16/04/2014 Asia Business Report


16/04/2014

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be built in an independent Scotland and jobs could be put at risk. The

:00:00.:00:00.

SNP accused him of spreading myths and misinformation. Time for Asia

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Business Report now. China's growth numbers are out on

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the government may be putting the brakes on growth as it looks to

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reform areas of the economy. And thousands of Chinese workers from a

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major shoe factory have gone on strike for improved social benefits.

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Thank you for joining us. Broadcasting to viewers around the

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world. We start off with China, which has just posted its slowest

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annual growth in more than two decades. Its economy expanded by

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7.4% in the January to March period, down from 7.7% in the previous

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quarter. Industrial production and fixed asset investment also showed

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signs of the slowdown. Let's cross the our correspondent in Beijing.

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Should we be worried about these figures? What China's premier has

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been stressing is we should not be fixated on the GDP figures. What

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he's talking about is not the quantity but the quality of growth.

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As you touched upon there, China's leaders are saying that the world 's

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second`largest economy needs major reform. One area is the country 's

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steel sector. That produces half the world steel. Many of the steel mills

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are saddled with debt. Is generally seen as an inefficient industry. I

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visited the country 's steel heartland just to see the scale of

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the challenge there. It's the industry that fired China's

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searing growth. Steel is transformed cities and laid the foundation of

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the second largest economy in the industry is a symbol of China's

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economic weakness. Nowhere is that clearer than in this province. It

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produces more steel in a year than the US. But oversupply as well as

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concerns about pollution mean unprofitable steel mills are being

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forced to close. We visited one of the dozens of plants that has

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stopped production. It is incredibly eerie here but when we talk about

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economic restructuring in China, this is what it looks like. It means

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that old industries such as steel will be left to rust. Investment

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goes elsewhere but it is eight painful process. The workers at this

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plant have already found out that it means tens of thousands of people

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will lose their jobs. Outside the gates, workers can wait for a whole

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day and get no work. This man says a couple of years ago, you could make

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$700 per month. Now, he is lucky if he makes half of that. If the steel

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meals do not produce, we don't get a job, he says. There are hundreds of

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people like me. Chinese leaders say major economic reforms are required

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to create new and better paying jobs. But many in the country's

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industrial heartlands fear that they will be thrown on the scrapheap. We

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hear a lot about these economic reforms. Economic costs and we have

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seen that the date in the slowing growth but it is easy to overlook

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the human cost as we heard from some steelworkers and the package just

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then. They are concerned about losing their jobs. There is one

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thing that the Communist Party prizes more than economic growth and

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that is social stability. There will be winners and losers in these

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economic reforms. The ruling party will be concerned about unemployment

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and the potential that that could trigger social unrest.

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Thank you very much for the update. China's first quarter GDP slowing to

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its... Slowest annual growth in more than two decades at 7.4%. Staying

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with China, thousands of workers have gone on strike in a factory

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which makes footwear for brands like Alibaba and Nike. These pictures

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show the striking workers clashing with police as they reach the

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blockade. The factory is owned by a footwear giant, which is not

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commented on the claims or the strike. Earlier, I spoke with a

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representative from a group which promotes workers rights on the

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mainland. He told me concerns about rights to social insurance have been

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growing. Workers over the past few years have started to realise that

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social insurance can benefit them. A few years ago, because of policy

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issues, social insurance that was provided to workers could not be

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transferred to another city or back home if the workers left their

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current employment. But policy changes have made that possible, for

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workers to take their benefits with them, and as workers have realised

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this, they have learned that they have not been paid these benefits

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for years. In this case, the workers are demanding this backpay for the

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past few years. That is why we have seen an increase in labour activism

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in the mainland. How will this be resolved between employers and

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employees? In this particular case, nothing has really happened in terms

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of negotiations as far as we know. The workers say they received a

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letter that just washes over the position and does not really talk

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about their demands. We are hoping the management will

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step out of their offices and talk to the workers. Hopefully the

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companies will also get involved and come to a resolution that is losing

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four everyone. The US has warned China that it is

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concerned about the recent drop in its currency. The US says the

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Chinese yuan is still significantly undervalued and that it is watching

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its movements closely. Many American lawmakers and politicians say that

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China deliberately keeps its currency weak in order to gain a

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trading advantage. Shares of Yahoo! Jumped by 8% in US

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trading. After it posted stronger than expected earnings. The company

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managed to increase revenue in the first quarter following a long

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period of decline. The stock also got the boost to to its stake in Ali

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Baba which posted a 66% hike in sales and is expected to hold one of

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the world 's largest initial public offerings later this year. Intel saw

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it profits drop as demand for personal computers that Mac

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computers shrinks. Revenues grew by 1% to $12.8 billion

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due to its tablet and data processing business.

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After decades of indecision, the Australian government yesterday gave

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the green light for a second airport in Sydney. The Prime Minister said

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the project will cost $2.5 billion and work will not begin for over a

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decade, but he said that it could potentially add $20 billion to the

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Australian economy by 2060. He said it could potentially add more than

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20 billion to this trillion economy. I asked whether a second airport was

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really necessary. It is long overdue. The Prime Minister himself

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said that we had been talking about this for 40 years and it is good

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that action comes. It indicates the political nature of these

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infrastructure planning decisions. It is a lesson for others in the

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region of the need to ensure that infrastructure keeps up with the

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expected growth and travel demand. South`east Asia's biggest carrier,

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Singapore Airlines, has announced plans to sponsor the first leg of

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the Singapore Grand Prix. Is going the same route as it rival, Emirates

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signed a sponsorship deal with the race last year. To stay profitable,

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Singapore Airlines is also investing in low`cost carriers and expanding

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into regional routes. We spoke to the chief executive and asked him

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about the carriers strategy for adapting in a competitive market. In

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some cases, we still want to extend our reach to smaller destinations.

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It makes sense for us to do so on our own. And when not, we will use

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partnership to achieve these proposals, such as our partnership

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with Virgin Australia and the partnership we have recently

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announced with Air New Zealand. You are announcing all these

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partnerships but in the past, Singapore has always been fairly

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independent. Are you acknowledging you need partnerships to grow? We

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are a commercial organisation and we cannot just be based on one

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particular model and stick to it forever. The environment is changing

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rapidly and we have to see how that environment has changed and what we

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have to do in order to make sure that we do well in that environment.

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Low`cost carrier traffic now accounts for some 30% of flights

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going in and out of Singapore and 50% of flights going in and out of

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south east Asia. Do you see your traditional long haul model dying?

:10:04.:10:09.

Long haul flights will continue to do well. Different markets obviously

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will have different growth on different levels of the market. In

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the case of long haul, when the economy begins to be more robust you

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will find those demand will pick up. We have invested in the low`cost

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sectors. The absolute signs of the airline, you still see the legacy

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airlines, a full`service carriers, are still forming a huge part of the

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capacity. Singapore Airlines will continue to grow and will continue

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to grow in places where it makes sense for us to operate.

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