02/01/2018 Asia Business Report

of New Year's Day in

unrelated incidents.

Police have made five arrests.

Now on BBC News, all the latest

business news live from Singapore.

All that rubbish - China bans the

import of waste. So where will all

of the garbage go and what

businesses are most affected? And we

look at how China will plans to

shake up the oil futures market, but

will foreign traders buy it? Happy

New Year, and welcome to Asia

Business Report live from Singapore.

Did you know that China has been the

biggest importer of foreign rubbish?

Everything from paper waste,

textiles to used plastic is sent to

China for recycling. But not any

more. These imports are now banned

because Beijing is trying to clean

up the country's environment and

improve public health. But the ban

will disrupt billions of dollars in

trade. In 2016, China imported $18

billion in waste. From Hong Kong,

Danny Vincent reports.

Recycling in Hong Kong - this is

where plastic waste ends up. Used

plastic near and far. Recyclers must

change the way waste is processed.

China's has introduced a ban on

recycling products. Hong Kong has a

challenge when it comes to dealing

with plastic waste. Right now the

majority of the West Coast to

mainland China. But that could be

set to change. The change also

represents an opportunity for

recyclers. Waste management is big

business. Some companies in Hong

Kong want to recycle the plastic

rubbish themselves. The man in the

driving seat is Mr Lam. The CEO of

one of Hong Kong's largest

recyclers. He has invested close to

$1 million to upgrade his equipment,

ready for the ban. TRANSLATION:

The

recycling industry in Hong Kong

faces many obstacles that these

days. The Chinese government has put

in place certain restrictions on

importing waste plastic. Because of

this, the industry has to look at

how to deal with the imminent demand

of how we process it.

Hong Kong has

a relatively underdeveloped

recycling sector. Activists hope the

Chinese ban will encourage Hong Kong

companies to do more to develop the

industry. Andy Lee is the founder of

a community-based recycling

programme.

If the Chinese policy is

changed, I think they don't want to

accept waste from the other

countries. They want good quality

items, good-quality recyclable

materials.

For years Hong Kong

companies are dependent on Chinese

appetite for waste product. Now that

many plastics are no longer

welcomed, these Hong Kong companies

will have to process the rubbish

themselves. That is if they wish to

make a profit.

In other news, Airbus begins the

year with a record number of

deliveries in 2017. The aircraft

maker is expected to be its target

of 700 deliveries with staff having

to work through the holidays to make

up for earlier delays. There is

still no word on a crucial $15

billion deal with Emirates. South

Korea's Hyundai has a dim outlook of

5 million cars for 2018. They lost 9

million cars last year over labour

strikes affecting sales in its big

market. Saudi Arabia has raised

local gas prices in the kingdom. The

initiative is aimed at more

efficient energy use and is part of

a programme to gradually eliminate

fuel subsidies as the Kingdom seeks

to overhaul the economy and balance

the budget.

Now, in the oil sector still, China

is edging closer to opening a

domestic market to trade oil futures

contracts, which means Chinese

buyers will be able to lock in oil

prices and pay in local currency.

Foreign traders will also be allowed

to invest - a first for Chinese

commodity markets. Oil prices saw a

fair bit of volatility last year -

this is the benchmark of crude last

year and earlier I spoke with an

energy expert, John Driscoll, about

the outlook for oil, and he said he

is sceptical about Chinese plans for

an oil futures market.

This time

there appears to be more conviction

but the real question is are if a

Chinese energy futures contract can

ascend to the same kind of level as

the CME in the States, or the

intercontinental futures exchange in

London, which are the main benchmark

futures exchanges for crude oil and

products globally. It has to also

gain acceptance from the industry at

large. You can look at some

commodity contracts in China and see

that there are large volumes traded,

but they are more speculative. It

seems almost like a casino for yield

seeking punters, large interests,

and long forward trade. The other

question will be the role this

Chinese central government will

play. If you are a foreign trade and

want to enter the Chinese market,

would you be willing to take on the

yuan denominated exposure, versus

the US dollar? Will there be

deliverability on the contract? Can

you access the domestic market?

Generally the central government of

China is hands-on in all phases of

the economy.

Is it fair to say this

is part of Beijing's effort to try

to replace or challenge the US

dollar's dominance in the oil

market?

You might take a cynical

type of you and say that this is

consistent with a pattern we have

seen going back a couple of years,

the establishment of the Asian

infrastructure bank, the rollout of

the belt and road initiative, this

is China ascending as an economic,

global superpower, challenging the

dominance of the west, in particular

the US, their roles in the economy

and leadership in Asia. You could

take that view, but there is no

doubt that China, as the world's

fastest growing energy consumer, the

biggest year-on-year growth in

imports, they feel that they deserve

a seat at the table and their

currency should be a basis for

settlement.

We saw some volatility

in oil prices. What is your outlook

for this?

We are going to test $70

but I see that as kind of a ceiling

that is going to be difficult to

breach because as the price of oil

goes up it affects the demand and it

makes it difficult for OPEC and non-

OPEC to withhold control output, but

if oil prices go up you are tempted

to overproduce more and break ranks

and that is what I would watch for

in the coming year.

If you thought oil prices were

volatile it is nothing compared to

the wild ride that Bitcoin took in

2017 and the digital currency is

tumbling and trading at around

$13,800, well below the record of

$19,000 in mid-December.

Now, to the special series,

Disrupters. Gene editing is

something you hear about in movies,

but one biotech firm is developing

technology to do that. They say they

have the potential to treat and

possibly even eradicate genetic

diseases, but it is not without

controversy. Let's have

diseases, but it is not without

controversy. Let's have a look.

It provides us with the ability we

hope to go in, modify your DNA at

the point that it is driving the

disease and allow us to repair the

DNA typo, repair it and fix it in a

single or handful of treatments.

This technology has the potential to

revolutionise healthcare as we know

it today.

The speed at which we have moved

forward from discovering it in 2012

and testing in animal systems in

2017, I think, is unprecedented.

It is the first trading day for many

of the global markets. Let's show

you how Asia is trading now. Hong

Kong Hang Seng index opening higher,

flirting with the import and 30,000

mark. Australia is down. Japan is

shut.