05/09/2017 Asia Business Report

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

Global leaders debate whether economic sanctions will be enough to

stop Pyongyang in its tracks. And it kind takes a tumble after China

cracks down on crypto currencies. It is a Tuesday, everyone -- Bitcoin

takes a tumble. Glad you could join us for this edition of Asia Business

Report. I'm Rico Hizon. We start off with United Nations, and the

Security Council is considering tough new sanctions against North

Korea, as a way to isolate the regime which continues to test

nuclear weapons. This comes hours after President Trump tweeted the US

may stop trading with any country doing business with North Korea.

That includes India, Russia, Pakistan and especially China. Let's

take a look at the trade between these two economic him it. The US

and China, it is worth around 650 billion US dollars, and that 80% of

North Korea's exports are to China, but will they be enough to stop

Pyongyang from further missile launchers? Well, I spoke earlier to

our Asian business adviser. North Korea is an ultranationalist,

xenophobic regime which cannot be influenced by outside powers, so

China cannot tell North Korea what to do, but it can cut North Korea

off and that a collapse, which I am convinced is the only way out of it.

China has showed it is not willing to get serious, so I think our only

resort would be hard secondary sanctions on Chinese entities and

banks enabling North Korea's weapons trade. Also, if Nikki Haley is not

successful in getting an oil embargo through the UN, we should cut US

dollar access to any company supplying North Korea. But there

could be repercussions in terms of US- China trade and business

relations, with the Chinese retaliating, and this could

basically complicate global trade. Yes, that is a real concern. But

again, I think China still needs us more than we need them, in terms of

trade. And this is another reason that we should not have pulled out

of TPP, to give the US trading companies access to China in the

case of something like this happening. When it comes down to

trade and national security, I think you have to go towards the latter,

so it is a risk worth taking. We will have to see of that

materialises. And some south-east Asian countries still do business

with North Korea, at our American allies. Yes, very unfortunately. You

are in Singapore, North Korea has an embassy in Singapore, of all places.

It also has several trading companies. Malaysia is the same even

though North Korean agents killed Kim Jong-nam in February, they

operate with impunity. I hate to bring this up given your own origin

but now that India has agreed to cut North Korea and trade, the

Philippines stands a dubious third place in terms of trade with North

Korea. So I think it is high time we lean on our friends and allies and

asked them to cut it out. That was my earlier conversation with John

King. The prices of Bitcoin and other crypto currencies have

plummeted after China ruled that initial Bitcoin offerings are

illegal. So what are these restrictions? Well, the best way to

describe ISOs are a cross between crowd funding and initial public

offerings for stocks. It is a way for investors to raise money. The

thing about ISOs is they are considered the latest financial fad.

There have been more than 100 so far this year. You even have socialites

like Paris Hilton and Floyd Mayweather promoting them. It has

become popular but it remains unregulated, which is why China has

taken a very strong step of banning them. And other countries going to

follow the lead of China, by banning these ISOs? That is possible. The US

authority, the SEC, has said they are looking closely at the sector,

they might label digital tokens or coins as securities. A lot of this

has to do with valuations. The entire cryptocurrency space is

estimated to be worth nearly $200 billion. Bitcoin, which makes up

most of that, cross the $5,000 mark for the first time over the weekend.

Now, these are things that didn't exist ten years ago, and

cryptocurrencies are not regulated by any financial Central Bank, so

the concern is that these are a threat to financial stability. That

is why China is taking such a strong move to do this. Another concern has

to do with criminal activity. People worry that criminals will use

cryptocurrencies like Bitcoin to launder money and fund terrorist

activities, and so forth. Well, when something is regulated, there are

indeed a lot of problems. Thank you so much for that update on these

ISOs. Borrowing and lending money without going through the official

banking channel, also known as peer-to-peer lending, is a

multibillion dollar industry. China had one of the first such companies

to launch in the world, back in 2006, and today it is one of China's

largest financial service platforms, having issued $30 billion in loans

to mainland customers. My colleague caught up with the company's chief

executive, and asked how business has evolved. They invented China's

peer-to-peer marketplace 11 years ago, in 2006, without knowing that

the model was also in the UK and in the US at that time. Basically it is

helping small businesses, micro- entrepreneurs, and consumers. It is

helping them have better access to financing, not only from

institutions, but also from individuals. But many peer-to-peer

companies like yours have failed. So how do you make it work? It has

become an industry, both in China and in the US. It is now a pillar of

global financial technology innovation. It is $1 trillion market

opportunity in China. I think the first risk is integrity. Whether the

platform is legit. And the regulations have come to China, and

going forward, the next decade, we expect that the market will become

more stable, more clean. Now, you say stable and clean, but

nonetheless the Chinese government has been cracking down on

peer-to-peer companies like yours. How has that affected the industry

as a whole? Industry like us, Credit Ease, and our subsidiary company,

will be the biggest beneficiaries as the market becomes more clean. Well,

moving out to Thailand, where beer sales totalled $2 billion last year.

Because of the country's alcohol law dating back to 1950, two brewing

giants dominate 90% of the market but beer lovers in Thailand are

looking for something different than the usual choices of Singha and

Chang. Our correspondent is looking for an alternative, brewing across

the border in an iMac Cambodia. -- in Cambodia.

Cheers. Craft beer made in Cambodia. Before we go, a quick look at the

markets, with US financial markets closed overnight due to the Labour

Day holiday. Not a lot of liquidity in the Asian markets, the Nikkei and

the All Ordinaries index are flat. Goodbye for now.

The top stories this hour: The US has accused North Korea of begging

for war, after its latest nuclear test, urging the world to respond

with the strongest possible measures.

Myanmar is under pressure to end its military crackdown