06/03/2014 Asia Business Report


06/03/2014

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directive. Now on BBC News all the latest business news live from

:00:00.:00:00.

Singapore. Creating jobs, China outlines its

:00:00.:00:25.

most important policy goals. Dry spell. What the recent drought could

:00:26.:00:30.

mean for agricultural industries in Asia. Welcome to Asia Business

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Report, broadcasting to viewers around the world. I am Rico Hizon in

:00:34.:00:42.

Singapore. We are into the second day of the leaders meeting in

:00:43.:00:46.

Beijing. The Finance Minister said job creation would need the most

:00:47.:00:49.

important policy going forward. Meanwhile, an official from the

:00:50.:00:53.

central bank reiterated comments from other officials that recent

:00:54.:00:58.

sharp movements in the currency is normal. We are joined by John.

:00:59.:01:08.

Employment one of the key issues discussed at the National People's

:01:09.:01:13.

Congress. Do we have any more people on which sectors will be creating

:01:14.:01:20.

jobs? We heard at a press conference with the Chinese Finance Minister.

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The target last year was 10 million new jobs and he said that was

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surpassed. The actual figure was more like 13 million. The big

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priority is the same this year. The whole talk, where we hear

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policymakers, focusing on the GDP. The reason it has been set at 7.5%,

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no change from last year, relatively high, the reason for all that is job

:01:54.:02:00.

creation. China needs GDP at that level so that when people continue

:02:01.:02:05.

the migration from the countryside to the city, there are jobs for them

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to take up. Living standards rise and there is this virtual circle.

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Leaders know that to maintain the grip on power, the legitimacy, they

:02:17.:02:24.

need this to continue. Also detail on tax reform. An important area has

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been trying to build a comprehensive tax system. We heard a little more

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about that. They said that they will focus on continuing the shift from

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aid is this tax to VAT, developing an environmental tax, very important

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as China tries to cracked down on pollution. And also looking at the

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property tax. Apart from tax reform and creating jobs, they also

:03:00.:03:04.

discussed recent movements in the currency. They said this was normal

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but last week we saw the currency fall by nearly 1% against the US

:03:10.:03:18.

dollar. How should we read that? Very briefly, the currency has been

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strengthening steadily. The market have almost got used to this as a

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sort of 1-way bet. We saw the value tumbled by 1% last week. A lot of

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speculation as to why that might eat. Some suggestions China was

:03:35.:03:40.

giving currency speculators a rap on the knuckles, others saying paving

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the way for a widening of the band. But China today reiterating this is

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completely normal. I suppose it is like the small print at the bottom

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of some contracts. Values may go up as well as down. Thank you so much

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for your insights on China's movement of the currency and job

:04:09.:04:14.

creation. Spending spree on the rise in Australia. Retail sales jumping

:04:15.:04:21.

by more than 1% in January, when compared to the same period last

:04:22.:04:24.

year. The government also revised up retail sales figures from December.

:04:25.:04:27.

The Australian dollar is picking up following this data, and it will

:04:28.:04:30.

support the case for a steady outlook on interest rates. The

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central bank decided to keep it on hold interest rates. In target,

:04:41.:04:50.

months after a data breach, 2008 resignations. They will search for a

:04:51.:05:02.

new CIO. During the massive data breach late last year, hackers stole

:05:03.:05:07.

credit card numbers and other personal data of millions of target

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customers. The US central bank confirmed that severe weather

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conditions across much of the country has taken a toll on shopping

:05:17.:05:19.

and consumer spending in recent weeks. A report which gives a

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snapshot of business conditions across the country, said that

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consuming slowed during December and January because of severe weather

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conditions. Mainly in New York and Philadelphia. It has been hot and

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dry in the east. In Singapore, February was the country's driest

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month in 144 years. It only ran for seven days last month. The drought

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is hitting hard. In Malaysia, residents in the capital are

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rationing water after a two-month dry spell. Forest fires have broken

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out in Indonesia. We have also heard this week about the effects of the

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drought in the outback of Australia, and in the north-west of Sri Lanka.

:06:03.:06:09.

So, what is the effect of this unusually dry season in this part of

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the world? Earlier, I spoke with John Baker, a food and agricultural

:06:17.:06:19.

expert, asking him how the current weather conditions will impact food

:06:20.:06:24.

prices. I think Indonesia is the focus. Indonesia is a significant

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producer of palm oil, rubber, cocoa and coffee. They are the top four

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ranked of all those commodities. We have already seen palm oil rise

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significantly, and the expectations for prices to rise above 300 in the

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next few months. -- 3000. Inevitably, the lag will be

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significant, so there won't be an instant impact from the weather

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event, but it will take place over the next few years. The market is

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factoring in that already. We are seeing rising prices for some

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commodities, but the opposite trend in Australia was much? The industry

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is affected mainly in the livestock industry. When it is dry, farmers

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are forced to sell their stock at the same time, so the price is

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dampened. It is the reverse effect we are having in the plantation

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crops in Indonesia. Generally, talking about Indonesia or

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Australia, the farmers on the ground are the most affected by the

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drought, and businesses, such as the retail sector, are the ones who

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benefit? I think that is a plausible argument. When we look at drought,

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the first order in practice on the farmer. In my home country, there

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are many farmers going through significant social distress at the

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moment. We need to be mindful of that. As for the market, we are more

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interconnected than ever, and production will find a way to a

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market. It will be a price mechanism that governs that. Your company

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invests in food and agriculture. Not a good time to put your money into

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it? Agribusiness is a long-term investment proposition, and it works

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in cycles. Weather cycles and also commodity cycles. You have to pick

:08:21.:08:24.

your time to enter the market, and I think now is quite an interesting

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time to be investing in the sector, given where evaluations lie

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generally. On agricultural land and even some processing access as well.

:08:37.:08:46.

India has set a date for a general election. It is a big task. Many are

:08:47.:08:53.

hoping that these elections will be a turnaround for the languishing

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economy. I am in the industrial heart of the north-western state. It

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is in the spotlight because it is home to one of the main contenders

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for the prime ministerial posts. Besides them and other Major Noel

:09:10.:09:16.

parties, scores of other regional parties will have an important role

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to play. Organising this election is a mammoth task. 800 million people

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will come out to vote between five weeks. It is likely to cost around

:09:26.:09:31.

half $1 billion and that is not counting what individual political

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parties will spend. This could be a boost to business as well. It is

:09:49.:09:54.

likely to be a very busy Indian summer. But there is a bigger

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picture. In the past two years, growth has slowed down sharply and

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most of the people we have in speaking to say they feel things are

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at a standstill waiting for the results of this election. The

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research that if a strong and elliptically stable government comes

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to power, they will be willing to take hard decisions for Econ in

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which could trigger growth. -- for the economy. All the colour

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associated with what is often called the world 's guest elections to

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come. Thank you for in investing your time with ours. Bye for now.

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The top stories this hour. Tension in eastern Ukraine where pro-Russian

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activists clash with supporters of the new authorities - as diplomatic

:10:53.:10:55.

meetings in Paris fail to produce a decisive breakthrough. Venezuela

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cuts of

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