11/09/2014 Asia Business Report


11/09/2014

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year. Now on BBC News all the latest

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business news live from Singapore. China's Premier opens the World

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Economic Forum with an assurance the government is working to prevent a

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sharp economic slowdown. We speak to Philip chief executive on why he is

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betting on healthcare equipment to boost growth in Asia.

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Thank you for joining us for this edition of Asia Business Report.

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China wants you, that was Premier Ricky Chung message to business

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leaders in his opening speech at the World Economic Forum. It comes after

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a wave of antimonopoly investigations into foreign

:00:58.:01:01.

companies including Microsoft. That has raised concerns that they have

:01:02.:01:05.

been targeted by Beijing to limit the competition. The Premier gave

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words of reassurance on China's economy, saying measures are in

:01:11.:01:17.

place to prevent a sharp slowdown. China's economy is resilient and has

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much potential and space to grow and we have a full range of tools of

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macro control. The measures are good for now and for the long`term. They

:01:27.:01:31.

will enable us to prevent major fluctuations and make a hard landing

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less possible. Our correspondent is there for us on Day two. No measures

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to address the economic problems from the Premier but still a sense

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of confidence about the outlook and progress of the reform programme.

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With me is the executive vice president of the world's biggest

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food company, and Nestle. Many thanks for joining us `` Nestle. The

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Premier gave a bullish outlook on the economic growth in this country.

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You are a huge company in China. How do you see the consumer market? We

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globally see a general headwind in the economic outlook across all

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countries. It was good to see the Premier as a global leader

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recognising the slowdown in the global economy and outlining plans

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to tackle it by energising the young people, by innovation, small

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enterprises, two `` to release entrepreneurialism. Our business in

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China is still growing. We have pockets that grow fast and others

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that don't. You have to learn from what works well and transfer it to

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areas that don't work well. In general, what we see is when there

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is real innovation and consumers perceive real value of those

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segments show strong growth. A concern for the foreign community

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has been the apparent targeting of foreign companies and a range of

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industries including the milk powder sector. Do you think it is a level

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playing field for a foreign companies in China? Nestle has been

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in China for 30 years and to my knowledge we are the only company

:03:18.:03:22.

that has invested in a local milk district and we buy fantastic

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quality milk from inner Mongolia and northern China. We have worked with

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local communities and provincial and central governments and have had

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nothing but the greatest support from every level of society in

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China. Do you think the difference for a company like Nestle is that

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you are relatively local, that two thirds of revenue comes from joint

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sector products. It could be an advantage `` joint`venture. More

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than being with local companies, what is important is we have

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invested in the farm sector in upgrading skills and output levels

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and we have plugged into the local communities. What is your advice to

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other companies working in this landscape? Particularly when you

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hear those concerns from Chambers of commerce that there is perhaps

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anticompetitive behaviour against foreign companies. We haven't felt

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that kind of allegation. My advice to most companies would be to plug

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into the local society and try to create value for the local community

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at the same time to become part of the local economy. Thank you very

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much. There are a lot of challenges facing China. The food industry is

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one of its fastest growing. Our correspondent at the World

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Economic Forum in China. The rate of inflation on the

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mainland has eased more than expected in August, to a four`month

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low of 2%. Further evidence the economy is

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slowing but gives authorities room to stimulate growth if need be.

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Despite the low rate, food prices remain high. Our correspondent is an

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applet `` analyst and gives us a forecast of food prices. With pork

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prices rising, food inflation might pick up. We don't expect inflation

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to go above 3.5% this year. What about utility price reforms? Could

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this push inflation over the coming quarters? It could be a factor. They

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are talking about introducing tiered pricing for gas and water, making up

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3% of the CPI deal, which will impact, gradually, local governments

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will gradually introduce it over the course of the next year. With core

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inflation prices between 1.2`1.3%, does this give the central bank some

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leeway to further ease interest rates? Inflation is not a concern

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when it comes to monetary policy. The primary concern is credit

:06:03.:06:08.

growth. Excess credit growth, credit growing farther than nominal GDP.

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That is what the main concern is. It is why policymakers have not been as

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active in monetary stimulus as they were in 2012.

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China's producer price insect `` index, PDI, prices paid to companies

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has been falling for more than two years as that is due to a

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combination of a drop in prices for raw materials and excess capacity in

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many Chinese industry. What you think of the brand`name

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Phillips? `` when you think. You might think of lighting and

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electronics but half of its business is focused on healthcare. The Dutch

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company is selling its home entertainment division and is

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betting on business in Asia due to the ageing population. That includes

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a multimillion dollar investment in a regional headquarters in

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Singapore. Our correspondent asks Phillips' chief executive what is

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behind this push into Asia. Hundreds of millions of people

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without enough doctors and nurses. Through the pioneering efforts that

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we are doing in Singapore, together with innovation partners, I am sure

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that we can innovate the healthcare system in this region may be faster

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than in the United States or Europe where people are perhaps a little

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bit more conservative. Which countries and regions are driving

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growth for Phillips? Over five years, we have seen strong growth

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from the emerging countries, especially Asia, where we have seen

:07:37.:07:41.

double`digit growth. In an era where Europe is stagnant. I am pleased

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with our growth here. 35% of Phillips' revenue comes from this

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region. Going forward, we will see a little bit more bumpy ride after

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all, the world economy is facing headwinds. Nevertheless, with our

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focus on improving healthcare, bringing energy efficient lighting

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and focusing on people's well`being, we expect growth in all areas. They

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must be competition from cheap rivals in Asia. That is right. Even

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though we are the global leader in healthcare solutions we see new

:08:17.:08:21.

competition coming from China, Japan and Korea. We see these competitors

:08:22.:08:24.

are focusing very much on standalone products. That's not really what

:08:25.:08:31.

hospitals need. Hospitals are looking for an integrated solution.

:08:32.:08:35.

How is technology affecting your business and the focus of your

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research and development? This is the 21st century and big date and

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the internet Lee a role in all new solutions. `` big date. That applies

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to healthcare. `` play a role. The date can bring healthcare providers

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closer together and enable collaboration between primary care

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physicians and specialist clinic and Hospital 's `` data. The data can

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help analyse diagnostics and come to better conclusions. We provide

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clinical decision`making support so that the same amount or staff can

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help more patients. This can be extended to the home, where patients

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with chronic afflictions, such as cardiac failure, heart failure, can

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be supported to live a good life at home.

:09:25.:09:30.

CEO of Phillips. Microsoft is in talks to take over the videogame

:09:31.:09:36.

studio behind Minecraft the deal to buy the Swedish studio could be

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around $2 billion. Reports suggest it could be signed this week. Mojang

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said it had sold 54 million copies of its game. Since then, it has been

:09:47.:09:50.

released for XBox One and PlayStation 4, further boosting

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sales revenue. We all know that Apple Mac fans can and will do

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anything to get there hands on the very latest gadgets from the tech

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giant `` Apple. Here is a queue at one store on your screen in Tokyo

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where Apple devotees have lined up waiting for the new iPhone six and

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six plus to go on sale. They have set up camp even though the device

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won't be released until next week. TRANSLATION: I haven't determined

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which the buyer, I will think over it slowly and deeply for the next

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nine days to make my choice before the launch. TRANSLATION: I am

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counting down the ladies until the launch of iPhone six. TRANSLATION:

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It is a chance for us iPhone fans to get together once per year and say

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hello to each other, like a street festival.

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Also releasing at the same time are South Korea, Singapore and Hong

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Kong. Here is a look at the markets. Asia is edging lower in trade after

:10:55.:10:59.

Barack Obama vowed to fight Islamic State militants scaring away in vest

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is. Thank you for investing your time with us.

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`` investors. I am Mike Embley in London with a

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new story is this hour: President Obama

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