08/12/2017 Asia Business Report


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08/12/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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LineFromTo

the deadlock over the Irish border

in Brexit negotiations.

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Now on BBC News, all the latest

business news live from Singapore.

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Find out how Japan is considering

rewarding businesses with a tax cut.

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And China releases trade data for

the month of November. We find out

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what we can expect.

Hello and welcome to this Friday

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edition of Asia Business Report, I'm

Sharanjit Leyl.

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We've been talking a lot lately

about Donald Trump's tax bill but

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the Japanese government is also

considering some new rules to boost

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the economy. The package will go to

prime ministers Shinzo Abe's Cabinet

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today, where it is expected to be

approved. The package rewards

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businesses that increase wages and

investing productivity growth by

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offering tax cuts. For more we are

joined by our business report of

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Carrico I. -- reporter Mariko Oi.

The tax rate in the pan has been

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coming down significantly under the

current Prime Minister, Shinzo Abe

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-- in Japan. When he came to power

in 2012 the tax rate was almost as

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high as the US, at 38%. But for the

upcoming fiscal year, starting in

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April, it is expected to go below

30%. And if this new package gets

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the green light it could go down as

low as 20%, but there's a catch. It

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only applies to companies which

reward their employees with a pay

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rise of at least 3% and invest in

productivity. Basically it's a

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measure to stop companies hoarding

higher profits.

Do we now how Japan

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compares to the rest of the world,

especially countries in this region

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that do we know.

If it goes down to

20% that's fairly low, even lower

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than the Asian average, just over

21% -- do we know. It isn't low as

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Hong Kong, for example, which is at

16.5%, the lowest among developed

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economies, or Singapore at 17%. But

it becomes on a par with China at

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20%. Of course, Japan isn't the only

country considering cutting the

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corporate tax rate. The United

States, as we've been talking about,

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the corporate tax rate combining the

national and state taxes roughly

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about 40%, but Donald Trump is

really trying to push through his

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tax reform bill to cut that rate

down significantly. The Japanese

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package is expected to get approved

by the Cabinet today and it will go

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to Parliament.

We will be watching

that very closely.

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Thanks for that.

Staying with Japan, the country's

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economy expanded at an annualised

rate of 2.5% between July and

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December according to the latest

government data, revised up from a

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preliminary estimate of 1.4%. The

revised figure came in well ahead of

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analyst expectations.

The US government has averted a

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possible shutdown but only

temporarily. The house and the

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Senate have now passed a stopgap

measure to avert the shutdown,

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leaving fights over budget

priorities and a range of other

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controversial issues for the coming

weeks.

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And another day, another record.

Bitcoin has rocketed to a lifetime

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high of just shy of $16,000, that's

a 60% gain for the week. It's

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intensified the debate about whether

the crypto currency is in a bubble

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that is about to burst. The JP

Morgan Chase it the called Bitcoin a

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fraud in September. China is due to

release new trade data for the month

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of November in the next few hours.

In recent years the government has

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intensified its crackdown on

polluting industries and financial

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risk but economists believe those

measures have put pressure on

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China's economic growth. Earlier I

spoke to a senior China our nest at

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a frontier strategy group and I

asked how the economy would handle

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the government's new direction --

analyst.

China are walking a fine

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line with trying to initiate another

slow down to the risk the financial

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system but on the other hand not

doing too much to cause a domino

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slowdown effect that could hurt

China -- de-risk.

To some extent we

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have seen the economy do well in

other parts, retail sales, you had

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the big Bonanza Singles Day then, to

what extent are those bits of the

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economy of setting the elements that

are slowing down?

Unfortunately

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consumption is still such a part of

the economy -- offsetting. I think

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the slowdown will continue

regardless even if consumption is a

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relatively positive story.

We know

the Chinese relationship with its

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trade partners hasn't always been

good, they've always had a massive

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surplus, particularly with the US,

but we've seen Donald Trump's trip

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to China where they came away with

$250 billion of trade deals. The

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trade surplus actually narrowed

somewhat recently as well, so our we

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seeing China's trade relationship

with its major partners going

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forward?

Look at the US, we will see

trade tensions picking up against.

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The US is relying on China with

North Korea and the expectation is

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they won't be able to. We have seen

rhetoric heating up again. You have

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the trade representative

investigating China's intellectual

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property practices and rules on

enforced technology transfer and an

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undersecretary at the Treasury who

said comprehensive economic dialogue

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has been stalled because China isn't

doing enough to address the

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imbalance or to liberalise its

economy, and the US is trying to

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block China from accessing market

economy status at the WTO, saying

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it's just not a market economy.

How

can China get the right balance,

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scale back on the financial risks

and polluting industries and keep

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investment and business appetite

buoyant?

That will be very

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difficult. They will try to present

themselves as being a global leader

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and open for business,

globalisation, but the reality is

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often different with foreign

companies complaining about being

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discriminated against.

Now, when it comes to technology and

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innovation, disrupters are very much

in vogue and one of the most famous

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is will.i.am. He's the seven time

Grammy Award winning musician and

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front man for the Black Eyed Peas.

His company is blending fashion,

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lifestyle and culture with advanced

technology in a way that really

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shakes up the status quo. He spoke

with the BBC's reporter.

I still

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make music.

I don't want to do music for a

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business. That's not the smartest

thing to do right now for me. For

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other folks, that's great, but for

me I don't how we compete with

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ourselves. I don't see myself on

stage at 60 years old as a business.

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The fact remains that many young

people are still drawn to the

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glamour of the hip-hop music world,

the entertainment industry, they

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still want to see their names in

bright lights, what is your message

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to those young people who, although

they may have to do music

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differently, but still want to do

it?

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To all the musicians out there with

big dreams, go out there and pursue

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those dreams. Like, don't let

anything stand in your way. But for

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all the folks on the fence who want

to do something bigger, errm,

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there's nothing bigger than Bill

Gates, there's nothing bigger than

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Steve Jobs, but you too have the

opportunity to, you know, try to be

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that big and if you try to be as big

as Bill Gates and don't succeed, you

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will be bigger than Michael Jackson,

I guarantee you that. Now that I'm

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40, I want to aim to be like, you

know, the other Mike, Michael Dell.

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I want to be like the other Steve

Ede, not Stevie Wonder, Steve Jobs.

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I want to change will.i.am to macro

free, Bill Gates. Why not shoot and

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aim that way? There's nothing wrong

with making sure your dreams have a

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great execution squad. I want to

surround myself with votes that

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reflect my new dream. If I can do

it, coming from the ghetto, you can

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do it too, you just have to surround

yourself with engineers and

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discipline future thinkers --

disciplined. If you could live in

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the conditions you're living in an

dream this way, should be a

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cakewalk.

The multi- award musician will.i.am

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speaking there.

Let's look at the

markets now before we go. A lot of

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gains in Asia, the markets that have

opened, including the Hang Seng and

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the All Ordinaries in Australia have

been rising most of the morning and

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doing well because we saw Wall

Street doing well, those stocks

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rising with the technology stocks

like Facebook and Google parent

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Alphabet doing well. We've been

reporting about the stopgap measures

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as well finally being passed through

in the US am so that's also going to

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reassure a lot of investors. Looking

at Australia still, looking at the

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energy stocks rising in tandem with

oil prices. Woodside petroleum doing

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well and origin energy gaining 4%

and at one point hitting its highest

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in two years. That's it for this

edition of

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