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suspected sex offender was poorly handled. Now on BBC News all the | :00:00. | :00:00. | |
latest business news live from Singapore. Japan's economy contracts | :00:00. | :00:16. | |
in the second quarter. We will take a closer look at the results and | :00:17. | :00:25. | |
what they mean. And Tencent, Asia's biggest company gets set to show | :00:26. | :00:27. | |
shareholders how the bottomline is looking, later today. Thank you for | :00:28. | :00:42. | |
joining us. I'm Rico Hizon. Japan's economy is in dire straits. The | :00:43. | :00:45. | |
economy contracted by 1.7% in the April`June period, compared to an | :00:46. | :00:49. | |
earlier quarter. It is not good news for the world's third`largest | :00:50. | :00:54. | |
economy. And even more dramatic, the economy has shrunk by 6.8%. But | :00:55. | :01:07. | |
today's numbers follow big gains in the previous quarter, so is this | :01:08. | :01:10. | |
just an economy readjusting, or is it an indication of the health of | :01:11. | :01:13. | |
the economy, being linked to sale statistics? `` sales tax. I spoke to | :01:14. | :01:23. | |
a Japanese macro economist. It is pretty bad. When you look at the | :01:24. | :01:27. | |
details, it is private consumption which really pulls down the economic | :01:28. | :01:33. | |
growth. Private consumption in April June quarter fell as much as 5%, so | :01:34. | :01:37. | |
that pretty much explains how Japan's economy is performing right | :01:38. | :01:43. | |
now. So as a consumer, you also lost your appetite to spend after the | :01:44. | :01:47. | |
sales tax was raised from 5% to 8%? Not at all. After the consumption | :01:48. | :01:55. | |
tax rate hike, everything looks more expensive, trains, taxis, even just | :01:56. | :01:58. | |
a $1 bottle of water looks expensive. So it is no wonder | :01:59. | :02:02. | |
consumers don't really feel like spending more than they need. All | :02:03. | :02:09. | |
right, so now you have a contraction during the April`June period. In | :02:10. | :02:11. | |
this particular quarter, are you expecting another contraction? With | :02:12. | :02:17. | |
two consecutive quarters, this could mean a technical recession for the | :02:18. | :02:24. | |
Japanese economy. I actually don't think so. We are halfway into the | :02:25. | :02:29. | |
July`September quarter, but we do see some improvements in consumer | :02:30. | :02:33. | |
and business confidence. So I do think it is more likely that we will | :02:34. | :02:36. | |
see moderately positive growth, perhaps a 3% growth in the September | :02:37. | :02:47. | |
quarter. But this consumer confidence could be dealt another | :02:48. | :02:49. | |
blow, because by next year the consumption tax will be raised again | :02:50. | :02:54. | |
from 8% to 10%. So could the government reassess its situation? | :02:55. | :02:58. | |
Yes, I think that would be prudent. The government should consider if | :02:59. | :03:09. | |
Abenomics is still alive. I think with this bad second`quarter | :03:10. | :03:13. | |
number, the Japanese government may need to revise down their outlook, | :03:14. | :03:16. | |
and they should seriously consider cancelling the last hike. So what | :03:17. | :03:22. | |
can we expect, then? More economic reforms, wage hikes? When will this | :03:23. | :03:26. | |
be implemented? I think wage hikes will come through gradually, but the | :03:27. | :03:30. | |
sad fact is that it is only happening very slowly. In the latest | :03:31. | :03:36. | |
data, it is only rising at 0.6%, far lower than inflation, which is at | :03:37. | :03:47. | |
3.6%. So in terms of Abenomics, it has been great so far, but from here | :03:48. | :03:51. | |
on, it doesn't seem to be going in the right direction. In other | :03:52. | :04:00. | |
business news, Japanese electronics giant Sony says its PlayStation TV | :04:01. | :04:04. | |
consoles will go on sale in the US from the 14th of October, and in the | :04:05. | :04:11. | |
UK one month later. The micro`console, which has been | :04:12. | :04:14. | |
available in Japan since last year, is part of the company's attempt to | :04:15. | :04:17. | |
compete with other streaming television consoles like Apple TV. | :04:18. | :04:23. | |
It will cost $99 in the US, and will include three games. Hand `` and | :04:24. | :04:39. | |
with thanks to a traditional Japanese dress, the high street | :04:40. | :04:42. | |
fashion label New Look is profiting from its kimono`style garments. The | :04:43. | :04:46. | |
company said its underlying operating profit was up by 30%. They | :04:47. | :04:53. | |
have sold 40,000 of these tops every week, which equates to one every | :04:54. | :05:01. | |
five seconds. A popular kimono! What a statistic there. Asia's biggest | :05:02. | :05:07. | |
electronics company updates its shareholders on results today. | :05:08. | :05:12. | |
Investors are expecting net profits to have surged by 4%. The Chinese | :05:13. | :05:17. | |
company started out with an instant messaging service called QQ, before | :05:18. | :05:21. | |
hitting the market with games. Now it is during its effort behind | :05:22. | :05:25. | |
mobile offerings, as our correspondent reports. The cyber | :05:26. | :05:29. | |
games arena. Players have come to sharpen their skills in an online | :05:30. | :05:32. | |
game, where teams battle to defeat opponents. League of Legends, or LL, | :05:33. | :05:48. | |
as it is known, is owned by Tencent, one of the biggest companies in | :05:49. | :05:51. | |
China. This is one of the most popular computer games on the | :05:52. | :05:54. | |
planet, and it costs absolutely nothing to play. Instead, the makes | :05:55. | :05:58. | |
company money through online transactions. So players can spend | :05:59. | :06:05. | |
their cash on purchasing new characters, or outfits for those | :06:06. | :06:13. | |
characters. The man who started it, with two partners, explains this | :06:14. | :06:18. | |
appeal. TRANSLATION: While you don't need a very powerful computer to | :06:19. | :06:22. | |
play, there is high awareness of the game. Because of frequent | :06:23. | :06:33. | |
competitions. Also, it is regularly updated with new characters and | :06:34. | :06:36. | |
situations. Computer games still have a massive fan base, but even | :06:37. | :06:38. | |
the most hard`core players are beginning to spend more time on | :06:39. | :06:44. | |
their smartphones. Tencent launched their games through a messaging | :06:45. | :06:51. | |
application last year. Titles like Thunder Raid, and Dash. If you look | :06:52. | :06:59. | |
at their chat, they have had to implement things like mobile | :07:00. | :07:01. | |
payments, online banking, games, even blogging platforms, to appeal | :07:02. | :07:05. | |
to the Chinese consumer. And because of that, they have had many more | :07:06. | :07:08. | |
channels that they can offer to monetise and develop those channels. | :07:09. | :07:11. | |
Tencent may be ahead, but it has tough competition. Online shopping | :07:12. | :07:15. | |
giant Alibaba has introduced its own messaging app. Search firm Baidu has | :07:16. | :07:29. | |
purchased new business, like App Store is. Back at the Arena, people | :07:30. | :07:38. | |
are gearing up for the World Championships in South Korea. | :07:39. | :07:41. | |
Tencent has profited hugely from this game, but future wealth lies in | :07:42. | :07:43. | |
offering games through smartphones and other applications. They are | :07:44. | :07:46. | |
cheap, have enormous music catalogues, and allow fans to share | :07:47. | :07:49. | |
new music with their friends, and are easy to use. Streaming services | :07:50. | :07:54. | |
are becoming increasingly popular among music lovers, and the major | :07:55. | :07:57. | |
players are trying to get a slice of the Asian market. But what does it | :07:58. | :08:03. | |
mean for musicians? For more on that, I spoke earlier to Jean Cook | :08:04. | :08:07. | |
from the Music Coalition in New York. I think musicians are | :08:08. | :08:10. | |
optimistic that new doors are opening for a legitimate | :08:11. | :08:17. | |
music`sharing system. A digital marketplace in Asia. Indeed, but are | :08:18. | :08:24. | |
deals already been signed between artists and labels that have been | :08:25. | :08:27. | |
successful and fair for everyone? I think that is a struggle. Over the | :08:28. | :08:30. | |
last ten years, since the founding of Napster several years ago, there | :08:31. | :08:33. | |
was quite a bit of playing catch`up within the industry, to make sure | :08:34. | :08:40. | |
all the agreements are in place. Copyright law is quite complex. And | :08:41. | :08:48. | |
making sure the musicians get paid is something that musicians have | :08:49. | :08:52. | |
been very patient in waiting for. And eventually, as these markets | :08:53. | :08:55. | |
mature, it is starting to happen. Indeed, you have the struggle from | :08:56. | :08:58. | |
the musicians, and they are also struggling with piracy, particularly | :08:59. | :09:03. | |
in the Asian market. And Spotify, who we interviewed weeks ago, says | :09:04. | :09:06. | |
piracy has dropped in markets where streaming music has become popular. | :09:07. | :09:14. | |
Do you think this could be a trend, going forward? I think certainly | :09:15. | :09:21. | |
that one of the reasons piracy exists is because of lack of | :09:22. | :09:24. | |
availability of things that people want. The technology exists, but the | :09:25. | :09:29. | |
market place hasn't yet inbuilt. That is one of the reasons we are | :09:30. | :09:33. | |
very optimistic. I understand that 2014 is seen as a year that will be | :09:34. | :09:37. | |
a big year for streaming music in Asia, and as these legitimate | :09:38. | :09:40. | |
marketplace is get up and going, I think consumers will find that if | :09:41. | :09:43. | |
they want to support the artist, it is much easier to do so, and they | :09:44. | :09:47. | |
will. That was Jean Cook from the Future of Music Coalition in New | :09:48. | :10:00. | |
York. And before we go, here is a quick look at the markets. Asian | :10:01. | :10:03. | |
stocks are currently mixed. US stocks ended slightly lower | :10:04. | :10:06. | |
overnight, pressured by a slide in energy share prices, and worries | :10:07. | :10:08. | |
over developments in Russia and Ukraine. You have the Nikkei flat, | :10:09. | :10:16. | |
the Hang Seng also going the same trend. Gaining about 23 points, at | :10:17. | :10:22. | |
the ASX All Ordinaries is lower by 16 points. This is on the back of | :10:23. | :10:27. | |
the Dow Jones industrial average slipping overnight. The NASDAQ, | :10:28. | :10:32. | |
faced with technology issues, in positive territory. Thank you for | :10:33. | :10:35. | |
investing your time with us, I'm Rico Hizon. I am Mike Embley. The | :10:36. | :10:51. | |
top stories this hour: One of Hollywood's great leading ladies, | :10:52. | :10:53. | |
Lauren Bacall, has died the age of 89. The legendary American actress | :10:54. | :10:56. | |
starred alongside Humphrey Bogart in To Have and Have Not and Key Largo. | :10:57. | :11:00. | |
The UN warns of a a tragedy of huge proportions in Northern Iraq. As | :11:01. | :11:03. | |
thousands flee Islamic militants, 130 more American military | :11:04. | :11:04. |