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Chinese markets have opened lower and are set for another bubbly | :00:17. | :00:26. | |
ride. And, the Taiwanese economy, is it swimming upstream, or will it be | :00:27. | :00:35. | |
gobbled up by a bigger fish, China? Welcome to Asia Business Report. I | :00:36. | :00:40. | |
am Sharanjit Leyl in Singapore. Investors will keep a close eye on | :00:41. | :00:45. | |
the turbulent Chinese markets today. They have opened a minute to go and | :00:46. | :00:50. | |
are trading lower. They start that trading week after fresh data from | :00:51. | :00:54. | |
China on the weekend showed inflation went up 1.6% from a year | :00:55. | :01:04. | |
earlier. That is just above the 1.5% rise from November. Cost of living | :01:05. | :01:06. | |
was pushed up with higher food prices. As we look at the trading so | :01:07. | :01:14. | |
far, lots of questions about the government's willingness to | :01:15. | :01:24. | |
intervene in the market. Now, that's take a look at how the markets are | :01:25. | :01:29. | |
faring this morning. -- let's. Shanghai and Shenzhen are trading | :01:30. | :01:33. | |
lower. Shanghai's markets were down about 2% at the open. Shares and is | :01:34. | :01:40. | |
down well over 3%. That was just a moment ago. -- Shenzen. In | :01:41. | :01:48. | |
Australia, the ASX has gone down 2%. Having a pretty bad morning. The | :01:49. | :01:53. | |
Nikkei was spared all of this because it was closed for a public | :01:54. | :01:59. | |
holiday. Let's go to Chris Conway from the Australian stock report in | :02:00. | :02:05. | |
London. He joins us live. Greece, a bad opening for markets this | :02:06. | :02:10. | |
morning. -- Chris,. The second trading week of the year. As we saw | :02:11. | :02:19. | |
last week, the first, a record weekend for bourses. What do you | :02:20. | :02:23. | |
anticipate? So far, this morning, Chinese markets are coming back on | :02:24. | :02:28. | |
line and being weaker, as you said. That follows on from last. A pretty | :02:29. | :02:37. | |
bad week. One of the worst ever. -- last week. Australia was down, | :02:38. | :02:41. | |
reversing gains leading up to the end of the year. A horrible start to | :02:42. | :02:47. | |
the new year. More of the same this week. There seems to be some | :02:48. | :02:55. | |
stability, though. Hopefully as the session unfolds today we get some | :02:56. | :03:00. | |
stability. Maybe we can claw back some of the losses. What is | :03:01. | :03:03. | |
interesting about the Chinese market is actually foreign investors are | :03:04. | :03:09. | |
not in it, it is tough to invest there, only 2% of the market has | :03:10. | :03:15. | |
foreign investment, so why are regional markets, like in Australia, | :03:16. | :03:17. | |
for instance, so influenced by places like China? Interesting | :03:18. | :03:25. | |
question. The Chinese stock market and the violent moves we are seeing | :03:26. | :03:32. | |
in it is a symptom of the Yuan pricing we have seen going on. There | :03:33. | :03:37. | |
is uncertainty. As China moves to shift it's economy from an export | :03:38. | :03:43. | |
economy to a consumption -based economy that evaluation is something | :03:44. | :03:46. | |
they have to do for that process to take place. -- its. Beijing has been | :03:47. | :03:53. | |
very opaque about their targets and what they are trying to achieve and | :03:54. | :03:57. | |
indeed when they are going to devalue it. Because of that, that is | :03:58. | :04:01. | |
what is causing uncertainty, especially in equity markets. The | :04:02. | :04:06. | |
Shanghai Composite, which is really the epicentre in terms of an equity | :04:07. | :04:11. | |
market, that flows through to Australia and through America. So, | :04:12. | :04:17. | |
not so much the Chinese market to be worried about, the devaluation of | :04:18. | :04:20. | |
the Chinese currency, is causing the problems. It is interesting you | :04:21. | :04:24. | |
mention is that, the authorities have lept in and intervened. Maybe | :04:25. | :04:32. | |
it is too much, maybe it is making the situation worse. That is | :04:33. | :04:36. | |
something I would agree with. I touched on it before, the lack of | :04:37. | :04:41. | |
clarity in regards to why Beijing and white china is choosing this | :04:42. | :04:47. | |
particular path to devalue the currency. -- why China. They have | :04:48. | :04:53. | |
not been clear. Look at what happened recently. They were clear | :04:54. | :04:57. | |
in helping the market understand when they were going to raise | :04:58. | :05:00. | |
interest rates in America and why they were going to do it and plenty | :05:01. | :05:06. | |
of evidence to back it up. China with the Yuan, the other hand, it | :05:07. | :05:09. | |
came of nowhere. The same thing happens last year. They clearly have | :05:10. | :05:16. | |
not learned. -- happened. We have seen the devaluation... We have seen | :05:17. | :05:25. | |
the big sellers. -- sell offs from before. They need to be clearer. | :05:26. | :05:29. | |
Thank you for joining us. Chris Conway. Apologies, as we saw, the | :05:30. | :05:38. | |
image froze a few times. Singapore airlines has declared it is takeover | :05:39. | :05:45. | |
of tiger airways. -- Tiger Airways. That came after the 60% of the | :05:46. | :05:51. | |
budget carrier being taken over. That happens until February. Staying | :05:52. | :05:58. | |
with Singapore airlines, it is subsidiary, Scoot, is still doing | :05:59. | :06:02. | |
pretty well for itself. It sustained it is a line waiting for two years. | :06:03. | :06:08. | |
After three years it is close to breaking even. -- its record. We got | :06:09. | :06:19. | |
an opinion. The first six months of us fly to Sydney we increased the | :06:20. | :06:22. | |
number of Singaporeans going to Sydney by a person. -- 3%. For | :06:23. | :06:36. | |
vacations, 67%. We brought in business to Singapore and their | :06:37. | :06:42. | |
airline. The evidence is clear. What about expansion? Our expansion plans | :06:43. | :06:52. | |
are to China. We will add a six Chinese destinations soon. -- sixth. | :06:53. | :06:59. | |
And next year, probably three Indian destination. Oil prices have been | :07:00. | :07:07. | |
volatile. What is your strategy? Our volume is combined with another's | :07:08. | :07:15. | |
and hedged as a hole. Beheading profile is two years. -- a whole. | :07:16. | :07:24. | |
Anything that was struck before 2013 was at high prices. -- The hedging. | :07:25. | :07:35. | |
They will run off by August 2016. That will be more akin to today's | :07:36. | :07:44. | |
spot price. That was the CEO. Taiwan will hold parliamentary elections | :07:45. | :07:46. | |
this Saturday and many voters will be weighing up which party can | :07:47. | :07:50. | |
better manage economies there economy grew by just 1%. -- economy. | :07:51. | :08:03. | |
-- there economy. Taiwan sees it as a Chinese province. That makes them | :08:04. | :08:10. | |
nervous. We have more. These fish will soon be served at Chinese | :08:11. | :08:16. | |
banquets. China is Taiwan's biggest customer for this expensive | :08:17. | :08:22. | |
delicacy, the grouper. They used to have to smuggle the fish there. Now, | :08:23. | :08:30. | |
he and other Taiwanese farmers can export them legally, without paying | :08:31. | :08:33. | |
tariffs, earning $160 million a year. All because of improving | :08:34. | :08:38. | |
relations between the two side. TRANSLATION: Taiwan's economy | :08:39. | :08:44. | |
depends on China. -- sides. If they close their market to ask we will | :08:45. | :08:50. | |
not be able to survive. -- us. Other companies share that view. Including | :08:51. | :08:57. | |
one that makes Taiwan's most famous souvenir, pineapple cakes. Demand | :08:58. | :09:02. | |
has soared since time is tourist began flocking here. -- Chinese. | :09:03. | :09:08. | |
TRANSLATION: Half of our business comes from Chinese tourists. If they | :09:09. | :09:13. | |
stopped coming half of us will become unemployed. But, prayers to | :09:14. | :09:21. | |
the gods, from the ruling party's candidate, for an election victory | :09:22. | :09:26. | |
and continuation of this row China policy, may be in vain. -- | :09:27. | :09:32. | |
pro-China. In the past eight years, Taiwan's government has signed more | :09:33. | :09:39. | |
than 20 deals with China. But economic benefits alone have not | :09:40. | :09:45. | |
helped him win over the Taiwanese. Instead, an increasing number of | :09:46. | :09:48. | |
people here are worried by no maybe using closer economic ties as a | :09:49. | :09:53. | |
neutral to take back the island. -- that China's. They staged huge | :09:54. | :10:02. | |
demonstrations last year to block approved and of a trade deal. -- a | :10:03. | :10:10. | |
trade deal. They believe it has mainly helped Taiwan's business | :10:11. | :10:16. | |
elite. This is the opposite candidate. She and her party do not | :10:17. | :10:22. | |
favour unification, so many would prefer her to negotiate deals for | :10:23. | :10:29. | |
Beijing. But the question for voters is, can she help improve ties and | :10:30. | :10:40. | |
improve the economy for the people? That is it for Asia Business Report. | :10:41. | :10:42. | |
Thank you for watching. | :10:43. | :10:53. |