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Researched by ICM for The Guardian newspaper showed 71 # % of people | :00:00. | :00:00. | |
thought Alex Salmond was the better performer. Now, on BBC News, all of | :00:00. | :00:07. | |
the latest business live from Singapore with Riko Heezon. | :00:08. | :00:17. | |
Online video games streaming ` could it be the next big thing after | :00:18. | :00:25. | |
Amazon buys Twitch? And bad debt ` how will China's rising loan | :00:26. | :00:33. | |
problems impact the banks? Hello and welcome to Asia Business Report on | :00:34. | :00:39. | |
BBC World News. I am Riko Heezon. The biggest online retailer Amazon | :00:40. | :00:42. | |
has bought video games service Twitch for nearly $1 billion. The | :00:43. | :00:47. | |
deal is it biggest acquisition since 2009 when it bought the online shoe | :00:48. | :00:52. | |
retailer. Twitch allows users to watch other people play video games. | :00:53. | :00:55. | |
It is not the first time Twitch was an acquisition target. Earlier in | :00:56. | :00:59. | |
the year, Google's YouTube was reported to be in talks to bow the | :01:00. | :01:05. | |
firm as well. Well, Twitch has over 55 mill you unique monthly viewers | :01:06. | :01:11. | |
as of July of this year. So is video gaming the next big thing? | :01:12. | :01:18. | |
Apparently the move makes sense for Amazon? If you are a retailer, what | :01:19. | :01:24. | |
do you do? You need to go where the people are. If there are 59,000 | :01:25. | :01:29. | |
users on tich Fitch you need to go there. How do you get there? You own | :01:30. | :01:35. | |
the 55 million eyeballs. They want to compete basically on all fronts. | :01:36. | :01:39. | |
They are competing against the likes of net politics and Google Microsoft | :01:40. | :01:42. | |
and Wal`Mart. This is not really their score business here. Well, it | :01:43. | :01:48. | |
is not, but the point is if your customers are on your side, then | :01:49. | :01:52. | |
they are nowhere else. They can't be in two places at the same time. What | :01:53. | :01:58. | |
Amazon wants is to. Engage these people onto its website so they are | :01:59. | :02:04. | |
not shopping somewhere else. And if these gamers, which are in the | :02:05. | :02:07. | |
millions will buy their products online. Well, that is the first | :02:08. | :02:11. | |
thing. I mean, the second thing, of course, is when people are playing | :02:12. | :02:17. | |
video games, compulsive video gamers, like myself, for instance, | :02:18. | :02:22. | |
want to know how other people have done certain things, so you want to | :02:23. | :02:24. | |
watch to see what they have done and when you have seen how they have | :02:25. | :02:28. | |
done it, then you want to improve yourself and, as you rightly said, | :02:29. | :02:31. | |
you will buy some of the games at the same time. David, I am your | :02:32. | :02:37. | |
opposite. I don't play any of the video games. Oh, you should, Riko. | :02:38. | :02:42. | |
You should. Amazon is trying to gain a foot hold here in Asia. Will it | :02:43. | :02:47. | |
allow them to allure the Asian glamer. Does the Asian gamer money | :02:48. | :02:52. | |
to spend? They are no different to any gamers nowhere else in the | :02:53. | :02:55. | |
world. They are compulsive gamers and they want to im#3r506 their | :02:56. | :02:59. | |
skills, therefore they want to learn how others do things. The first | :03:00. | :03:04. | |
thing is to engage the user, get the user familiar with your site. If you | :03:05. | :03:08. | |
get them onto your site, the next thing is to start cross selling | :03:09. | :03:12. | |
your. Product. Do you think the online gaming streaming is the next | :03:13. | :03:15. | |
big thing because Google and YouTube passed it up. It is for now. If you | :03:16. | :03:20. | |
have a look at, say, for instance, my son who also is a compulsive | :03:21. | :03:23. | |
gamer, he will have all of his Frenches together and that is what | :03:24. | :03:27. | |
they want to do. When they play a particular game, there might be | :03:28. | :03:29. | |
something they are very proud of. They are particularly proud of a | :03:30. | :03:33. | |
particular move that they make. They upload it and want to share it with | :03:34. | :03:36. | |
other people to say, guess what, I am actually quite good at this. You | :03:37. | :03:41. | |
are right, it is the next big thing. Thank you. For the first time mobile | :03:42. | :03:46. | |
phones can be used on planes, but only if you are flying Qantas and | :03:47. | :03:50. | |
Virgin Australia. Passengers on those flights will be able to move | :03:51. | :03:54. | |
mobile phones on board starting today. Carriers had always | :03:55. | :03:58. | |
considered phones and other mobile devices a safety risk. Other | :03:59. | :04:01. | |
airlines are expected to follow suit, but devices are still expected | :04:02. | :04:06. | |
to be put on flight mode when the plane takes off. India's new Foreign | :04:07. | :04:12. | |
Minister Sushma Swaraj met with her Vietnamese counterpart to try to | :04:13. | :04:16. | |
best bilateral relations. Regional issues including matters in the | :04:17. | :04:20. | |
South China Sea were on the agenda. Just before the visit Vietnam | :04:21. | :04:25. | |
reknewed India's lease of two oil blocks in the South China Sea for | :04:26. | :04:30. | |
another year. India's Supreme Court has ruled that all coal mining | :04:31. | :04:36. | |
licences awarded between 1993 and 2010 are illegal. The court said | :04:37. | :04:40. | |
previous governments gave rights to mine coal to state and private | :04:41. | :04:44. | |
companies in a way which was not fair and transparent. | :04:45. | :04:50. | |
It will examine whether O'200 licences should be cancelled. The | :04:51. | :04:55. | |
Treasurer said the country lost more than $200 billion because coalfield | :04:56. | :04:58. | |
rights were sold off cheaply. Cruising bad loans in China have put | :04:59. | :05:01. | |
the spotlight squarely on the earnings of the biggest banks. The | :05:02. | :05:05. | |
latest report, Agricultural Bank of China releases its half`year numbers | :05:06. | :05:10. | |
today. An increase in non`performing loans has been a cause for concern | :05:11. | :05:15. | |
for both China's policy makers, as well as foreign investors. Bad loans | :05:16. | :05:20. | |
at mainland banks totalled $80 billion by the end of 2012. By the | :05:21. | :05:25. | |
end of last year that climbed to $100 billion. One of the reasons, | :05:26. | :05:29. | |
the slowdown in the Chinese economy has made it harder for businesses to | :05:30. | :05:36. | |
repay their debts. Now we speak act if rise in China's bad loans. To put | :05:37. | :05:42. | |
it in perspective, $100 billion, Riko, is just about a little less | :05:43. | :05:47. | |
than 2% of the total loan book of all of the Chinese banks combined. | :05:48. | :05:51. | |
It is not a very large number. The point is it has been growing quit | :05:52. | :05:55. | |
rapidly and that of course is of concern, but, on the other hand, | :05:56. | :05:58. | |
when you think about it, the Chinese banking system is highly regulated. | :05:59. | :06:03. | |
So how the banks make profits is they have a big spread between | :06:04. | :06:07. | |
deposit rates that they pay their depositors and the rate at which | :06:08. | :06:13. | |
they get on their lending. So that spread allows them to make | :06:14. | :06:15. | |
sufficient profits to write down these bad loans and that I think is | :06:16. | :06:19. | |
the way forward. Now, look at the other side ` who are the big | :06:20. | :06:24. | |
borrowers whose loans are going bad? Mainly the municipalities, the big | :06:25. | :06:28. | |
cities that built a lot of infrastructure and real estate, | :06:29. | :06:32. | |
which is not giving them returns. Those municipalitieses are starting | :06:33. | :06:37. | |
to issue bonds, as of this month, August. We have seen the NPC giving | :06:38. | :06:42. | |
$400 billion worth of room for these issuers to go ahead and raise bonds. | :06:43. | :06:51. | |
That will fund some of these potential bad debts. But if you do | :06:52. | :06:54. | |
critique the prospects of the cities that have been over the past decades | :06:55. | :06:58. | |
been the lynchpin, the catalyst for growth in the Chinese economy, this | :06:59. | :07:01. | |
could further slow down the economic growth of the Chinese economy, which | :07:02. | :07:07. | |
has been between 7`7. 5% over the past year and we have seen a Jekyll | :07:08. | :07:12. | |
and hide character of the Chinese economy which has been mixed data. | :07:13. | :07:18. | |
Absolutely. Basically, the Chinese economy used to grow 10% and that | :07:19. | :07:26. | |
has come down to 7. 5%. That drop is a reflection of overreliance on | :07:27. | :07:30. | |
infrastructure and real estate that perhaps whats been excessive. Now | :07:31. | :07:34. | |
the Chinese are trying to rebalance the economy into consumption. They I | :07:35. | :07:37. | |
are trying to get the Chinese to consume more and that is how the | :07:38. | :07:41. | |
they expect the economy to grow into the future to be more | :07:42. | :07:46. | |
consumer`reliant and less on investment. Thank you. While there | :07:47. | :07:51. | |
may be concern about bad loans in China, plenty of global businesses | :07:52. | :07:55. | |
are still betting on the willingness of the Chinese to spend moneyment as | :07:56. | :07:58. | |
a result, mainland consumers are being told they can look forward to | :07:59. | :08:03. | |
thousands of new shopping malls in years to come. According to new | :08:04. | :08:07. | |
research the number of malls in China could rise by as much as 70% | :08:08. | :08:12. | |
over the next five years, but that brings its own challenges. I spoke | :08:13. | :08:17. | |
to a consultant in Hong Kong. If you actually look at the penetration | :08:18. | :08:22. | |
rate of malls in China, compared to other | :08:23. | :08:26. | |
France, the actual penetration of malls is one`third to one`fifth. So | :08:27. | :08:31. | |
in terms of actual total number of malls being developed, based on the | :08:32. | :08:34. | |
penetration rate, you would argue it is not that extreme. There is a lot | :08:35. | :08:37. | |
of opportunity, but at the same time there is risk and that is where the | :08:38. | :08:42. | |
problem becomes because there are another 1,000 malls that will be | :08:43. | :08:46. | |
built in the next 3`5 juniors or so. But the retail market in China is | :08:47. | :08:50. | |
still not developed as that of the United States or in Europe and we | :08:51. | :08:54. | |
already are seeing retail sales numbers, Mr Chan, slowing down in | :08:55. | :08:58. | |
China in the first few months of this year. That's correct. I think | :08:59. | :09:02. | |
that in itself presents the problem. There is a retail slowdown, however | :09:03. | :09:06. | |
the market is still growing, so therefore there is a lot of | :09:07. | :09:09. | |
opportunity based on this particular growth. | :09:10. | :09:13. | |
offer lip rely on a load of different factors and one particular | :09:14. | :09:16. | |
factor is making sure you are in the right location. So location is | :09:17. | :09:21. | |
important but creating the mall that has some kind of unique proposition, | :09:22. | :09:27. | |
either unique tenants or unique food and Bev rage offering, something | :09:28. | :09:30. | |
unique to draw people to the mall. That will be a key success factor to | :09:31. | :09:34. | |
the thousands of malls being developed in China. What happened to | :09:35. | :09:40. | |
the malls that don't succeed in they become white elephants and owe banks | :09:41. | :09:44. | |
debt. This could add to the mounting debt problem of China? Well, this is | :09:45. | :09:50. | |
the funny and interesting thing about China because many of these | :09:51. | :09:53. | |
malls are mixed used developments, so often there is an office building | :09:54. | :09:57. | |
and residential building there and a mall there, so often the | :09:58. | :10:01. | |
and the income that comes from the actual office building or the | :10:02. | :10:03. | |
residential building, in fact, caters for the mall itself, so | :10:04. | :10:08. | |
therefore whilst the mall may not have many people inside because the | :10:09. | :10:11. | |
whole development is not caught up in terms of progress yet, the actual | :10:12. | :10:16. | |
financing of the mall is such that the other components can actually | :10:17. | :10:19. | |
fund the mall itself. Therefore, it will take some Tim before it is `` | :10:20. | :10:23. | |
there is a big shakeout in the market place I believe. Thank you | :10:24. | :10:26. | |
for investing your time with us on Asia Business Report. I am Riko | :10:27. | :10:30. | |
Heezon. Bye for now. | :10:31. | :10:37. |