:00:00. > :00:14.Now on BBC News all the latest business news live from Singapore.
:00:15. > :00:24.The US economy is not a bubble ready to burst. Here why the Federal bank
:00:25. > :00:29.chief talk about high interest rates. Consumers hit with a new tax
:00:30. > :00:43.targeting foreign goods ordered online. Good morning Asia. Hello
:00:44. > :00:47.world. It is a Friday. Glad you could join us for this edition of
:00:48. > :00:53.Asia Business Report. The chair of the Federal reserve has been talking
:00:54. > :00:59.up the strength of the US economy adding it is still on track for more
:01:00. > :01:03.rate hikes. She made the comments in a panel discussion in New York
:01:04. > :01:11.alongside the former Federal reserve chief. She said that she rejects
:01:12. > :01:16.that it was a bubble ready to burst and confirmed that she will stick to
:01:17. > :01:19.the plan of higher borrowing rates. We indicated that we thought the
:01:20. > :01:25.path of rate increases would be gradual. And that remains our best
:01:26. > :01:30.expectation that if the economy continues on the path it is on of
:01:31. > :01:37.recovery that further rate increases will be justified but for a variety
:01:38. > :01:40.of reasons, particularly a set of headwinds that from the legacy of
:01:41. > :01:48.the financial crisis that we suffered. And with global growth and
:01:49. > :01:54.a strong dollar that has gone with that the level of rates that are
:01:55. > :02:00.sometimes called the neutral rate, a level of short-term rates that would
:02:01. > :02:04.neither be particularly stimulating the economy holding it back, that
:02:05. > :02:13.that level of mutual rates is quite low. So, yes, there is a
:02:14. > :02:19.accommodation in the monetary policy that we have but we think a gradual
:02:20. > :02:25.part of rate increases will be appropriate. That was the chief of
:02:26. > :02:29.the US central bank. From today, China's consumers could be paying
:02:30. > :02:32.more for foreign goods bought mine with EU income tax that is coming
:02:33. > :02:38.into a defect. There is growing demand for foreign products from
:02:39. > :02:41.cosmetics to baby formula, and until now, if you bought them on the
:02:42. > :02:51.Internet and had then shipped across the border to your door there were
:02:52. > :02:55.next to no taxes. This is a little complex, but overall, the Chinese
:02:56. > :03:01.government is saying that they are changing the tax regime for goods
:03:02. > :03:05.produced abroad. It is trying to level the playing field. For some
:03:06. > :03:12.time now, the regime in place as being preferential for the
:03:13. > :03:19.e-commerce companies in China. There was tax exemption for anything that
:03:20. > :03:29.had a tax liability under $8. And up to the value of $150. You pay tax
:03:30. > :03:34.anywhere between ten and 50%. That is changing and that exemption is
:03:35. > :03:39.going completely and people buying goods from abroad will now be liable
:03:40. > :03:44.to pay the value added tax and any consumption tax. That is likely to
:03:45. > :03:52.mean that the price of some of these goods coming from outside of China
:03:53. > :03:59.will go up. What sort of impact will these changes have the businesses
:04:00. > :04:02.and is it a positive step? Earlier I spoke from a firm on Chinese policy
:04:03. > :04:09.to find out. I think it is a good move. It is not a prohibitive tax
:04:10. > :04:13.and it is simply moving the parcel tax which was administered by the
:04:14. > :04:16.state post bureau. Restructuring at Soders easier for the general and
:04:17. > :04:22.assertion of customs to collect import duties, the value added tax
:04:23. > :04:27.and consumption tax. The main purpose of the tax is to clean up
:04:28. > :04:32.the business to consumer trade segment, which was unregulated. And
:04:33. > :04:39.encourage foreign exporters into more normal business to business. It
:04:40. > :04:45.is basically extending the market. It is basically doing that. The
:04:46. > :04:51.cross-border trade is only about 5% of the domestic e-commerce market.
:04:52. > :04:55.Most central policy coming out is about encouraging the growth of the
:04:56. > :05:01.domestic markets and we are about growing and extending Internet
:05:02. > :05:08.infrastructure and traditional logistics down into the countryside.
:05:09. > :05:14.Really most of the central policy is this is friendly, and it is about
:05:15. > :05:18.growing large-scale enterprises and a handful of large-scale enterprises
:05:19. > :05:21.which will be better equipped to carry the tax burden, deliver
:05:22. > :05:25.cheaper prices to the consumer and it will be these enterprises which
:05:26. > :05:30.joint domestic and international markets. But this also means
:05:31. > :05:37.additional revenue for the national government. How much will this add
:05:38. > :05:41.to their pockets? This is an administrator 's tax and all make it
:05:42. > :05:44.easier for them to regulate the quality infrastructure and to ensure
:05:45. > :05:52.that goods are crossing borders is passing through China's quality
:05:53. > :05:56.infrastructure. It is a very generous tax for foreign exporters
:05:57. > :06:02.because they are only paying 70% of the value added tax. Sofa most
:06:03. > :06:08.foreign exporters you are going to an 11% tax from a complete tax
:06:09. > :06:21.avoidance under the parcel tax. And so you still enjoy a 30% subsidy. In
:06:22. > :06:32.telecommunications, one of the most competitive markets has unveiled a
:06:33. > :06:44.new device to challenge Apple and Samsung. It was developed with the
:06:45. > :06:50.German camera maker. To most consumers were a fairly new brand.
:06:51. > :06:55.But we do need to do quite a bit of work in terms of building the brand
:06:56. > :07:00.awareness and ensuring that consumers realise we are high
:07:01. > :07:04.quality and premium as we are. In association with the German company
:07:05. > :07:08.that brings that to the consumer. If you look at yourselves, it shot up
:07:09. > :07:11.14% and more than any of the other major brands, but you are still
:07:12. > :07:18.selling half the number of phones than Apple. If you are going to
:07:19. > :07:25.crack those you're going to have to do well in the US and you have a bit
:07:26. > :07:29.of a brand problem. Surely they are an important market, but today we
:07:30. > :07:33.are already number one in China and that brings a lot of scale to the
:07:34. > :07:37.business. We doing great in Europe and the top three in ten of the
:07:38. > :07:40.European market. We're doing well in a number of another part of the
:07:41. > :07:47.world including Latin America, Asia. The US is important, don't get
:07:48. > :07:54.me wrong, but we can still be very competitive by being successful in
:07:55. > :07:56.the rest of the world. Sailing the high seas on a multimillion dollar
:07:57. > :08:02.yachts is a luxury not everyone can afford. That is why they are setting
:08:03. > :08:14.their sights on the altar wealthy in Asia. Are they buying these boats?
:08:15. > :08:19.The waiting list to dock your boats here is several months long. But
:08:20. > :08:22.given the global downturn, is this a luxury that people are still
:08:23. > :08:31.splashing out on? Let us go find out. I spoke to the organiser of the
:08:32. > :08:34.Singapore yacht show. So two years ago they were more than 90 yachts on
:08:35. > :08:39.display, and this year there are 71. What is happening? It is a bad
:08:40. > :08:44.hammer your tweaking get into this marina. We have on this road alone
:08:45. > :08:50.we are five very big boats and we have a very limited space. Who is
:08:51. > :08:57.buying? They are tycoons, industry leaders and people with a lot of
:08:58. > :09:02.money. Basically millionaires of mainline China and Hong Kong. A lot
:09:03. > :09:06.of companies say they look to Asia the growth and that the Chinese are
:09:07. > :09:10.driving demand, but the fact is we're seeing a downturn taking place
:09:11. > :09:17.and we can't really keep winning our hopes on the Chinese. We're very
:09:18. > :09:23.optimistic about the Chinese markets are several reasons. China has
:09:24. > :09:27.surpassed the US with 500 semi- Ili Inez in mainland China, plus 100
:09:28. > :09:34.billionaires in Hong Kong and Taiwan. Which is a large number of
:09:35. > :09:40.clients. Last year, three alien dollars worth of yachts were sold,
:09:41. > :09:41.what proportion we seeing of the business coming from Asia? It is a
:09:42. > :09:47.small business coming from Asia? It is a
:09:48. > :09:54.amount and that is a wonderful opportunity that we have. The
:09:55. > :09:59.interest is growing rapidly. Thank you very much. So as you can see
:10:00. > :10:03.there is cautious in industry optimism about Asia, especially
:10:04. > :10:09.given the rising number of ultrahigh networks in the region. If the
:10:10. > :10:17.economic downturn get any worse, who is to say that business will still
:10:18. > :10:25.be smooth sailing? This is where the Asian markets stand. And a safe
:10:26. > :10:31.haven was strengthened against the dollar. Japan and Sydney in the red.
:10:32. > :10:33.Thank you for investing your time with