13/08/2014 Asia Business Report


13/08/2014

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suspected sex offender was poorly handled. Now, it is time for Asia

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Business Report `` Sir Peter Fahy. Japan's economy contracts in the

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second quarter. We will take a closer look at the results and what

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they mean. And, Asia's biggest company gets set to show

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shareholders have the bottomline is looking later today. Thank you for

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joining us. Japan's economy is in dire straits. The economy contracted

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by 1.7% in the April to June period, compared to an earlier quarter. It

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is not good news for the world's third`largest economy. Even more

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dramatic, the economy has shrunk by 6.8%. These numbers follow big gains

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in the previous quarter, so is this just an economy readjusting, or is

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it an indication of the health of the economy being linked to sail

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statistics? It is pretty bad. When you look at the details, it is

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private consumption, which really pulls down the economic growth.

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Private consumption fell as much as 5%, so that pretty much explains how

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Japan's economy is performing Right now. As a consumer, you also lost or

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appetite to spend after the sales tax was raised from five to 8%? Not

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at all. Everything looks more expensive, trains, taxis, even just

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a $1 bottle of water looks expensive. It is no wonder consumers

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don't really feel like spending more than they need. So, now you have a

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contraction during the April to June period. In this particular quarter,

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are you expecting another contraction? This could need a

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technical recession for the Japanese economy `` mean a technical

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recession. I don't we are halfway into the July/ September quarter,

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but we do see some improvements in consumer and business confidence. I

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do think it is more likely that we will see moderately positive growth,

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perhaps a 3% growth in the September quarter. This consumer confidence

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could be dealt another blow, because by next year the consumption tax

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will be raised again from eight to 10%. Could the government reassessed

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its situation? Yes, I think that would be prudent. The government

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should consider if Abenomics is still alive. The Japanese government

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may need to revise down their outlook, and they should seriously

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consider cancelling the last hike. What can be expected? More economic

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reforms, wage hikes? When will this be implemented? I think wage hikes

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will come through gradually, but the sad fact is that it is only

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happening very slowly. In the latest data, it is only rising at 0.6%, far

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lower than inflation, which is at 3.6%. In terms of Abenomics, it has

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been great so far, but from here on, it doesn't seem to be going in

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the right direction. In other business news, Japanese electronics

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giant Sony says its PlayStation TV consoles will go on sale in the US

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from the 14th of October, and in the UK one month later. The micro`

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console, which has been available in Japan since last year, is part of

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the company's attempt to compete with other streaming television

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consoles like Apple TV. It will cost $99 in the US and will include three

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games. Thanks to a traditional Japanese dress, the high street

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fashion label New Look, is profiting from its kimono style garments. They

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said they sold 40,000 of these tops every week. Which equates to one

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every five seconds. Asia's biggest electronics company updates its

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shareholders on results today. They expect net profits to have surged by

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4%. The company started out with an instant messaging service called QQ,

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before hitting the market with games.

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The cyber games arena. Players have come to sharpen their skills in an

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online game, where teams battle to defeat opponents. This is owned by

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Tencent, one of the biggest companies in China. This is one of

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the most popular computer games on the planet, and it costs absolutely

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nothing to play. Instead, the makes company money through online

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transactions. Players can spend their cash on purchasing new

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characters, or outfits for those characters. The man who started it

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with two partners, explains this appeal. Transpac while you don't

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need a very powerful computer to play, there is high awareness of the

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game. It is regularly updated with new characters and situations.

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Computer games still have a massive fan base, but even the most

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hard`core players are beginning to spend more time on their

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smartphones. QQ launched their games through a messaging application last

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year. If you look at their chat, they have had to implement things

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like mobile payments, online banking, games, even blogging

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platforms, to appeal to the Chinese consumer. Because of that, they have

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had many more channels that they can offer to monetise and develop those

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channels. Tencent may be ahead, but it has tough competition. Online

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shopping giant Alibaba has introduced its own messaging and.

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Another search firm has purchased new business, like App Store is.

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People are gearing up for the World Championships in South Korea.

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Tencent has profited hugely from this game, but future wealth lies in

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offering games through smartphones and other applications.

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They are cheap, have enormous music catalogues, and allow fans to share

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new music with their friends, and are easy to use. Streaming services

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are becoming increasingly popular among music lovers, and the major

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players are trying to get a slice of the Asian market. What does it mean

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for musicians? I spoke earlier to Jean Cook from the music coalition

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in New York. I think musicians are optimistic that new doors are

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opening for illegitimate music sharing system. Are deals already

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been signed between artists and labels that have been successful and

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fair for everyone? Think that is a struggle. Over the last ten years,

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since the founding of Napster several years ago, there was quite a

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bit of playing catch up within the industry, to make sure all the

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agreements are in place. It is quite complex. Making sure the musicians

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get paid is something that musicians have been very patient in waiting

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for. Eventually, as these markets mature, it is starting to happen.

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Indeed, you have the struggle from the musicians, and they are also

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struggling with piracy, particularly in the Asian market. Spot fire, who

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we interviewed weeks ago, says piracy has dropped in markets where

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streaming music has become popular `` Spotify. I think one of the

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reasons piracy exists is because of lack of availability of things that

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people want. The technology exists, but the platforms have not been

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built. 2014 is seen as a year that will be a big year for streaming

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music in Asia, and as these legitimate marketplace is get up and

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going, I think consumers will find that if they want to support the

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artist, it is much easier to do so, and they will. That was Jean Cook

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from the future of music coalition in New York. A quick look at the

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markets. Asian stocks are currently mixed. US stocks ended slightly

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lower overnight, pressured by a slide in energy share prices, and

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worries over developments in Russia and Ukraine. The Dow Jones

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industrial average slipped. Thank you for investing your time

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with us, I am Rico Hizon. Our top stories: The legendary

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American actress, Lauren Bacall, has died at the age of 89. The UN is

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warning of a tragedy of huge precautions in northern Iraq, as

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thousands flee Islamist

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