17/03/2017 Asia Business Report

on getting a good Brexit deal for all the UK.

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

$65 billion, the size of the deal Saudi Arabia is closing with China.

We look at what is in it for both sides. And what will happen to US

companies doing business with China if Trump follows through on his

campaign promises? It is Friday, everyone. Good morning, Asia, hello,

world, glad you could join us for this edition of Asia Business

Report. I am Rico Hizon. We start off with Saudi Arabia's King Salman,

he is visiting Beijing and hasn't come empty-handed. The world's

largest oil-producing state has signed deals worth up to $65 billion

to cement ties to the world's second largest economy. That is a

significant amount but where is the money going to? That is a question I

posed earlier to an analyst. It is a big number indeed, but there are no

details behind it. What we do know is that a lot of that was letters of

intent, MoUs, a sickly are very preliminary understanding. Very

preliminary deals. We don't know if all of them will pan out. I think

what the underlying message here is, the bigger one, is that Saudi Arabia

has money to invest in this region. Despite low oil prices, now hovering

at $50 a barrel? Yes, so they have been struggling as well. We have

seen bonds issued by the Saudi government but relatively they still

have deep pockets and I think it is very important for them to cement

their relationship with really important crude customers in this

part of the world. But when do you think will these so-called letters

of intent, these agreements, come to fruition, if ever? Yes, that is very

difficult to see. But I think what is very obvious is that it is a very

natural, important relationship between the world's biggest crude

exporter and now China as the world's biggest crude importer. Now

Chinese demand is not going to continue growing as strongly as it

has in the past decade but this relationship as to evolve from being

just a crude supplier, Saudi Arabia now want to get into refining,

petrochemicals, both at home and abroad and certainly in Asia. As the

US Secretary of State prepares to arrive in Beijing this weekend, the

prospect of a trade war between the world's two largest economies is

lingering. But any move by Washington to increase tax on

imports to try to protect US jobs would almost certainly mean

retaliation from Beijing. US companies sell just about everything

to China, from cars to fruit. A Shanghai correspondent has more.

Best robbery, fresh, sweet, and maybe the next weapon in a

transpacific trade war. -- the strawberry. China's ever expanding

middle-class love fresh fruit, so much so that US firms like Driscolls

have set up to grow in China. There is also a place for its California

strawberries. They will be flown in and they will be pricey. China adds

14% on fresh strawberries from the US. The prospect of a hike any time

soon could squash sales. Certainly we would be concerned from the

standpoint of how our product may be affected any type trade issues

between our two countries. But certainly for us, what we can do is

we can continue to focus on premium, that is the best thing we can do to

ensure that consumers are willing to pay. It is not just the china

ambitions of fresh fruit that could be at stake. Ford could face a bump

on the road for one of its iconic brands. Made in America but on sale

for a few years now in China, this is make or break for Lincoln. It has

been a bit of a fading brand in the Ford portfolio, although recently

sales have ticked up in the State. But if these drivers here in China

don't embrace Lincoln, then it could be the end of the road for the car

that has carried presidents. This giant is made in Kentucky then

shipped to China. It costs twice as much here. Part of the reason for

that is the import tax, 25%. On the prospect of an increase, Lincoln's

parent company, Ford, told the BBC it would evaluate the situation

should the need arise, but it would not comment on speculation. I

believe that most American companies feel that, both in Beijing and

Washington, that the two leaders of the two governments appreciate that

the stakes are too high, and this would be harmful and unproductive

for either country, so the expectation of a trade war, you

know, is quite low if not non-existent. What about china's

consumers? Are they swayed by price, provenance, politics? Why? Because I

like the taste, delicious. You think American ones are better? Yes. I

don't think so. What if your leaders said to you to buy American fruit,

you should buy locally? Does that matter? We can choose by ourselves.

Trade war or no trade war, china sometimes plays by its own rules.

The US -based chocolate manufacturer Hershey 's has had a factory here

shutdown, all because of a complex dramatic row with South Korea over a

missile defence system -- diplomatic row. It is an ominous sign that

China doesn't always need to take a chunk and tax to make its point.

Finance leaders in the world's top economies are meeting in Germany

this weekend. However, the trip will most likely not be a relaxing one.

The us now has a president who believes trade should be fair, not

free, at other G20 members are not interested in abandoning the path

towards globalisation. So how will it all pan out? I asked a

representative from the bank of Singapore. I think everybody is

really talking about what on earth is the new American administration

going to be doing? They seem to view trade as a zero-sum game and there

seems to be a big change in policy, of the anti- protectionism which has

been underpinning G20 statements for years. So much rhetoric over the

past month and during the campaign period from Donald Trump,

complaining about China, but still no concrete policy. Well, no

policies yet, I think partly because they haven't had the people in

place. You have had delayed confirmations. As they go in, his

hands are free at to pursue a more aggressive approach towards China

and he has been consistently hostile towards China throughout the

campaign, as has his trade appointments. So you have to think

something is going to be going on there. But during the National

People's Congress you had the Premier, Li Keqiang, trying to be

conciliatory with the US President, saying that China and the US have to

create opportunities rather than trouble. Yes, they have been

conciliatory. Mainly they realise they have the most to lose. It must

be that Asia is vulnerable if America starts to put up the

barriers. But what would you like to come out from that meeting of Mr Xi

and Mr Trump in April? Do you think we are going to see both sides at

loggerheads, or could we see some kind of reconciliation? Well, he

seems to find it very easy to talk hard on his Twitter account, or to

domestic audiences, but when he meets people he seems to have a

personal warmth. It is very hard to predict what comes out of this. We

haven't seen any flareups in the past few months. Admittedly he has

mainly been focused on domestic policy rather than external

policies, but so far there has been surprisingly little trouble. The

British government has referred Rupert Murdoch's plan to take over

Sky the regulators to decide if the deal is indeed in the public

interest. Mr Murdoch's US television interest 21st Century Fox already

owns a stake in Sky. Critics have expressed fears the deal would give

Mr Murdoch too much control of the UK media. Japanese carmaker Toyota

is investing nearly $300 million to upgrade its main facility located in

central England and there will be additional investment from the

government as well. My UK colleagues sent this report from the Toyota

factory in Burnaston. Toyota will invest ?240 million to upgrade the

Burnaston plant. In return the government is providing ?21 million

for training and research. It is all good news for the 2500 workers at

the site. The truth is, this plant needed to be upgraded simply to be

able to compete with Toyota's plans around the world to build new cars.

Now, they currently make cars here. A decision on whether to make a new

vehicle at this plant is expected in the next year or two. This

investment could make all the difference. But, as we leave the EU,

all UK car manufacturers faced the prospect of higher cost, with

tariffs on the components they import and on the cars they export.

Despite assurances from the government, Nissan has warned it

will re-evaluate its UK operations once the final Brexit deal is known.

Let's have a quick look at the markets before we go. As you can

see, a mixed bag for Asia. The Nikkei 225 down 55 points due to the

strength of the Japanese yen against the US dollar -- 59 points. Hang

Seng in the All Ordinaries also in positive territory. Have a great

weekend, everyone. Sport Today is up next.