:00:19. > :00:22.The leaders of the campaigns for and Online video game streaming, could
:00:23. > :00:29.it be the next big thing after Amazon buys Which? And how will
:00:30. > :00:39.Japan's rising loan problem impact that the banks?
:00:40. > :00:43.Welcome to Asia Business Report. The world's biggest online retailer
:00:44. > :00:47.Amazon has bought video games service Twitch for nearly $1
:00:48. > :00:52.billion. The deal is the biggest acquisition since 2009, when it
:00:53. > :00:57.bought an online shoe retailer. Twitch allows users to what other
:00:58. > :01:02.people play video games. It's not the first time it was an acquisition
:01:03. > :01:09.target. Delivery at `` earlier in the year you tube was reported to be
:01:10. > :01:17.in talks to buy the firm as well at over 55 million `` as well. It had
:01:18. > :01:22.over 55 million viewers this year. Thank you so much for joining us,
:01:23. > :01:27.David. This is a surprise move by Amazon. What do they gain from this
:01:28. > :01:32.acquisition? You have to ask yourself is, if you are a retailer,
:01:33. > :01:36.what do you do? You need to go where the people are. If there are 55
:01:37. > :01:41.million users on Twitch, you want to be there. How do you get that? By
:01:42. > :01:47.buying the company. Therefore, you owned 55 million people.
:01:48. > :01:52.They want to compete on all fronts. They compete against the likes of
:01:53. > :01:58.Netflix, Google, Microsoft and Walmart. This is not their core
:01:59. > :02:07.business. It's not but if your customers are on your side, they
:02:08. > :02:11.can't be anywhere else. What is on bonds `` wants is to engage people
:02:12. > :02:17.on their website survey on shopping somewhere else. And see if these
:02:18. > :02:22.gamers, in the millions, will buy their products online. That is the
:02:23. > :02:26.first thing. The second thing of course is when people are playing
:02:27. > :02:31.video games, compulsive video gamers, like myself, we want to know
:02:32. > :02:35.how other people have done certain things. So they might watch to see
:02:36. > :02:39.what they have done. When you see how they have done it, they might
:02:40. > :02:43.want to improve themselves. As you said, you will buy some of the games
:02:44. > :02:50.at the same time. I am your opposite, I don't play any video
:02:51. > :02:54.games. I should! The website is trying to gain a foothold in Asia.
:02:55. > :03:01.Will the strategy allow Amazon to lure the Asian gamer? They are no
:03:02. > :03:06.different to gamers other places in the world. They are compulsive, they
:03:07. > :03:10.want to improve their skills, therefore they want to learn how
:03:11. > :03:14.other people do things. The first thing is to engage the user. To get
:03:15. > :03:19.the use of familiar with your website. If you get them there, the
:03:20. > :03:25.next thing is to start selling to them, to start cross selling. Do you
:03:26. > :03:29.think online gaming streaming is the next big thing? Because Google and
:03:30. > :03:34.YouTube passed it up. It is for now. If you look at my son for instance,
:03:35. > :03:37.who is also a compulsive game, he will have his friends together and
:03:38. > :03:41.that's what they want to do. When they play a particular game, there
:03:42. > :03:45.might be something they are especially proud of. A particular
:03:46. > :03:55.move. They upload it and Sheraton other people to save, I'm good at
:03:56. > :03:59.this. `` share it. This might make Amazon profitable going forward.
:04:00. > :04:04.Thank you so much. For the first time, mobile phones
:04:05. > :04:07.can be used on planes but only if you are flying Qantas and Virgin
:04:08. > :04:10.Australia. Passengers on those flights will be able to use their
:04:11. > :04:15.mobile phones on`board starting today. Carriers considered phones
:04:16. > :04:20.and other mobile devices safety risk. Other airlines are expected to
:04:21. > :04:23.follow but the devices are expected to be put in flight mode when the
:04:24. > :04:36.plane takes off. The new Foreign Minister in Vietnam
:04:37. > :04:46.met with counterparts to boost trade links.
:04:47. > :04:53.Rising learnt in China have put the spotlight squarely on the earnings
:04:54. > :04:56.of the country's against banks. The latest to report, the Agricultural
:04:57. > :05:01.Bank of China, unveiling half`year numbers they do today. An increase
:05:02. > :05:04.in non`performing loans has been a cause for concern for both China's
:05:05. > :05:11.policymakers and foreign investors. Loans at Chinese banks total $80
:05:12. > :05:17.billion at the end of 2012. `` total. That climbed to nearly 100
:05:18. > :05:22.Ilium dollars US, one year later. One of the reasons is it has made it
:05:23. > :05:28.harder for businesses to repay their debts. `` 100 billion dollars. I
:05:29. > :05:35.spoke earlier about the rise in the bad loans. To put it in perspective,
:05:36. > :05:41.$100 billion is just about a little less than 2% of the total loan book
:05:42. > :05:45.of all Chinese banks combined. It's not a big number but it has been
:05:46. > :05:49.growing quite rapidly. That is of concern. On the other hand, when you
:05:50. > :05:54.think about it, the Chinese banking system is highly regulated. How the
:05:55. > :06:00.banks make profits is that they have a big spread between the deposit
:06:01. > :06:03.rates they pay and the rate at which they get on their lending. That
:06:04. > :06:09.spread a allows them to make sufficient profits to write down
:06:10. > :06:12.these bad loans. That's the way forward. Look at the other side. Who
:06:13. > :06:16.are the big borrowers whose loans are going back? Mainly the
:06:17. > :06:20.municipalities, the big cities that build a lot of infrastructure and
:06:21. > :06:25.real estate, which isn't giving them returns. Those in `` municipalities
:06:26. > :06:34.are starting to issue bonds. As of August, we saw the NPC giving $400
:06:35. > :06:39.billion worth of room for these issuers to go ahead and raise bonds.
:06:40. > :06:44.That will fund some of these potential bad debts. If you do
:06:45. > :06:48.curtail these new projects of the municipalities and cities which have
:06:49. > :06:51.been over the past decade been the linchpin for growth in the Chinese
:06:52. > :06:57.economy, this could further slowdown the economic growth of the Chinese
:06:58. > :07:03.economy, which has been between 7% ` 7.5% over the past year. We have
:07:04. > :07:07.seen the Jacqueline Hyde character of the Chinese economy, which has
:07:08. > :07:11.been mixed data. Basically the Chinese economy used to grow at over
:07:12. > :07:16.10%. That has come down to 7.5% and a drop is a reflection of this
:07:17. > :07:20.overreliance on investment. And the creation of new real estate and
:07:21. > :07:24.infrastructure, which has been perhaps excessive. Now the Chinese
:07:25. > :07:28.are trying to be balanced the economy and moving to consumption.
:07:29. > :07:33.They are trying to get the Chinese to consume all, which is hardly
:07:34. > :07:37.expect the economy to grow. `` consume more. To be more consumer
:07:38. > :07:41.reliance and less reliant on investment. Briefly, with this new
:07:42. > :07:47.strategy, in terms of how to handle bad debts, you think we could see
:07:48. > :07:51.the Chinese economy going beyond its 7.5% target this year? I don't think
:07:52. > :07:55.so. I think the Chinese are quite comfortable with the economy growing
:07:56. > :08:03.at 7.5%. There hasn't been any sign of social unrest as a consequence of
:08:04. > :08:07.the economic slowing. If anything, the anticorruption policy and others
:08:08. > :08:14.are keeping things on an even keel. I think upto 8% on the outside would
:08:15. > :08:18.be the target for the medium term. There could be concerned about bad
:08:19. > :08:21.loans in China. And plenty of businesses are still betting on the
:08:22. > :08:24.willingness of the Chinese to spend money. As a result, Mainland
:08:25. > :08:28.consumers are told they can look forward to thousands of new shopping
:08:29. > :08:34.more thing is to come. According to new research, the number of balls
:08:35. > :08:39.could rise as much as 70% over the next five years that brings own
:08:40. > :08:43.challenges. `` malls. I spoke to a retail consultant in Hong Kong. If
:08:44. > :08:48.you look at the penetration rate of malls in China compared to other
:08:49. > :08:52.countries, like the US or maybe France, the actual penetration of
:08:53. > :08:56.malls is up to one fifth. In terms of the total number of malls that
:08:57. > :09:00.are being developed, based on the penetration rate you would argue
:09:01. > :09:03.it's not that extreme. There's a lot of opportunity but at the same time
:09:04. > :09:08.there is a lot of risk and that's where the problem becomes relevant.
:09:09. > :09:13.There will be 1000 more malls built in the next few years. But the Ricoh
:09:14. > :09:18.`` retail market in China isn't as developed as that of the US or
:09:19. > :09:22.Europe. We are already seeing retail sale numbers slowing down in China
:09:23. > :09:27.in the first few months of this year. That's correct. I think that
:09:28. > :09:31.in itself presents a problem. There is a retail slowdown but the market
:09:32. > :09:36.is still growing, so there's a lot of opportunity based on this group.
:09:37. > :09:39.Success will rely on a whole load of different factors. One factor is
:09:40. > :09:49.obviously making sure you are the right location. That's. Also
:09:50. > :09:53.creating a mall with a unique offering, tenants or something
:09:54. > :09:59.unique that draws people to the mall. That will be one of the key
:10:00. > :10:03.success factors for these thousands of malls being built. What happens
:10:04. > :10:12.to the malls that don't succeed? They owed banks debt, which could
:10:13. > :10:19.add to the mounting debt problem. Because many of these malls are
:10:20. > :10:22.mixed use of elements, there is a business building, a residential
:10:23. > :10:26.building, often the financing and income that comes from the actual
:10:27. > :10:31.office building or the residential building in that caters for the mall
:10:32. > :10:36.itself. Therefore, while it may not have many people inside, it was the
:10:37. > :10:40.development isn't caught up in terms of progress, the actual financing of
:10:41. > :10:43.the mall is such that the other components can actually find it.
:10:44. > :10:47.Therefore, it will take some time before there is a big shakeup in the
:10:48. > :11:00.marketplace. Thanks for watching and goodbye for now.
:11:01. > :11:05.The top stories this hour. Ukrainian troops say they have clashed with
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