18/01/2017 Asia Business Report


18/01/2017

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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Now on BBC News, all the latest business news live from Singapore.

:00:00.:00:13.

The de facto head of the Samsung empire could face arrest over a

:00:14.:00:24.

major corruption scandal. And Brexit means Brexit, the pound surges after

:00:25.:00:34.

UK Prime Minister Theresa May vows to quit the European Union. Good

:00:35.:00:39.

morning, welcome to Asia Business Report, live from Singapore, with

:00:40.:00:44.

me, Mariko Oi. The head of Samsung, JY Lee, has arrived at a South

:00:45.:00:48.

Korean court and the judge will be deciding today whether he should be

:00:49.:00:51.

arrested over his alleged involvement in a major corruption

:00:52.:00:55.

scandal. For the latest, let's go live to Kevin Kim in Seoul. Thank

:00:56.:01:00.

you for joining us this morning. This is a huge deal, isn't it? But

:01:01.:01:05.

when are we expecting the outcome, and are there any hints what the

:01:06.:01:10.

judge might decide? Well, we will probably be hearing the results

:01:11.:01:14.

later tonight, or possibly even tomorrow. JY Lee, the head of

:01:15.:01:19.

Samsung, was seen arriving in court with a grim faced, and the judge

:01:20.:01:24.

will soon be hearing the arguments. Prosecutors believe Samsung has

:01:25.:01:29.

committed bribery and has asked JY Lee, the head of South Korea's

:01:30.:01:34.

largest company, to be jailed. The allegation is that Samsung gave

:01:35.:01:37.

millions of dollars in return for the votes of the national pension

:01:38.:01:43.

fund, in a bid and contested restructuring of the company. Last

:01:44.:01:48.

week JY Lee was summoned as a suspect and was questioned for

:01:49.:01:51.

almost 24 hours. After filing an arrest warrant on Monday,

:01:52.:01:56.

investigators said in a news conference that, despite some

:01:57.:02:00.

concerns that JY Lee's arrest may have a negative effect on the

:02:01.:02:03.

economy, establishing justice was more important. I mean, we have seen

:02:04.:02:11.

some of the business leaders of big conglomerates in South Korea being

:02:12.:02:14.

in trouble with the authorities before, but is it fair to say that

:02:15.:02:19.

this is the first time that he could actually be jailed? Well, if JY Lee

:02:20.:02:25.

does get detained, it will be a big blow to the image of the company. So

:02:26.:02:32.

far no member of the Samsung family has ever spent time behind bars. His

:02:33.:02:39.

arrest may not affect short-term production or the running of the

:02:40.:02:42.

firm but there does seem to be a growing anxiety of the long-term

:02:43.:02:47.

implications. Samsung is one of the biggest electronic companies in the

:02:48.:02:51.

world, and for the head of the company involved in a corruption

:02:52.:02:56.

scandal, would be seen as a huge embarrassment. Thank you so much for

:02:57.:03:01.

updating us, Kevin Kim in Seoul, and I'm sure you will be across the

:03:02.:03:06.

story as we find out more. You know you are in strange times when the

:03:07.:03:10.

head of Communist China speaks passionately about free trade around

:03:11.:03:15.

the world, while America's president in waiting speaks equally

:03:16.:03:17.

passionately about the damage it does. Xi Jinping's address to the

:03:18.:03:24.

World Economic Forum, in Davos, focused on economic growth. Here is

:03:25.:03:29.

what we had to say. TRANSLATION: We must remain committed to developing

:03:30.:03:33.

free trade and investment, promote trade and investment liberalisation

:03:34.:03:39.

and facilitation, through opening up, and say no to protectionism. No

:03:40.:03:48.

one will emerge as a winner in a trade war. President Xi Jinping

:03:49.:03:53.

speaking at the World Economic Forum in Davos. It is actually the first

:03:54.:03:56.

time a Chinese leader has attended the gathering, and fought China,

:03:57.:04:05.

finally -- finding its voice on the global economic stage. So in the

:04:06.:04:08.

wake of the Chinese President's speech in Davos, a little bit of

:04:09.:04:14.

irony has come into play. Is it not normally the United States, the

:04:15.:04:18.

leader of the free world, which is championing globalisation and the

:04:19.:04:21.

opening of Borders? No, it appears that the United States is more in a

:04:22.:04:26.

mood to put up some walls and create barriers. Meanwhile, China, of

:04:27.:04:31.

course, historically much more closed in terms of trade, but it

:04:32.:04:36.

benefited enormously from globalisation, is now saying

:04:37.:04:38.

globalisation is a good thing. Describes it as Pandora's box, once

:04:39.:04:46.

opened, many things may come out, some good and some bad but it is

:04:47.:04:50.

really a question of managing those bad things. Xi Jinping described the

:04:51.:04:55.

global economy as an ocean in which China had struggled at times to get

:04:56.:04:59.

and to survive, but now had learnt to swim and it was absolutely not

:05:00.:05:04.

time to retreat to the creeks and small rivers of the globe. Another

:05:05.:05:09.

big topic in da Boss is the UK's decision to leave the European

:05:10.:05:16.

Union. -- Davos. And British prime Minister Theresa May has revealed

:05:17.:05:18.

her long-awaited plan for Brexit. She has made clear that the UK will

:05:19.:05:22.

quit the single European market as part of moves to control immigration

:05:23.:05:26.

but she insisted that the British government would not turn its back

:05:27.:05:29.

on Europe. The Prime Minister says she wants a trade deal with the

:05:30.:05:34.

other 27 members of the European Union, under what is called a

:05:35.:05:37.

Customs agreement. But she is warning that the UK could walk away

:05:38.:05:41.

if it is a bad deal. Here is what she had to say. Not partial

:05:42.:05:46.

ownership of the European Union, associate them to ship of the

:05:47.:05:49.

European Union, or anything that leaves us half in, half out. I want

:05:50.:05:55.

to be clear. What I am proposing cannot mean membership of the single

:05:56.:06:01.

market. Business leaders are still divided on the implications of

:06:02.:06:07.

Brexit, but most of them seemed to welcome at least some clarity from

:06:08.:06:13.

the prime Minister -- membership. Our business editor has been talking

:06:14.:06:18.

to some of them in Davos. There is nothing like a bit of mountain air

:06:19.:06:22.

to give you clarity. Business leaders gathered in Switzerland were

:06:23.:06:25.

watching the prime minister for exactly that. Did they get it?

:06:26.:06:30.

Clarity, first of all. Really codify in what many of us are expecting

:06:31.:06:35.

around the result, particularly around the single market. We are

:06:36.:06:38.

also seeing the government's willingness to put a bit of edge

:06:39.:06:41.

into the negotiating dynamic. That makes a lot of sense. Trade

:06:42.:06:44.

negotiations are negotiations and you have to be pretty tough to get

:06:45.:06:48.

what you want. For some, the uncertainty is still too great. In

:06:49.:06:52.

London, the insurance market has already decided to move some

:06:53.:06:56.

business to Europe. We still have to pursue a subsidiary in the EU for

:06:57.:07:03.

post- Brexit world, meaning that we can still serve our customers and

:07:04.:07:06.

policyholders in those European Union countries. So no ifs, no buts,

:07:07.:07:12.

no single market. Clarity, yes. Desired outcome, not for everyone.

:07:13.:07:16.

And with the continued argument over whether we are a partial member of

:07:17.:07:20.

the customs union, many companies will say it takes a continent to

:07:21.:07:25.

build a car and if there are hold-ups at the border that could be

:07:26.:07:29.

bad news. And the car industry gave MPs its version of clarity. The cars

:07:30.:07:35.

that we import, and remember we import about 80% of the vehicles we

:07:36.:07:41.

sell in the UK, that would add about ?2.7 billion, or about ?1500 per car

:07:42.:07:47.

sold. Financial markets were watching closely as well. Suddenly

:07:48.:07:50.

the pound rocketed against the dollar, at the very moment the prime

:07:51.:07:56.

Minister offered MPs a chance to vote on any final deal, markets

:07:57.:08:01.

making one last bet that Brexit could still be derailed. But even

:08:02.:08:07.

some of the business world's staunchest remainers weren't fooled,

:08:08.:08:11.

and a knuckling down to the political reality. Most businesses

:08:12.:08:14.

are trying to move forward positively, trying to ensure that

:08:15.:08:17.

the complexity of this is well understood and we take the steps

:08:18.:08:21.

both in government and business to deal with this and minimise the

:08:22.:08:24.

impact of this very complex process. Government shed some light on its

:08:25.:08:27.

priorities, but his listeners we are still in the foothills of a massive

:08:28.:08:31.

undertaking. -- business knows we are still in the foothills. In other

:08:32.:08:38.

business news, shares in Toshiba are rising by as much as 5% in Tokyo

:08:39.:08:43.

after the company said it is considering a spin-off of its

:08:44.:08:46.

semiconductor business to raise money. According to the Nikkei

:08:47.:08:52.

newspaper, it may also sell a 20% stake in the unit to Western Digital

:08:53.:09:01.

for $2.7 billion. Facebook founder Mark Zuckerberg has denied a

:09:02.:09:05.

suggestion that its toll virtual reality technology from a rival

:09:06.:09:10.

firm. He faced hours of tough questioning on Tuesday. Earlier our

:09:11.:09:14.

North American technology reporter provided more details about the

:09:15.:09:18.

case. Mark Zuckerberg was on the stand wearing not his typical grey

:09:19.:09:22.

T-shirt but a full suit and tie and while he was there his company,

:09:23.:09:25.

Facebook, was accused of essentially stealing technology from another

:09:26.:09:31.

firm, which worked very closely with Oculus, the virtual reality firm, in

:09:32.:09:36.

its early days and the company says it was their input which made the

:09:37.:09:42.

did buy the company for $2 billion Facebook wanted

:09:43.:09:50.

in 2014 and shortly after that deal, a lawsuit. Mark Zuckerberg, on the

:09:51.:09:54.

stand, said it is typical when a big deal is made for companies to come

:09:55.:09:58.

out the woodwork and claim some kind of credit for that work. He said all

:09:59.:10:02.

the innovation in that headset was done by the oculus team, and the

:10:03.:10:06.

Oculus team alone. The trial will last for about three weeks. Let's

:10:07.:10:13.

show you markets before we go. This is how Asian markets have started

:10:14.:10:18.

trading this morning, taking the cue from Wall Street and opening lower.

:10:19.:10:22.

That's it for this edition of Asia Business Report. Thank you for

:10:23.:10:23.

watching.

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