24/06/2014 Asia Business Report


24/06/2014

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paid tribute, describing his family as extraordinary people. Now on BBC

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News, all the latest business news, live from Singapore.

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Japan's biggest carmakers are recalling millions of vehicles over

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potentially explosive airbags. How will investors react? Sri Lanka's

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slave island is seeing new developments. Welcome to the

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programme. Shares in Japan's three biggest carmakers, Honda, Nissan and

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Toyota, are falling today after they announced a major recall over faulty

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airbags. Japanese companies are not the only ones affected. Honda has

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been hardest hit by the problem, forced to recall an additional 2

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million vehicles. Nissan has recalled 750,000. Mazda has also

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been affected. The part was supplied by another Japanese company. Other

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carmakers including Toyota have also issued recalls over the same part.

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Globally, Japanese manufacturers have recalled a combined total of

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nearly 7 million vehicles. There have been no reports of accidents or

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injuries because of the issue so far, however Toyota has one report

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of a seat cover learning. Japanese carmakers are not the only ones

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dealing with recalls at the moment. General Motors has recalled more

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than 17 million cars in the US this year, more than it sold in the

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previous year. The recalls have involved faulty ignition switches,

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responsible for over one dozen deaths. General Motors has also

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issued recalls over seatbelts, transmissions and airbags as well as

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potential fire issues. Thank you for joining us. Will this affect the

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Japanese reputation for quality? These problems have occurred in

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vehicles that are no longer being made. The carmakers are confident

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that these problems are not in vehicles currently being made. The

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impact on sales might be limited. The impact on reputation, however is

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yet to be determined. Other companies that will be kit will be

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the supplier that made these faulty airbags. In an earlier recall, they

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took a charge of $300 million, and you can expect similar charges this

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time around as well. We know that these recalls takes the total number

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of vehicles recalled to almost 7 million globally. That is a lot of

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cars. Is this a sign of manufacturing standards going down?

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Is there just tougher scrutiny? Suddenly the numbers are

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astonishing, especially when you look at a company like General

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Motors, with the millions and millions of vehicles it has recalled

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in one year. It will be alarming to consumers as well. I would say that

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the quality of vehicles produced today has never been better. It has

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much to do with the sophistication of many of the small parts and

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electronics going into cars. A good deal of scrutiny goes into them and

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people are not willing to tolerate even small glitches that might have

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been overlooked in the past. Staying with transport, cruise

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operators are looking to Asia's a growing middle class to increase

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their business over the past decade. Business is growing 14% annually in

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the region. Many governments are building new infrastructure to

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accommodate new cruise liners. The industry is betting on growth in the

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region. They are supportive of the initiative because they all like

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tourism, which provides significant economic benefits for their

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countries. And cruising is very popular around the world, providing

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high customer satisfaction rates. It is of great value. There is a lot of

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potential for cruising in Asia, given the population and, as you

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say, the growing middle class. Where is it coming from in Asia,

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specifically? We have seen this industry grow by 14% this year. Is

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it sustainable? I think that it is sustainable. Growth is coming from

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China and Japan and Singapore, the main areas, but throughout Asia,

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there is increased interest. The great thing about cruise liners is

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they are movable assets and we can move them to where there is demand.

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What about the headlines? We have seen the tragic ferry disaster in

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South Korea and we also have events like the Costa Concordia sinking in

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2012. Doesn't this put people off from taking cruises? Those were very

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unfortunate cases, of course, but in general, cruising is a very safe

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vacation with high customer satisfaction. Historically, it is

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safer going from one port to another. Really, we think that

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growth will continue and is sustainable. Japanese Prime Minister

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Shinzo Abe is expected to unveil several new measures aimed at

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boosting growth in Asia's second largest economy today, including

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cutting corporate tax and legalising the casino industry. The South

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Korean government is looking to sell its stake in one of the country's

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biggest financial companies for the first time. The government holds a

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50% stake in the bank, worth $4.5 billion, but they have had trouble

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privatising the lender. South Africa's longest ever work stoppage

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has officially ended after unions reached a deal with platinum mining

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companies. Tens of thousands of workers will receive a 20% increase

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to their basic wage. They have been on strike for the past five months,

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affecting South Africa's economy and the earnings of mining companies.

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Oracle is buying Microsystems for more than $5 billion. It is its

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first acquisition in five years. The chief executive hopes that it will

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help Oracle boost flagging growth. Oracle makes software and hardware

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for restaurants and hotels. Google has plans for its own domain name

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registration service. It is testing a service which will allow consumers

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to search and purchase or find an transfer a domain names to the

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business. Since the end of the civil war, the physical face of Colombo

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has been radically changed as part of what Sri Lanka calls

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beautification. Long`standing low income areas are being demolished to

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make way for prestige developments. One such area in the city centre was

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known as a slave island. We report on a vanishing way of life. It is

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like a small Sri Lanka in the beating heart of the city. Slave

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island, Muslim, Buddhist, Christian and Hindu. Everyone jostles

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side`by`side. Life is lived on the streets and in the alleyways. Most

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people do not have much money but they value their way of life. This

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woman from the ethnic Malay minority watches the world go by. She was

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born in the same 2`room house which now shelters her large family. She

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is unhappy, because it has been earmarked for demolition.

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TRANSLATION: I want to go. I want to stay here. But many nearby houses

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have already been demolished. After decades of war, the government says

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it wants a Colombo that can rival Singapore and it intends to liberate

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these lands for commercial purposes. In recent months, entire streets of

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those traditional neighbourhoods have been flattened, resulting in

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this. Luxury high`rise flats and hotels have come up, like these,

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already mushrooming elsewhere in the city. Here in a suburb of a more

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modest flat for people evicted from slave island, we meet one family

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that was displaced some years ago. He says it is nice because their old

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neighbours have also moved here but they received no payment for their

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old house, only a small amount towards rent. Some human rights

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campaigners say the people of slave island are being unwillingly forced

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out with no consultation. Because the urban development authority is

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run by the powerful Defence Ministry, people seem to fear

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protesting. But some say the movement from houses to flats is a

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natural one. People will move to that situation. It happened in

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Vietnam, it happened in Singapore and in many other countries. It is a

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normal process. In a positive move, one developed has promised to build

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flats for the locals were their old houses were `` one developer. That

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will help them keep something they treasure about slave island, its

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centrality. Although its architectural heritage and unique

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and sea are still passing into history. `` unique atmosphere are

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still passing into history. Looking at the Asian markets, now. Of

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course, as I mentioned, many investors are focusing on the

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Japanese prime minister 's policies aimed at boosting growth there,

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which will be unveiled later today. Thank you for watching.

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An Egyptian court has sentenced three Al Jazeera journalists to

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seven years in jail, sparking international outrage.

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As Michael Schumacher continues his recovery, there are concerns his

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medical records may have been stolen and offered for

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