29/07/2014 Asia Business Report


29/07/2014

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all the latest business news live from Singapore. Australia gives the

:00:00.:00:21.

green light to a coal mine that could provide power to millions, but

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environmentalists are worried. And an apology from the boss of the firm

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that owns a Chinese company at the centre of a food scandal. It is all

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about wielding respect and trust in the management of systems and their

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integrity. Welcome to Asia Business Report. The Australian government

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has approved the construction of their biggest coalmine. The $15

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billion Carmichael mind in Queensland is being built. It could

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provide electricity to millions in India. Coming a fortnight after the

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government repealed its carbon tax on big polluters, the appeal is a

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Mac approval has angered environmentalists, who say it could

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threaten the Great Barrier Reef. The Prime Minister says strict

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conditions will be imposed. I asked our correspondent how markets will

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be reacting. I think the market, and especially the environmentalist is,

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are concerned about the Carmichael coal mine being approved. Because it

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will be moving something like 60 million tons of thermal coal per

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annum. And it will be Australia's biggest thermal coal operation once

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it is in production. The environmentalists are concerned

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about the amount of coal, because there are water tables, and also the

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area where the coal will be shipped. Abbott `` Abbot's Point. Does it

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need another mine? How will this address energy needs? There is no

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doubt that this will be able to supply power stations for a long

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time to come. The life of the mine is something like 60 years. We do

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believe that, looking forward, thermal coal as an energy source is

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not going to go away. It will incrementally increase. So by the

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time this project comes into being, which will be several years, we do

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expect the demand for thermal coal would have risen. By the mid`2020s,

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you know, I expect the coal will be well used. New data out this morning

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shows Japanese spending and retail sales dropped. Consumers are

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tightening their purse strings, showing they are not happy with

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recent tax hikes. He campaigned, and he promised and he delivered, and

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now his popularity is declining, in part due to those promises, aimed at

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bringing Japan back on the path of economic growth. 18 months after

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taking office, Prime Minister Shinzo Abe's policies are no longer popular

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at home. A recent poll carried out showed his approval rating for his

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Cabinet fell to 45.6%, which is the lowest ever. From 1000 who responded

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to the poll, 47% expressed disapproval of the Prime Minister's

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economic policies. His most recently implemented policy was to increase

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consumption tax, a move expected to spur spending. And end nearly two

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decades of deflation, or falling prices. It is also designed to bring

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down Japan's massive public debt. But one month after the hike in

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consumption tax, retail sales fell at a record price in May. Consumers

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racked up spending before the tax hike, and held off spending after.

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The government will face another battle in December, when it needs to

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decide whether they should hike the unpopular tax from 8% to 10%. I

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spoke to a correspondent from JP Morgan. He says Shinzo Abe is still

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very popular, despite his economic policies. For the first time in 1.5

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years in power, his popularity is below 50%. It is hardly a big

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plunge. I think most politicians would be envious of his 45% rate.

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But to the point, yes, taxes have been hiked, and people are not happy

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about it. That is natural. That is the way it is. But I think the good

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news is going to be that the underlying economic recovery in

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Japan is still intact. So a feelgood factor is going to start coming

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through in the next couple of months. Tell us, how is the Prime

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Minister trying to bring back voters and boost the rural economy? How

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might this work? Let's face it. There are no easy solutions here for

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the government. Taxes will have to go up further. Japan's public

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deficit is more than 250% of GDP. So it is going to be not an easy route.

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The good news is the private sector. It is not about the Prime Minister

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or the government. Corporate Japan has restructured. Corporate Japan

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hiring people quite aggressively. It is their falling unemployment rate,

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their improvement in income, that is where the feelgood factor is coming

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from in Japan. In fact, new figures show unemployment in Japan rose for

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the first time in almost a year. The jobless rate climbed to 3.7% in

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June. The markets had been expecting unemployment to remain flat, but it

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may not be as bad as it seems. The Labour Ministry said the number of

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job offers rose to its highest rate in more than two decades. More

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people are said to be looking for work, as the Labour market improves.

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Japanese carmaker Nissan has reported a rise in profits, which is

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a 13% jump. And it is nearly tripled the margins posted last financial

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year, when they felt the impact of a expansion drive in lifting its

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global market share. Microsoft has confirmed that the body responsible

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for enforcing business laws in China visited some of its officers. The

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firm, which is not accused of any wrongdoing, did not disclose the

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reasons for the visit, but it may face an anti`trust investigation.

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Microsoft issued a statement saying it will answer any concerns the

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government have. American meat supplier which owns a Chinese

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company at the centre of the food scare is stepping in to take control

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of operations. The OSI Group says Husi in Shanghai fell short of its

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high standards. It comes after five Husi staff were detained last week,

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following allegations he firm sold out`of`date meat to firms like KFC

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and McDonald's. Boss of the parent company is now in damage control. It

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is all about rebuilding trust and respect in systems with integrity.

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And about ensuring that never happens again. The food safety

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scandal was not confined to the Chinese mainland. It also affected

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Japan and Hong Kong, where local food safety officers are looking

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into it. From there, our correspondent reports. Like other

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outlets across China, this McDonald's, located in Hong Kong's

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business district, has stopped selling its products because of a

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tainted meat scandal. Now here, Chicken McNuggets, amongst other

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items have been pulled from the menu because they have been linked to

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Husi, the supplier accused of selling expired meat. Now in other

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parts of the country, hamburgers are also off the menu. Now at this

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particular branch, it is no exaggeration that business used to

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be booming for Breakfast, lunch and dinner, and all the hours in

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between. But now it is clear they far fewer customers. So what do

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consumers have to say about eating here? TRANSLATION: Actually I know

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that McDonald's food is not healthy. After the news broke, I stopped

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eating McDonald's, because I worried that more problems would arise

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later. I am not surprised. I think that other companies would have

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similar things, whether this is exposed or not. There is a mix of

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opinion here. It is important to point out that no`one has reported

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being sickened by the expired meat. Here at McDonald's Hong Kong, they

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promise to resume selling salad as early as next week, with supplies

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from Taiwan or the United States. But it is unknown at the moment when

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chicken will be back on the menu. A quick look at the markets now. Most

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markets are higher. However, a lot of markets and investors are

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sidelined as they await some aged data due out this week. Housing data

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from the US as well as reports from GDP. As well, the Federal reserve is

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meeting to decide on interest rates this week. So a lot of anticipation

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ahead of that. That is it for this edition of Asia Business Report. You

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are watching BBC News. The main headlines: Intense shelling is

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continuing in Gaza, after Israel's Prime Minister warns of a prolonged

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military campaign. Air strikes have targeted a building housing media

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companies.

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