13/04/2017 Asia Business Report


13/04/2017

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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After months of tough talk, President Trump now says he will not

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label China currency manipulator. And we are tracking this food

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delivery service on the streets of San Francisco. Welcome to Asia

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Business Report, I am Sharanjit Leyl. US President Donald Trump says

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his administration will not label China currency manipulator. It is a

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stunning reversal from one of his key election campaign promises. Mr

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Trump told the Wall Street Journal that he changed his mind because

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China has not been manipulating its currency recently, and that doing so

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jeopardise talks with Beijing about how to deal with North Korea.

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Earlier I spoke to an economist about whether the US president was

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softening his trade stance on China. In the past, China has arguably used

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currency to push its trade policy. They have moved away from that over

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the past year or so, and I think although Jock, Donald Trump is the

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candidate a year ago was very vibrant on this point, that is not

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currently today's situation. Again, he is not looking for a fight but he

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will push them on market access on things like tech, financial

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services, steel, autos, that is where you will see a very forceful

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Donald Trump. The US Treasury is due to release a report later this week

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on the currency practices of major trading partners. This is how

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currencies are doing this morning. We are seeing a strong yen having an

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impact on the market, the Japanese market, the Nikkei already lower. We

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have already also heard President Trump staying overnight that the US

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dollar was too strong, and that he would prefer it if the US Federal

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Reserve would keep interest rates low. Meanwhile, the World Trade

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Organization says local trade is expected to pick up slightly this

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year. The WTO says the value of goods shipped around the world will

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increase by 2.4% this year, and potentially grow even faster in the

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next two years. This is up from a very weak 1.3% expansion in 2016,

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but the trade body also warned of potential risks to its outlook on

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trade, which include the danger of protectionist government policies in

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response to job losses. Our correspondent has more on the WTO's

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numbers. They crept up the numbers a bit but it means we are on the right

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trend. And what I read from that is two question marks over the trade

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environment over the last six months or so, exit and the Trump election

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and the Trump Presidency, and because both of them embody or at

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least tilt towards some of this protectionist instinct. What we have

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seen is very good stewardship in London and good stewardship on trade

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in DC, at least in so far as saying that no one is spoiling for a trade

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fight. Donald Trump is clearly going to be more forceful on some trade

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issues than his predecessor but he had a good meeting with Xi Jinping

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and is not looking for a fistfight. It is interesting you mentioned

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makes it and some of the talk which Donald Trump has done throughout his

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campaign and residency, but he hasn't really acted on it unless you

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include getting rid of the transpacific partnership, which he

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has done. So are we braced for an even more dire outlook once these

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real consequences are felt? Well, I think we have seen some signals from

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the Trump Administration that he will be more forceful on some of

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these enforcement provisions, anti-dumping and some others,

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putting top trade lawyers and those spots. By the way there is not

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necessarily anything wrong with that. If that is all you do on trade

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you are limiting yourself. In other words, that is the bad cop side of

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things, you also need the good cop. He signalled with racks of a free

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trade agreement with the UK might be feasible. Abe's visit, he was

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talking about the possibility of a free trade agreement with Japan. All

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we know is not on the table is the TPP, but what is on the table, we we

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will have to wait a few more months. Samsung's replacement for Apple Siri

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has been delayed. The Galaxy as eight and as eight plus will now

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ship without English voice controlled -- S8 and S8 Plus. Hong

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Kong's flagship carrier Cathay Pacific has announced a change of

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leader. The current chief executive will be replaced by the chief

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operating officer, Rupert Hogg. A few weeks ago the airline reported a

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loss of $74 million for last year, the first annual loss since 2008.

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Earlier I spoke with an industry analyst and asked why Cathay Pacific

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is struggling. There are a few key changes which have happened to

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Cathay. You can say that their greatest advantage, being close to

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China, which drove their traffic throughout their history, has become

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a major disadvantage. You can see the Chinese carrier is adding

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immense capacity so trainees passengers have options to bypass

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the hub in Hong Kong and fly direct from major Chinese cities and in

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addition foreigners who might be travelling who used to fly with

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Cathay and change at the Hong Kong hub can now fly direct. Is this all

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symptomatically something all premium airlines are having to deal

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with, or is it specifically a problem for Cathay Pacific? Varies

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across the industry how people are affected. Cathay Pacific is

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extremely exposed to heavy and intense Chinese competition.

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Singapore airlines is also exposed, to a lesser extent. They have a

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geographic advantage in their distance from China, but they are

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struggling with the low-cost carriers in the region and

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continuing competition from the traditional rivals like Geruda,

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Malaysia airlines and so forth. They have undertaken the biggest review

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of their business in two decades, and this change of leadership as

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part of that. Are they optimistic that this will change things and

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turn things around? -- Garuda. The people leading Cathay Pacific, I

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believe, a very cognisant and aware of the issues they are facing and

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they have a sense of what needs to be done. They recently announced

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they will be cutting 30% of the costs at their headquarters, that is

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an important first step and the new 777 planes will have an additional

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seat per row in economy class, so it will be a bit tighter when you are

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sitting in economy, but it will drive their costs down and hopefully

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bring some of that revenue back. Italian luxury brand Prada reported

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a 16% fall in profit for 2016. Many luxury brands have struggled in Asia

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over the last 16 years because of a corruption scandal in China and

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stock markets but for the rivals business is picking up -- volatile

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stock market. Overall it was quite a disappointing year for product, in

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fact it was its worst annual profit since 2011, when it first listed in

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Hong Kong. Analysts at Thomson Reuters were looking for net income

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around 300 million euros and instead it came in at around 20 million

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euros less than that. It suggests the anti-corruption crackdown in

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China hasn't fully been resolved by a Prada. It was in stark contrast to

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its larger rival which just a few days ago posted a very strong first

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three months of the year. So in contrast to that, Prada said it is

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seeing green shoots of recovery, to borrow a phrase we were using during

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the financial crisis. In its third quarter, mainland China bottomed out

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and in the first three months of the year mainland China was growing in

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terms of revenue in the double digits. So Prada, that is what is to

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appease or tell its investors, that things are turning around,

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especially in mainland China, and it hopes to maintain that momentum.

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Feeling a bit hungry but not willing to step out of the house to get some

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food? One company in San Francisco may have the answer for you, and it

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involves robots. We think the best approach for this

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kind of system is one where there is constant human oversight of the

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robots. The architecture we have chosen is one where a person is

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capable of controlling one or two robots, and overtime we are building

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more and more autonomous operations, so that there is one person in

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controlling five and then ten and so on. It is effectively multiplying

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the possibility of a person to do more work over the set of robots

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that they are overseen. -- overseeing.

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Deliveries with a difference. That is it for this edition of Asia

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Business Report. Thank you for watching.

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The top stories this hour: After hours of talks in Moscow,

:10:40.:10:42.

Russia and America fail to resolve their differences over

:10:43.:10:46.

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