:00:17. > :00:26.Chinese markets have opened lower and are set for another bubbly
:00:27. > :00:35.ride. And, the Taiwanese economy, is it swimming upstream, or will it be
:00:36. > :00:40.gobbled up by a bigger fish, China? Welcome to Asia Business Report. I
:00:41. > :00:45.am Sharanjit Leyl in Singapore. Investors will keep a close eye on
:00:46. > :00:50.the turbulent Chinese markets today. They have opened a minute to go and
:00:51. > :00:54.are trading lower. They start that trading week after fresh data from
:00:55. > :01:04.China on the weekend showed inflation went up 1.6% from a year
:01:05. > :01:06.earlier. That is just above the 1.5% rise from November. Cost of living
:01:07. > :01:14.was pushed up with higher food prices. As we look at the trading so
:01:15. > :01:24.far, lots of questions about the government's willingness to
:01:25. > :01:29.intervene in the market. Now, that's take a look at how the markets are
:01:30. > :01:33.faring this morning. -- let's. Shanghai and Shenzhen are trading
:01:34. > :01:40.lower. Shanghai's markets were down about 2% at the open. Shares and is
:01:41. > :01:48.down well over 3%. That was just a moment ago. -- Shenzen. In
:01:49. > :01:53.Australia, the ASX has gone down 2%. Having a pretty bad morning. The
:01:54. > :01:59.Nikkei was spared all of this because it was closed for a public
:02:00. > :02:05.holiday. Let's go to Chris Conway from the Australian stock report in
:02:06. > :02:10.London. He joins us live. Greece, a bad opening for markets this
:02:11. > :02:19.morning. -- Chris,. The second trading week of the year. As we saw
:02:20. > :02:23.last week, the first, a record weekend for bourses. What do you
:02:24. > :02:28.anticipate? So far, this morning, Chinese markets are coming back on
:02:29. > :02:37.line and being weaker, as you said. That follows on from last. A pretty
:02:38. > :02:41.bad week. One of the worst ever. -- last week. Australia was down,
:02:42. > :02:47.reversing gains leading up to the end of the year. A horrible start to
:02:48. > :02:55.the new year. More of the same this week. There seems to be some
:02:56. > :03:00.stability, though. Hopefully as the session unfolds today we get some
:03:01. > :03:03.stability. Maybe we can claw back some of the losses. What is
:03:04. > :03:09.interesting about the Chinese market is actually foreign investors are
:03:10. > :03:15.not in it, it is tough to invest there, only 2% of the market has
:03:16. > :03:17.foreign investment, so why are regional markets, like in Australia,
:03:18. > :03:25.for instance, so influenced by places like China? Interesting
:03:26. > :03:32.question. The Chinese stock market and the violent moves we are seeing
:03:33. > :03:37.in it is a symptom of the Yuan pricing we have seen going on. There
:03:38. > :03:43.is uncertainty. As China moves to shift it's economy from an export
:03:44. > :03:46.economy to a consumption -based economy that evaluation is something
:03:47. > :03:53.they have to do for that process to take place. -- its. Beijing has been
:03:54. > :03:57.very opaque about their targets and what they are trying to achieve and
:03:58. > :04:01.indeed when they are going to devalue it. Because of that, that is
:04:02. > :04:06.what is causing uncertainty, especially in equity markets. The
:04:07. > :04:11.Shanghai Composite, which is really the epicentre in terms of an equity
:04:12. > :04:17.market, that flows through to Australia and through America. So,
:04:18. > :04:20.not so much the Chinese market to be worried about, the devaluation of
:04:21. > :04:24.the Chinese currency, is causing the problems. It is interesting you
:04:25. > :04:32.mention is that, the authorities have lept in and intervened. Maybe
:04:33. > :04:36.it is too much, maybe it is making the situation worse. That is
:04:37. > :04:41.something I would agree with. I touched on it before, the lack of
:04:42. > :04:47.clarity in regards to why Beijing and white china is choosing this
:04:48. > :04:53.particular path to devalue the currency. -- why China. They have
:04:54. > :04:57.not been clear. Look at what happened recently. They were clear
:04:58. > :05:00.in helping the market understand when they were going to raise
:05:01. > :05:06.interest rates in America and why they were going to do it and plenty
:05:07. > :05:09.of evidence to back it up. China with the Yuan, the other hand, it
:05:10. > :05:16.came of nowhere. The same thing happens last year. They clearly have
:05:17. > :05:25.not learned. -- happened. We have seen the devaluation... We have seen
:05:26. > :05:29.the big sellers. -- sell offs from before. They need to be clearer.
:05:30. > :05:38.Thank you for joining us. Chris Conway. Apologies, as we saw, the
:05:39. > :05:45.image froze a few times. Singapore airlines has declared it is takeover
:05:46. > :05:51.of tiger airways. -- Tiger Airways. That came after the 60% of the
:05:52. > :05:58.budget carrier being taken over. That happens until February. Staying
:05:59. > :06:02.with Singapore airlines, it is subsidiary, Scoot, is still doing
:06:03. > :06:08.pretty well for itself. It sustained it is a line waiting for two years.
:06:09. > :06:19.After three years it is close to breaking even. -- its record. We got
:06:20. > :06:22.an opinion. The first six months of us fly to Sydney we increased the
:06:23. > :06:36.number of Singaporeans going to Sydney by a person. -- 3%. For
:06:37. > :06:42.vacations, 67%. We brought in business to Singapore and their
:06:43. > :06:52.airline. The evidence is clear. What about expansion? Our expansion plans
:06:53. > :06:59.are to China. We will add a six Chinese destinations soon. -- sixth.
:07:00. > :07:07.And next year, probably three Indian destination. Oil prices have been
:07:08. > :07:15.volatile. What is your strategy? Our volume is combined with another's
:07:16. > :07:24.and hedged as a hole. Beheading profile is two years. -- a whole.
:07:25. > :07:35.Anything that was struck before 2013 was at high prices. -- The hedging.
:07:36. > :07:44.They will run off by August 2016. That will be more akin to today's
:07:45. > :07:46.spot price. That was the CEO. Taiwan will hold parliamentary elections
:07:47. > :07:50.this Saturday and many voters will be weighing up which party can
:07:51. > :08:03.better manage economies there economy grew by just 1%. -- economy.
:08:04. > :08:10.-- there economy. Taiwan sees it as a Chinese province. That makes them
:08:11. > :08:16.nervous. We have more. These fish will soon be served at Chinese
:08:17. > :08:22.banquets. China is Taiwan's biggest customer for this expensive
:08:23. > :08:30.delicacy, the grouper. They used to have to smuggle the fish there. Now,
:08:31. > :08:33.he and other Taiwanese farmers can export them legally, without paying
:08:34. > :08:38.tariffs, earning $160 million a year. All because of improving
:08:39. > :08:44.relations between the two side. TRANSLATION: Taiwan's economy
:08:45. > :08:50.depends on China. -- sides. If they close their market to ask we will
:08:51. > :08:57.not be able to survive. -- us. Other companies share that view. Including
:08:58. > :09:02.one that makes Taiwan's most famous souvenir, pineapple cakes. Demand
:09:03. > :09:08.has soared since time is tourist began flocking here. -- Chinese.
:09:09. > :09:13.TRANSLATION: Half of our business comes from Chinese tourists. If they
:09:14. > :09:21.stopped coming half of us will become unemployed. But, prayers to
:09:22. > :09:26.the gods, from the ruling party's candidate, for an election victory
:09:27. > :09:32.and continuation of this row China policy, may be in vain. --
:09:33. > :09:39.pro-China. In the past eight years, Taiwan's government has signed more
:09:40. > :09:45.than 20 deals with China. But economic benefits alone have not
:09:46. > :09:48.helped him win over the Taiwanese. Instead, an increasing number of
:09:49. > :09:53.people here are worried by no maybe using closer economic ties as a
:09:54. > :10:02.neutral to take back the island. -- that China's. They staged huge
:10:03. > :10:10.demonstrations last year to block approved and of a trade deal. -- a
:10:11. > :10:16.trade deal. They believe it has mainly helped Taiwan's business
:10:17. > :10:22.elite. This is the opposite candidate. She and her party do not
:10:23. > :10:29.favour unification, so many would prefer her to negotiate deals for
:10:30. > :10:40.Beijing. But the question for voters is, can she help improve ties and
:10:41. > :10:42.improve the economy for the people? That is it for Asia Business Report.
:10:43. > :10:53.Thank you for watching.