24/10/2016 Asia Business Report


24/10/2016

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

:00:00.:00:14.

A megamerger in corporate America - AT wants to buy Time Warner. We

:00:15.:00:24.

look at what is at stake. Under review - the Chinese government will

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go over the code of conduct with its officials to extend the drive to

:00:29.:00:30.

crack down on corruption. It is Monday, the start of a

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brand-new trading week. Glad

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you could join me for this Monday The biggest media deal in recent

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years faces an uphill battle with American telecoms company AT

:00:55.:00:57.

needing to get regulatory approval for the plan to buy the media and

:00:58.:01:03.

entertainment giant Time Warner. The deal is worth more than $85 billion

:01:04.:01:09.

US, which would make it one of the biggest corporate takeovers so far

:01:10.:01:15.

in 2016. Critics have warned of the potential merger, if approved by

:01:16.:01:19.

regulators, concentrates too much media power into one entity. Our

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correspondent reports on what's at stake.

:01:24.:01:29.

It is the Gothic fantasy which millions of people pay considerable

:01:30.:01:38.

sums to watch, Game of Thrones is made by HBOS owned by Time Warner,

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which is why AT is paying ?70 billion to own it. Time Warner is

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big, very big. Apart from HBO, it owns CNN and the Warner Brothers

:01:51.:01:55.

studios from which the Dark Knight comes. This is the home of Harry

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Potter, produced by Warner Brothers and it allows Time Warner and AT

:02:00.:02:04.

to raise their sights higher because it brings together two very

:02:05.:02:08.

different companies. AT is the platform or the means with which we

:02:09.:02:13.

access the Internet. While Time Warner is the content or the TV

:02:14.:02:17.

shows and movies that we actually want to watch. Warner Brothers has a

:02:18.:02:24.

huge franchise in Harry Potter and it is very important to us in the

:02:25.:02:30.

UK. What AT is buying is a blue-chip media company with an

:02:31.:02:35.

awful lot of content both in hand and in the pipeline to keep people

:02:36.:02:42.

watching the screen. Byte merging two media giants could deprive

:02:43.:02:46.

consumers of choice and might be resisted by regulators -- but. The

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would-be next president Donald Trump has already said he would block it.

:02:52.:02:56.

As an example of the power structure, AT is biting Time

:02:57.:03:02.

Warner and thus CNN, a deal we will not approve in my Administration

:03:03.:03:06.

because it is too much concentration of power -- buying. In the hands of

:03:07.:03:13.

too few. If the deal does go ahead, don't expect other giant media

:03:14.:03:17.

companies to sit on their hands. The battle for our eyeballs is merely

:03:18.:03:22.

getting started. For more about AT's planned

:03:23.:03:26.

acquisition, check out the website for the latest on the story, at BBC

:03:27.:03:33.

.com /business. An important meeting in China today, the top political

:03:34.:03:37.

leaders in the country to review decades old codes of conduct. That

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is at the central committee plenum. Previous have led to crackdowns in

:03:46.:03:49.

corruption, a fitting casinos, luxury goods and alcohol sales. We

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speak with a China expert and independent analyst, Fraser Howley,

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who told me what we can expect. These are private meetings. We will

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get nothing publicly -- Howie. The couple of messages will be

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emphasised, one is unity, one is loyalty to the party, which is what

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Xi Jinping is strong on. He doesn't want to lose the gains on the

:04:13.:04:16.

corruption tracked down, which has been a keystone policy obvious. How

:04:17.:04:21.

successful has he been, though, in his anticorruption drive? In some

:04:22.:04:24.

ways not at all because corruption is endemic in China. Finding corrupt

:04:25.:04:28.

officials and punishing them is easy. How to change the system and

:04:29.:04:33.

put in better checks and balances, whistleblowing, things like that, he

:04:34.:04:37.

has not moved at all. So what should he do to be able to solidify this

:04:38.:04:42.

agenda? There are a couple of things. What he should do is use the

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legal process. At the moment the legal process, all the corruption

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programmes are happening outside the Judiciary Committee is happening

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intraparty, the party say they are guilty and they are processed. He

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needs to embrace the law and have a more and transparent process. What

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about reforming the state-owned sector, what more needs to be done?

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What more needs to be done? Start reforming. He hasn't done any of the

:05:09.:05:11.

things he promised three years ago. It has not been lots of talk but he

:05:12.:05:15.

has done nothing substantial to reform the state. With all of this

:05:16.:05:20.

rhetoric and you say he hasn't done much, he now really wants to

:05:21.:05:25.

consolidate his power base and maybe run the country beyond his term in

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2022. Will that happen? It is far too early to say. There is a lot of

:05:31.:05:34.

speculation that Xi Jinping sees himself as a strong man in the style

:05:35.:05:39.

of Vladimir Putin in Russia, and there is speculation he will look to

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extend his term. As I say it's complete speculation. What we are

:05:44.:05:48.

looking for is starting to extend term limits or retirement ages to

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give an indication they can go past retirement. And what would it mean

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for the economy, waffling between 6.5% - 7%? At the moment I don't eat

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it will make a big difference because they can step in to support

:06:07.:06:10.

the economy, they are happy to increase debt to keep growth going,

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so the immediate term will have no impact, but long-term for China it

:06:14.:06:18.

is a very bad sign. China expert, Fraser Howie. In news just in, Japan

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is feeling the effects of the global economic slowdown with the latest

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trade numbers of revealing exports dropping nearly 7% in September

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compared to a year ago. That is the world straight month of decline in

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overseas demand for goods made in Japan. Imports also fell 16%. This

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fresh report puts the trade balance at a surplus of 4.8 billion US

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dollars. A bid by Australian mining magnate Gina Rinehart and her

:06:49.:06:55.

Chinese joint-venture partner to buy the Kidman Cattle empire could be

:06:56.:07:00.

scuppered with a 100% owned Australian company has made a

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counter bid of $200 million US, and if accepted it would need approval

:07:05.:07:08.

from the government or regulators. And not just Gina Rinehart is trying

:07:09.:07:12.

to cash in on the market in China with an army of freelance exporters

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selling a range of goods from beauty products, infant formula, wine and

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vitamin C Chinese consumers, known as Daigo, expatriate retail

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consultants, part of the retail trade who use WeChat build a network

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of clients. From Sydney, this report from Phil Mercer.

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Multimillion dollar export industry starts with a trip to the shops.

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This woman is an accountancy graduate in Sydney. She is a Daid,

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selling health supplements and baby food to 300 clients back home in

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China. What they want, genuine products -- Daigo. Baby formula is

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most popular, something everyone cannot buy in good quality or

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reliable formula in China, so they want to lie from Australia. If it is

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more extensive, they don't care of the price. Daigo is a retail agent

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who buys goods to order and in Australia they are almost

:08:22.:08:24.

exclusively from mainland China. Many are small enterprises set up by

:08:25.:08:28.

students to help subsidise rent and university fees. They sell to family

:08:29.:08:34.

and friends. But others do grow far bigger. Some of them grow to much

:08:35.:08:39.

bigger scale businesses, which establish their own logistics, their

:08:40.:08:44.

own e-commerce website and formally distribute products. So it is all

:08:45.:08:49.

about trust. What they are doing is building trust between their clients

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and client groups' personal connections. They are small, but

:08:55.:08:59.

there are a lot of people. If you pack them together, it is huge. It

:09:00.:09:05.

is estimated there are 40,000 Daigo in Australia and most are based here

:09:06.:09:09.

in Sydney. It has a large Chinese community and many direct flights to

:09:10.:09:13.

China, which makes doing business on lot easier. However, earlier this

:09:14.:09:17.

year the authorities in Beijing tightened regulations on cross

:09:18.:09:22.

online shopping but there is still money to be made. This man started

:09:23.:09:27.

his business with three friends from university just a few weeks ago.

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They pack their goods with Australian magazines to help prove

:09:32.:09:39.

their authenticity to buyers in China. The income from Daigou is

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reasonable compared with other working opportunities, like working

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in a respite or something. 30% in my classes are doing Daigou. The scale

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of the trade has improved some larger retailers to go into

:09:55.:09:57.

partnerships with these freelance shopping consultants. That is to

:09:58.:10:02.

open up new untapped market in China. Phil Mercer, BBC News,

:10:03.:10:07.

Sydney. Before we go, a quick look

:10:08.:10:09.

US equities closed lower on Friday despite the worse than expected

:10:10.:10:25.

trade numbers of the Nikkei to defy these up a fraction but the all

:10:26.:10:27.

ordinaries index The top stories this hour: A group

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of hostages from China, Vietnam and the Philippines,

:10:28.:10:45.

held by Somali pirates for nearly five years, has been freed and are

:10:46.:10:52.

on their way home.

:10:53.:10:56.

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