18/02/2016 Asia Business Report


18/02/2016

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Now on BBC News all the latest business news live from Singapore.

:00:00.:00:14.

A huge drop in profits and worries about China. Why is the boss of

:00:15.:00:31.

Caplan upbeat? And does flight mode now means staying connected? Good

:00:32.:00:39.

morning Asia and hello world. Glad you could join us for Asia Business

:00:40.:00:46.

Report. We start off with the real estate market and the head of one of

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Asia's largest companies, Singapore's Capital Land saying he

:00:53.:00:58.

is optimistic for 2016 despite the slowing of China. They have posted a

:00:59.:01:03.

near 40% fall in their fourth-quarter numbers compared to

:01:04.:01:08.

their year ago numbers and get its chief executive says its growth

:01:09.:01:19.

forecast remains positive -- yet. Despite the slowdown, we expect

:01:20.:01:23.

China to continue to grow at about 615%. There is a major change now in

:01:24.:01:29.

the composition of the overall GDP of the economy in that the focus is

:01:30.:01:38.

less on export and more on consumption. And consumption is

:01:39.:01:46.

growing in China. In our specific sector, we are looking at, for

:01:47.:01:51.

example, retail consumption which has grown. It is still growing in

:01:52.:01:59.

the double digits and we continue to enjoy high growth. In the case of

:02:00.:02:08.

the residential property sector, the government has been putting in

:02:09.:02:15.

policies that are encouraging homeownership insofar as people who

:02:16.:02:21.

are purchasing their first home or upgrading will be supported. It will

:02:22.:02:29.

underpin some of the real demand for property. What about how the

:02:30.:02:33.

authorities have been managing this situation? Not just the economy but

:02:34.:02:38.

the sharp falls we have seen in the stock markets? I think the stock

:02:39.:02:41.

market volatility is something that none of us want to see, including

:02:42.:02:45.

the Chinese authority. From what I can gather from all the different

:02:46.:02:51.

speeches made by the people responsible for looking after the

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economic sector, they are also very clear that they're learning from

:02:56.:02:58.

this whole experience. Going forward, I think there will be a lot

:02:59.:03:03.

more preparation in terms of dealing with this disruption in volatility

:03:04.:03:11.

in the market. In other business news making headlines, Japan's

:03:12.:03:15.

exports have fallen for a fourth month in a row. This January they

:03:16.:03:21.

were 12.9% lower than January last year. The data also revealed Japan

:03:22.:03:26.

is importing less. The situation is worse than forecast and confirms the

:03:27.:03:30.

economy is still showing signs of weakness amid concerns of the global

:03:31.:03:33.

economic slump and in particular, slowing growth in the mainland.

:03:34.:03:41.

Those concerns are reflected in the freshly released minutes from

:03:42.:03:44.

January's US central bank meeting. They show that members considered

:03:45.:03:52.

changing course in terms of raising rates for 2016. The decision to hike

:03:53.:03:58.

the cost of borrowing was made in December. Venezuela has devalued its

:03:59.:04:04.

currency and massively it -- back raised the cost of fuel. The

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exchange rate will be simple five and the cost of petrol which was

:04:13.:04:15.

practically free in the oil-producing country will increase

:04:16.:04:20.

the first time in 20 years. As of Friday, the cost of gasoline will

:04:21.:04:32.

increase more than 6000%. For a long time Australia got rich on the back

:04:33.:04:35.

of the mining boom but the collapse in global commodity prices have left

:04:36.:04:38.

the government struggling to balance its books. The price of coal has

:04:39.:04:43.

jumped by 60% over the last five years. Australian coal exports to

:04:44.:04:53.

China are down by 25% over the past year, reflecting a slowdown in the

:04:54.:04:57.

Chinese economy to which Australia is so strongly tied. Now we go to

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our correspondent. Dawn in central Queensland. Ground Zero for

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Australia's: history. The state has some of the largest coal reserves

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and was at the bottom of the country's mining boom -- coal. It is

:05:19.:05:24.

a boom at which hasn't gone bust yet but which these days is certainly

:05:25.:05:27.

providing a lot less bang for the buck. Coal continues to be pulled

:05:28.:05:34.

out of the ground here in Queensland on a massive scale but such has been

:05:35.:05:40.

the fall in the price of the product that many of the big mines are

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struggling to turn a profit. That has hit mining communities like this

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one hard. Nearly everyone here is connected to the coal industry but

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wages have been cut and jobs have been lost. I'm not quite sure where

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boom and bust originated from but it certainly is cemented into the

:06:06.:06:09.

mining industry in particular. We do need to work towards sustainability

:06:10.:06:16.

and more consistency. And this town has definitely not seen that. These

:06:17.:06:20.

houses don't look to flash but during the boom when miners were

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flushed with cash, this small, nondescript town had some of the

:06:27.:06:31.

most expensive real estate in all of Queensland. But in the last few

:06:32.:06:37.

years, many people have left and property prices have dropped by as

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much as 70%. The town is starting to struggle now because of the impact

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from the mines. You don't have the money to spend around the town. I'm

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always concerned about my family in the community's future. Hopefully it

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will come back. Always live in hope. We hope we will see a flattening and

:06:57.:07:00.

general increase in demand, but there is always that worry.

:07:01.:07:05.

Australia's coal reserves are not going to run out anytime soon but

:07:06.:07:09.

digging it up is one thing. Selling it for profit is another. Tomorrow

:07:10.:07:21.

we hear about Australia's boom in agricultural investment as Asia's

:07:22.:07:25.

middle classes demand more high-quality food. Over the weekend

:07:26.:07:29.

you can get a look at how Australia is repositioning itself in the new

:07:30.:07:35.

global economy on Talking Business at these times. Anyone who has used

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the Internet on a plane may have had a less than favourable experience.

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Low-speed, delays in loading, dropped connections, and all at a

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significantly higher cost than what can be purchased on the ground. Is

:07:52.:07:55.

there a future where we will all be surfing at 30,000 feet? We have

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details from the Singapore air show. We have all had those moments

:08:02.:08:05.

where we desperately need to send an e-mail or two before we get onto our

:08:06.:08:08.

flight and switch off our phones and laptops. That that is now changing.

:08:09.:08:16.

-- but. It was on multimillion dollar debts like this one that the

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idea of Wi-Fi was first pioneered and that is because the owners were

:08:21.:08:23.

the only ones who could afford it that technological advances mean

:08:24.:08:26.

that now commercial aviation can adopt it as well. By 2023,

:08:27.:08:34.

commercial aircraft with high-speed broadband communications are

:08:35.:08:41.

expected to reach more than 13,000 but passengers have had mostly

:08:42.:08:43.

negative experiences so far and the economics of it means that we saw

:08:44.:08:49.

headlines like passengers stung with $1200 bills or the crazy economics

:08:50.:08:54.

of in-flight Wi-Fi. Some airlines have also complained that they are

:08:55.:08:58.

not making money from the service. So does it still makes financial

:08:59.:09:03.

sense for airlines to install it? This company is one of the biggest

:09:04.:09:08.

makers of aircraft Wi-Fi equipment. It has a 20 year deal with a

:09:09.:09:14.

satellite provider to build a new global network for aircraft which

:09:15.:09:16.

they say will transform rapid connectivity. If you can imagine

:09:17.:09:23.

flying across the ocean, not dropping a signal, having the

:09:24.:09:27.

ability to actually stream video, it is a completely different parameter

:09:28.:09:31.

of customer experience that has never been touched before. Carriers

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here at the Singapore air show are keen to show they're investing in

:09:39.:09:41.

this type of technology to keep ahead of the competition. Indonesia

:09:42.:09:46.

says first and business class passengers don't have to pay for

:09:47.:09:50.

onboard Wi-Fi and that in economy it is about $25 for 20 hours of use.

:09:51.:09:57.

But you after member that airlines will have different types of

:09:58.:10:01.

networks as well as price data plans because ultimately they all have

:10:02.:10:07.

different bottom lines. And over the last few minutes we have heard from

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China on their inflation numbers. The CBI measure of inflation, say it

:10:13.:10:25.

has risen to 1.8% which is less than expected. Thank you for spending

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your time with us and goodbye for now.

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