18/08/2016 Asia Business Report

at her home in Lancashire and then stabbed her repeatedly

Final push! Deadline David Ford two Chinese companies looking to take

over an Australian energy company. -- day for. And Aung San Suu Kyi is

in China. Good new trade deals be on the horizon? -- could.

Good morning! Glad you could join us for this Thursday edition of Asia

Business Report. Companies from China and Hong Kong have fun till

today, Thursday, to convince Australia to sell them its largest

electricity network Oz Grid. Last week the Australian government

blocked the deal, citing national security. The Chinese company is

after a controlling stake. More from Sydney.

The decision to block the sale of Australia's Egypt electricity

network wanted sections of the Chinese media to accuse Canberra of

paranoia and China phobia. One of the bidders already owns electricity

assets in South Australia and Victoria. But it seems the company

had been given the green light to make a bid for the Ozgrid network in

NSW. Back in March when we had the federal government saying it was

fine for Chinese readers, we ticked them off the shortlist for this

company and a few years later we said it was unacceptable. You have

to look for an explanation somewhere and xenophobia could be one of the

unfortunate explanations. The government won't say how the sale of

Ozgrid to buyers in China and Hong Kong might compromise Australia's

national security interests. Investors do insist that their

decision is strategic, not political, nor an attempt to placate

right or protectionist parties in the upper house of Parliament. The

anti-immigration One Nation party will have four senators in Canberra,

giving its controversial leader Pauline Hanson power. She has warned

Australia was being swamped by Asians. Community groups feared the

Pauline Hanson factor has influenced the decision not to sell Ozgrid. I

think it sends a negative message to any country that wants to do foreign

investment in Australia. And to other sectors like tourism, I think

that's already been affected by Pauline Hanson's return and the fact

that there are things going on in this country that scare other

tourists away. Why would you want to go to a country where you don't feel

welcome or you feel under threat? China is Australia's biggest trading

partner. Future prosperity depends on those commercial ties. They are

unlikely to be unduly streamed in the short term by the Ozgrid saga,

what if the Chinese feel an fairly locked out future deals there could

be trouble ahead. Earlier I speak political economist

from the university of Sydney and asked if this deal was likely to go

ahead. I don't think there will be much change, even though both

companies have been given another week to revise their bids. I think

it was just a formality and I don't think there will be any change and I

think both of them will be still denied the opportunity to acquire

this particular asset and the NSW state government will have to

comment is a new bidding process. What is really at the heart of this

issue? Is it Chinese phobia? I am not a foreign relations expert. I

think it has got wider implications in terms of policy inconsistency.

They're in mind, Ozgrid is the largest electricity utility in the

world that has a strong global reputation. It has owned electricity

assets in Australia since 2012. So they are in the same sort of assets

in the state of South Australia, in the state of Victoria, in the

national capital and they were ticked off as one of... As an

accepted bid for the first privatisation of the networks, NSW

networks, that was done last November. So there's been a change

of attitude at the last minute in this particular bidding process and

the only thing that the government has said is because of national

security concerns. The Chinese and the Hong Kong power companies are

also ticked off by this latest flip-flopping of policies from the

Australian government. Could their current operations already in

Australia be jeopardised because of this? I don't think the Australian

government would consider jeopardising their current ownership

interests. But I think they've drawn a line and said they aren't prepared

to consider further acquisitions of existing assets. There is another

electricity privatisation muted for the state of Western Australia, so

it will be interesting to see if these large global energy companies

are willing to bid for those assets. But I would think now they will be

deterred. The political economist based in

Sydney there. In other business news, the US tech giant is slashing

up to 7% of its global workforce. It is estimated the plan to cut 5500

jobs will cost the company $700 million in charges. But the number

is far less than what was feared after reports earlier suggested

14,000 jobs would go. The world's diggers to videogame

company has been saying they had a 40% jump in profits. It is planning

to spend big on premium content. Advertising revenue has more than

doubled, at 60%, and net profits have come in at 1.6 billion dollars.

The world's biggest computer company has reported profits up two thirds

compared to one year ago. Net profits expanded to 173 million, far

beating analyst expectations, but it smartphone sales were weak.

Minutes from the US Federal Reserve's last meeting reveals

policymakers are split over when the next interest rate rise should be.

Some said members believe a rise is needed soon while others want to

wait for more economic data. The US central bank opted to hold rates

between .5% and a quarter of a percent, with another increase

expected before the end of the year, possibly as early as next month. As

you can see right now, the Dow Jones was up to 22 points. The NASDAQ was

flat. But in positive territory. Aung San Suu Kyi is in China this

week. More opportunities for trade could be on the agenda. An exchange

of goods between China and Myanmar or $10 million next year. There are

likely to be talks over the fate of land project which has been put on

hold after Myanmar questioned the potential benefits to its economy.

Will it go ahead? Aung San Suu Kyi has appointed a

committee to study the project. This is a very smart move and it gives

her time. It was very important, the fact that she is going to China, she

is in China right now, before she visited the United States.

I wanted to find out about that! How significant is that? It is very

significant. Relations between Myanmar and China have really made

wild swings in the last 20 years. For many years China was the main

backer. The government has moved much closer to the United States and

Aung San Suu Kyi is making a very deliberate effort since she has come

to power to improve relations with China. This is very delicate. She

needs China to help resolve the border issues. She needs also

China's involvement in the Myanmar economy. It will be very tough.

How are investors viewing all of this? Do they need to bring

additional investment into the country?

China is already a trading partner. Myanmar needs China and China needs

Myanmar. China already builds two pipelines across Myanmar, to give

access to the sea. So China is a natural big investor in Myanmar. But

Myanmar doesn't want to be a Chinese client state. It wants to deal with

China on its own terms. That will be very delicate for her to negotiate a

good relationship. That was a Myanmar business expert.

Before we go, a quick look at the markets. This is where the

Asia-Pacific market stand. We are seeing lacklustre movement, down by

about 1.25%, and the All Ords are flat to hire. Thanks for investing

your time with us. -- to higher. Olympic results coming up next.

The government's been accused of watering down its long-awaited

strategy to tackle childhood obesity in England.

Campaigners are angry that the action plan,

that will be published later this morning,

does not contain curbs on junk food advertising or restrictions on cut