30/07/2014 Asia Business Report

new rules, the money could be reclaimed up to six years after it

had been paid. Now on BBC News all the latest business news live from

Singapore. Lessons from MH17. How aviation

chiefs are improving safety for flights over conflict zones. We go

to Taipei to see a key part of the economy, family business. Welcome to

Asia Business. Top aviation industry bosses have wrapped up a key meeting

in Montreal, about reducing risk of flights over conflict zones. It

comes after the downing of Flight MH17 over eastern Ukraine. Let me

start with some background. They wanted to see new international laws

relating to those who make and deploy anti`aircraft missiles. There

was a lot of talk about the information that comes from

individual countries about how safe it is to fly over their airspace. If

you think about Ukraine, the government there had set their

airspace was saved. `` said their airspace was safe. I asked the head

of an industry body if they can do more when it comes to reporting on

their airspace. What do we have to compare? We depend on the free will

of the states having information and implementing provisions. At the end

of the meeting, should passengers feel safer? Here is the head of the

industry's main trade body. This is an exceptional case. It is the first

time that a peaceful civil aircraft has been shot down by the missile

like this. We have to keep this into perspective. This is extremely row.

I was told that if prices did go up, they would be negligible. The

message coming out of here is that the system is still working there

are gaps that those here I tried to close.

From what you have heard, there is no denying that the ad business is

tough to be in. As well as the recent tragedy, all players are

being affected by competition. We will hear more about Singapore

airlines and what is at the heart of their problems. What is happening if

they don't make enough money. Singapore Airlines generates 14

billion worth of profit, it doesn't have great margin of safety on what

it is able to generate. When you add on extra things, like new flight

paths, extra insurance and extra costs, that is going to damage the

company completely. You talk about the flight paths over conflict

zones. We have looked at that closely. That emerged after MH17.

Singapore Airlines was flying over large parts of eastern Ukraine more

frequently than Malaysian Airlines. Are all airlines don't have to think

about this? It's going to cost them more now. The cost is one part. They

will have to pass that on to customers. Customers will have to

ask what they want, cheaper airlines or safety. Unless they are pushed

into using new flight paths, they will think it is safe enough and

they will use it. That is the difficulty they have. They have to

balance the cost. Flying a new route is going to cost them more fuel and

more money. Are they going to be able to pass that cost on? Being for

the free market, I would say the passengers will decide. In the

future, passengers will say whether they are comfortable with it or not.

Microsoft is under scrutiny in China.

Chinese authorities raided Microsoft offices. They say that Microsoft

breached competition rules with their new system. They must have

changed for Microsoft in China since 2006. That was when the then Chinese

President flew to the United States to have dinner with the then

chairman Gates, before travelling to the White House. Since then, the

company has been struggling in China. It has been struggling to

battle with piracy. Its prospects of selling legal software in China

looked best when it was negotiating with the government. The

announcement of an investigation into the company seems to have

dimmed that prospect. The government has readied band of the purchase of

Windows eight software by government buyers. Things are not looking good

for the company. Could Microsoft be lumped in with a lot of other

foreign corporations right now? We have seen Chinese authorities going

after foreign companies. We have seen Chinese regulators and the

Chinese state`run media really turning up the heat on foreign

corporations. We have seen pharmaceutical companies fast food

companies and now technology companies, they are all really being

scrutinised very carefully by the Chinese government. The Chinese

government says it is doing best to protect the interests of local

consumers and in an effort to bring prices down, it is also trying to

protect local companies. It is something that happened all over the

world. At some point, the Chinese government will have to take you

step back in its efforts to make things a little more palatable for

foreign companies working in China. Twitter had losses of 125 million

losses in the quarter to June. Investors were still buoyed by the

fact that Twitter has 270 million users. To Taiwan, where three

sisters have taken over a family farm and changed into a popular

weekend it away. There has been a transition from one set of leaders

to the next, but not everyone in Taiwan finds it easy. Preparing a

dish of shrimp, this mother and daughter duo make a bid team. At the

back, the father is roosting the family's trademark chicken. The

youngest daughter is in charge of the front desk and seeing guests to

their rooms. The eldest daughter is the head of marketing and conjures

up creative beverages in the cafe. TRANSLATION: It just happened. We

put the youngest at the front desk at two years old. At 22, she is in

charge of it. We are happy the young people have taken over managing the

farm. They have better ideas on how to run the business than we do.

Family businesses make up the bulk of Taiwan's economy. While this

family has succeeded in having done the business to the younger

generation, many companies in Taiwan, including some of the

biggest firms, do not have a succession plan. They are run by the

founders, who are getting on in age, but do not have any successors lined

up. 70% of Taiwan's against companies are family owned. Only 30%

have a succession plan. The companies are either too big to be

passed down to family members or the offspring are not capable or

interested in running them. Experts say the succession challenges for

many Taiwanese companies put a question mark over their future,

especially in the mind of shareholders. The first generation

entrepreneurs do not want to give up their position. They still want to

make major decisions for the company. The successful is to not

successors do not have a chance. Elderly business owners are not

willing to let go. This is making businesses struggle. The country may

be slow to change and risk future competitiveness. That is not the

case for this family. It rests very firmly on the next generation.

A quick look at the markets. They are fairly subdued. The Nikkei is

up. We sought the numbers out from Japan, with the biggest loss since

the earthquake in 2011. `` saw. The top stories this hour: Israel's

bombardment of Gaza is continuing. The military commander of Hamas has

said there'll be no truce unless what he called the siege of Gaza is

lifted. The United States and the European Union have announced broad

economic sanctions on Russia over its support for rebels in