:00:16. > :00:25.A vote of confidence for China's currency as the IMF adds the yuan to
:00:26. > :00:30.its elite global club. Sweetening the deal or sour grapes?
:00:31. > :00:35.We look at the winners and losers in Beijing's trade deal with Australia.
:00:36. > :00:44.Good morning, Asia. Hello, world. Glad you could join us for this
:00:45. > :00:50.Tuesday edition of Asia Business Report. We begin with International
:00:51. > :00:55.Monetary Fund, and this multilateral organisation has decided to include
:00:56. > :01:02.the Chinese yuan as one of the five currencies it uses to value the
:01:03. > :01:05.price of emergency loans. The yuan joins an elite company which
:01:06. > :01:10.includes the US dollar, the British pound, the euro and the Japanese
:01:11. > :01:13.yen. It won't have much of an impact on global markets but it is seen as
:01:14. > :01:18.a powerful symbol of the reforms taking place in the Chinese economy.
:01:19. > :01:25.The addition and inclusion of the yuan in the basket of currencies is
:01:26. > :01:30.recognition of the significant reforms that have been conducted, of
:01:31. > :01:40.the significant opening up of the Chinese economy, of the financial,
:01:41. > :01:46.more market-driven principles that are being used by the Chinese
:01:47. > :01:52.authorities going forward. That is clearly symbolic, in a way, of all
:01:53. > :01:56.those reforms, which is why I associated the yuan's inclusion with
:01:57. > :01:58.the reforms conducted and to be continued.
:01:59. > :02:06.What will be coming a reserve currency mean for the Chinese yuan?
:02:07. > :02:13.So, they did it. The International Monetary Fund has included China in
:02:14. > :02:17.its elite basket of special currencies, and this could open the
:02:18. > :02:21.door for the Chinese yuan to be used far more widely on international
:02:22. > :02:26.markets. Keep in mind that currently the Chinese yuan is only used in
:02:27. > :02:33.around 2% of international transactions. Compare that to the US
:02:34. > :02:35.dollar, which makes up around two thirds of the global transactions in
:02:36. > :02:41.terms of how much money changes hands every day around the world. So
:02:42. > :02:45.you can see why China was so keen to be part of this special club of
:02:46. > :02:50.international currencies. Being a part of this basket means that it
:02:51. > :02:55.may become much cheaper for China to borrow money, and, as more countries
:02:56. > :02:59.start to use the Chinese yuan as their reserve currency, it can help
:03:00. > :03:04.to stabilise the currency. But at the same time, even though this is
:03:05. > :03:07.unlikely to go into effect until sometime next year, analysts already
:03:08. > :03:13.warning that the global economy will become far more exposed to what is
:03:14. > :03:15.happening in China than it ever has been before.
:03:16. > :03:25.News just in at this hour: New data from China shows manufacturing
:03:26. > :03:29.output shrinking more than expected in November. The official
:03:30. > :03:35.manufacturing managers index now stands at 49.6. Anything below 50
:03:36. > :03:37.indicates contraction. The sector has now been shrinking for four
:03:38. > :03:45.months in a row. India is now outpacing China,
:03:46. > :03:50.particularly in domestic demand and manufacturing activity. Its economy
:03:51. > :03:54.expanded by 7.4% between July and September, and that is compared to
:03:55. > :03:59.the same period a year ago, and that is better than expected.
:04:00. > :04:05.Japan's largest media group has completed its purchase of the
:04:06. > :04:09.Financial Times for 1.3 billion US dollars. It is the biggest
:04:10. > :04:13.international acquisition by Japanese media organisation. The top
:04:14. > :04:21.executives of companies have been talking, and Nikkei's executive said
:04:22. > :04:27.its intention was to go global and digital. Online prescriptions now
:04:28. > :04:29.account for 70% of the iconic newspaper's readership while
:04:30. > :04:36.questions have been raised about independence. But their CEO says
:04:37. > :04:42.it's a good thing. We've obviously thought very hard about it. Nikkei
:04:43. > :04:44.made it clear that editorial independence and integrity will
:04:45. > :04:51.remain unchanged. They've written a number of very clear and robust
:04:52. > :04:56.letters reassuring us about that. I've known Nikkei for many years in
:04:57. > :04:59.my time in Asia and I'm clear they will keep that commitment. There's
:05:00. > :05:06.so many players, the competition is very fierce, so when you have a
:05:07. > :05:10.trusted guide like the FT and like Nikkei, that's very powerful. People
:05:11. > :05:15.turn to those trusted guides and brands when there's so much
:05:16. > :05:19.information. So they are clearly the dominant business news media brand
:05:20. > :05:26.in Japan. Obviously more broadly in Asia, too, and we see ourselves
:05:27. > :05:29.playing that role internationally. South Korean farmers and activists
:05:30. > :05:32.have protested against the free trade deal which has now been
:05:33. > :05:37.approved by the government. The agreement removes billions of
:05:38. > :05:41.dollars of tariffs but demonstrators, as you can see right
:05:42. > :05:46.here, blamed the government's policies for a dramatic dip in the
:05:47. > :05:53.price of rice and vegetables. As the Chinese central bank meets
:05:54. > :05:57.today to discuss monetary policy, it's expected to keep them hold
:05:58. > :06:01.despite the slowing economy, and one way Australia is trying to kickstart
:06:02. > :06:05.growth is through a free trade agreement with its largest trading
:06:06. > :06:09.partner, China. The deal cuts tariffs on many Australian exports
:06:10. > :06:12.but in return Chinese companies and workers will get greater access to
:06:13. > :06:18.Australia. Phil Mercer reports from Sydney.
:06:19. > :06:24.Demand from China has helped Australia to power through troubled
:06:25. > :06:27.economic waters. A Free Trade Agreement is promising a great
:06:28. > :06:31.opportunity, and one Australian industry that's hoping to take
:06:32. > :06:39.advantage of the deal is showcasing its wares on an island on Sydney.
:06:40. > :06:44.Last year, Australia sold wine worth $160 million to China, and exporters
:06:45. > :06:48.hope that figure could double or even triple in years to come.
:06:49. > :06:55.Australia makes some of the best wine in the world, and increased
:06:56. > :06:58.sales to China are the big prize. Under the trade agreement, tariffs
:06:59. > :07:05.on imported Australian wine will be phased out, and produces here on
:07:06. > :07:11.Wine Island and beyond will be hoping to cash in. I think this is a
:07:12. > :07:15.mixed golden era for Australian wine. We've been in the doldrums, no
:07:16. > :07:21.doubt, and this will help drag us to where we should be and have been.
:07:22. > :07:24.But trade unions fear the deal could cost thousands of Australians their
:07:25. > :07:29.jobs and drive down wages because imported labour could be paid less.
:07:30. > :07:34.There are concerns, too, that their skills might not be up to local
:07:35. > :07:39.standards. The agreement will allow more Chinese migrants, including
:07:40. > :07:42.those with trades, to work in Australia on temporary permits.
:07:43. > :07:50.There are about 170,000 foreign workers currently here on the most
:07:51. > :07:54.commonly used 457 visas. That number is expected to increase, much to the
:07:55. > :07:59.alarm of the unions. We support free trade agreements but what we don't
:08:00. > :08:02.support is those agreements that undermine and a road existing
:08:03. > :08:06.standards and conditions, and the fact that Australian workers should
:08:07. > :08:10.be the first in the line when it comes to jobs. Despite more than 30
:08:11. > :08:14.years of experience, and attrition Graham Paterson says he and his
:08:15. > :08:21.colleagues fear the worst. -- electricity. They are worried about
:08:22. > :08:24.their jobs. It's not helping that a Free Trade Agreement, which is going
:08:25. > :08:31.to bring workers from overseas with supposedly the same qualifications
:08:32. > :08:35.with us, we'll come and take our jobs. But politicians say the deal
:08:36. > :08:39.with China is critical for Australian jobs in the future. The
:08:40. > :08:43.deal took a decade to negotiate but its consequences, both positive and
:08:44. > :08:50.negative, will be felt for years to come.
:08:51. > :08:53.Global leaders meeting at a major climate change summit in Paris have
:08:54. > :08:57.vowed to wrap up a deal to reduce greenhouse gas emissions and
:08:58. > :09:00.overcome the divisive issue of financing, but it's not just
:09:01. > :09:04.political leaders trying to navigate the way forward. Business leaders
:09:05. > :09:08.are there as well, assessing the financial and environmental
:09:09. > :09:13.consequences of whatever is agreed. Tanya Beckett explains.
:09:14. > :09:18.As the Paris talks begin, the question is, what is the cost of
:09:19. > :09:23.climate change on businesses? Citigroup says inactivity could
:09:24. > :09:29.prove expensive. It estimates the cost of doing nothing at $44
:09:30. > :09:34.trillion by 2060. If sea temperatures rise by five Celsius,
:09:35. > :09:39.then up to $7 trillion worth of assets could be lost. That's more
:09:40. > :09:44.than the total market capitalisation of all the companies listed on the
:09:45. > :09:50.London stock exchange. The White House says in action would cost the
:09:51. > :09:59.US economy $150 billion a year. 90% of companies on the S over 100
:10:00. > :10:02.index identify climate risk, such as extreme storms, flooding and
:10:03. > :10:07.drought, as a current or future threat to business. Insurance
:10:08. > :10:14.company Munich really had to pay out $130 billion on climate change
:10:15. > :10:18.related losses in 2012. That is expected to rise in coming years.
:10:19. > :10:22.But climate change risks continue to be very difficult to quantify.
:10:23. > :10:29.Currently very few companies let them influence their business
:10:30. > :10:34.decisions. Is it time that changed? That report from Tanya Beckett.
:10:35. > :10:38.Let's have a brief look right now at the markets:
:10:39. > :10:47.Thank you so much for investing your time with us. I'm Rico Hizon. Sport
:10:48. > :10:50.Today is up next. MPs will vote on Wednesday
:10:51. > :10:55.on plans to extend British