08/05/2017 Asia Business Report

Labour has pledged not to raise income tax for anyone earning less

the euro rises on Emmanuel Macron's victory. What does it mean for

global business and trade? And we look at why pharmaceutical companies

are resisting Donald Trump's plans to cut red tape.

Welcome to Asia Business Report. France has elected a new president,

Emmanuel Macron, and the euro has risen during the trading day in Asia

as the markets breed a sigh of relief. The euro factor against the

yen hit a one-year high since falling back slightly, and this is

how the other currencies are trading at the moment. If we look at the

other financial markets that have just opened,, the Nikkei has jumped

almost 1%, the All Ordinaries as well, and the Hang Seng due to open

just a little later. Of course Mr Macron is seen as business friendly.

He defeated the far right's Marine Le Pen, who vowed to take France out

of the European Union. He won 66% of the popular vote according to the

Interior Ministry and it was an election that divided the country,

but he says he's ready to deal with difficulties facing France.

TRANSLATION: And for the next five years my responsibility is going to

be to calm fears and to make us believe in optimism again, and to

recover the conquest spirit, which is the best definition of the French

spirit. My responsibility will be to gather together all the men and

women who are willing to face the challenges that we have to expect.

What will his win mean for business? My guests specialises in

geopolitics. We've been talking a lot about his domestic agenda, and

he talked about it during campaigning, but how is he going to

be for the rest of the world? Of course we are all watching. We seen

those markets picking up. Will he fulfil his promises? Thank you. In

fact during his campaign he fought very much on domestic economic

policy. The foreign one, I can see two circles. The first will be the

European Union and the second theme will be outside the European Union.

He positioned himself as a champion of European Union co-ordination and

cooperation, so secondly they want to scale back from the existing

rules and agreements that they have, and maybe they will go even further

now that the United Kingdom is getting out of Brexit. Maybe they

will believe that one of the obstacles concerning the future

cooperation and integration of the European Union is also going down,

and during his campaign he was also quite hard concerning Brexit. He

said it won't be easy and he won't make it easy! But for the rest of

Europe it is very good news because they will continue with the existing

agenda. He didn't go very much outside. He went to the United

States but now the relationship with President Trump won't be the best

one. As we know, President Trump to some extent wanted to help Marine Le

Pen to win, while for Asia, since China is positioning itself as the

champion of globalism, we just have too referred to Xi Jinping going to

Dallas - probably hear there will be much more options concerning

cooperation. Let me ask you one question. Obviously Asia is looking

at this more positively, but how is he looking at Asia? Will he visit? I

think he will, because after Europe it will be the first, I would say,

reason to visit because of the amounts of money that we are talking

about, and also the cooperation. On the other side of the Atlantic,

since President Trump is not positioning himself as a

globalisation champion, I don't see many other opportunities, so this is

why maybe by default he will come to Asia rather than somewhere else. We

will leave it there. Thanks for joining us.

Let's take a look at some of the news will be keeping an eye on this

week. Tomorrow, Tuesday, it's the turn of the South Koreans to cast

their vote for a new president. The election comes just a month ousted

president was arrested on corruption charges. Snap will release its first

earnings report in New York, and Toyota later will release full-year

results. The strength of the yen has been a drag on the carmaker's

earnings, and we'll also keep an eye on oil prices after a big slide at

the end of last week, though oil prices did see an uptick on Friday.

Earlier I spoke to Simon Littlewood from ACG. He started by explaining

what he is expecting from South Korea's collection. A lot has been

said about the need for transparency, and of course the

previous president, poor thing. Timmy, it's clear the South Korean

economy depends massively on the relationship between these

vertically integrated combines and the government, and political

corruption is a reality, so I don't see any change in the nature of the

establishment or the politics. The big thing, the big story in Korea is

because of demographics you now have a majority of the population born

after the Korean War, so they don't share the same attitudes towards the

North. I've got to push onto those other things on the agenda. Toyota

is the other one of course, the world 's largest carmaker reporting

earnings on Thursday, and of course we know it's a very intense kind of

market we are seeing, particularly in the US, and Trump insisting these

carmakers start producing in the US. It's interesting. I remember being

on this so when Toyota became the largest carmaker about a decade ago.

They are facing two major challenges in the US. Globally the yen has

climbed significantly over the last couple of years. That's hurting

their earnings. Secondly, Trump used a lot of rhetoric during the

campaign about how he would punish companies that imported lots of

Robert and didn't employ workers. The difficulty is that he has walked

back on a lot of this rhetoric. Our reading of this is that there will

be some kind of tokenism, some kind of deal done. Got to snap in there

with Snap coming in with its earnings for the first time. I had

to have my daughter explained what Snapchat was, and it didn't film you

with joy. It's one of these highly frothy text docks where the results

will be disappointing. They are struggling to monetise the product.

But the reality is that the price-earnings ratio there is very

little reference to earnings. Simon Littlewood. The Trump

Administration's response to slow but steady growth in the United

States has been to declare that cutting red tape would boost company

profits and economic activity. The president has issued orders and

initiatives for a range of industries, and one of them is the

pharmaceutical sector. The president has said cutting regulations would

make it easier for drug companies to get new medicines to the market, but

how realistic is that proposal? With the executives of big

pharmaceutical by his side, President Trump said low hearing the

cost of prescription drugs had to be done. How? Cutting regulations. We

are going to be streamlining the process so that when you have a drug

you can get it approved instead of waiting for many, many years. In

that meeting in the White House was the influential pharmaceutical lobby

group. We are living with regulations that were developed 40

years ago. We have to keep safety first but there are opportunities to

modernise the system to be able to give medicines to the marketplace

faster and help patients. Faster approval by the Federal drug

Administration or FDA would mean more drugs on the market, which

should increase competition and bring down prices. But the cost of

that idea could be even greater. In patient safety. This is a small drug

company that tests new cancer treatments. These are the companies

that take most of the risk when getting a drug to market, a process

that can cost billions of dollars, take ten to 15 years, and no

guarantee of success. But perhaps surprisingly, they are not convinced

faster approval Zara good idea. What's important is to develop

effective therapies that are also safe. I don't believe we should

lower the bar. The President's views on the pharmaceutical industry, like

his views on others, is that there are simple business solutions to its

problems. However, the testimony from the industry itself

demonstrates that Donald Trump was Mac solutions don't always have much

to do with the underlying problem. Let's take a look at those markets.

I was telling you about them at the start of the programme, but they

continue to rise, the Nikkei really on the rise, the highest since

September 20 15. That's it for this issue of Asia Business Report.

The pro-European centrist, Emmanuel Macron, who's just

39, was voted in with a projected 66%