure over the next two years, so pretty strong. Pretty | :07:55. | :07:58. | |
strong that they even have enough steel supplied to provide the | :07:59. | :08:05. | |
world? Yes. Exports are still good. Yeah, it is all strong. I think | :08:06. | :08:09. | |
exports will go down a bit because the strength inside China is very | :08:10. | :08:14. | |
good right now. Is China really deserving these massive tariffs | :08:15. | :08:19. | |
being imposed by the United States? 522% on this steel? With that kind | :08:20. | :08:25. | |
of steel it is a smaller market, the big markets are the HRC and the | :08:26. | :08:31. | |
retail market is. In that regard, no, most exports are going to get | :08:32. | :08:38. | |
places like Japan and Korea. They go mainly to Asia rather than the US. | :08:39. | :08:45. | |
All of these tips for tax tariffs by the US and China will not only | :08:46. | :08:50. | |
impact the small sector but it could have a knock on effect on other | :08:51. | :08:55. | |
things -- tit for tat. We have to see what happens in terms of trade | :08:56. | :08:59. | |
tariffs around the world, you find those cropping up not just in the US | :09:00. | :09:03. | |
but across the world when it comes to steal. Interesting to see what | :09:04. | :09:08. | |
happens. With the mechanics and the dynamics, where do you see steel | :09:09. | :09:13. | |
prices going forward? That's a good question. It's been very volatile | :09:14. | :09:18. | |
this year for the iron ore and steel segment in Asia, right now things | :09:19. | :09:22. | |
like iron ore prices are in the 50s and steel is relatively strong, | :09:23. | :09:26. | |
margins are good and production is high. But you have money going into | :09:27. | :09:30. | |
infrastructure but also Beijing putting in $15 billion for layoffs | :09:31. | :09:35. | |
because there will be consolidation in the steel industry. Longer term | :09:36. | :09:40. | |
the idea is they will be less steel production coming out of China. | :09:41. | :09:43. | |
Annalisa Jefferies. Before we go, the markets... It is a Friday in | :09:44. | :09:53. | |
deed and Asian stocks as you can see are looking very lethargic and | :09:54. | :09:58. | |
lacklustre. This is after stocks remain under pressure as investors | :09:59. | :10:02. | |
continued to digester possibility that the US Federal Reserve will | :10:03. | :10:07. | |
raise rates potentially as soon as June. The Nikkei two to five down by | :10:08. | :10:14. | |
24% and the macro All Ords down by a 10th. The Hong Kong stock exchange | :10:15. | :10:17. | |
will be opening in about 15 minutes. As for Wall Street, the Dow | :10:18. | :10:24. | |
and the NASDAQ finishing negatively. Thank you so much for | :10:25. | :10:28. | |
investing your time with us. I'm Rico Hizon. Sport Today is coming up | :10:29. | :10:30. | |
next. | :10:31. | :10:33. |