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Now on BBC News, all the latest business news live from Singapore. | :00:00. | :00:17. | |
Status check. The banking regulator in China wants a report card on | :00:18. | :00:28. | |
overseas acquisitions. Kazakhstan is strapping in for what could be a | :00:29. | :00:34. | |
fast ride on China's One Belt, One Road expansion. Good morning, Asia. | :00:35. | :00:40. | |
Hello, world. Welcome to another edition of Asia Business Report. | :00:41. | :00:43. | |
It's a Friday. I'm Sharanjit Leyl. China's banking regulator has | :00:44. | :00:46. | |
ordered a group of lenders to assess the exposure to offshore | :00:47. | :00:50. | |
acquisitions by a handful of companies on a buy spree overseas. | :00:51. | :01:02. | |
They are some of China's largest, like HNA and Fulson. I spoke to our | :01:03. | :01:08. | |
Shanghai correspondent asking why authorities are so worried. There | :01:09. | :01:11. | |
are two elements to this. They see the acquisitions, a vast 235 billion | :01:12. | :01:20. | |
US dollars last year, they see it as giving a risk to the currency. They | :01:21. | :01:29. | |
don't want that level of capital out of there. And they are worried about | :01:30. | :01:32. | |
big Chinese conglomerates raising money in this country. There is a | :01:33. | :01:37. | |
big worry about debt overall in China. Wealth management products, | :01:38. | :01:44. | |
retail vehicles, high risk, high interest-bearing, it is a concern | :01:45. | :01:50. | |
among much of the authority base here about the risk they pose to not | :01:51. | :01:54. | |
just the companies using them, but more widely to be financial system | :01:55. | :01:59. | |
in China. This is not just about economics and the financial sector, | :02:00. | :02:05. | |
it is also about politics. This is a very important year for the | :02:06. | :02:08. | |
president of China, Xi Jinping. In October this year at the conference, | :02:09. | :02:13. | |
he will almost definitely be chosen for another five years. At the very | :02:14. | :02:19. | |
top, we are seeing a message out to the most influential and prominent | :02:20. | :02:24. | |
economic leaders that they need to be risk averse and reminded of who | :02:25. | :02:28. | |
is in charge overall. Will this put an end to the Chinese companies and | :02:29. | :02:37. | |
their foreign buying spree, paying eye-wateringly high prices for | :02:38. | :02:40. | |
foreign assets? The tide has turned already. For instance, Delian, | :02:41. | :02:47. | |
controlled by the richest man in China, he owns Legendary Pictures in | :02:48. | :02:58. | |
the US along with an attempt to get Dick Clark Productions, which did | :02:59. | :03:05. | |
not happen in the end. The tide is turning. Much of that is trying to | :03:06. | :03:14. | |
stem the capital outflows and it is about the pressure on the currency, | :03:15. | :03:18. | |
the RNB, as well. And there is money flooding out to Hong Kong. We are | :03:19. | :03:23. | |
seeing the tide turning. We are not seeing levels last year and this | :03:24. | :03:29. | |
year repeating again. The Chief Executive of Fox Com says the | :03:30. | :03:32. | |
company will invest more than 10 million US dollars in a display | :03:33. | :03:37. | |
making factory in the United States. The Taiwan -based company is the | :03:38. | :03:42. | |
largest contract electronics maker and a major supplier for Apple. He | :03:43. | :03:47. | |
says he is optimistic about doing business in the US. TRANSLATION: | :03:48. | :03:51. | |
This time when we go to America it is not just to build a factory, but | :03:52. | :03:58. | |
to move the entire supply chain to one oil prices have had a volatile | :03:59. | :04:05. | |
ride this week. We can see they are up slightly in Asian trade. They | :04:06. | :04:09. | |
bounced back yesterday ever so slightly after hitting ten month | :04:10. | :04:15. | |
lows. The market sentiment remains negative because oil producing | :04:16. | :04:19. | |
countries refused deeper cuts despite a global supply glut. | :04:20. | :04:27. | |
Peaking at $57 a barrel in February, prices are at about 20% lower. I | :04:28. | :04:33. | |
spoke with an energy expert earlier asking which way prices will go | :04:34. | :04:36. | |
next? There will be continued pressure on markets, with too much | :04:37. | :04:45. | |
or little out there and too much oil from the States. And Libya and | :04:46. | :04:52. | |
Nigeria are exempt from OPEC accords, which is putting even more | :04:53. | :04:56. | |
pressure to be more barrels are going into it. Industries are not | :04:57. | :05:02. | |
going down. These are the kind of things that make it challenging for | :05:03. | :05:12. | |
this new cartel of OPEC, non-OPEC, to reach objectives. They want to | :05:13. | :05:16. | |
reach a five-year average of global inventory is. The consensus is we | :05:17. | :05:20. | |
will be lure for a while and market rebalancing will take a while. -- | :05:21. | :05:26. | |
lower. Where are we headed next? At the end of May, after the OPEC | :05:27. | :05:33. | |
meeting, you asked me that same question, and I certainly will not | :05:34. | :05:38. | |
reach 55, the US speed limit. I see a massive correction. I think we | :05:39. | :05:42. | |
will test 40. That could be the wakeup call. Everyone is trying to | :05:43. | :05:49. | |
call the bottom, point do we hit the threshold and bounce back? The head | :05:50. | :05:55. | |
of the world's largest defence contractor says big-ticket products | :05:56. | :05:58. | |
will remain relevant despite security challenges. A persistent | :05:59. | :06:04. | |
criticism of large contractors is military hardware does not do much | :06:05. | :06:07. | |
to addressing increasingly common low-tech threats. But they say there | :06:08. | :06:13. | |
is plenty of demand for the products. There is a broad range of | :06:14. | :06:18. | |
threats in the marketplace, from the low and, as you just described, to | :06:19. | :06:24. | |
the high end. -- end. We focus on the need to high end. . -- mid to | :06:25. | :06:34. | |
high. We just got a $600 million contract to supply to the | :06:35. | :06:37. | |
Netherlands, to Australia, Japan, and Korea. Again, that is to address | :06:38. | :06:48. | |
the high-end threat that they see a need for a capability to defeat. | :06:49. | :06:54. | |
China's Belt and Road initiative is ploughing through central Asia into | :06:55. | :06:58. | |
Europe. As part of that global initiative, China has supplied | :06:59. | :07:02. | |
billions of dollars' worth of trade, infrastructure, and energy deals in | :07:03. | :07:06. | |
the 6-iron. They want to bring growth and jobs to the oil-rich | :07:07. | :07:14. | |
nation. -- Kazakhstan. They also want to help China's energy needs. | :07:15. | :07:21. | |
We went to the economic capital of China to see the impact on the city. | :07:22. | :07:29. | |
No, it is not Beijing or Shanghai, it is a marketplace in Kazakhstan in | :07:30. | :07:36. | |
central Asia. This man has owned this market for 15 years. And this | :07:37. | :07:42. | |
woman came from China to take part in an eyes skating competition, but | :07:43. | :07:47. | |
stayed for the opportunities. -- ice skating. TRANSLATION: It has been | :07:48. | :07:52. | |
great for business. Many people have come here and they need my products | :07:53. | :07:59. | |
from China. Everything in this market is from China. It is not just | :08:00. | :08:07. | |
good, upload, toys, exercise equipment, even infrastructure. The | :08:08. | :08:16. | |
local community says it is starting to take off. This oil and gas man is | :08:17. | :08:28. | |
also taking profit from the initiative. At the start it was just | :08:29. | :08:32. | |
him. Now it does deals worth almost $200 million every year. He is | :08:33. | :08:36. | |
expecting business to keep growing. Xi Jinping said the two countries | :08:37. | :08:42. | |
have gone from friends to relatives. Kazakhstan has given the Chinese | :08:43. | :08:47. | |
preferential policies and is trying to speed up approvals and | :08:48. | :08:51. | |
formalities for us. But with that success has come suspicion. Last | :08:52. | :08:58. | |
year, Kazakhstan soul protesting against a controversial land reform | :08:59. | :09:02. | |
bill. -- saw. Many thought that China would own too much of the | :09:03. | :09:09. | |
country. Yes. Only beautiful statements. China is our neighbour, | :09:10. | :09:13. | |
it is our good partner, it is our future. And, umm, Kazakhstan is | :09:14. | :09:21. | |
going to use this China economical problem and wealth for our own | :09:22. | :09:28. | |
economical interests. But what about the ordinary people? There are many | :09:29. | :09:31. | |
different statements about China. Traditionally, inside of our | :09:32. | :09:39. | |
society, we have our own culture. Despite those fears, China is still | :09:40. | :09:43. | |
an increasingly important influence here. At this Chinese language | :09:44. | :09:49. | |
school, they see this as the language of the future. For most | :09:50. | :09:54. | |
people in Kazakhstan, this is the new reality, the relationship with | :09:55. | :09:59. | |
China, one that will not change any time soon. If you are interested to | :10:00. | :10:05. | |
hear more from the minister of energy in Kazakhstan, tune into | :10:06. | :10:10. | |
Talking Business from Astana this weekend. A quick look at the | :10:11. | :10:16. | |
markets. The Nikkei is a little bit low. Rebounding today. The All | :10:17. | :10:20. | |
Ordinaries Index in Australia is slightly higher and is doing well | :10:21. | :10:23. | |
because of the energy-related stocks and resource related shares doing | :10:24. | :10:28. | |
better with the rising oil prices. We will be telling you about that. | :10:29. | :10:31. | |
That is it for | :10:32. | :10:32. |