20/05/2016

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:00:00. > :00:13.Now on BBC News all the latest business news live from Singapore.

:00:14. > :00:22.It's Taiwan's new president set for an early clash with China? We

:00:23. > :00:27.assessed the potential impact on the economy -- is. And why is Fujitsu

:00:28. > :00:29.getting involved on the UK referendum on whether to stay in the

:00:30. > :00:41.European Union? Good morning, Asia and hello,

:00:42. > :00:45.world. It's Friday and glad you could join us for this edition of

:00:46. > :00:49.Asia Business Report, I'm Rico Hizon. We start with Taiwan and the

:00:50. > :00:54.new president Tsai Ing-wen steps into the country's top job today and

:00:55. > :00:58.investors will be watching very closely as to how she will address

:00:59. > :01:05.China in her inauguration speech. The mainland is the island's biggest

:01:06. > :01:10.trading partner and the outgoing president was known to be friendly

:01:11. > :01:13.towards Beijing but since Tsai Ing-wen won the elections in

:01:14. > :01:18.January, cross trade relations have becoming greasing the tense. Earlier

:01:19. > :01:23.I spoke to an economist in Taipei to ask him what investors are expecting

:01:24. > :01:29.to hear from the new president. It seems the result of the January

:01:30. > :01:34.election has meant we have seen the early signs of soft economic

:01:35. > :01:40.sanctions. Or example the reduction of the Chinese tourists visiting

:01:41. > :01:46.Taiwan -- for example. In some parts of China it has reduced by almost

:01:47. > :01:51.40%. The visitors from China account for a significant part of Taiwan's

:01:52. > :01:56.foreign visitors each year so the tourism sector in Taiwan is already

:01:57. > :02:00.feeling the pressure. Should investors be concerned about these

:02:01. > :02:06.early warning signs from Beijing and the tough stance of Tsai Ing-wen

:02:07. > :02:11.with the mainland? The economic sanctions will continue to be in

:02:12. > :02:19.place for the foreseeable future. I think regardless of what President

:02:20. > :02:26.Tsai will say today in her speech, Beijing will be a bit disappointed

:02:27. > :02:30.compared with what President Ma has been doing over the last few years.

:02:31. > :02:39.In the short-term investors have a reason to be concerned. It might

:02:40. > :02:43.bring the cross trade China Taiwan relationship to a more healthy and

:02:44. > :02:49.sustainable point, though. The other big challenge for Tsai Ing-wen is

:02:50. > :02:55.the retooling of the Taiwanese economy, with its worst performance

:02:56. > :03:01.in six years in 2015, and a major trading partner of Taiwan is

:03:02. > :03:06.mainland China. Yes, indeed. There are two Mac major structure issues

:03:07. > :03:11.in Taiwan's exports. First is the market concentration as you mention,

:03:12. > :03:16.30% of time on these trade goes through China and now the problem is

:03:17. > :03:21.the product concentration because China's exports are concentrated on

:03:22. > :03:28.ICT and flat panel display areas. All these areas are unfortunately

:03:29. > :03:32.going to be confronted by China's so-called import substitution

:03:33. > :03:38.policy. In the long run Taiwan's exports to China with or without

:03:39. > :03:41.sanctions are going to reduce. They need policies to mitigate these

:03:42. > :03:46.issues by Doug Lhasa diversifying the market and also by having new

:03:47. > :03:48.areas of product -- by diversifying. Roy Chun Lee, an

:03:49. > :03:57.economist based in Taipei. Age is BC will be closing down

:03:58. > :04:01.branches in India following a strategic review showing customers

:04:02. > :04:05.are increasingly choosing to do their banking online -- HSBC. It's

:04:06. > :04:12.been on a massive cost-cutting drive and the lender has slashed more than

:04:13. > :04:17.87,000 jobs overseas. That's over the past five years.

:04:18. > :04:22.American clothing retailer Gap will be closing down 75 stores abroad as

:04:23. > :04:29.they turn their focus to the North American market to revive fortunes.

:04:30. > :04:36.The Cure at retail family includes Old Navy and Banana Republic, it

:04:37. > :04:43.will include all 53 Old Navy outlets in Japan. It will help save 255 and

:04:44. > :04:49.is. The chairman of Fujitsu has warned that if the UK leads the

:04:50. > :04:56.European Union it would reconsider its investments. It's the biggest

:04:57. > :04:59.Japanese employer in the UK. We were told by him in an interview to the

:05:00. > :05:05.BBC that he thought Britain leaving the UK would be a threat to

:05:06. > :05:09.investment stashed the EU. TRANSLATION: So far we believe the

:05:10. > :05:14.UK is the centre of the European region and that's why for the last

:05:15. > :05:19.decade we have made ?3 billion in investment. If there is any change,

:05:20. > :05:23.with the UK remaining in the EU or not, we have to be careful about

:05:24. > :05:31.watching the process, the outcome, then decide if we will make any

:05:32. > :05:34.further investment or not. We have been making the most investment in

:05:35. > :05:38.the UK within the European region and yes we believe that the UK is

:05:39. > :05:44.going to remain at the centre of the EU. Where are we going to make

:05:45. > :05:48.investment to? Well, we have data centre and cloud type services, we

:05:49. > :05:52.have to really see what the issues are, what the challenges are in the

:05:53. > :05:57.respective market and the respective region, then make the decision as to

:05:58. > :06:01.how we are going to invest and in which area. We would like to see the

:06:02. > :06:04.entire EU region as one single market.

:06:05. > :06:10.Mr Yamamoto from Fujitsu. Plain packaging for tobacco products will

:06:11. > :06:13.be introduced in the UK from today after a legal challenge against the

:06:14. > :06:18.new law was dismissed by the High Court. The case was brought about by

:06:19. > :06:23.four of the world's biggest tobacco companies including Philip Morris

:06:24. > :06:27.international. Plain packaging means a ban on all marketing of tobacco

:06:28. > :06:32.packages to make smoking less attractive, especially to young

:06:33. > :06:34.people. Australia was the first country to make plain packaging

:06:35. > :06:41.compulsory in 2012. Phil Mickelson will return nearly $1

:06:42. > :06:44.million in profits linked to an insider trading scheme. He said he

:06:45. > :06:51.had no desire to benefit from training and stock that regulators

:06:52. > :06:54.found questionable. The US market regulator alleged a friend of his

:06:55. > :07:00.had passed on a trading tip to the golfer about Dean food stock that

:07:01. > :07:07.came from the company's Chairman. China's food industry has been in

:07:08. > :07:10.hot water lately with producers in Europe and the US accusing the

:07:11. > :07:16.Chinese of flooding the market with cheap products. Beijing has set

:07:17. > :07:19.aside over 4 billion US dollars to help local governments pay for

:07:20. > :07:25.closures in the steel and coal sectors. The production by steel

:07:26. > :07:30.mills is still picking up. Earlier I spoke with Anna-Lise Jefferies and I

:07:31. > :07:33.asked her for her outlook on the Chinese steel sector. The Chinese

:07:34. > :07:37.steel sector is doing very well right now, this year it is Tronc, we

:07:38. > :07:41.have strong demand partly because of growth in the cities with properties

:07:42. > :07:45.-- strong. That's unexpected because many thought these empty flats we

:07:46. > :07:51.were hearing about would be a problem but we have seen a lot of

:07:52. > :07:54.growth. Also the Chinese government is investing $750 billion in

:07:55. > :07:58.infrastructure over the next two years, so pretty strong. Pretty

:07:59. > :08:05.strong that they even have enough steel supplied to provide the

:08:06. > :08:09.world? Yes. Exports are still good. Yeah, it is all strong. I think

:08:10. > :08:14.exports will go down a bit because the strength inside China is very

:08:15. > :08:19.good right now. Is China really deserving these massive tariffs

:08:20. > :08:25.being imposed by the United States? 522% on this steel? With that kind

:08:26. > :08:31.of steel it is a smaller market, the big markets are the HRC and the

:08:32. > :08:38.retail market is. In that regard, no, most exports are going to get

:08:39. > :08:45.places like Japan and Korea. They go mainly to Asia rather than the US.

:08:46. > :08:50.All of these tips for tax tariffs by the US and China will not only

:08:51. > :08:55.impact the small sector but it could have a knock on effect on other

:08:56. > :08:59.things -- tit for tat. We have to see what happens in terms of trade

:09:00. > :09:03.tariffs around the world, you find those cropping up not just in the US

:09:04. > :09:08.but across the world when it comes to steal. Interesting to see what

:09:09. > :09:13.happens. With the mechanics and the dynamics, where do you see steel

:09:14. > :09:18.prices going forward? That's a good question. It's been very volatile

:09:19. > :09:22.this year for the iron ore and steel segment in Asia, right now things

:09:23. > :09:26.like iron ore prices are in the 50s and steel is relatively strong,

:09:27. > :09:30.margins are good and production is high. But you have money going into

:09:31. > :09:35.infrastructure but also Beijing putting in $15 billion for layoffs

:09:36. > :09:40.because there will be consolidation in the steel industry. Longer term

:09:41. > :09:43.the idea is they will be less steel production coming out of China.

:09:44. > :09:53.Annalisa Jefferies. Before we go, the markets... It is a Friday in

:09:54. > :09:58.deed and Asian stocks as you can see are looking very lethargic and

:09:59. > :10:02.lacklustre. This is after stocks remain under pressure as investors

:10:03. > :10:07.continued to digester possibility that the US Federal Reserve will

:10:08. > :10:14.raise rates potentially as soon as June. The Nikkei two to five down by

:10:15. > :10:17.24% and the macro All Ords down by a 10th. The Hong Kong stock exchange

:10:18. > :10:24.will be opening in about 15 minutes. As for Wall Street, the Dow

:10:25. > :10:28.and the NASDAQ finishing negatively. Thank you so much for

:10:29. > :10:30.investing your time with us. I'm Rico Hizon. Sport Today is coming up

:10:31. > :10:33.next.