:00:19. > :00:25.The Asian stock markets, is it ready for a strengthening dollar? The US
:00:26. > :00:33.rate hike now looks unstoppable. We reveal exclusive footage from the
:00:34. > :00:44.South China Sea. What does this mean for the most important shipping
:00:45. > :00:50.routes in Asia? Good morning. I am Rico Hizon in Singapore. Officials
:00:51. > :00:58.of the US bank and Federal Reserve said down for a two-day meeting. The
:00:59. > :01:04.financial world will be on its toes. -- sit. They will be watching
:01:05. > :01:16.for a long expected rise. Hywel ready is Asia for a rate hike? --
:01:17. > :01:21.How. There is some nervousness. Quantitatively, it is different. You
:01:22. > :01:26.have to think they have had a year's warning about this. It should
:01:27. > :01:32.not have that much impact. What about the currency markets. Earlier
:01:33. > :01:36.this year, we saw many of our Southeast Asian currencies falling
:01:37. > :01:41.to levels not seen since the 1998 financial crisis. Could there still
:01:42. > :01:48.be more pressure on regional currencies? Yeah, depending on the
:01:49. > :01:53.signalled the Fed gives about how fast rates are going up. They are
:01:54. > :01:57.anticipating a very slow pace of rate increases. You may see the
:01:58. > :02:05.dollar head of another bout of strength. That could put pressure on
:02:06. > :02:09.regional currencies. -- off on another. Indonesia, Malaysia, they
:02:10. > :02:16.may be vulnerable. But outside of that they have big external
:02:17. > :02:23.surpluses. They aren't too worried. It looks inevitable that the Fed
:02:24. > :02:28.will raise the price of borrowing. But China was a factor when it
:02:29. > :02:36.decided to keep rates on hold earlier. Will it be again? I don't
:02:37. > :02:41.think so. That reference to China couple of meetings ago was a
:02:42. > :02:46.mistake. It is fairly clear that China doesn't have much impact on
:02:47. > :02:51.the American economy. The second thing is that over the past few
:02:52. > :02:57.months China has showed signs of stabilising. The US will probably be
:02:58. > :03:04.fairly comfortable China is not a big risk to them. Let's have a look
:03:05. > :03:07.at US oil prices. They have bounced back overnight, briefly falling
:03:08. > :03:20.below $35 per barrel, the lowest since 2009. This is where they stand
:03:21. > :03:25.right now. Hopes of a reprieve for oil were dashed at the start of the
:03:26. > :03:31.month when OPEC decided to maintain current production levels. In a sign
:03:32. > :03:37.of how tough it has become for the energy industry, Shell says it will
:03:38. > :03:46.cut three 800 jobs if the merger goes ahead. -- 2800. That comes on
:03:47. > :03:59.top of another 7500 jobs later to be cut in July. The BBC has pictures of
:04:00. > :04:01.the South China Sea islands. Showing attempts to turn reads into
:04:02. > :04:10.artificial islands. They have the potential to further worsen
:04:11. > :04:26.relationships with America. -- reefs. This is how Chinese naval
:04:27. > :04:37.with it. -- dealt with it. -- the Chinese navy. So far, there has been
:04:38. > :04:41.no disruption to trade, but America and China should do everything to
:04:42. > :04:45.prevent a flare-up. The reality is that it is overwhelmingly in
:04:46. > :04:49.everyone's interests for trade to continue to be smooth. If I look
:04:50. > :04:53.around at the things worrying me most about the Asian economy in the
:04:54. > :04:59.next few months it would not be the Chinese building on reefs, it is the
:05:00. > :05:03.disappearing money from emerging markets, raising the interest rates
:05:04. > :05:10.in the US, and so on... It will take a very foolish move by either
:05:11. > :05:15.China, or possibly by a newly incumbent US resident, to create
:05:16. > :05:20.real tension in the South China Sea. No one wants that. In the interest
:05:21. > :05:26.of China, these trading routes are open and free. China depends on the
:05:27. > :05:31.South China Sea for oil and everything else. China regards
:05:32. > :05:34.smooth development, economic development, as a political
:05:35. > :05:39.imperatives in order to maintain calm and stability at home. It will
:05:40. > :05:48.not want to see any disruption in trade flows. So, no. But, if they
:05:49. > :05:51.continue to build these man-made islands on reefs and expand them,
:05:52. > :05:55.don't you think this could create more tensions going forward and this
:05:56. > :06:02.could disrupt the trade and shipping? You have about
:06:03. > :06:08.international law, many think the claims under the revival of ancient
:06:09. > :06:15.claims, a nuts. The fact is... -- are. The political clout and trade
:06:16. > :06:19.clout, there is nothing really that anyone can do about it. It doesn't
:06:20. > :06:26.make sense to keep banging the drum. We need to adjust to a new and
:06:27. > :06:30.assertive China. Rupert Wingfield-Hayes was on a civilian
:06:31. > :06:35.aircraft and they passed over the reefs. They were threatened by
:06:36. > :06:41.Chinese naval authority. If you say that the Chinese want these routes
:06:42. > :06:46.open and free, why are they so sensitive about it? Because the
:06:47. > :06:49.Chinese, as a result of decades of internal dialogue, they have a
:06:50. > :06:58.particular mindset. It is the sea, much as the Romans called the
:06:59. > :07:05.Mediterranean Our Sea. It belonged to them in the eyes. We have to
:07:06. > :07:08.understand it from the China perspective. China see it that way.
:07:09. > :07:14.There isn't much we can do about it. It is in our interest,
:07:15. > :07:22.overwhelmingly, to accommodate them. We have to adjust to the new
:07:23. > :07:30.reality. Be pasted the first drop in cargo traffic in nearly two years.
:07:31. > :07:36.-- They posted. Global air cargo revenue would fall by nearly 3% in
:07:37. > :07:49.pretty 16, despite expectations of a slight pickup. -- 2016. Fiorina,
:07:50. > :08:02.behind luxury models like Ferrari, are undergoing a new deal. We have
:08:03. > :08:05.small on this. -- more. They aren't the only one with lofty ambition.
:08:06. > :08:11.The Australian Government is expected to reveal today how it will
:08:12. > :08:26.pay to inspire a bolder entrepreneurial spirit that embraces
:08:27. > :08:28.economic spirit. Tell Mercer has more. -- Phil. People are
:08:29. > :08:37.shredded's rate is resourced. The Prime Minister believes that the
:08:38. > :08:43.future depends on the ability to innovate. The mining boom continues
:08:44. > :08:51.to fade. -- Australia's greatest resource. Roads are the driving
:08:52. > :08:55.force behind the new start-up established by a mathematician. Kate
:08:56. > :09:00.says there are too many empty trucks on the roads. She is helping firms
:09:01. > :09:07.to buy and sell the capacity. She is excited by the Prime Minister's
:09:08. > :09:13.plans. -- there. Were on the cusp of a huge change. It will be so much
:09:14. > :09:16.better for people. -- We're. You will have a more sustainable and
:09:17. > :09:24.exciting culture. Innovation is our strength. Some established companies
:09:25. > :09:28.believe that Australia still has some way to go to create a smarter
:09:29. > :09:35.economy. This engineering firm in Sydney at sport computer-controlled
:09:36. > :09:40.machines that cart industrial textiles. -- exports. This person
:09:41. > :09:45.says he is often frustrated with the government which needs to do more to
:09:46. > :09:47.promote the spirit of creativity. We have a culture of innovation in
:09:48. > :09:53.Australia but we don't have a country of funding innovation. We
:09:54. > :09:56.will have a hard time because we will have two go through a period
:09:57. > :10:05.where they are not enough people thinking innovation. -- to. Not
:10:06. > :10:11.enough undergoing science courses. To become a more clever country,
:10:12. > :10:11.they have to harness the brainpower of foreigners. Those with bright
:10:12. > :10:22.ideas for the chance to live here permanently
:10:23. > :10:25.and be a part of and innovation revolution. -- an. Before we go,
:10:26. > :10:33.these are the market. A mixed picture. -- markets. I am Rico
:10:34. > :10:34.Hizon. Goodbye for