18/12/2017 Asia Business Report

of Saturday morning,

which killed six people.

One other man is critically

ill in hospital.

Lure for me later, at but first

convert here is Asia Business

Report.

-- but first here is.

China's plugging away at developing

its one belt, one road initiative.

Will the world's second-biggest

economy continue down the same path

in 2018?

Welcome to Asia Business Report.

I'm Sharanjit Leyl.

Bitcoin has begun trading on the

CME, that is the world's largest

derivatives exchange operator, the

move is seen as a major validation

of the online currency which has

been named as a fraud and in a

bubble by some of its critics.

Alicia centre rally is with us now,

we know that this is the second move

in a week, disease mean it is

gaining some legitimacy?

Investment

has been cautious by investors,

especially given this is a brand-new

investment class. It is a premium to

what it is currently trading on the

stock market, depending on which

exchange you look at, of course. As

we mentioned, this is a milestone

for the currency given previously,

institutional investors could not

cash in on this because they are not

allowed to buy from these regulated

exchanges, and so now, they have

this avenue in which they can

actually bet on a cryptocurrency and

interestingly, with the launch of

these, we are also going to see ways

for investors to bet against it, so

hedge funds can now try and short

queen if they are sceptical about

its future.

Always, but nonetheless,

we know that it has been called all

sorts of things by detractors, JP

Morgan has called it a fraud. Will

we see potentially a painful crash?

That is definitely a possibility and

a very valid concern, at the start

of the year, Bitcoin was trading at

$1000, now it has risen by 200% and

is trading at $20,000. We spoke to a

critic who had this warning for

investors.

If you want to invest in

Bitcoin, be prepared to lose all

your money.

That was the case

financial regulator, but for every

sceptic, there is a proponent of the

digital currency. We saw Christine

Lagarde, the head of the

International Monetary Fund, saying

it would not be wise to dismiss

cryptocurrency, and that we could

see a rise of them in developing

countries, where they have unstable

currencies, for example Venezuela,

where we see the central bank or

government backed currency losing

its value. He says he is not opposed

the idea of and is still interested

in it. It is based in blotch and

technology, which has a lot of

potential applications for the real

world.

All right, it is something

that should not be criticised at

all, as you say. We'll be watching

that trade very closely. Volatility

of course, is a word that we have

used a lot, and that is something

you've had a lot about in 2017. It

has kept investors on their toes as

the rules they use to guide their

decisions seem to have all changed.

For example, North Korea's threats

have put the US and its neighbours

on high alert and President Trump

was sworn into office and promised

widespread changes to financial and

economic policies. President Xi

Jinping has taken on the role of

global sales statesman, calling for

a cleaner environment and global

trade. And finally, remember

WannaCry and the data breach? Well,

they have become an unavoidable

threat that affected all of our

lives. Well, I asked why the markets

kept reaching such unstable highs in

recent times.

It is a bit of

mystery, actually. You would

essentially think that with

everything that is happening in the

markets in the world, the oil-price

would be going up and down, it is

just not the case. I guess there is

so much cheaper money in the system,

interest rates remain low, and that

is what is fuelling economic growth.

I guess if there is one thing we

could put a finger on, it is now

that the US is self-sufficient.

Moving away from that, let's take a

look at the North Korean crisis

because that is something that is

creating a lot of headlines in this

region, especially because it is a

rogue nation that does not seem to

want to get back into line. How do

you see that resolving it at all, in

2018?

It will be hard to find a

resolution because it will involve

both sides stepping down, not much

sign of that happening as 2017 comes

to an end. North Korea appears to be

going to stick to its strategy,

which means putting nuclear

capability to the point that the US

and China take it seriously enough,

in its view, to enter into

negotiations. There is no indication

that the US is going to do that and

no indication that China is going to

be able to pull a rabbit out of a

hat and find some solution that can

accommodate both what North Korea

wants to get, what China itself

wants out of this, and indeed will

satisfy the US.

And very quickly, of

course, the concern around the cyber

hacks. What you have to say about

that?

They are going to be coming

thick and fast, I would like to be

able to say otherwise but I am

afraid they are a significant

feature of corporate life.

And that

was the global chief of control

risk. As the year draws to a close,

we are of course looking at some of

the year's biggest business topics,

and China is almost always at the

top of that list. Growth appears to

have slowed down over the long-term

as the economy much yours, expansion

was slightly stronger this year than

last. The most recent figure for GDP

growth is about 6.8%. China also

attempting to expand their influence

overseas, through massive assistance

in a programme known as one belt,

one road. The government has

censored many Web services, while

Western Internet giants continue

looking at ways to enter the Chinese

Internet market. What could all this

mean for next year? Well, the annual

central economic conference, which

begins today, could be a good

indication of what is to come.

Usually, this is the forum at which

the economic elites will set the

agenda for next year, including

pretty detailed economic policies.

We expect them to make a decision on

the GDP growth target for next year,

if they want to signal they are

ready to reform, they are ready to

tighten, they could set a lower GDP

target, but I think the overall aim

is still to double the 2010 GDP by

2020, and that would require the

growth averaged over the next two

years to be leased 6%.

Are we

expecting any shocks when it comes

to the world's 's second-largest

economy and its growth target? Or

will it be, as you say, slow and

steady?

No, we don't expect any

dramatic shocks or changes at all,

China, the leadership's preference

is always sort of stability above

anything else. I think any changes

to the policies or reforms will be

happening in a moderate fashion.

Something we have heard a lot about

in 2017, it is really China's

attempt to gain influence in the

region with soft power, are we going

to see that continue in 2018?

Yes,

absolutely, this is one of Xi

Jinping's signature policies. He

will come out of the Party Congress

and definitely want to push ahead

with that, but this is definitely

not something that he alone can

push. There are more than 160

countries participating, and there

are a number of financial issues to

consider. I think next year, it will

be basically saying we will see

progress but also setbacks in some

areas.

All right, very briefly, the

Internet. We know you have huge

Chinese firms like Ellie Butler, for

instance, what do you see happening?

-- Alibaba.

China will try to

continue to support large online

companies like Alibaba, and try to

restrict access to foreigners.

We at

only a few days away from the end of

the year, in case you have not

noticed, here is what is due out

this week. Delivery giant FedEx will

be reporting quarterly results. Yes,

they do still make products under

licensing with the Chinese

government. And Nike is due to give

us a financial update. On the agent

financial side, Japan is going to be

holding a monetary meeting as well.

We'll be looking out for all about,

that is it for this week's Asia

Business Report. Hanky