02/01/2014 Asia Business Report


02/01/2014

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3.1%, but campaigners say any rise is still too much after a decade's

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worth of big fare increases. As much of the world gets back to

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work we examine the opportunities and challenges facing the region in

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2014. Malaysia is set to raise to see prices for the first time in two

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years. The government wishes to reduce its public subsidies. --

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electricity prices. Welcome to Asia Business Report. For many others,

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today is the first day back at work after holiday period and the

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beginning of a new calendar year. With 2013 behind us and a brand-new

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year ahead, we asked our correspondence from around the

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region to tell us what to watch out for in 2014. First up, John from

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Sydney. Australia saw fair amount of change

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in 2013. Not least, three prime ministers in less than three months.

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With the economy, the talk was also of transition and how the country

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should cope with the slowdown in the mining boom, which has fuelled

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growth here for so long. The economic news was a little bit

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gloomy. Growth was down as demand from China fell. The budget deficit

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was expanding. Unemployment was also creeping up. So 2014 could be a

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challenging economic year. But Australia's economy has proved

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remarkably resilient over the years. 22 years of consecutive

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growth. The country is still doing relatively well. But as we enter the

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new year, there is perhaps a feeling of economic uncertainty.

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Here in Hong Kong, investors in the city 's financial district are

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feeling upbeat in the New Year after a lacklustre six months in the first

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half of 2013. The market for new listings has come roaring back.

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According to the research firm, Hong Kong was the second-biggest

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destination in the world after New York. There are hopes that this

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trend will continue in 2014. One of the biggest questions on their minds

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is whether a Chinese Internet giant Alibaba will eventually list here.

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Talks over several months eventually fell apart in September because of

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disagreements over the company 's proposed shareholding structure. The

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comments from both sides since then suggest a Hong Kong listing may

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indeed be a possibility. India's political parties are getting set to

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battle it out in nationwide polls to be held a few months from now. It's

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an election that is being watched with much hope. Here in Mumbai, the

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country 's financial capital, most of the business voice as we have

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heard recent months believe that if a strong government were to come to

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power, no matter which party it was headed by, the gloomy sentiment that

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has been surrounding India for the last few years will change

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dramatically. There is belief that investments could pick up and

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growth, which is at its slowest in a decade, may finally turn a corner.

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The government that has just been voted in may be more confident to

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take tough economic decisions. But the biggest worry for ordinary

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citizens here of the past year has been inflation, particularly soaring

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food prices. That is likely to be on top of people 's minds when they

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come to polling booths around the country. Every political party will

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have the tough task of convincing voters that they will be able to

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bring down the prices of food and keep them stable.

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Other notable business moments in 2013 included Twitter are going

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public, Google and found some launching more high-tech gadgets and

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even the likes of Virgin Atlantic selling commercial spaceflight

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ticket for the first time. I think what is very interesting is this

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move of emerging market brands targeting emerging market countries.

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Tata, who famously did very badly recently... With Nano, they have not

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succeeded in pushing that. But they have been very smart and looking at

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other emerging markets. They are looking at launching in other

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south-east Asian emerging countries. They are applying their

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understanding of that market across. All the attention and spend in the

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developing world. Blackberry is looking at where there are real

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heartland is. Their second-biggest market in the world as Indonesia and

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they are taking the money they would be taking fighting Samsung and Apple

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in developed markets to focus more on those big emerging markets where

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there is huge potential for them still. And of course, next year,

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what with the one child policy relaxing in China, that's obviously

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a huge boom to baby brands, infant brands. But is that a move of China

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from being a production to a consumption economy? Is it saying to

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the Chinese population, you have done your work, time to reap the

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reward? In Malaysia, not such a great start to 2014. Alex is the

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prices are set to go up for the first time in two years. --

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electricity prices. The move comes just two months after other bills

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have increased. In downtown Kuala Lumpur, within two

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blocks, you can find five shopping centres. This activity, this way of

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attracting consumers, is becoming more expensive. Starting this

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month, electricity prices will go up by as much as 15%. No doubt the cost

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will trickle down to Malaysian consumers. Some say this is too

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much, too soon. It will probably be a bit of a burden as a family. We

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have quite a lot of electrical items in the house. Washing machine and

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everything. The cost of living, everything is up, you see the petrol

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money, the necessary living things. In less than 18 months, Malaysians

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will have to pay broad-based consumption tax is. The Malaysian

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government has been spending an average of $4000 per family a year

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just to keep the cost of essential living low. But it pushes up

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national debt and makes it difficult for the government to invest in

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high-paying jobs. Malaysian leaders see it is absolutely necessary to

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cut back on subsidies. Most Malaysians here agree. But there is

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resistance. In recent months, the auditor general has found a

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government departments spending 30 times more for clocks than

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originally budgeted. Another spent seven times more for scanners. These

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stories of government spending in west make Malaysia is sceptical.

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People here are willing to make a sacrifice, but if they do, not all

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Malaysians are convinced they will benefit in the long run.

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China has reportedly lifted its year-long freeze on public offerings

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on the mainland. Regulators have given their approval for six

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companies to list. China's manufacturing growth slowed in

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December, adding to view is the world 's second biggest economy lost

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some steam lately. Any reading above 50 signals expansion while that

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below signals contraction. The city of Shanghai it claims to set a new

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construction milestone. The first subway system with a total length of

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500 kilometres. Shanghai has been laying new track faster than

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anywhere else in history. It is already on course to overtake London

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and New York. It's hard to believe with 7 million

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passengers a day that the Shanghai Metro system is barely 20 years old.

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The pace of expansion has been breathtaking. It is now the world 's

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longest subway network. And with the opening of lines 12 and 16 this

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week, the first to stretch over 500 kilometres. TRANSLATION: I used to

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take the bus. That took ages. This is great. This new line saves me

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half an hour on my normal journey. I'm really happy. As of this week,

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Shanghai now has 567 kilometres of operational track, leaving London

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languishing with a mere 400 and New York even further behind with just

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330 kilometres or so. In the game of my metro is bigger than yours, China

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looks likely to remain the undisputed champion. The Beijing

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Metro is now the world 's second largest. 16 Chinese cities already

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have subway systems and at least 18 more have begun construction. If

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nothing else, it is a sign that there is little letup in big

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government spending despite all the talk of the need to rebalance this

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economy. This week, Shanghai also announced a ban on passengers eating

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on-board. But the appetite for growth is undiminished. In the next

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few years, yet another 230 kilometres will added. More than the

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total length of the Paris metro. And that's the end of Asia Business

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Report. Time now for all the sports news in Sport Today.

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