03/07/2014 Asia Business Report

that over 150,000 victims in the UK. Time for the latest business news,

live from Singapore. China's president heads for South

Korea. Will the two sides finally agree to a trade deal? India is

taking steps to combat food waste caused by improper storage and

transport. Welcome to Asia Business Report. The economic relationship

between South Korea and China is likely to be high on the agenda when

the Chinese president, Xi Jinping, touches down in Seoul today. Trade

between the two countries tops $270 billion annually. Foreign investment

is about a quarter of that, at $57 billion. The two sides have been in

talks about a bilateral free trade agreement, so what is the likelihood

of that passing through the trip? I posed that question earlier. From

South Korea's perspective, getting a free trade agreement done with China

is a top priority. The US has been trying to get South Korea to join a

multilateral trade agreement with the US and China, but the president

he has made it clear that China will happen first. Both sides have had

about a dozen meetings and are coming close to a deal. I think that

is part of what they are looking forward to pushing towards in this

visit. Much has been made of President Xi Jinping visiting the

South head of the North, a break with tradition. How much assisted

with business links? Business links are getting more and more

important, as you mentioned. South Korea is one of the most important

trading partners with China, and the reverse is even more true. From

China's perspective, South Korea is the destination for many exports.

From China's perspective, as you know, North Korea is, it is not what

it used to be, and certainly from Beijing's perspective, we see South

Korea as being more important. That is something they want to court and

encouraged. President will be accompanied by a delegation of some

100 Chinese businessmen. What kind of deals are you expecting to come

out of this? The President will be spending a lot of his Friday

afternoon at and investment forum. We have already seen a battery

making company within LG group, they have announced they will be opening

another battery factory in China over the next year or so. Those are

the sort of agreements that both sides want to see. Samsung

electronics, the big smartphone maker, they have the plans as well

to make connections in China. A lot of that foreign investment you are

going to see, and that is really the sort of Thais they want to

strengthen. Rare earth elements played a crucial role in the

manufacture of of modern electronics, but getting them out of

the ground and processing them can be risky. An Australian company has

a rare earth processing facility in Malaysia, but it struggles to

contain local protests over potential environmental and health

impacts. Despite the controversy, it plans to move its headquarters to

Malaysia from Australia. Earlier, I asked Jennifer Pak would lead to

that decision? This is part of a bigger plan for them to cut cost per

of moving their headquarters to Malaysia. They said they would be

cutting some jobs, mainly contract positions. Also, they are looking to

renegotiate supply contract as well. They have been facing a very tough

two years, because rare earth metals, although very precious,

their prices have dropped significantly. More importantly,

they haven't been able to boost their output up to capacity here at

the Malaysia planned, because of various reasons. One of them being

the various protest from environmental activist as well as

residents, against the company. Has there been any reaction from those

environmental protests as well as the residents, in terms of his big

boot they are making? They see the move as probably, there is a mixed

sign, that the company are showing sign, that the company are showing

they are here to stay. Perhaps to show to invest as they are

confident, they will be able to get a licence renewal, which activists

say will be coming up shortly. Activists say it might the better

that they are here, if their executives here it might be easier

to lobby them. We have to remember why people are so against the

company being here in setting up the refinery. Rare earth, despite its

name, is not very rare to mind. But it is a very dirty and messy process

to refine, and much of that has been left up to China up until now. In

Malaysia, this has been one of the first companies to try to break

China's chokehold. Malaysian airlines may possibly be taking

private by its largest investment firm. It owns about 70% of the

company and is reportedly looking for different ways to fix its

fortunes. It has been losing money for several years, and finances have

worsened since the disappearance of flight MH370 in March. French

carmaker Peugeot plans to build its fifth factory in China. It has two

joint ventures in the country, one with its new shareholder, and one

with another Chinese company. The factory will produce an additional

300,000 vehicles per year starting from 2016. Facebook is buying a

video advertising technology company. The social network did not

disclose how much they paid, but the move reflects its desire to attract

more advertising money online and away from television. LiveRail

creates online video ads for companies like Major league

baseball, and ABC. India is the world's second`largest grower of

fruit and vegetables after China, but by some estimates they say 14%

of all fresh food produced in India is wasted because it rots before it

can get to customers. A major cause is the lack of cold storage and

investment. As part of our series on global food wastage, we look at what

is being done to try to tackle the problem.

This is one of Asia's largest wholesale markets. It is in the

Indian capital. Truckloads of produce a here every day to be

auctioned and sold at the best prices. This man has driven eight

hours from a village in a neighbouring state, bringing his

harvest of potatoes. It is a long trip that might earn him as much as

$3000. But he says he has no other choice. TRANSLATION: Once we harvest

our vegetables, we just don't know what to do with them. We need to

sell them fast or they are just going to rot. We don't have large

markets in the village, so I have to pay for them to be transported all

the way to Delhi. More food is brought here than ever before to

feed India's hungry cities. But conditions here haven't really

changed in the last few decades. This reflects one of the biggest

threats to India's food security. Improper storage means that nearly

14% of what the country produces perishes before even reaching

consumers. Despite being the world's second`largest grower of

fruits and vegetables, India throws away fresh produce worth about $7

billion every year. This is one solution, India has just over 6000

are still it is like this. Only a fraction of what it actually needs.

Providing technology for climate controlled warehouses is proving to

be a good business for companies. The price of milk per litre

potentially could go down by 20 to 40% if wastage was reduced. For

fruit and vegetables, prices could be halved potentially, so for a

country, as I said earlier, of 1.2 billion people, if you can bring

down pricing it is good for everyone. India's inability to keep

much of what it produces edible means many are left hungry. Unless

India invests in modern warehouses and cool trucks, or perhaps tempting

foreign retail giants to make the investment for them, the problems of

hunger and high food prices will only get worse.

Little change with Asian shares, that a flat at the open. Some are

gaining, the ASX mainly taking its cues from the record close on Wall

Street. All eyes to date on the crucial decision, and the June

payrolls report keeping investors fairly cautious in Asia. A record

close, but a short week for Wall Street, which will be closed for the

Independence Day celebrations on Friday. Thank you for watching.

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