03/08/2017 Asia Business Report

As Kaesler's latest earnings shift into high gear we look at China and

India leading Asia's ambitions for electric cars. -- Tesla's latest.

And the Dow pushes past 22,000 mark. Will the rally extends to Asia. --

kickstand to Asia? Welcome to Asia Business Report. I am Sharanjit

Leyl. We begin with the auto sector. Electric car maker temper -- Tesla

just reported revenues of more than $2 billion for the April- June

quarter, more than doubling. The electric car maker burnt through

more than $1 billion in that quarter, ramping up production for

its mass-market Model three, released last week. There are about

half a million pre- orders for the Model three. Asia has its own

ambitions when it comes to electric cars. China has mandated 8% of all

vehicles sold the new energy cars by 2019. India has vowed to make all

cars sold electric I 2030. Earlier I spoke to an auto analyst in Sydney.

I think you have to differentiate Chinese case from the Indian case.

If you look at the background statistics, China has a penetration

of electric cars around 1.4%, higher than the US. They accounted for half

of all you -- will electric cars registered in 2016, around 250,000 a

year. They are on a naked trajectory. Also, China has an

ability to provide infrastructure, because it is a decision by the

government. 150,000 public charging spots exist already. I am more

confident about the Chinese case. There are lots of manufacturers of

electric vehicles and hardly anybody else. BID and BAIC, they cell tens

of thousands of cars per month, and found a widespread brands because

they are only in China. If you look at India, I think that is a greater

challenge. The current penetration is 0.02%. They sold 11,000 electric

vehicles in 2016 and only 1000 were cars out of that. That is a long way

to go when it goes to 100% penetration. Which countries and

Manufacturer 's will stand to gain from this potential increase? --

manufacturers. Honestly, I think China might be one of the countries

benefiting from India, because they have cars which are underneath the

$40,000 range. If you look at the growth of national income per capita

in China and India, it is about $7,000, so it would take five years,

and on top of it, Tesla is not even present in India get. So I think the

European manufacturers or American Manufacturer 's would have to have a

lower entry point on the model three to crack the market in India.

We can now go to the assembly line in the United States were factory

workers of Japanese automaker Nissan are set to vote on the right to form

a union. The head of the deadline tensions have fled with the union

describing it as one of the nasty is, antiunion fights in US history.

Michelle Florey reports from Mississippi. Nissan launched this

massive antiunion campaign to threaten and intimidate workers. We

did the research may UAW and we do not want what they are offering.

Once again we are in a battle, we have to struggle and fight just to

have the right to vote. The fight to form a union at the Nissan factory

in canton, Mississippi. We are battling against our own, not for

the right to vote or not to vote, but for the right to manipulate and

lie to each other. For 14 years, workers at the Nissan plenty have

been engaged in a pitched battle with management over the right to

form a union. Mississippi, like many Southern states, has typically been

resistant to letting in unions. This time, workers here are hopeful they

have a chance. I want to have a voice in the plant. Health and

safety. Like I said, equal opportunity. I got hurt on the line

and I have been dealing with that throughout the whole time. So it has

been a real process. And I think the union would really stand up for us.

Not everybody wants the union. Nissan is the best thing that has

happened to the state of Mississippi. We are campaigning hard

to keep the UAW out of our plant. We do not need an outside entity to

tell us how to do what we are doing. To get its message across, Nissan

has posted antiunion messages inside the factory, landing them in trouble

with the national labour relations board. The company denied

allegations of intimidation, saying that voters have the right to know

the company's perspective. For those who remember first-hand the south's

troubled past, this is not just about worker rights. It is about

civil rights. When black people would go to register to vote,

somebody might come buy their house burning across. Or wearing a hood.

Now they do not wear the hood, or burn across, but they come by and

say, we are going to oppose the union and oppose the plant. When it

is time to vote, vote yes! The union is hoping to turn past failure into

success. Victory here might like the spark for the US labour movement

across the South. -- light to the spark.

The United States is said to be planning possible trade sanctions on

Beijing of international -- intellectual property theft, which

would affect areas fleck semiconductors and artificial

intelligence. US businesses have been lobbying for tough actions

against what they feel like unfair trade and market practices by China.

What can you tell us? It looks like the honeymoon between

President Xi Jinping and President Donald Trump is well over. They

first met four months ago and it was a very positive face-to-face

meeting. President Trump tweeted afterwards, tremendous goodwill and

friendship was formed, and their meetings led to 100 days of trade

talks between the two countries. Fast forward to today and the tone

has changed. He is disappointed over China's lack of progress on issues

like steel dumping and their trade deficit, which stands at more than

$300 billion each year. As well as in action over North Korea and its

weapons programme. So now the Trump Administration is stepping up the

pressure on China. They are believed to be building a case of

intellectual property theft, and we could see an announcement about that

within days. According to reports, the US might invoke a rarely used

law provision which will allow it to unilaterally Institute tariffs and

possibly restrict the transfer of advanced technology to Chinese

firms. This is interesting because the move marks a shift in strategy

for the Trump Administration, but raises concerns that such actions

may spark a trade war between the two sides. Intellectual property

cases should go through the World Trade Organization. But disputes the

there tends to take years to resolve. Bypassing the WTO would

raise a whole set of issues between the two sides. On Wednesday, the

head of the WTO said to reporters that there is a clear risk of a

trade war because of protectionist policies, and we just don't want

that. No, we certainly don't. Well, in

other news, India's central bank reduced the cost of Orrell in by

cutting key interest rates. It is the first time the Reserve Bank of

India has dropped its rates to a seven-year low of 6%. The move will

make it cheaper to take out loans for large-scale purposes as a way to

boost the economy. Qatar Airways has abandoned plans to buy a 10% stake

in American Airlines. Qatar Airways made an unsolicited bid worth at

least $800 million in June. Qatar said investing in the US carrier no

longer meets its objectives. Executives from the American airline

had opposed the partnership and it was first disclosed. Strong earnings

from corporate America, including Apple's latest results, since the

blue-chip index and the Dow to a new all-time high. It climbed past

22,000 mark, marking its sixth straight record close. Earlier, I

asked Sarah Hussein how long the rally could last. That is the big

question. There are lots of worries about whether or not the market is

becoming too hot, and if we are due for some sort of correction. Most

people believe there is going to be some sort of correction but of

course you can never really tell when this might happen. Lots of

people are also wondering how much of this is being attributed to

President Trump and some of the policies that he has put through.

From Wall Street's respective, they have really shrugged off the fact

that, you know, President Trump has not been able to achieve a lot of

the legislative goals he wanted to. For example, reforming the tax code

or getting through a big infrastructure spending bill. Wall

Street has largely shrugged that off, saying that there is a business

friendly person in the White House now.

Let's take a look at Asian markets. We are not seeing those kinds of

figures. The Nikkei has opened flat. The All Ordinaries is down 1%. The

Nikkei has been under pressure to some degree because the yen is

stronger against the US dollar, which is always pressure. Japanese

exporters that rely on the weaker yen for their profits. So that is

possibly the reason there. We are also seeing a little bit of profit

taking after a few aids of gains, particularly the likes of Australia.

We have also seen the oil prices under pressure. That is all from

this edition of Asia Business Report. Thank you for watching.

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