04/01/2017 Asia Business Report


04/01/2017

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Welcome to Asia Business Report. US car manufacturer Ford cancelled

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plans for a $1.6 billion plant in Mexico. That was in favour of

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further investment at home. The CEO Mark Field says the policies of the

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President-elect and his incoming Administration factored into the

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decision. We look at a lot of factors when we look at decisions.

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The announcements we are making today of $700 million in the flat

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rock plant and adding 700 jobs, one factor we put into that is the

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favourable US business environment that we see under the

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President-elect and some of the growth policies and reforms, whether

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it is tax or regulatory, that he is talking about, that played

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positively in this and it is a vote of confidence that he can deliver.

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The CEO of Ford motors. He says a more favourable US environment was a

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reason for the decision. The threat of harsh taxes on imports has been

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looming over American companies, especially carmakers.

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Donald Trump has launched a series of attacks on Twitter are making big

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US multinationals who import goods from abroad and sell them in

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America. In particular the President-elect has spoken out

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against auto companies manufacturing cars across the border. The North

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American free trade deal allows vehicles to be sold duty-free within

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the US, Canada and Mexico if they are at least 65% made in the block.

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Trump wants to rip up the agreement and impose a 35% border tax.

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In other news:, shares of the Japanese conglomerate Toshiba are

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recovering by 2% after falling 5% earlier. That follows a report that

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Japan's security watchdog suspected the company of padding profits over

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the last three years by more than $400 million. A newspaper has said

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the exterior -- X -- exchange commission have reported it to

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authorities. At a strike to come after rejecting a pay offer with

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British Airways according to the Unite union with strikes planned

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over Christmas holidays suspended after the new offer was made. The

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union members rejected it by 71. The airline says it will provide further

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details to customers on Friday when it has finalised contingency plans.

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Now, Chinese banks have begun imposing additional requirements on

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customers who want to buy foreign currencies. Each Chinese citizen has

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a quota of $50,000 they are allowed to exchange every year and it resets

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in January. With the strong US dollar and concerns about the

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weakness of the Chinese yuan, that is adding two rules to be able to

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stop a rush to exit. He is the view from an economist in Shanghai. What

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happens every year it is on January one the quota is reset, and over the

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last one and a half years roughly $1 trillion has left China both through

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companies and individuals and the concern at the central bank is at

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the start of the year there would be a stampede to the exit, so it has

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kept the $50,000 quota and now banks have to report any transaction of

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more than $10,000, so effectively they are trying to put years to slow

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the rush to the exit. -- gears. You say it has been $1 trillion, is it

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correct, leaving the country, so this is a worry for the Chinese

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authorities - how are they going to address it, will these rules be

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enough? They are trying to address it in a variety of ways, so the

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rules announced in the last days are relating to individual transactions

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by individuals. Beyond that, over the last couple of months, they have

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put restrictions on companies doing transactions abroad, whether buying

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companies, property, foreign investment, and they are basically

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stepping up scrutiny along every step of the chain, making it a lot

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harder for money to leave the country. At the same time they are

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determined to encourage what they see as good foreign investment. As

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you know, there has been Chinese investment in energy and financial

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sectors, buy-in sports teams around the world, they want to see the good

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investment taking place, whereas what they are concerned about is

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people rushing out to buy property or looking to acquire any kind of

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foreign asset because they are concerned about the Chinese economy.

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There are concerns about this amounts to capital controls. They

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are denying it. It doesn't help that the US dollar is strong because

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interest rates in the US are higher. What has been happening when Donald

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Trump takes office? As he says, he labels China a currency manipulator?

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The trade war is a concern, if he caused them a currency manipulator,

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although that doesn't necessarily lead to specific action. China is

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worried it will eventually lead to steep tariffs, so China is buying

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time with Trump, you can see it has on the one hand criticised what his

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team had threatened and it is trying to give enough space, wiggle room,

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to back down from his fierce rhetoric.

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Now, investors snapped up shares of fear not airlines on Tuesday. The

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government owned airline offered new shares -- Vietnam Airlines. The

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airline is valued at just over $2 billion. This might benefit the

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government, which wants to sell off the majority stake in the carrier. A

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monitor of the airlines industry has more on how the sale is likely to

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unfold. It is a very small stake and it stems from the government's

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concern about letting these assets go to cheaply, accounting for the

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small stake size. What will they hope to gain? The government

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realises it is not a great place to run an airline. Governments in

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developing nations who have run airlines don't do a good job of it,

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so it makes sense that they want to offload and bring in foreign

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partners. It is interesting you say they are trying to get rid of it, we

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know this huge demand in aviation is an area that is set to grow, the

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International Air Transport Association essentially estimating

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the region is among the top five fastest-growing in the next 20

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years, so we saw the IPO price skyrocketing, what do you a tribute

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that too, growth in the sector? It would be part of that, it is a tiny

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stake size though, so there is pent-up demand to take up V is a

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boom story -- attribute. There is a bit of it going on. If you want to

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play the airline sector in Vietnam you don't have any other options

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other than Vietnam's airlines of stock. The initial IPO was in 2014

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but bureaucracy to lead the listing until yesterday. The low-cost rival

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is always talking about an IPO and that might come out at some point as

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well but we are never sure exactly when that is going to be.

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Now, a cheap umbrella would usually only cost you a few dollars and that

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is a good thing if you are prone to forgetting it. Well, at least year's

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Consumer Electronics Show in Las Vegas, a new technology will be

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launched to remind you to pick up your umbrella before you head out

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the door, but does the innovation justify the pricetag?

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You have a smart umbrella, it sounds like one of the more ridiculous

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things on show. What does it do? Yeah, it is not ridiculous, because

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what happens when umbrellas is you lose it all the time, you leave at

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the height or whatever, so we decided to create an umbrella that

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is unforgettable, and to do that we created disconnected umbrella. And

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so how does it work? It has a small chip in the handle that is connected

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here with your smart phone, and this chip sends you another, on your

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smart phone, so if you leave it behind, with the Bluetooth election

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not connected, it will give you an alert, to say, don't leave me stop

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for those who leave it on the bus it will save money, so what will it

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cost? $89, which means, you do the maths, if you're used to losing

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umbrella is all the time, it is worth it. You would have to lose

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quite a lot of umbrellas for that? This is also an amazing design, so

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you'll never forget it. And, of course, keep across all our

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CES coverage online. A quick look at the markets before

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we go, because they have all opened on a positive note, that is here in

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Asia, Japan of course, the Nikkei seeing the first trade for that day

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into any 17. I told you about the Toshiba shares, reversing earlier

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declines, they are also rising. This is because the US dollar hit a 14

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year high, helping exporters, and likewise in the other markets which

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have also opened higher. And that is it for this edition of Asia Business

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Report. Thank you for watching. Republicans in the US Congress have

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ditched plans to reduce the powers of an independent ethics watchdog,

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after voters and Donald Trump

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