13/04/2017 Asia Business Report


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


label China currency manipulator. And we are tracking this food


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


have already also heard President Trump staying overnight that the US


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


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


Organization says local trade is expected to pick up slightly this


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


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


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


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


trade, which include the danger of protectionist government policies in


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


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


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


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


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


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


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


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


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


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


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


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


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


include getting rid of the transpacific partnership, which he


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


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


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


these enforcement provisions, anti-dumping and some others,


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


immense capacity so trainees passengers have options to bypass


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


addition foreigners who might be travelling who used to fly with


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


symptomatically something all premium airlines are having to deal


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


across the industry how people are affected. Cathay Pacific is


extremely exposed to heavy and intense Chinese competition.


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


geographic advantage in their distance from China, but they are


struggling with the low-cost carriers in the region and


continuing competition from the traditional rivals like Geruda,


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


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


involves robots. We think the best approach for this


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


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


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


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


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


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


that they are overseen. -- overseeing.


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


Business Report. Thank you for watching.


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


Russia and America fail to resolve their differences over


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