12/10/2016 Asia Business Report


12/10/2016

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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The value of the sterling continues to slide as concerns continue about

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access to the European market. Now on BBC News, all the latest

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business news live from Singapore. Saint-Saens share price continues

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its downward slide. -- Samsung. And we speak to Indonesia's former trade

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minister about how China's slowdown is affecting his economy. Good

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morning. Glad you could join us for this midweek edition of Asia

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Business Report. I'm Rizo Hizon. We kicked -- kick off with Samsung

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Electronics and its shares have dropped another 3% of the hefty

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falls in its market value on Tuesday. This follows the company's

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decision to permanently stop reduction of its faulty Galaxy Note

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7, which has left the company facing a mounting bill. The device was

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meant to rival Apple but is now a corporate disaster. Here is our

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technology correspondent. In a fast food restaurant a mobile phone is on

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fire. This all involve replacement Galaxy Note 7 phones. Now Samsung

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has halted production and sales of the phone. Customers have been told

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to turn them off and return them to stores. In London this morning this

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man who bought previous versions of V Note was disappointed. I love the

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phone and was told to send it back. I got my replacement and I was happy

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with it and I was heartbroken to have to take my new phone in and

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handed back. Samsung broke new ground with the Note, proving there

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was an appetite for a bigger phone. We believed this would be the

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bestselling yet. It is now clear that the Galaxy Note 7 isn't coming

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back and the company must concentrate on limiting the damage

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to its whole brand. Shares in the company fell sharply, wiping

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billions of its value as investors worried that the reputation of its

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other products might suffer. What's interesting about Samsung is it is

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really respected as being technologically excellent and also

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really great functionally. When that basis of trust has been damaged,

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that's what they need to recover from and that will be the test on

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whether they are able to recover some of the value that they are

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losing by the day. While this incident is the most serious so far,

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Samsung isn't alone in seeing smartphone batteries overheat. The

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reason for the problem is that modern smartphones are immensely

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powerful computers. They use a lot of energy to make all of those

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wonderful things work. That energy could be dangerous if it gets

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released quickly and in certain circumstances that can happen.

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That's the problem. We want more and more from our phones, but as Samsung

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has found the one thing we demand above all others is that they are

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safe. The fierce competition in the

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smartphone sector has led to a lawn and constipated legal battle with

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Apple over patents. -- complicated. There has been a dispute over

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designs and intellectual property, but can Apple and smaller rivals

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gain from Samsung's problems? At this stage Apple has the upper hand.

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The rivalry has been going on for years. The first and foremost

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question is whether they copied some of the design patents from Apple.

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And how important is the design aspect in a smartphone, visit the

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visibility aspect. Taking a look at these phones and the patents, some

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of them are not widely available on so does this case really matter or

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is this just boiling down to the patents and the designs? This might

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be used as a benchmark for smartphones and other technology

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products. The whole issue about what is the design complex vis-a-vis the

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utility, that's what the debate is. Is it the design aspect or the

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utility aspect influencing the money flow. That is the bigger question,

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in terms of this might be used as a benchmark case. Taking a look at

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Samsung and the Galaxy Note 7, it will no longer be in production.

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What do you think will happen? How can Samsung recover from this? Will

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they have a Note8? I don't think so. It has been a disaster, even in the

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second phase. Do you think they should come up with a totally new

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product? I think so. The Note brand is now associated with the disaster.

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I think it would be important for Samsung to work on rebranding, teach

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the Note series itself. How do you think it will take? I would have

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thought it would take at least two to three quarters for them to

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rebrand, come up with a new series and totally avoid the Note branding,

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which has been associated with a disaster in the last three quarters

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now. In other business news: Japan's Parliament has passed an extra

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spending package of $32 billion, boosting Shinzo Abe's land to revive

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the economy. It will be funded by lawns, adding to Japan's already

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heavy public burden. The money will be spent on infrastructure projects

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and boosting money for healthcare workers. Fujitsu was planning to

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slash a number of jobs in the UK, more than 10% of its workforce. The

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plan would see the first workers leave early next year. The company

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says it is not linked to Britain's decision to leave the EU, but in

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line with its goal to become more competitive against foreign rivals.

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The union representing workers is deceptive resume talks with

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management in a bid to end the dispute for higher pay. This comes

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after months of industrial action, including a nationwide strike last

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month. The walkouts have any cost the company $2.6 million in loss

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production. Indonesia's economy continues to

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prove resilient, despite a slowdown in its nearest and largest

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neighbour, China. The head of Indonesia's investment and former

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trade minister spoke to us and started by explaining how the

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slowdown is impacting his country's on economy. The major transition in

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the Chinese economy from heavy industry towards more high-tech and

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services, the desire by the Chinese leadership to be more consumer

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driven, all the economies in China's backyard, ours included, have to

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adjust to that, do we have to shift from supplying raw materials to

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Chinese industry towards more consuming... Towards more producing

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consumer goods, or for example tourism services, for the rising

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consumer class. One of the issues I am sure you will be discussing is

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Britain's decision to leave the EU. Does that create any particular

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problems for Indonesia or your relationship with Britain or the EU?

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It is certainly a fresh wrinkle. I don't think it constitutes anything

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that's not manageable. For example, as we complete our trade agreement

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with the European Union in the next two or three years, you know, that

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set the template that could easily replicate to the UK. In Indonesia

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you have this tax amnesty whereby people who haven't paid taxes they

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should have done can come forward now and pay only minimum penalties.

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Is that there on the people who have been paying their taxes all along?

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Yes, the OECD also heavily criticised our tax amnesty for being

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excessively generous to people who have been obtaining tax for many

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years or even decades. In that sense, being punitive to people who

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have been compliant. But, like you said, it is on track to being the

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most successful tax amnesty in the history of the world, which

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surprises frankly even be, but I'm very happy. I think what I would say

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is that it's a perfect illustration of the very pragmatic approach,

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which the president has brought to our economic policy. What it says

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is, look, forget about the past, what's past has passed, let's just

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push the reset button, start with a clean slate and if I can offer very

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attractive terms to attract back billions and even tens of billions

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of dollars the capital, which he is now well on track to accomplish,

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then that's good for the economy now and going forward.

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That was Indonesia's investment minister speaking with Andrew

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Walker. Before we go, a quick look at the markets. So far it's a day of

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losses for Asian stocks. This is after US equities tumbled overnight

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due to a disappointing start to the earnings season. Especially led by

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resource company Alcoa, whose numbers fell before market

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forecasts. That is also dragging down stocks in Australia's big

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miners and adding to the issue of investorsand the price of oil. That

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is all from the four now. The top stories this hour:

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Donald Trump has lambasted senior Republicans for abandoning his

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campaign and said he's now free

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