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Carrie Lam will become Hong Kong's new chief executive. But what the | :00:00. | :00:22. | |
new leadership mean for the economy? And what to look for in buying a | :00:23. | :00:26. | |
piece of art. We get a few tips from the experts. | :00:27. | :00:35. | |
Hello and welcome to Asia Business Report. I'm Sharanjit Leyl. A 1200 | :00:36. | :00:44. | |
strong committee dominated by pro- Beijing executives have elected | :00:45. | :00:52. | |
Carrie Lam as the new Hong Kong chief executive. She has promised to | :00:53. | :00:57. | |
heal wounds over Beijing's industry. With a slowing economy in mainland | :00:58. | :01:02. | |
China, she could be facing economic headwinds. I spoke with research at | :01:03. | :01:10. | |
Peter Church at that the issues that will be at the top of her agenda. In | :01:11. | :01:14. | |
Hong Kong, the affordability question on housing has been a huge | :01:15. | :01:18. | |
economic and political hot button in Hong Kong. And if you look at it | :01:19. | :01:24. | |
rationally, it is really a supply it generated a problem. Hong Kong has | :01:25. | :01:29. | |
been producing less than half of the long-term average supply of housing | :01:30. | :01:34. | |
in the last decade. So there is a massive shortfall of housing that | :01:35. | :01:38. | |
has built-up. You put that in context of very low interest rates, | :01:39. | :01:46. | |
and you can see, you don't have to be an economics Ph.D., to understand | :01:47. | :01:51. | |
that prices will go up. And besides property, there are other issues. | :01:52. | :01:55. | |
There are a lot of concerns about whether Hong Kong, which has always | :01:56. | :01:58. | |
been seen as the gateway to China, can remain relevant as a financial | :01:59. | :02:03. | |
hub. Especially as there are many Chinese cities perfectly capable of | :02:04. | :02:06. | |
playing that role as gateway to China. So how will they remain | :02:07. | :02:10. | |
relevant? There are a lot of areas. Hong Kong, as you say, has always | :02:11. | :02:15. | |
been the conduit of Finance and financial services into and out of | :02:16. | :02:19. | |
China. That role should continue. But probably what needs to be done | :02:20. | :02:25. | |
is more of a focus on areas such as wealth management and harnessing the | :02:26. | :02:31. | |
flows of capital out of China and into the rest of the world through | :02:32. | :02:38. | |
what is in fact a rule of law economy that can't really be | :02:39. | :02:42. | |
replicated in China. I think we can also expect to see the government | :02:43. | :02:46. | |
pushing for improvements in legislation, which allows Hong Kong | :02:47. | :02:54. | |
to participate in change issues like the one built one road and the Asian | :02:55. | :02:58. | |
investment banks. So those areas where we expect to see the | :02:59. | :03:03. | |
government puts focus that was Peter Church speaking to me earlier. | :03:04. | :03:08. | |
Shares in Toshiba are higher on news that Westinghouse could file for | :03:09. | :03:13. | |
bankruptcy protection as early as Tuesday and is seeking support from | :03:14. | :03:20. | |
Korean alleged power. Toshiba's gains come against a backdrop of a | :03:21. | :03:23. | |
broader market downturn this morning. The fund now has 70 member | :03:24. | :03:34. | |
countries, with 13 joining just last week. Including Canada. The former | :03:35. | :03:39. | |
British minister Danny Alexander told me the international make-up of | :03:40. | :03:43. | |
the 80 I ID means it is not possible for the Chinese to promote their own | :03:44. | :03:51. | |
interest. Above others. -- AIIB. People can actually see now that | :03:52. | :03:55. | |
this is an institution that has very high standards of international | :03:56. | :03:57. | |
governments. All members are involved in our decisions. We have a | :03:58. | :04:01. | |
well functioning board of directions. John has one seat | :04:02. | :04:05. | |
amongst well. Many other countries are represented on that board as | :04:06. | :04:11. | |
well. -- China has one seat amongst 12. Most important, the standards we | :04:12. | :04:15. | |
set for our projects, in terms of environment will impact and how | :04:16. | :04:19. | |
social issues like population resettlement are dealt with. The | :04:20. | :04:28. | |
access of countries to access these issues and affect how we deal with | :04:29. | :04:41. | |
them in funding. -- AIIB. There has been a lot of focus on the Chinese | :04:42. | :04:50. | |
one belt, one road process, which is a push to develop like the silk | :04:51. | :04:53. | |
road. Those are projects that you are funded. It seemed to suggest, | :04:54. | :04:57. | |
though, that this is closely and lined to China's international | :04:58. | :05:01. | |
interest. If you look at the projects that we find, so we | :05:02. | :05:06. | |
wondered that a slum upgrade project in Indonesia. We funded a new | :05:07. | :05:12. | |
gas-fired power station in Myanmar, upgrading hydroelectric power | :05:13. | :05:17. | |
schemes in Pakistan. With these sorts of projects all over the Asia | :05:18. | :05:21. | |
region. Some of those things will overlap with the one belt, one road | :05:22. | :05:26. | |
policy. Many are different from it. At the end, the bank meets its own | :05:27. | :05:32. | |
decisions, about what are the appropriate things to find. There | :05:33. | :05:37. | |
are important policies of many different governments that are | :05:38. | :05:42. | |
considered. All the member countries have a role in that. So we must make | :05:43. | :05:46. | |
sure that in each country we are working according to the direction | :05:47. | :05:50. | |
that the government has set and the international agreements that they | :05:51. | :05:54. | |
have signed up to. And that was Danny Alexander speaking to me. | :05:55. | :05:57. | |
History will be made in Europe this week as a new entrant into the | :05:58. | :06:04. | |
mobile market appears. Britain will trigger Article 50 on Wednesday. | :06:05. | :06:08. | |
This will officially begin the process of breaking away from the | :06:09. | :06:12. | |
European Union. Also on that same day, you have Samsung, they are | :06:13. | :06:19. | |
scheduled to release the Galaxy S8, which was the U replacement for the | :06:20. | :06:24. | |
Galaxy Note 7 that was recalled for exploding batteries. I spoke earlier | :06:25. | :06:33. | |
with Andrew Staples and asked if the Brexit honours will have an | :06:34. | :06:36. | |
immediate effect. Just in the process, this is something we have | :06:37. | :06:39. | |
been waiting for for the last nine months. This will trigger a two year | :06:40. | :06:45. | |
period of negotiation for UK to leave the EU. Here in Asia, I think | :06:46. | :06:49. | |
the impact will be minimal. Certainly in the short term, there | :06:50. | :06:53. | |
could be some volatility around the pound sterling. But that has been | :06:54. | :06:56. | |
priced into the market over the last months and weeks. Longer term, there | :06:57. | :07:01. | |
will be continuing questions over the UK's attractiveness as an | :07:02. | :07:04. | |
investment destination. Of course, a lot of Asian investment goes to the | :07:05. | :07:08. | |
UK, particularly thinking about the Japanese auto sector and so on. But | :07:09. | :07:12. | |
we have seen positive news from people like Toyota and Nissan who | :07:13. | :07:16. | |
have confirmed their commitment to the country. There will be | :07:17. | :07:19. | |
uncertainty over what kind of relationship the UK will have with | :07:20. | :07:23. | |
the European Union following this two year period. You have mentioned | :07:24. | :07:28. | |
Toyota there, at Nissan, and Toyota said they would invest in Britain, | :07:29. | :07:33. | |
but they are warning that they need terror free access to the continent. | :07:34. | :07:36. | |
Is that something our businesses should be looking out for? | :07:37. | :07:41. | |
Absolutely. But that will not become clear any time soon. There is this | :07:42. | :07:44. | |
two year period of negotiation. There is scepticism as to whether we | :07:45. | :07:48. | |
will reach a deal in that time. If we don't, then we will revert to WTO | :07:49. | :07:57. | |
access to the EU. Which would not be preferential for people like Toyota. | :07:58. | :08:02. | |
And the other news of course is the S8, which comes after the exploding | :08:03. | :08:09. | |
Galaxy Note 7 is, and comes in a political crisis in which there are | :08:10. | :08:12. | |
factor boss has effectively been put in jail. Will this be everything | :08:13. | :08:17. | |
they hope for? Certainly hoping so. They need to pull something out of a | :08:18. | :08:21. | |
hat given the political situation in Korea and the difficulties that | :08:22. | :08:24. | |
Samsung have had over recent months, as well. Let's see how the market | :08:25. | :08:31. | |
response that, especially consumers. Nearly 80,000 people visited Asia's | :08:32. | :08:35. | |
biggest art fair in Hong Kong this weekend. The organisers of Art Basil | :08:36. | :08:45. | |
said sales were strong and tapped into a grey market in Asia for | :08:46. | :08:50. | |
high-end art. We asked to art experts for their tips on buying. -- | :08:51. | :08:56. | |
Art Basel. The first thing I will tell a young collector is to take | :08:57. | :09:02. | |
your time. Don't rush into anything. Find a good dealer, a good adviser, | :09:03. | :09:06. | |
you can trust. Trust is very important. And then engage with | :09:07. | :09:17. | |
them. You should know the artist's basic background, such as where they | :09:18. | :09:22. | |
were educated or how they started. What is, how he developed to this | :09:23. | :09:28. | |
style. Then you make a combination of judgement. A work of art is not a | :09:29. | :09:36. | |
cheap thing to get involved with. And I will always tell them, by the | :09:37. | :09:45. | |
best quality. And if it doesn't hurt when you purchase it, don't buy it. | :09:46. | :09:51. | |
I encourage the young collector to buy artists more or less the same | :09:52. | :10:00. | |
age. The reason is I think after 30 years or 40 years, you will look | :10:01. | :10:11. | |
back and you will have grown at Canterbury to the others. I think | :10:12. | :10:15. | |
this is a wonderful and special memory for the collector. And that | :10:16. | :10:21. | |
was investing in art. Let's look at investing markets. Not great this | :10:22. | :10:25. | |
morning. You can see the Nick Cave and a stratum markets have opened | :10:26. | :10:31. | |
lower. -- Nikkei. That is it for Asia Business Report. Thank you for | :10:32. | :10:33. | |
watching. -- Australian. Welcome back. You're watching BBC | :10:34. | :10:41. | |
News. We bring you up with the | :10:42. | :10:42. |