08/04/2016 Asia Business Report


08/04/2016

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Now on BBC News all the latest business news live from Singapore.

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The US economy is not a bubble ready to burst. Here why the Federal bank

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chief talk about high interest rates. Consumers hit with a new tax

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targeting foreign goods ordered online. Good morning Asia. Hello

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world. It is a Friday. Glad you could join us for this edition of

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Asia Business Report. The chair of the Federal reserve has been talking

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up the strength of the US economy adding it is still on track for more

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rate hikes. She made the comments in a panel discussion in New York

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alongside the former Federal reserve chief. She said that she rejects

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that it was a bubble ready to burst and confirmed that she will stick to

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the plan of higher borrowing rates. We indicated that we thought the

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path of rate increases would be gradual. And that remains our best

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expectation that if the economy continues on the path it is on of

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recovery that further rate increases will be justified but for a variety

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of reasons, particularly a set of headwinds that from the legacy of

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the financial crisis that we suffered. And with global growth and

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a strong dollar that has gone with that the level of rates that are

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sometimes called the neutral rate, a level of short-term rates that would

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neither be particularly stimulating the economy holding it back, that

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that level of mutual rates is quite low. So, yes, there is a

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accommodation in the monetary policy that we have but we think a gradual

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part of rate increases will be appropriate. That was the chief of

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the US central bank. From today, China's consumers could be paying

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more for foreign goods bought mine with EU income tax that is coming

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into a defect. There is growing demand for foreign products from

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cosmetics to baby formula, and until now, if you bought them on the

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Internet and had then shipped across the border to your door there were

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next to no taxes. This is a little complex, but overall, the Chinese

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government is saying that they are changing the tax regime for goods

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produced abroad. It is trying to level the playing field. For some

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time now, the regime in place as being preferential for the

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e-commerce companies in China. There was tax exemption for anything that

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had a tax liability under $8. And up to the value of $150. You pay tax

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anywhere between ten and 50%. That is changing and that exemption is

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going completely and people buying goods from abroad will now be liable

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to pay the value added tax and any consumption tax. That is likely to

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mean that the price of some of these goods coming from outside of China

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will go up. What sort of impact will these changes have the businesses

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and is it a positive step? Earlier I spoke from a firm on Chinese policy

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to find out. I think it is a good move. It is not a prohibitive tax

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and it is simply moving the parcel tax which was administered by the

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state post bureau. Restructuring at Soders easier for the general and

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assertion of customs to collect import duties, the value added tax

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and consumption tax. The main purpose of the tax is to clean up

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the business to consumer trade segment, which was unregulated. And

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encourage foreign exporters into more normal business to business. It

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is basically extending the market. It is basically doing that. The

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cross-border trade is only about 5% of the domestic e-commerce market.

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Most central policy coming out is about encouraging the growth of the

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domestic markets and we are about growing and extending Internet

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infrastructure and traditional logistics down into the countryside.

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Really most of the central policy is this is friendly, and it is about

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growing large-scale enterprises and a handful of large-scale enterprises

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which will be better equipped to carry the tax burden, deliver

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cheaper prices to the consumer and it will be these enterprises which

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joint domestic and international markets. But this also means

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additional revenue for the national government. How much will this add

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to their pockets? This is an administrator 's tax and all make it

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easier for them to regulate the quality infrastructure and to ensure

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that goods are crossing borders is passing through China's quality

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infrastructure. It is a very generous tax for foreign exporters

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because they are only paying 70% of the value added tax. Sofa most

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foreign exporters you are going to an 11% tax from a complete tax

:06:03.:06:08.

avoidance under the parcel tax. And so you still enjoy a 30% subsidy. In

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telecommunications, one of the most competitive markets has unveiled a

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new device to challenge Apple and Samsung. It was developed with the

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German camera maker. To most consumers were a fairly new brand.

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But we do need to do quite a bit of work in terms of building the brand

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awareness and ensuring that consumers realise we are high

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quality and premium as we are. In association with the German company

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that brings that to the consumer. If you look at yourselves, it shot up

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14% and more than any of the other major brands, but you are still

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selling half the number of phones than Apple. If you are going to

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crack those you're going to have to do well in the US and you have a bit

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of a brand problem. Surely they are an important market, but today we

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are already number one in China and that brings a lot of scale to the

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business. We doing great in Europe and the top three in ten of the

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European market. We're doing well in a number of another part of the

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world including Latin America, Asia. The US is important, don't get

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me wrong, but we can still be very competitive by being successful in

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the rest of the world. Sailing the high seas on a multimillion dollar

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yachts is a luxury not everyone can afford. That is why they are setting

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their sights on the altar wealthy in Asia. Are they buying these boats?

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The waiting list to dock your boats here is several months long. But

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given the global downturn, is this a luxury that people are still

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splashing out on? Let us go find out. I spoke to the organiser of the

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Singapore yacht show. So two years ago they were more than 90 yachts on

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display, and this year there are 71. What is happening? It is a bad

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hammer your tweaking get into this marina. We have on this road alone

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we are five very big boats and we have a very limited space. Who is

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buying? They are tycoons, industry leaders and people with a lot of

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money. Basically millionaires of mainline China and Hong Kong. A lot

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of companies say they look to Asia the growth and that the Chinese are

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driving demand, but the fact is we're seeing a downturn taking place

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and we can't really keep winning our hopes on the Chinese. We're very

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optimistic about the Chinese markets are several reasons. China has

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surpassed the US with 500 semi- Ili Inez in mainland China, plus 100

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billionaires in Hong Kong and Taiwan. Which is a large number of

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clients. Last year, three alien dollars worth of yachts were sold,

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what proportion we seeing of the business coming from Asia? It is a

:09:41.:09:41.

small business coming from Asia? It is a

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amount and that is a wonderful opportunity that we have. The

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interest is growing rapidly. Thank you very much. So as you can see

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there is cautious in industry optimism about Asia, especially

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given the rising number of ultrahigh networks in the region. If the

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economic downturn get any worse, who is to say that business will still

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be smooth sailing? This is where the Asian markets stand. And a safe

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haven was strengthened against the dollar. Japan and Sydney in the red.

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Thank you for investing your time with

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