06/03/2018 Asia Business Report


06/03/2018

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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the cyclist Sir Bradley Wiggins,

has told the BBC he is not a drugs

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cheat, after a Parliamentary report

accused him of using an asthma drug

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to enhance his performance.

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Now on BBC News, all the latest

business news live from Singapore.

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Global shares are higher, as

investors shrugged off fears of a

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trade war. And electric cars move

into the fast lane. How new

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technology is bringing radical

changes to the auto industry. Good

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morning, welcome to Asia Business

Report, live from Singapore, with

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me, Mariko Oi. After a few days of

panic selloff switch we saw,

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investors seem less nervous about

President Donald Trump's threat to

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impose tariffs on steel and

aluminium. On Wall Street, the Dow

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broke a four they losing streak, up

1.4%. Investors started to see the

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President's comments as a

negotiating tool after he tweeted

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that Canada and Mexico could avoid

his proposed tariffs if they agreed

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on a new North American Free Trade

Agreement. We are now seeing Asia

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following Wall Street, with the

Nikkei up by 2%. But is their

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enthusiasm premature? I put that

question to my colleague Joe Miller

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in New York.

They do seem quite

optimistic about it at the close

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today, but earlier this morning,

when the President tweeted those

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things and seemed to tie the fate of

these tariffs to Nafta, initially

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the read on Wall Street was that

this was bad news, that this was the

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President doubling down on these

plans to put 25% tariffs on steel,

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10% on aluminium, that they thought

in turn would hurt US businesses

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like car makers which rely on US

steel. But as the day wore on,

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despite the fact that President in

the Oval Office said he was not

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backing down when it came to these

tariffs, I think people started to

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see this as a negotiating position,

as you said. The reason for that is

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we have seen a really strong

backlash from people within the

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President's own Republican Party. We

have seen house leader Paul Ryan

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coming out to say he strongly urges

the President to reconsider, and we

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have seen other Senate Republicans

say similar things. So it is

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beginning to look as though the ink

has not dried on these tariffs yet,

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and there may be some tempering of

this position. That is why we have

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seen the markets, or at least the

Dow Jones, closed some 300 point up

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today.

In other business news,

speaking on proposed tariffs on

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imported steel and aluminium, car

giants General Motors and Ford would

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suffer a $1 billion profit hit

according to analysts at Goldman

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Sachs who say the tariffs proposed

by President Trump could result in

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increased costs. Harley-Davidson

says a punitive or territory tariffs

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on its motorcycles in any market

would have a significant impact on

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its sales there. The European

Commission's president last week

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threatened to impose tariffs on

their products if President Trump

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followed through on a plan to impose

global duties on aluminium and

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steel. Harley said in a statement

that it supports free and fair trade

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and the proposed import tariffs

would drive up costs for all

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products made with aluminium and

steel regardless of their origin. As

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you can imagine, President Trump's

threats to impose those tariffs have

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certainly caused a stir ahead of

this week's Geneva auto show. Most

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people in the industry appear to be

waiting to hear more details before

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they decide on how to respond.

Meanwhile, at the show itself it is

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business as usual and carmakers

continue to prepare themselves for

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the radical change which new

technology is bringing. Part of that

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change is a move towards electric

cars which is steadily gathering

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momentum.

More can convenient

motoring is the dream of every car

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owner Britain. The Commuta could

well be one of the answers to that

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dream.

Electric cars have been

around for years but for a long time

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they had an image problem. They were

seen as quirky but slow and unable

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to go far before the batteries ran

out. Then Tesla came out with its

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Model S. Launched in 2012, it showed

electric vehicles could be powerful,

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fast and have decent range but

choice was limited. If you wanted a

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high-performance electric car you

had to buy a Tesla. Now, that might

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be allowed to change. This is a new

car from Jaguar which is attracting

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a lot of attention at the Geneva

motor show. It is a battery electric

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car and the reason that matters is

it is the first high-performance

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electric vehicle to come on the

market to really challenge Tesla's

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crown. So let's see what it can do.

This car matters because it is

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sporty, it can do zero to 60 in 4.5

seconds and it has a maximum range

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of 300 miles. As we know, range is

all-important.

The way the market is

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going, there is no doubt about that.

There are still very few electric

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vehicles sold, one in every 200 last

year, but the market is shifting

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towards alternative drive vehicles

and we are shifting with it so this

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is us entering the market.

So Jaguar

may have won the race to be the

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first real challenger to Tesla at

the Top End of the market, but it

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won't be the last. Because Porsche

are bringing out another

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high-performance electric vehicle.

Mercedes have something similar in

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the pipeline, and so does Audi. This

could become quite a crowded market.

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Finally EVs have been pushed into

the mainstream, and I think with tax

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incentives and people wanting less

pollution in city centres people are

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starting to see the benefit in an

electric car and they are starting

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to see that they are quite an

addictive, luxurious, relaxing thing

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to be in.

Of course, most people

probably won't be able to afford an

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upmarket electric cart like Jaguar's

I-Pace or the Has lures, but that is

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not the point. They are making

people more likely to buy something

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more affordable. -- Teslas. For

this, Nissan's Leaf. It is day two

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of China's annual meeting of

Parliament and we are waiting on

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details from a super regulator which

will keep insurance and banking

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industries under one watchdog. It is

one of the crucial measures the

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President has been looking at the

counter risks to the financial

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system. Growth is slowing down in

China, and I spoke to a professor of

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Chinese business at the University

of Sydney, who says the pressure

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around the topic is starting to

shift.

There is general consensus is

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that in the end growth had to be

brought down from the very high, two

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digit levels, to a sustainable

level. In fact what has happened now

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is that the debate about growth has

shifted away from the actual

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figures. So whether 6.5 or slightly

more or slightly less is less

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important than the quality of

growth, and that means growth that

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is promoting domestic consumption,

building on domestic consumption, as

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opposed to government investment in

big projects. That is growth which

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is sustainable, that means growth

that rings a reduction of pollution,

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rings among other things, better

health, and thereby makes the whole

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economy, all puts the whole economy,

on a much more stable basis. That is

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more important now than the actual

growth figure.

India has had its

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fair share of banking scandals

lately. Now its income tax

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department has discovered a scam

involving more than 400 companies

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who haven't paid 100 of millions of

dollars to the government. Joining

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me live from Mumbai is my colleague.

Tell us the details of this latest

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scandal.

Well, it is being called

yet another fraud here in India. The

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Indian income tax Department says

that around 461 million dollars

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worth of money has not been

deposited with it. Indian companies

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tax employees' salaries at course to

make sauce, it is called TDS, and

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many companies have failed to

deposit that TDS with its income tax

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department -- source. Now a large

construction firm and multinational

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IT company have been implicated.

According to the income tax act in

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India, not depositing that money

faces jail time of between three

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months and seven years. So it is bad

news for those companies if they are

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named. It is also bad news for the

government. Apart from failing to

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get those revenues, it is also the

latest scam which has come to light

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after a series of scams and frauds

in the last month. The biggest one

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was won at a state owned bank called

the Punjab National bank. It seems

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that around $2 million worth of

money was defrauded of a single

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branch here in Mumbai, so there is a

lot of pressure on the government to

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clean up its act and tighten its

checks and balances for these kinds

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of things.

Thank you so much for

that update. I am sure we will have

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more of the details as they continue

to investigate.

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more of the details as they continue

to investigate. Let's take a look at

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markets before we go. As we

mentioned, Wall Street recovered

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overnight and now we are seeing some

rebound here in Asia as well, with

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the Nikkei and Hong Kong up by

nearly 2%. In Japan, we are

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monitoring the shares in steel after

a business newspaper said its boss

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may be stepping down because of that

scandal over the quality of its

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product, and in currencies we are

watching the euro. Of course, we had

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that inconclusive weekend election

over the weekend,

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that inconclusive weekend election

over the weekend, and that is it for

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this edition of Asia Business

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