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Now on BBC News, all the latest business news live from Singapore. | :00:00. | :00:14. | |
Rock bottom and still sliding. Iron ore prices have a new decade low. | :00:15. | :00:29. | |
Following in the family. How this third generation business is | :00:30. | :00:31. | |
competing on the High Streets of Hong Kong. Welcome to Asia Business | :00:32. | :00:44. | |
Report. The price of iron ore, the key ingredient of this deal, has hit | :00:45. | :00:49. | |
a fresh ten year low. It closed at $43. $43.89 a ton. Some say it has | :00:50. | :00:58. | |
got much further to fall. This economist says it will go below $40 | :00:59. | :01:05. | |
a ton by the end of the year and will be in the Turkey is at the end | :01:06. | :01:12. | |
of 3016. This is why. -- thirties. -- 2016. It is not sustainable. I | :01:13. | :01:16. | |
think the demands will cool off white a lot in the next year. -- | :01:17. | :01:24. | |
quite. China's production and demand will fall a lot. There will be some | :01:25. | :01:30. | |
pushing of the price down to where only the largest producers can be | :01:31. | :01:36. | |
profitable. There will be many bankruptcies. Number one, there are | :01:37. | :01:43. | |
Chinese high cost producers that are used to 100 million tons. Most of | :01:44. | :01:48. | |
the world will need to be priced out. That will be a painful process. | :01:49. | :01:55. | |
I put that question to an analyst in Sydney. When you look at the market | :01:56. | :02:00. | |
and how it is priced at the moment you can see that looking 2-3 years | :02:01. | :02:11. | |
out it will be lower. The market is already rising levels below $40 in | :02:12. | :02:15. | |
the next couple of years. -- pricing. When you look at it there | :02:16. | :02:19. | |
is a lot of capacity coming to the market. Whether it will stay at | :02:20. | :02:23. | |
those levels is another thing. As he correctly pointed out, as the price | :02:24. | :02:31. | |
goes low you lose our lot of tons through minds shutting down. It is | :02:32. | :02:35. | |
through that that you will find the price will be more supportive. -- | :02:36. | :02:39. | |
mines. The you see the big miners will continue to ramp up production? | :02:40. | :02:44. | |
That is what we have seen, ironically, because they are | :02:45. | :02:47. | |
low-cost operators and are putting more iron ore on the market. If you | :02:48. | :02:51. | |
look at the export that continue to go at record levels I don't see that | :02:52. | :02:58. | |
ranging. -- exports. What is more important is what is being produced | :02:59. | :03:08. | |
is consumed. -- reducing. Those that cannot will actually be taken over | :03:09. | :03:14. | |
or go out of business or shut down. BOC price is sitting at the $30 mark | :03:15. | :03:22. | |
for a few years to come? -- Do you see the. Or are you more optimistic | :03:23. | :03:28. | |
and say $50 a ton? I am more optimistic. When you look at the | :03:29. | :03:35. | |
price of iron or where it is and where China is positioned, China | :03:36. | :03:41. | |
requires growth at 7.5 to 8% to keep the economy stable. -- iron ore. I | :03:42. | :03:46. | |
think the more negative the data is that comes out of China the more | :03:47. | :03:51. | |
stimulus they will put in the market and there will be more demand. You | :03:52. | :03:55. | |
are optimistic. Does this more positive outlook... Some people are | :03:56. | :04:01. | |
thinking, why do I care about the iron ore? But it is about the | :04:02. | :04:06. | |
broader economic Outlook. China is still putting stimulus on the table. | :04:07. | :04:12. | |
-- outlook. We have to ask a why I be looking at increasing interest | :04:13. | :04:20. | |
rates? -- why are they looking at. Consumption will dramatically pick | :04:21. | :04:23. | |
up and as a result of that capacity in the market and the spare capacity | :04:24. | :04:27. | |
we are in at the moment, in my mind, it will be taken up in the market. | :04:28. | :04:31. | |
That will create stable, if not, higher prices are quite China's | :04:32. | :04:38. | |
slowing economy is not just causing those problems, but key issues for | :04:39. | :04:43. | |
other businesses like the largest private investment fund for the | :04:44. | :04:55. | |
mainland. -- prices. The executive vice president told Sharanjit Leyl | :04:56. | :05:00. | |
that now is a good time to go global. We believe that China is at | :05:01. | :05:08. | |
a stage where we will see more companies going global and becoming | :05:09. | :05:11. | |
international players in the next ten years. I think for an investment | :05:12. | :05:18. | |
company this is a good opportunity. To help them grow globally as well | :05:19. | :05:25. | |
as make good profit, I mean. But the signals from China are not | :05:26. | :05:31. | |
reassuring. Six rate cuts in a year and constant stimulus to reignite | :05:32. | :05:38. | |
the economy... Had is that impact your firm? It will be more difficult | :05:39. | :05:46. | |
to invest ethically in China because the economy is slowing down. -- how. | :05:47. | :05:50. | |
But we can also see, because of the slowdown, many Chinese companies are | :05:51. | :05:55. | |
trying to grow their business overseas. That is also a good sign | :05:56. | :06:00. | |
for us. In my personal opinion, I guess, starting a US business in a | :06:01. | :06:07. | |
slowdown period is probably a good thing, rather than in peaktime. You | :06:08. | :06:11. | |
can pick up some bargains, is what you are saying? No, we see good | :06:12. | :06:16. | |
opportunities. In other news, Ali Abbas insurance is setting up a | :06:17. | :06:22. | |
joint-venture with China's search engine. -- Alianz. It is to | :06:23. | :06:28. | |
establish an on line insurer in the country. It only brings in a small | :06:29. | :06:33. | |
part of their overall revenues but China's expanding middle-class has | :06:34. | :06:37. | |
seen increased demand for insurance products. The Chinese smartphone | :06:38. | :06:45. | |
maker has launched its latest handset to revive dwindling sales. | :06:46. | :06:49. | |
Revised three months after its loss is, it is relatively cheap and has a | :06:50. | :07:02. | |
fingertips and so. -- predecessor. -- fingertip sensor. China is | :07:03. | :07:09. | |
increasing the minimum wage to boost consumer spending and economic | :07:10. | :07:11. | |
growth. That economy has leapt into recession twice Shinzo Abe came to | :07:12. | :07:17. | |
power nearly three years ago. -- Japan. His government has been under | :07:18. | :07:23. | |
pressure to improve the economy's performance. Hong Kong was once the | :07:24. | :07:29. | |
factory of the world making everything from electronics to | :07:30. | :07:32. | |
toys. But after it opened up in the 19 50s many live to the mainland. -- | :07:33. | :07:44. | |
1950s. Decades later only a handful of businesses remained there. One is | :07:45. | :07:50. | |
making shoes. Were told how the enterprise is revamped. -- We are | :07:51. | :07:59. | |
told. TRANSLATION: It was founded in 1958 by my grandfather. It was just | :08:00. | :08:05. | |
a booth under a staircase. It was a smart shop that sold all kinds of | :08:06. | :08:10. | |
bugs, mainly Chinese slippers. -- products. I started helping out at a | :08:11. | :08:15. | |
very young age. Slowly, I fell in love with traditionally embroidered | :08:16. | :08:20. | |
shoes. Dan Norris started to get involved in the designing. -- then I | :08:21. | :08:25. | |
started. That is when I decided I could invest one whole life in the | :08:26. | :08:31. | |
business. Before slippers were warned mainly in the last. -- my. | :08:32. | :08:36. | |
Then I tried to modernise the design and use new materials. -- worn. Now | :08:37. | :08:41. | |
they can be used outside. These are the traditional shoes revamped. Many | :08:42. | :08:50. | |
people like to wear high heels at their weddings. Traditionally, they | :08:51. | :08:56. | |
were all flat shoes. I get a lot of inspiration from my daily life. I | :08:57. | :09:02. | |
like to hang out in different places and get inspired by many things. I | :09:03. | :09:06. | |
like to explore the neighbourhood around my shop. I spend hours | :09:07. | :09:10. | |
looking for fabrics and designs. I often forget out what to do during | :09:11. | :09:19. | |
my next season during this process. -- figure out. I started social | :09:20. | :09:23. | |
media to attract more younger customers. People say, I didn't know | :09:24. | :09:29. | |
these shoes were still being sold. All our products are handmade. My | :09:30. | :09:33. | |
biggest obstacle is that I don't have enough staff. Very few people | :09:34. | :09:39. | |
in Hong Kong choose to make shoes as a full-time job. Another obstacle is | :09:40. | :09:45. | |
the rent prices. We were forced out of our former location in Hong Kong. | :09:46. | :09:50. | |
Since we moved, we have lost a lot of older customers. They weren't | :09:51. | :09:56. | |
able to find us. The customers we were able to keep worthy younger | :09:57. | :09:59. | |
ones who kept up with us on social media. More than half of our | :10:00. | :10:05. | |
customers are now under 40. -- were the. I hope to keep doing this, not | :10:06. | :10:09. | |
just to keep it in the family, but to broaden interest among fellow | :10:10. | :10:13. | |
designers to get into this business, to do this with me. It is | :10:14. | :10:21. | |
time for just a quick check of the Asian markets. You can see that most | :10:22. | :10:26. | |
of them are just ever so slightly down. The Nikkei is down 120 point. | :10:27. | :10:33. | |
The All Ords is also down. That is it for Asia Business Report. -- | :10:34. | :10:36. | |
points. Thank you for watching. | :10:37. | :10:44. |