Latest / Best of Business / Peter Lewis: Asia Business Correspondent on Indonesia's deal with Apple, China cutting a Taiwanese subsea cable, Trump taking aim at Chinese trade and investment

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Peter Lewis: Asia Business Correspondent on Indonesia's deal with Apple, China cutting a Taiwanese subsea cable, Trump taking aim at Chinese trade and investment · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talks, it'd be
• 0:12
  Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.
• 0:16
  Speaker 2: Peter Lewis is our Asia business correspondent Hypeeda Hi Ryan
• 0:21
  Speaker 2: And now Indonesia and Apple are apparently agreeing on terms
• 0:25
  Speaker 2: to lift an iPhone sixteen band.
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  Speaker 3: What's this about, Yes, Well, this is to do with
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  Speaker 3: a regulation that smartphones that are sold in India have
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  Speaker 3: to have forty percent of their contents and their components
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  Speaker 3: sourced locally. Now, this forty percent role has been a
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  Speaker 3: problem for a lot of manufacturers in Indondes because it's
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  Speaker 3: quite hard to meet. It's actually very difficult to find
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  Speaker 3: all the bits and components that you need locally to
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  Speaker 3: be able to put into a smartphone like an iPhone sixteen. Well,
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  Speaker 3: it was deemed by the Indonesian government that Apple didn't
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  Speaker 3: meet this forty percent requirement, so they banned sales altogether
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  Speaker 3: of the iPhone sixteen until it was resolved. Now, the
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  Speaker 3: interesting thing about this is that Apple has tried very
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  Speaker 3: hard to resolve it because Indonesia is a very big market.
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  Speaker 3: There's about three hundred million people there, so it's certainly
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  Speaker 3: a market that Apple wants to operate in. It initially
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  Speaker 3: offered ten million dollars to invest. That was nowhere near enough.
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  Speaker 3: It offered one hundred million dollars then to go and
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  Speaker 3: invest in Indonesia, and then finally it offered one billion
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  Speaker 3: dollars to completely build a new plant in India, but
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  Speaker 3: the government turned it down and said, despite it being
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  Speaker 3: a billion dollars, you still weren't sourcing forty percent of
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  Speaker 3: your components locally. What they have now done is they've
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  Speaker 3: come to an agreement where there are going to be
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  Speaker 3: a couple of new plants from Apple in Indonesia and
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  Speaker 3: they're going to invest about three hundred and fifty million.
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  Speaker 3: So what the Indonesian government hasn't explained here is how
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  Speaker 3: they've ended up going down from a one billion dollar
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  Speaker 3: investment to three hundred and fifty million dollars. Why didn't
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  Speaker 3: they accept the initial one billion dollars because you know,
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  Speaker 3: this is a very significant investment in an emerging market
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  Speaker 3: like Indonesia. But anyway, everyone seems to be happy. The
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  Speaker 3: government seems to be happy, Apple seems to be happy.
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  Speaker 3: They're going to be providing jobs for local people there.
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  Speaker 3: They when they build this factory, which will be Apple's
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  Speaker 3: very first one in Indonesia.
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  Speaker 2: Fascinating and what a low ball to start with the
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  Speaker 2: ten million dollars. I'm glad they've gone one.
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  Speaker 3: That's someone in the Indonesian government hasn't got the art
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  Speaker 3: of the deal.
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  Speaker 2: No, certainly not. Now Taiwan has apparently caught a Chinese
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  Speaker 2: own ship cutting a sub seed cable. What's what's this about?
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  Speaker 2: What was the cable for? And have we had confirmation
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  Speaker 2: from the Chinese on the salt or what?
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  Speaker 3: We haven't heard a word from the Chinese. The Taiwanese
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  Speaker 3: governments say that they caught red handed this boat attempting
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  Speaker 3: to cut an underwater cable. These are the cables that
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  Speaker 3: provide international data traffic and provide Internet. We've seen this
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  Speaker 3: in the Baltics, with Russia cutting cables around the Baltic
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  Speaker 3: States and around Finland. Now in Taiwan, they call this
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  Speaker 3: gray zone activities. In other words, it's sort of activities
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  Speaker 3: that fall short of an act of war, but nevertheless
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  Speaker 3: they're very intimidating. So the thought sort of things that
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  Speaker 3: Taiwan that China does here is providing putting blockades around
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  Speaker 3: the island, harassing local fishermen, and fishing boat, cyber attacks
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  Speaker 3: and so on. So this is part of those what
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  Speaker 3: they call gray zone operations have been going on now
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  Speaker 3: for quite a while around Taiwan, as you know, to
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  Speaker 3: China wants to have a reunification between the mainland and Taiwan.
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  Speaker 3: The Coastguard caught the boat. It was just staffed with
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  Speaker 3: Chinese nationals. They've been taken back to Taiwan and local
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  Speaker 3: prosecutors are investigating. But this all comes at a rather
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  Speaker 3: difficult time for Taiwan because they're watching nervously what is
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  Speaker 3: going on with Ukraine and there is a feeling obviously
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  Speaker 3: that Ukraine is maybe being sold down the water here.
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  Speaker 3: And what is the US's stance going to be on Taiwan.
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  Speaker 3: Donald Trump hasn't actually said so far what his thoughts
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  Speaker 3: are about Taiwanese, about the harassment that's going on around Taiwan,
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  Speaker 3: and about the reunification of China, of mainland China and
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  Speaker 3: the island. So we wait to see, but people in
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  Speaker 3: Taiwan are quite nervous about this.
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  Speaker 2: Yeah, I can imagine now at the White House taking
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  Speaker 2: aim on Chinese trade and investment. We know that he's
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  Speaker 2: put some of those tariffs on then how's that been
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  Speaker 2: received there.
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  Speaker 3: Well, this is going to become a big issue because
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  Speaker 3: just in the last twenty four hours Taiwan, Trump has
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  Speaker 3: said he's going to double the tariffs that are on
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  Speaker 3: Chinese goods. They were originally set at ten percent. These
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  Speaker 3: were actually, out of all the tariffs that he's threatened,
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  Speaker 3: the only ones that actually went into effect at the
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  Speaker 3: beginning of the month. Well, as of March the fourth,
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  Speaker 3: they are going to become twenty percent, along with twenty
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  Speaker 3: five percent tariffs on Mexico and Canada. It's not totally
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  Speaker 3: clear why they're being doubled on China. It's made clear
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  Speaker 3: that he's unhappy with Mexico and Canada because of fentanyl
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  Speaker 3: going over the border, which he says is flooding in
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  Speaker 3: through Canada and Mexico. China and the US have been
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  Speaker 3: working quite hard in the last year or so on
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  Speaker 3: the fentanol issue, and China believes it has made quite
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  Speaker 3: good progress with the US on this. So it's rather
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  Speaker 3: bemused as to why it's now had these tarists doubled.
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  Speaker 3: It'll be interesting to see what China will do. Last time,
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  Speaker 3: Like at the beginning of the month, they introduced their
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  Speaker 3: own tariffs within minutes of the US ones coming into effects.
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  Speaker 3: The problem is, there aren't a lot of things that
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  Speaker 3: China can put tariffs on. So the best thing that
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  Speaker 3: it can do here while all this is going on
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  Speaker 3: is try and boost its own domestic economy. It's what
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  Speaker 3: known as the Two Sessions coming up next week, which
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  Speaker 3: is the annual meeting of the Chinese legislature. They're going
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  Speaker 3: to focus on the economy and trying to find ways
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  Speaker 3: of boosting the local economy. This will be the best
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  Speaker 3: way of trying to counter all these actions. Trump's talking
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  Speaker 3: about other things as well. He wants Mexico to put
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  Speaker 3: tariffs on Chinese goods because some countries are rerouting their
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  Speaker 3: products through Mexico, and is also threatening to put a
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  Speaker 3: tariff on any Chinese made ship that docks anywhere in
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  Speaker 3: the US. Now, if he does that, that's going to
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  Speaker 3: have a huge impact on international trade and relations with
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  Speaker 3: not just China, but with a host of other countries
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  Speaker 3: as well. So it seems that, you know, China may
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  Speaker 3: be the main target of all these tariffs because Trump
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  Speaker 3: is certainly ramping up the pressure at the moment.
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  Speaker 2: Certainly is thank you so much for that Peter, a
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  Speaker 2: very comprehensive wrap from you. Peter Lewis our Asia business
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  Speaker 2: correspondent with.
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