30/08/2017 Asia Business Report

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

Japan's Prime Minister, Shinzo Abe, welcomes Theresa May to Tokyo. Will

North Korea overshadow trade negotiations? From bicycles to

football, we look at where -- whether the sharing economy has gone

too far. It is Wednesday, everyone. Glad you could join us for this

edition of Asia Business Report. I am Rico Hizon. As we mentioned in

the headlines, UK Prime Minister Theresa May is in Japan from today

for a three-day visit. Before we get to that story, let's check out the

state of the world's third-largest economy. Here is our Asia business

correspondent. About a year ago, the economic news coming out of Japan

was still pretty gloomy. After all, this was a country which struggled

with falling prices and slower growth since the stock-market

collapsed company bubble in the 1990s. But now things might be

looking up. What has given Japan's economy this bounce? Low

unemployment is helping wages to grow just a little bit more quickly,

and that means more cash in people's pockets to spend. Consumer spending

makes up more than half of Japan's economy. And there is more. The

Tokyo 2020 Olympics are just around the corner. The government is

spending billions on new stadiums and it has already seen a rise in

tourist numbers. And then there is exports. While they did fall

recently, they are going strong so the stuff that Japan is well known

for making like smartphones, cars and memory chips is in demand all

over the world. But alarm bells ahead. The Japanese currency, the

yen, is getting stronger, making Japan's stuff more expensive to buy.

So does this all mean that Abenomics, the economic policies of

Shinzo Abe to jumpstart Japan, are actually working? Well, to a point.

Japan might be having its best run for a decade but that level of

growth is not that impressive when compared to other developed

economies. One of its biggest names, Toshiba, is at risk of becoming a

zombie company propped up either State and the ageing population and

shrinking workforce are fundamental problems for Japan that economics

alone will not be able to fix. As she mentioned about Shinzo Abe, he

will be hosting his UK counterpart, Theresa May, who will be in Japan

starting today for a three-day visit. Tensions surrounding North

Korea could rank high on the agenda and both sides could also be looking

at ways to boost trade post Brexit. Last year the UK exported 50 billion

US dollars to Japan -- 15 billion US dollars, while imports amounted to

$14 billion US. Japanese investors have invested $52 billion in the UK,

across various industries including banking and autos. Britain is home

to 1000 Japanese companies, employing 140,000 people. Earlier I

spoke to senior economist Martin Schulz about the importance of their

relationship. The UK is clearly the most important country in many ways

for the Japanese economy and for Japanese investors. Most

headquarters of companies are sitting in London. Finances

really... The international finance hub for Japan, as well. An overall,

the idea in Japan is that the domestic economy is booming, a

growing beyond potential. They want to invest in the euro and the UK is

still an important hub for Japan. It is important, but we now have the

Brexit negotiations. Will the Japanese agreed to discuss a free

trade agreement with the UK sooner rather than later? Well, this is

really the most important point. Mrs May will have to explain to Japan,

to investors and the government, what is the future plan? How will

she support businesses in the UK? How can the UK actually do better

outside the EU? This is very hard to grasp for Japanese businesses

because Japan has just negotiated an EU Japan FDA, so they are joining

the market while Japan is leaving a very difficult situation. Mrs May

will have a great deal to do. The mood is calm but the big question is

how to move on. You deal with a lot of Japanese businesses on the

ground, Martin. What are these businesses sceptical about? By

joining a free trade agreement with the UK? Well, it is legally

impossible. That is a problem for the Japanese government, because,

well, the UK is still technically part of the EU, so they can't

negotiate outside. But more importantly, there will be indirect

talks. There will be talks about future plans. But overall Japan is

now focusing on the all-important EU Japan FDA, is not to disturb

anything on that side, and it is moving on businesses. They want an

internal plans, they want to know the future plans of the government

in the UK, as an investment hard in Europe. Martin Schulz in Tokyo.

Shifting our attention to the aviation industry and Chinese

carriers are having to way politics over profitability. The big three,

China Southern, China Eastern and air China, are out soon. Will events

in the world cause a dent in that online? As they pressure South Korea

over its deployment of a missile defence system. Joining me is my

colleague. Will the South Korean tourism industry really have an

impact on the bottomline of these Chinese carriers? Yes, it will,

because it is a case of politics over profits. Essentially China's

big three Allied is a China Southern, China Eastern and Air

China. Let's take a look at a graphic illustrating the size of

each. They are Asia's three largest airlines in terms of their fleet

size and the sheer number of passengers they carry. China

Southern is the largest, carrying over 70 million passengers this year

as of July, with over 500 veins in the F. China Eastern follows with 63

million passengers. -- 500 planes in the air. Finally Air China, which

flew 57 million people with just a fleet size of 400 planes. You can

imagine, with the sheer size of these airlines, you would think they

would report fairly good profits. Actually they have reported a fairly

mixed bag. Yesterday we saw decent earnings from China Eastern, which

saw its first half profit rise. That was really on the fact that they had

a 1-off sale of a logistics unit. A stronger Chinese currency, as well,

the yuan. China Southern recorded an 11% fall in first half profit, due

to higher fuel prices and lower returns on its international

flights. That is where we get to South Korea. They had to cut their

flights to South Korea after Beijing banned tour groups from visiting

there. The cuts came as China began to pressure South Korea over Seoul's

deployment of a missile defence system, the THAAD, designed to

thwart North Korean attacks. China sees it as a threat to its own

security. That is what I meant what I said politics over profits for

these guys. Many headaches for these Chinese carriers, massive fleets but

not many passengers. Thank you for joining us. Moving on to other

business news making headlines, Uber says it is cooperating with a

preliminary investigation by the US Department of Justice into possible

allegations of bribing foreign officials. It is unclear whether

authorities are focused on one country or multiple countries where

the carrier operates. It is the latest legal problem right hailing

giant faces as they await their new chief executive taking over the

reins. And what is yours could also be ours, that is the thinking of the

sharing economy taking off in various parts of the world,

including China. How far would businesses go to push the sharing

concept? Our correspondent looked around the Chinese city of Beijing.

But what about ball sharing? The company behind this venture planned

to make 20 million footballs and basketball is available for hire

across China. -- basketballs. That is very unique, exercising on a

treadmill in the middle of the street. That is the sharing economy

in China. That is it for this edition of Asia Business Report.

Thank you so much for investing your time with us. I'm Rico Hizon in

Singapore. Sport Today is coming up next.