29/03/2017 Asia Business Report

footage. Our top story: The UK: The Scottish Parliament has voted in

favour of making a formal request to the UK government of making a

independence referendum. -- our top story in the UK:

Britain formally begins the process to exit the European Union, what

should Asian companies be looking for? Are we set to the higher oil

prices? We will hear from the international energy agency.

Hello. Later today Prime Minister Theresa May will be triggering

Article 50 and that will officially start the process of Brexit.

Japanese businesses were some of the most vocal against Brexit ahead of

the referendum last year. Their comments are not surprising

considering Japan is the biggest Asian investor in the UK. And its

companies account for about 140,000 permanent jobs. Carmakers such as

Nissan, Toyota and Honda are major employers. Their factories make

almost half of the 1.7 million cars built in Britain in 2016. Earlier I

spoke to Simon Black, a lawyer who advises Japanese businesses, I asked

him which companies face the biggest challenges. The car companies in

particular will be looking at three key areas on how the negotiations

play out. Firstly it's how the tariffs, if they are reimposed, they

could be up to 10%, a major issue in exporting in the major competitive

market in car manufacturing. And customs, if there are delays at the

border, that could be damaging for the companies. The third area they

will look at is can Britain attract a car parts supply chain into

Britain and create more companies that supply the parts for car

manufacturers. That's important if there are going to be tariffs on

cross-border trade. Simon, apart from the automotive sector in Japan,

you have the financial institutions most worried about financial

passporting. You're right, the banks have perhaps the next biggest

headache after the car companies. Financial passporting, that need you

to have a subsidiary company in the EU. Most of the Japanese banks at

the moment don't actually have that. So there's a race to establish

subsidiaries somewhere in the EU companies... In the EU countries,

and then the big question is actually what do they have to do

with those subsidiaries and how much of their London business, their main

centre, can they actually keep. And that's really down to what

activities they can continue to do in London and what activities they

have to move to the continent. These are two major industries, so broadly

speaking, Simon, what are the upsides of Brexit for Asian

companies? It's interesting, the Japanese investment in the UK has

actually dramatically increased since Brexit. I think that shows

there are good businesses that companies can acquire, but also

we've had the effect of the currency that is devalued by about 15%. While

there are quite a lot of challenges, there are significant upsides for

Asian companies, Japanese and elsewhere, investing in the UK at

the moment. And the government will be trying to promote that in

everywhere it possible. Brexit will have a major impact elsewhere. You

have London, that's been the financial hub for many American

banks, but Britain seems to be heading for a clean break with the

well's largest training block, which would leave the UK without a trade

arrangement to maintain access or the financial services industry.

What does this mean for American financial institutions that operate

in London? Samira Hussain reports from New York. The UK is about 3000

miles that way, and some of America's biggest banks are less

than a mile over that weight. So how has the decision to trigger Article

50, something happening way over there, having an impact way over

their -- that way. This is a decision based on hassles, because

they are expensive. The banks aren't saying much, but some, like Goldman

Sachs behind me, have indicated jobs will be leaving London. The number

of people leaving London are probably going to be measured in the

low tens of thousands, and that's in a city with millions and millions of

people, many of them already employed in the finance sector.

There's a lot of noise being driven by the finance sector and the

lobbying groups trying again to bend rolls to their advantage, but the

reality is this is not as nearly a big threat as they make it sound

like. That takes care of the short-term but what about the

long-term -- rules. Brexit doesn't necessarily tricks it a big exit of

employees from London but it may cause banks to look at where they

have their business in the future. The big question is, in a

post-Brexit Iraq, will London remain a global financial centre? That will

ultimately determine whether or not the American banks stay put --

post-Brexit Iraq. Samira Hussain from New York. The US government has

launched an anti-dumping investigation against imports of

Chinese aluminium foil. -- post-Brexit Iraq. It's a series of

cases that could result in the imposition of punitive duties. US

companies filed a report earlier this month saying Chinese imports

are dumped into the market at prices lower than the cost of production.

Chinese technology giant TENSENT is best known for its messaging app,

now it is investing in electric cars. The company has bought a 5%

stake in Tesla. It comes as Tesla prepares to launch a mass-market

model three. Some analysts believe TENSENT could help test the cell or

even build cars in China. Uber's first report on employee diversity

shows low numbers for women, especially in technical positions.

The report comes as pressure increases on the company in light of

sexual harassment claims by a former employee, the antics of its

embattled Chief Executive, and ongoing criticisms of a sexist

culture. Energy giant Exxon Mobil has asked President Donald Trump not

to scrap US participation in the landmark Paris climate agreement,

running counter to White House moves on carbon emissions. The news comes

as the president unveiled a new executive order that could roll back

some of the previous Democratic administration policies aimed at

curbing greenhouse gas emissions and climate change.

Well, the wells is set to face an oil shortage and higher prices if

consumption rates aren't kept up -- the world. That is due to an

international agency forecast. I spoke to the director of energy

markets and security at the IEA and he said Asia is driving much of the

demand. Asia, including China, India, and the ASEAN countries, they

will be the global leader in demand for growth and we almost China was

the dominant leader in the global demand growth, but in our forecast

India will be the leader, especially in the second half of this

projection period. Why will India be leading in the oil demand area going

forward? Because of their population growth and in terms, for instance,

in terms of the vehicle per catheter ownership. The Indian level is very

low. -- capita. So the rate of increase in India will be very

rapid. While in the case of China, they have achieved a certain level

of car ownership. Of course they will continue to grow. So we expect

the growth in India will be larger, especially in the second half of the

projection period. With this increased demand from India and

China, two of the largest countries in the world, will this mean that we

will continue to import oil from the Middle East, or will we look for

other sources of oil? Yes, that's a very good question. You pointed out

that growth in demand in Asia, but also at the same time supply from

Asia will decline substantially in the coming five or six years. That

means the import requirement for Asia will grow quite robust league.

And even if all of the Middle East and exports come to Asia, that's not

enough to fill the gap and therefore Asia will need to import from other

parts of the world, Central Asia, Latin America or Africa. Will this

mean higher prices for oil as China and India continue to expand with

their demand and their -- then import less from the Middle East?

That's what we've been warning to the world. Of course it depends on

the level of investment. If investment picks up rapidly then it

may be able to take care of the demand growth in the 2020s. A quick

look now at the markets and as you can see, Asia continues to rebound

for a second day in early trading after Wall Street stocks scored some

solid gains overnight. Japan and Australia are in positive territory.

Thank you so much for investing your time with us on Asia Business

Report. I'm Rico Hizon, Sport Today is coming up next.

You're watching BBC News. I'm Babita Sharma. The headlines this hour:

Australian officials are beginning