25/04/2017 Asia Business Report


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


China stocks taking a nosedive as regulators crackdown and investors


lose confidence. And will South Korea's giant family -- family run


companies change the elections? -- ahead of the. It is a Tuesday. Good


morning Asia, hello world. Glad you could join us for Asia Business


Report. I Rico Hizon. We start off with Chinese investors and they are


closely watching their portfolios today after the worst day of trading


this year. As you can see right here on our graphic board, stocks on the


Shanghai stock market have been on a downward spiral over the past two


weeks. So what is causing the loss of confidence? Regulators are


cracking down on speculative trading and underlying concerns that the


economy is slowing, weakening investors' enthusiasm. We get more


from our Shanghai corresponded. The Shanghai and stock market and the


Shenzhen stock exchange are opening in about one hour. Everybody will be


watching how they will react to what happened yesterday. --


correspondent. Yes. I think one of the most interesting statistics


after yesterday's events was that the last time we saw a fall like


this in 2015, it was followed by 820% fall over the next six days.


That came two years ago in that summer of horror. We had to


substantial falls in the Chinese stock markets and $5 trillion was


wiped off the value of shares in this country. And the economic


incompetence, really, of the regulators, here, and the political


leadership here was exposed. In the next hour, we will see whether the


trend is likely to continue from yesterday, and then the test will be


the extent to which this regulatory bite is willing to tolerate falls in


the market, or if there is a limit for China's newly emboldened


regulators and we may see some kind of intervention, either in a


suspension of trading, or if government backed investors will


come on trade of all things up. So it will be interesting. One fall --


1.4% drop yesterday. Some say this crackdown is a positive for the


Chinese stock markets because it will increase the appeal of the


stock market to foreign investors such as pension funds. Yes.


Volatility is a huge issue in the stock markets here, particularly in


Shenzhen. What we're seeing is effort from the newly emboldened


Rigoletto is to try and send a message to investors looking to come


in, but also investors with money in the market already, that they are


willing to let them write it out on our own, really. They tried to send


the message that they won't always be there to intervene, and this


market can be more mature and become something more like a free, open


stock market. But like I say, I think there is a level of tolerance


here. Remember this is an important political year for the government


here. Overall, the regulators I don't think will let things go


completely on their own. Everybody will watch the opening trades in the


Shanghai stock market in about 55 minutes' time. South Korea's is a


selection is in two weeks from today. There are calls for real


reform and particularly in regards to chaebols. The biggest chaebols


have been charged in the events that brought down the President. We take


a look now at peace two. Calls for of chaebols have happened many times


before. But it really feels, on the ground, for many of the people that


I spoke to, that this time it is different. I spoke with business


leaders in small and medium-sized enterprises that said that chaebols,


these massive family run conglomerates, that they stack the


system against them. Young people as well complain about the lack of jobs


and opportunities because of this chaebol dominated system. Another


Saturday, another protest in Seoul. Many here are calling for the reform


of massive family run conglomerates, or chaebols, as they are known.


TRANSLATION: Right now, cables monopolise to much of the wealth in


South Korea and it isn't being used properly. I think this needs to be


corrected. -- chaebols. One of frustration, a sense that the system


is stacked in favour of the chaebols. South Korea's president


and the heads of Samsung and Lotte have been charged with bribery. But


at the top of the country's tallest tower, built by Lotte, we can see


how far this has brought South Korea. Here, South Korea's marvel at


what the chaebols have built in just a few decades. You know, it occurs


to me, as I looked out from this building, towering over the city of


Seoul, that it is like the relationship between chaebols and


how much they dominate the South Korean economy. On the face of it,


you would never know that scandal had hit Lotte. But there is


recognition in the sprawling empire that something has to change.


TRANSLATION: The corporate brand image has been damaged. Because of


that, new investment and development of new businesses may have been


affected. But it has also provided us with the opportunity to look at


corporate governance, which we have not been paying attention to. That


is little comfort for those who challenge the dominance of the


chaebols. 15 years ago, this man was the founder of a successful


business. He partnered -- partnered with a chaebol to spend. But after


there was a disk ute over the deal, he lost everything. -- dispute. His


business, his house, and his marriage. He should be the evidence


of his long campaign for justice, which has come to nothing.


TRANSLATION: I have fought for 15 years. I have met more than 170


congressmen. My case has been discussed in the National Assembly


and featured countless times in the media. It is impossible in Korea for


a small business to win against a chaebol. Whatever is next for Cho,


his future and that of other families will inevitably be checked


by chaebols. They have been some steps to change, but it is hard to


see how real reform could go. And his was not the only story we heard.


There were many such similar tales that people in Seoul told us about


the unfairness of the system. Because the reformer getting louder.


But we are sounding like a broken record here. Over and over again,


reforms for chaebols, but now, with what has happened, is there enough


impetus for reform is to take root? I think that the real test for this


will be at the elections next month, when South Koreans go to elect their


new president. Brita much every single candidate has made chaebol


reform part of their election campaign platform. -- pretty much.


Whether or not this actually happens, you will be very difficult,


even how entrenched chaebols are within the South Korean economy.


While commuting to meetings, is that of traffic, could you take a


helicopter? Sharanjit Leyl went for a browse. If you're in the market


for a new helicopter or a state-of-the-art drone, then this is


the place for you. This is Asia's first show dedicated to rotorcraft.


And just about every big Pharma is here, hawking products. So let's


seem what is on offer and who buys them. This is the Airbus H160. Let's


go inside and have a look. How much is this cost? The cost of a


helicopter in the basic version, it should be around, all included,


about 10.4 million euros in 2017. That is a lot of money. So who buys


these things? VIPs, of cores. We also have oil and gas operators. --


offcourse. Doctors love the interior and it can be used as a long-range


ambulance. Finally, it is public services, which might include search


and rescue missions, and others who need this size of a helicopter. --


of course. Let's find out who some of these buyers are. This man has


his place in order for three helicopters, amounting to $60


million. He is with an aircraft maintenance and charter firm. Time


is money. We make deals happen. People who come into the country or


arrived in Manila, we fly them to their meeting place, to our helipad.


They have their meeting in two hours, make a big deal happen, and


give jobs to a lot of people. So business aviation really provides


the opportunity to create, actually, jobs, deals. The region is still a


relatively new market for helicopters. But these companies are


betting orders and demand continues skyward.


Great looking helicopters. Thank you for investing your time with us. I


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


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