08/09/2017 Asia Business Report


08/09/2017

Live from Singapore, the essential business news as it breaks and a look ahead to the news that will shape the business day.


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

:00:00.:00:18.

Irma churns through the Caribbean towards Florida, one week after

:00:19.:00:24.

Harvey slams into Texas. But who bears the cost? And earning a degree

:00:25.:00:30.

in winemaking. Find out why this dude and are choosing to learn the

:00:31.:00:34.

trade in Australia. -- these students. Welcome to Asia Business

:00:35.:00:40.

Report. As you've been hearing Newsday,

:00:41.:00:49.

Hurricane Irma is barrelling through the Caribbean towards the US. Irma

:00:50.:00:55.

arrives a little over a week after Hurricane Harvey slammed into Texas,

:00:56.:01:00.

which caused severe flooding and displaced more than 1 million

:01:01.:01:03.

people. The damage bill from Hurricane Harvey is currently

:01:04.:01:09.

estimated at about $180 billion, with much of the bill going towards

:01:10.:01:14.

the taxpayers. Earlier I spoke to someone from research house and

:01:15.:01:18.

asked who is likely to foot the bill. The range of damage can vary

:01:19.:01:23.

tremendously, however the consequences for the population is

:01:24.:01:28.

very much linked to insurance. So the ability of the countries to

:01:29.:01:37.

ensure and take private cover varies tremendously and that also in packs

:01:38.:01:42.

and long-term impact. Nonetheless, with the intensity of storms and the

:01:43.:01:46.

frequency, surely this will take a toll on the insurance industry?

:01:47.:01:50.

Certainly, but they prepare for this over hundreds of years. The

:01:51.:01:56.

insurance industry has been quite resilient in its capacity to cover

:01:57.:02:01.

events because they use actual estimates the project potential

:02:02.:02:04.

losses. How much are they prepared to deal with the intensity that we

:02:05.:02:10.

are seeing now and the frequency? They've had some good years and

:02:11.:02:14.

build up reserves. Of course insurance companies also use

:02:15.:02:18.

reinsurance so they spread the risk between insurers, citing they have

:02:19.:02:23.

the capacity. Of course one of the big problem is that happening right

:02:24.:02:26.

now is climate change is changing the dimension of the intensity of

:02:27.:02:34.

storms and the projections by many scientists are that the damage from

:02:35.:02:37.

such weather-related events will intensify.

:02:38.:02:44.

US credit reporting agency Equifax may have suffered the country's

:02:45.:02:49.

biggest cyber bridges, potentially compromising the personal details of

:02:50.:02:55.

about 143 million consumers. Shares were down as much as 13% in market

:02:56.:02:59.

trading. Our reporter has more. What's happened? We know that cyber

:03:00.:03:05.

attacks are becoming more commonplace. What makes this

:03:06.:03:09.

interesting is the size and scope of this attack, one of the largest to

:03:10.:03:13.

head to America behind the large one that he Yahoo last year. Equifax is

:03:14.:03:18.

one of three credit reporting agencies in America. They collect

:03:19.:03:23.

financial data into build a credit score. People need this in order to

:03:24.:03:28.

buy a car or house or apply for a student loan, for example, to which

:03:29.:03:33.

we imported. With 143 million people potentially affected by this

:03:34.:03:36.

information breach, that's about half of the US population. The

:03:37.:03:42.

hackers targeted wings like names, addresses, birthdays, driving

:03:43.:03:46.

licence numbers, social Security numbers and about 200,000 Americans

:03:47.:03:49.

also saw their credit card numbers taken. So the CEO of the company has

:03:50.:03:55.

apologised for what he called a disappointing event, but it will

:03:56.:03:59.

take a long time to recover from this and assure customers that they

:04:00.:04:04.

can protect their information online. Quite a worrying

:04:05.:04:07.

development. Thank you. In other news, Japan's government

:04:08.:04:12.

has revised the economy's growth rate in the second quarter. Gross

:04:13.:04:16.

domestic product rose by 2.5% in the three months to June, but that's

:04:17.:04:20.

down from a more preliminary estimate of 4%. The revised figure

:04:21.:04:25.

came in below the average forecast, but still marks Japan's longest

:04:26.:04:29.

period of economic expansion in more than a decade.

:04:30.:04:33.

Amazon Fire TV a second headquarters in North America, with a whopping $5

:04:34.:04:40.

billion. US states like Colorado are now going to compete for the

:04:41.:04:43.

contract, which could bring in about 15,000 new jobs. Separately, a

:04:44.:04:48.

former analyst for Amazon Fire TV guilty to insider trading will stop

:04:49.:04:52.

the former employees sold details about its results to a form of

:04:53.:04:56.

fraternity brother before the actual earnings were released.

:04:57.:05:00.

Students from China are hoping to emulate the success of companies in

:05:01.:05:04.

Australia by heading there to study winemaking. In the last 20 years,

:05:05.:05:09.

the value of Australian wine exports has more than doubled to over 1.8

:05:10.:05:16.

billion dollars US. Last year China became its biggest customer, with

:05:17.:05:20.

orders up 44% in the year. The students enrolled at the University

:05:21.:05:23.

of Adelaide spoke to our correspondent.

:05:24.:05:28.

Learning techniques tested over decades, these students hope they

:05:29.:05:33.

are on the path to prosperity. You don't have to be a connoisseur to

:05:34.:05:38.

know turning grapes into wine can be a very profitable business. But by

:05:39.:05:42.

coming to learn in Australia, home to some of the world's exist wine

:05:43.:05:48.

brands, they can clearly see opportunities ahead. Hopefully I can

:05:49.:05:56.

be a winemaker in a big winery at the beginning and in the and I can

:05:57.:06:01.

have my own winery. Do you think one day you can make Chinese wine that's

:06:02.:06:04.

as good as or even better than French, Italian or Australian wine?

:06:05.:06:08.

Probably, definitely. But there are differences because we have a very

:06:09.:06:13.

short winemaking history, so there's a long way to go. The University of

:06:14.:06:19.

Adelaide has seen a number of Chinese didn't in rolling for

:06:20.:06:23.

winemaking degrees travel in five years. Drawn not so much by the

:06:24.:06:27.

weather, but by the booming local industry. Winemaking here in the

:06:28.:06:33.

Barossa Valley is known around the world. Australia is the fifth

:06:34.:06:37.

biggest wine producer over the planet -- on the planet, but could

:06:38.:06:42.

soon be overtaken by China. The Chinese wine makers are issue won't

:06:43.:06:47.

be the quantity and quality. And that doesn't come quickly. Australia

:06:48.:06:53.

took decades to shake off the snobbery attached to wine, so can

:06:54.:06:58.

China do the same? Vignettes are only ten or 15 years old, so they

:06:59.:07:05.

are several decades behind where Australia was -- vineyards.

:07:06.:07:10.

Knowledge is needed to know what works best. Used well, that

:07:11.:07:14.

knowledge can have international awards. This winery in the Adelaide

:07:15.:07:20.

Hills has won gold medals for extra rows and plenty of orders in China

:07:21.:07:25.

as well, but customers are becoming more demanding. You start to see the

:07:26.:07:28.

trend of using Chinese imagery or Chinese references like the number

:07:29.:07:35.

eight. I think we are seeing a consumer that's getting on the back

:07:36.:07:38.

and realising that Australian wine needs to be about the Australian

:07:39.:07:41.

story and our pedigree, a region a key.

:07:42.:07:46.

As China's wine market mature is, these students hope they will have a

:07:47.:07:52.

part to play and get to enjoy the fruits of their labour.

:07:53.:07:56.

Well, it's not just Australia or China, Europe, the traditional home

:07:57.:08:02.

of wine, and in European wine consumption is slowly falling. Asia,

:08:03.:08:06.

specifically China, is the new growth market for wine, expected to

:08:07.:08:10.

become the second most valuable maker by 2020. Is it time for

:08:11.:08:14.

producers to pop the court and celebrate? Earlier I spoke to the

:08:15.:08:18.

global chief executive of a champagne maker and asked how

:08:19.:08:21.

important markets like China were for her company. We are not so much

:08:22.:08:27.

interested in trying to become like a fashion brand, because when you

:08:28.:08:36.

take over a house, there's so much craftsmanship and it is limited in

:08:37.:08:40.

its volume, you take 20 years to make a champagne. You have to be

:08:41.:08:49.

very careful and try to work with market that are stable, where you

:08:50.:08:54.

can guarantee the sustainability and long-term stability. So it's crucial

:08:55.:09:00.

to try to meet that demand. Let's take a look at global champagne

:09:01.:09:05.

sales. They fell by 2% in 2016 will stop this was partially driven by

:09:06.:09:10.

lower sales in the UK due to Brexit. In France as well, your home market,

:09:11.:09:15.

where there were terror attacks, fewer tourists visiting, are you

:09:16.:09:19.

worried about the future of the industry? Though. I'm not worried

:09:20.:09:26.

about the industry. I think it's a normal temporary kind of thing. In

:09:27.:09:30.

the case of France, there is a big consumption and very low price for

:09:31.:09:35.

champagne, which is not very healthy. So it will change and in

:09:36.:09:42.

the case of the UK it is Brexit, but also very significant is per se --

:09:43.:09:56.

Prosecco. For a long time Japan has been one of your biggest markets. It

:09:57.:10:01.

is a big market. In the past, 40 years ago, it was a big spirits

:10:02.:10:08.

market. In its evolution, it is now an important market for champagne.

:10:09.:10:15.

Let's take a look at the markets. The Nikkei over in Japan has opened

:10:16.:10:21.

lower. Of course as stronger Japanese yen isn't helping and there

:10:22.:10:26.

are continuing geopolitical worries over the Korean crisis. The

:10:27.:10:30.

Australian market is flat, mirroring what happened on Wall Street

:10:31.:10:34.

yesterday. That's it. Thanks for watching Asia

:10:35.:10:35.