:00:00. > :00:00.Researched by ICM for The Guardian newspaper showed 71 # % of people
:00:00. > :00:07.thought Alex Salmond was the better performer. Now, on BBC News, all of
:00:08. > :00:17.the latest business live from Singapore with Riko Heezon.
:00:18. > :00:25.Online video games streaming ` could it be the next big thing after
:00:26. > :00:33.Amazon buys Twitch? And bad debt ` how will China's rising loan
:00:34. > :00:39.problems impact the banks? Hello and welcome to Asia Business Report on
:00:40. > :00:42.BBC World News. I am Riko Heezon. The biggest online retailer Amazon
:00:43. > :00:47.has bought video games service Twitch for nearly $1 billion. The
:00:48. > :00:52.deal is it biggest acquisition since 2009 when it bought the online shoe
:00:53. > :00:55.retailer. Twitch allows users to watch other people play video games.
:00:56. > :00:59.It is not the first time Twitch was an acquisition target. Earlier in
:01:00. > :01:05.the year, Google's YouTube was reported to be in talks to bow the
:01:06. > :01:11.firm as well. Well, Twitch has over 55 mill you unique monthly viewers
:01:12. > :01:18.as of July of this year. So is video gaming the next big thing?
:01:19. > :01:24.Apparently the move makes sense for Amazon? If you are a retailer, what
:01:25. > :01:29.do you do? You need to go where the people are. If there are 59,000
:01:30. > :01:35.users on tich Fitch you need to go there. How do you get there? You own
:01:36. > :01:39.the 55 million eyeballs. They want to compete basically on all fronts.
:01:40. > :01:42.They are competing against the likes of net politics and Google Microsoft
:01:43. > :01:48.and Wal`Mart. This is not really their score business here. Well, it
:01:49. > :01:52.is not, but the point is if your customers are on your side, then
:01:53. > :01:58.they are nowhere else. They can't be in two places at the same time. What
:01:59. > :02:04.Amazon wants is to. Engage these people onto its website so they are
:02:05. > :02:07.not shopping somewhere else. And if these gamers, which are in the
:02:08. > :02:11.millions will buy their products online. Well, that is the first
:02:12. > :02:17.thing. I mean, the second thing, of course, is when people are playing
:02:18. > :02:22.video games, compulsive video gamers, like myself, for instance,
:02:23. > :02:24.want to know how other people have done certain things, so you want to
:02:25. > :02:28.watch to see what they have done and when you have seen how they have
:02:29. > :02:31.done it, then you want to improve yourself and, as you rightly said,
:02:32. > :02:37.you will buy some of the games at the same time. David, I am your
:02:38. > :02:42.opposite. I don't play any of the video games. Oh, you should, Riko.
:02:43. > :02:47.You should. Amazon is trying to gain a foot hold here in Asia. Will it
:02:48. > :02:52.allow them to allure the Asian glamer. Does the Asian gamer money
:02:53. > :02:55.to spend? They are no different to any gamers nowhere else in the
:02:56. > :02:59.world. They are compulsive gamers and they want to im#3r506 their
:03:00. > :03:04.skills, therefore they want to learn how others do things. The first
:03:05. > :03:08.thing is to engage the user, get the user familiar with your site. If you
:03:09. > :03:12.get them onto your site, the next thing is to start cross selling
:03:13. > :03:15.your. Product. Do you think the online gaming streaming is the next
:03:16. > :03:20.big thing because Google and YouTube passed it up. It is for now. If you
:03:21. > :03:23.have a look at, say, for instance, my son who also is a compulsive
:03:24. > :03:27.gamer, he will have all of his Frenches together and that is what
:03:28. > :03:29.they want to do. When they play a particular game, there might be
:03:30. > :03:33.something they are very proud of. They are particularly proud of a
:03:34. > :03:36.particular move that they make. They upload it and want to share it with
:03:37. > :03:41.other people to say, guess what, I am actually quite good at this. You
:03:42. > :03:46.are right, it is the next big thing. Thank you. For the first time mobile
:03:47. > :03:50.phones can be used on planes, but only if you are flying Qantas and
:03:51. > :03:54.Virgin Australia. Passengers on those flights will be able to move
:03:55. > :03:58.mobile phones on board starting today. Carriers had always
:03:59. > :04:01.considered phones and other mobile devices a safety risk. Other
:04:02. > :04:06.airlines are expected to follow suit, but devices are still expected
:04:07. > :04:12.to be put on flight mode when the plane takes off. India's new Foreign
:04:13. > :04:16.Minister Sushma Swaraj met with her Vietnamese counterpart to try to
:04:17. > :04:20.best bilateral relations. Regional issues including matters in the
:04:21. > :04:25.South China Sea were on the agenda. Just before the visit Vietnam
:04:26. > :04:30.reknewed India's lease of two oil blocks in the South China Sea for
:04:31. > :04:36.another year. India's Supreme Court has ruled that all coal mining
:04:37. > :04:40.licences awarded between 1993 and 2010 are illegal. The court said
:04:41. > :04:44.previous governments gave rights to mine coal to state and private
:04:45. > :04:50.companies in a way which was not fair and transparent.
:04:51. > :04:55.It will examine whether O'200 licences should be cancelled. The
:04:56. > :04:58.Treasurer said the country lost more than $200 billion because coalfield
:04:59. > :05:01.rights were sold off cheaply. Cruising bad loans in China have put
:05:02. > :05:05.the spotlight squarely on the earnings of the biggest banks. The
:05:06. > :05:10.latest report, Agricultural Bank of China releases its half`year numbers
:05:11. > :05:15.today. An increase in non`performing loans has been a cause for concern
:05:16. > :05:20.for both China's policy makers, as well as foreign investors. Bad loans
:05:21. > :05:25.at mainland banks totalled $80 billion by the end of 2012. By the
:05:26. > :05:29.end of last year that climbed to $100 billion. One of the reasons,
:05:30. > :05:36.the slowdown in the Chinese economy has made it harder for businesses to
:05:37. > :05:42.repay their debts. Now we speak act if rise in China's bad loans. To put
:05:43. > :05:47.it in perspective, $100 billion, Riko, is just about a little less
:05:48. > :05:51.than 2% of the total loan book of all of the Chinese banks combined.
:05:52. > :05:55.It is not a very large number. The point is it has been growing quit
:05:56. > :05:58.rapidly and that of course is of concern, but, on the other hand,
:05:59. > :06:03.when you think about it, the Chinese banking system is highly regulated.
:06:04. > :06:07.So how the banks make profits is they have a big spread between
:06:08. > :06:13.deposit rates that they pay their depositors and the rate at which
:06:14. > :06:15.they get on their lending. So that spread allows them to make
:06:16. > :06:19.sufficient profits to write down these bad loans and that I think is
:06:20. > :06:24.the way forward. Now, look at the other side ` who are the big
:06:25. > :06:28.borrowers whose loans are going bad? Mainly the municipalities, the big
:06:29. > :06:32.cities that built a lot of infrastructure and real estate,
:06:33. > :06:37.which is not giving them returns. Those municipalitieses are starting
:06:38. > :06:42.to issue bonds, as of this month, August. We have seen the NPC giving
:06:43. > :06:51.$400 billion worth of room for these issuers to go ahead and raise bonds.
:06:52. > :06:54.That will fund some of these potential bad debts. But if you do
:06:55. > :06:58.critique the prospects of the cities that have been over the past decades
:06:59. > :07:01.been the lynchpin, the catalyst for growth in the Chinese economy, this
:07:02. > :07:07.could further slow down the economic growth of the Chinese economy, which
:07:08. > :07:12.has been between 7`7. 5% over the past year and we have seen a Jekyll
:07:13. > :07:18.and hide character of the Chinese economy which has been mixed data.
:07:19. > :07:26.Absolutely. Basically, the Chinese economy used to grow 10% and that
:07:27. > :07:30.has come down to 7. 5%. That drop is a reflection of overreliance on
:07:31. > :07:34.infrastructure and real estate that perhaps whats been excessive. Now
:07:35. > :07:37.the Chinese are trying to rebalance the economy into consumption. They I
:07:38. > :07:41.are trying to get the Chinese to consume more and that is how the
:07:42. > :07:46.they expect the economy to grow into the future to be more
:07:47. > :07:51.consumer`reliant and less on investment. Thank you. While there
:07:52. > :07:55.may be concern about bad loans in China, plenty of global businesses
:07:56. > :07:58.are still betting on the willingness of the Chinese to spend moneyment as
:07:59. > :08:03.a result, mainland consumers are being told they can look forward to
:08:04. > :08:07.thousands of new shopping malls in years to come. According to new
:08:08. > :08:12.research the number of malls in China could rise by as much as 70%
:08:13. > :08:17.over the next five years, but that brings its own challenges. I spoke
:08:18. > :08:22.to a consultant in Hong Kong. If you actually look at the penetration
:08:23. > :08:26.rate of malls in China, compared to other
:08:27. > :08:31.France, the actual penetration of malls is one`third to one`fifth. So
:08:32. > :08:34.in terms of actual total number of malls being developed, based on the
:08:35. > :08:37.penetration rate, you would argue it is not that extreme. There is a lot
:08:38. > :08:42.of opportunity, but at the same time there is risk and that is where the
:08:43. > :08:46.problem becomes because there are another 1,000 malls that will be
:08:47. > :08:50.built in the next 3`5 juniors or so. But the retail market in China is
:08:51. > :08:54.still not developed as that of the United States or in Europe and we
:08:55. > :08:58.already are seeing retail sales numbers, Mr Chan, slowing down in
:08:59. > :09:02.China in the first few months of this year. That's correct. I think
:09:03. > :09:06.that in itself presents the problem. There is a retail slowdown, however
:09:07. > :09:09.the market is still growing, so therefore there is a lot of
:09:10. > :09:13.opportunity based on this particular growth.
:09:14. > :09:16.offer lip rely on a load of different factors and one particular
:09:17. > :09:21.factor is making sure you are in the right location. So location is
:09:22. > :09:27.important but creating the mall that has some kind of unique proposition,
:09:28. > :09:30.either unique tenants or unique food and Bev rage offering, something
:09:31. > :09:34.unique to draw people to the mall. That will be a key success factor to
:09:35. > :09:40.the thousands of malls being developed in China. What happened to
:09:41. > :09:44.the malls that don't succeed in they become white elephants and owe banks
:09:45. > :09:50.debt. This could add to the mounting debt problem of China? Well, this is
:09:51. > :09:53.the funny and interesting thing about China because many of these
:09:54. > :09:57.malls are mixed used developments, so often there is an office building
:09:58. > :10:01.and residential building there and a mall there, so often the
:10:02. > :10:03.and the income that comes from the actual office building or the
:10:04. > :10:08.residential building, in fact, caters for the mall itself, so
:10:09. > :10:11.therefore whilst the mall may not have many people inside because the
:10:12. > :10:16.whole development is not caught up in terms of progress yet, the actual
:10:17. > :10:19.financing of the mall is such that the other components can actually
:10:20. > :10:23.fund the mall itself. Therefore, it will take some Tim before it is ``
:10:24. > :10:26.there is a big shakeout in the market place I believe. Thank you
:10:27. > :10:30.for investing your time with us on Asia Business Report. I am Riko
:10:31. > :10:37.Heezon. Bye for now.