0:00:00 > 0:00:04Now on BBC News, all the latest business news live from Singapore.
0:00:17 > 0:00:22US stocks retreat on reports that China could be losing its appetite
0:00:22 > 0:00:25for purchasing American debt as tensions between the two countries
0:00:25 > 0:00:31continue to escalate. Destination Cambodia, find out what
0:00:31 > 0:00:35storing international companies to this manufacturing hub in Southeast
0:00:35 > 0:00:45Asia. Good morning, Asia. Hello, world.
0:00:45 > 0:00:49Glad you could join us for this Thursday edition of Asia Business
0:00:49 > 0:00:54Report, I'm Rico Hizon. We start with Wall Street and the major stock
0:00:54 > 0:00:58indices ending lower overnight after a choppy trading session and one of
0:00:58 > 0:01:03the reasons involve is Asia's biggest economy, Bloomberg is
0:01:03 > 0:01:08reporting Chinese officials are thinking of slowing or possibly even
0:01:08 > 0:01:13halting purchases of US Treasury bonds. China is the biggest foreign
0:01:13 > 0:01:19holder of US government debt, with $1.2 trillion in Treasuries as of
0:01:19 > 0:01:23October, 2017. But Chinese officials were cited as saying they would slow
0:01:23 > 0:01:29down the purchase because of trade tensions between the two big
0:01:29 > 0:01:32economies and there is further evidence of a delicate business
0:01:32 > 0:01:36relationship between the Americans and the Chinese, and these stories
0:01:36 > 0:01:40both concerns Mark phones. Apple says a Chinese government owned
0:01:40 > 0:01:44company will take control of its iCloud services in the country.
0:01:44 > 0:01:50Vincent from the BBC News service says Apple's boss Tim Cook had no
0:01:50 > 0:01:53choice but to do this if he wanted to keep this company in the
0:01:53 > 0:01:57mainland. I think this is a dilemma for
0:01:57 > 0:02:01companies like Apple. The Chinese market is really attractive to all
0:02:01 > 0:02:04sorts of businesses across the world, but if you want to enter
0:02:04 > 0:02:07China there are local rules and regulations that you have to comply
0:02:07 > 0:02:14with and I would say Tim Cook was facing a really tough choice. From
0:02:14 > 0:02:19the Chinese government and business perspective, it only makes Apple and
0:02:19 > 0:02:22equal player in China because all businesses operating in China have
0:02:22 > 0:02:28to comply with Chinese government role and they would argue why Apple
0:02:28 > 0:02:32is exceptional. The government were saying I'm glad you're complying
0:02:32 > 0:02:37with our laws, welcome to our market, but Apple, for them, they
0:02:37 > 0:02:41won the market in China, but they lose the moral argument outside
0:02:41 > 0:02:46China.Vincent Ni from the BBC China news service.
0:02:46 > 0:02:51Leading Chinese and smart phone manufacturer wow why has chosen,
0:02:51 > 0:02:57axing its US business presence Paul Frew at the last minute because of
0:02:57 > 0:03:02security concerns. It wanted to sell phones through AT&T in America but
0:03:02 > 0:03:07there was strong competition. The US move has an air of protectionism.
0:03:07 > 0:03:10We've seen this in the infrastructure market and now it
0:03:10 > 0:03:13seems to be coming to the smart phone market. The key difference
0:03:13 > 0:03:21here is that Huawei's chipset is its own chipset and I think that's why
0:03:21 > 0:03:27we've seen particular emphasis on Huawei and this model in the US and
0:03:27 > 0:03:31this AT&T deal. Certainly 18 lawmakers have signed a document to
0:03:31 > 0:03:37the FCC highlighting their concerns over this. Concerns over Chinese
0:03:37 > 0:03:40manufacturers' equipment has been long-running in the US, and of
0:03:40 > 0:03:45course we get into this tit for tat, it might be the US being
0:03:45 > 0:03:48protectionist over backdoors but who started that? The US.
0:03:48 > 0:03:52The next guest says the trend is still upwards for big deals in the
0:03:52 > 0:03:59region. In 2017 the various deals in the Asia-Pacific added up to over
0:03:59 > 0:04:03673 billion US dollars, that's 4.8% higher than 2016.
0:04:03 > 0:04:08The story is a bit different when you look at muggy coming from China.
0:04:08 > 0:04:17Government restrictions reduced mainland outbound M& by:
0:04:19 > 0:04:25If you count megadeals, Asia saw four major deals in 2017, one more
0:04:25 > 0:04:28than 2016. I spoke to Stephanie Hanna in Hong
0:04:28 > 0:04:32Kong and I asked her about the future for deals already on the
0:04:32 > 0:04:35table. I think it casts a shadow for other
0:04:35 > 0:04:40deals that are still waiting for approval that involves Chinese
0:04:40 > 0:04:46buyers. Were talking about deals like Jen Worth being sold to China
0:04:46 > 0:04:51Ocean wide, a life insurance company, other deals being sold in
0:04:51 > 0:04:56the semiconductor space. It doesn't bode well for those deals that are
0:04:56 > 0:05:05still hanging in the balance and I think it goes to show that Cifius is
0:05:05 > 0:05:09considering access to consumer day as part of that umbrella of national
0:05:09 > 0:05:13security risks.Later today a UK court will rule on evidence
0:05:13 > 0:05:18pertaining to the extradition case of the Jane Malcolm Turnbull, the
0:05:18 > 0:05:21fugitive tycoon has co- ownership of Formula 1 Force India race team and
0:05:21 > 0:05:28he also owns Kingfisher Airlines, which has been grounded since 2012.
0:05:28 > 0:05:39Let's go to Mumbai. What is this case all about?Well, Rico, Vijay
0:05:39 > 0:05:45Mallya is a wanted man in India and ever since he left India for the UK
0:05:45 > 0:05:49in 2016, the Indian government has really ramped up its efforts to get
0:05:49 > 0:05:54him extradited back to India to face trial for financial crimes. Vijay
0:05:54 > 0:05:59Mallya's known for being a very flamboyant businessman, this
0:05:59 > 0:06:04business interests ranged from airlines to alcohol and he co- owned
0:06:04 > 0:06:08the Formula 1 team. He was once dubbed the Richard Branson of India
0:06:08 > 0:06:11but this companies owe a lot of muggy to Indian banks. The Indian
0:06:11 > 0:06:17government is trying to get back around 1.4 $1.4 billion from his
0:06:17 > 0:06:21companies. He said he is subject to a witch-hunt and the extradition
0:06:21 > 0:06:27trial is politically motivated and he denies all the allegations.It
0:06:27 > 0:06:32seems like the Indian government is singling out Vijay Mallya, is this
0:06:32 > 0:06:40true?Vijay Mallya owes a lot of money to Indian banks, $1.4 billion
0:06:40 > 0:06:45is no laughing matter, but he's become really the face of a wider
0:06:45 > 0:06:49problem in India. Public-sector banks, which give out around 70% of
0:06:49 > 0:06:54loans, more than that, in India, are struggling with non-performing
0:06:54 > 0:06:59assets and that's really causing problems here, it's limiting the
0:06:59 > 0:07:03banks' ability to give credit to small businesses and it's affecting
0:07:03 > 0:07:06the banks' balance sheets and it's affecting foreign investment coming
0:07:06 > 0:07:10into the country and that's what the Indian government really needs in
0:07:10 > 0:07:14order to boost growth. The Indian economy slowed down a little bit
0:07:14 > 0:07:18last year and the Indian government really wants to improve that. So
0:07:18 > 0:07:21Vijay Mallya has become the very public face to a really serious
0:07:21 > 0:07:28problem here. Thank you so much for that update.
0:07:28 > 0:07:31Many foreign companies are knocking on the doors of Southeast Asia and
0:07:31 > 0:07:35companies to do business since they are less expensive than its economic
0:07:35 > 0:07:39powerhouse to the North. A survey from the US chain of commerce in
0:07:39 > 0:07:42China found nearly a quarter of its members are considering moving or
0:07:42 > 0:07:47have already done so. Of those about half are looking at other countries
0:07:47 > 0:07:52in Asia where labour costs are lower. But do labour costs always
0:07:52 > 0:07:56mean more profits? Tim McDonnell has more from Phnom Penh.
0:07:56 > 0:08:00It's exam day at this school and by Cambodia's largest textile industry
0:08:00 > 0:08:07group. Many manufacturers come here in search of cheap labour,
0:08:07 > 0:08:11especially as wages rise in China. But there's plenty of competition
0:08:11 > 0:08:16from other low-cost countries, like Vietnam and Bangladesh. So these
0:08:16 > 0:08:20classes are aimed at making sure productivity keeps pace with wages,
0:08:20 > 0:08:25which have been rising here. There's way to offset more than 100%
0:08:25 > 0:08:30increase over three years through productivity gains. If wages rise to
0:08:30 > 0:08:34a level whereby we are competitive then there is no development. There
0:08:34 > 0:08:42can only be growth and gain when there's economic development. If you
0:08:42 > 0:08:45are uncompetitive it means there's no investors or fewer investors
0:08:45 > 0:08:49coming to invest in Cambodia, so where do you get development?Wages
0:08:49 > 0:08:53will need to clear that speed bump and start rising if ordinary
0:08:53 > 0:08:56Cambodians are to improve their fortunes but economists say they
0:08:56 > 0:09:00will need better skills to do it. Our productivity now has improved
0:09:00 > 0:09:06from day to day, but we need more skill to improve. If our government
0:09:06 > 0:09:11improves we can gain manufacturing from China.
0:09:11 > 0:09:14But a more diverse manufacturing sector might be part of the answer
0:09:14 > 0:09:17to two. The overwhelming majority of
0:09:17 > 0:09:21manufacturing in Cambodia is in the garment industry, but a new
0:09:21 > 0:09:25generation of companies are moving in hoping to take advantage of the
0:09:25 > 0:09:31country's low wages. This Japanese company makes equipment for car
0:09:31 > 0:09:35factories. TRANSLATION:Bearings, gears shifts, we line up the parts
0:09:35 > 0:09:39and heat it up at a high temperature to make it more durable.The jobs
0:09:39 > 0:09:44are a little more skilled and the pay is a bit better. This man says
0:09:44 > 0:09:47there are many challenges but Cambodia is cheap enough for
0:09:47 > 0:09:57investing here to make sense. TRANSLATION:Wages are increasing in
0:09:57 > 0:10:00China, by manufacturing in China and in porting to Japan it doesn't make
0:10:00 > 0:10:05much of a difference. Because of that we've moved our factory to
0:10:05 > 0:10:09Cambodia and Southeast Asia -- importing.
0:10:09 > 0:10:12The World Bank says the number of non- textile factories here is
0:10:12 > 0:10:16growing and they could be vital to lifting the country's living
0:10:16 > 0:10:20standards. Some of those jobs might come to Cambodia because China's
0:10:20 > 0:10:25getting more expensive and workers there are making more money. That's
0:10:25 > 0:10:31a luxury many Cambodians would like too. Timothy Wood Donnell, BBC News,
0:10:31 > 0:10:34Phnom Penh. With that we end this addition of
0:10:34 > 0:10:40Asia Business Report. -- Timothy McDonnell. Don't forget to follow us
0:10:40 > 0:10:42on Twitter.