17/03/2017 Asia Business Report

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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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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.