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linkedin.com/Spoken. That's linkedin.com/Spoken. Terms and

1:16

conditions apply. Hello

1:21

and welcome to World Business Report here

1:23

on the BBC World Service. I'm Rahul

1:25

Tanden, plenty coming up as always. As

1:28

France decides to take action against shrinkflation.

1:30

Consumer have the right to know when

1:32

the produce are reducing and the price

1:34

are going up because industry were doing

1:37

it behind the back of

1:39

the consumer. And we're going to

1:41

find out why the Chinese are

1:43

sipping less imported wine. But

1:46

let's start by talking about a Chinese

1:48

app because lots of people around the

1:50

world use TikTok. But this weekend, the

1:52

US Senate will vote on a requirement

1:55

that the company, the Chinese company ByteDance,

1:57

which owns TikTok, should divest from it.

2:00

This is due to security concerns. Let's

2:02

get the thoughts on this of our

2:04

North America business correspondent, Aaron Delma, and

2:06

firstly on the popularity of TikTok in

2:09

the US. Extremely popular, extremely

2:11

influential, and that becomes even more so when

2:13

we talk about the younger generation. That's the

2:15

group that is more likely to be on

2:17

TikTok and be on TikTok for quite a

2:19

bit amount of time every day. We're talking

2:21

about some 170 million estimated US users. And

2:26

what's really astronomical to me is the growth, because if

2:28

we go back to the year 2020, that

2:31

number was hovering around 100 million. And

2:34

when you zoom out and you look at the 140-some-odd countries

2:37

around the world where TikTok appears, you're looking

2:39

at around 1 billion users. It's

2:41

just an astronomical audience. It

2:43

really is, isn't it? This is not the

2:45

first time that we have seen calls from

2:48

those in government to take action against TikTok.

2:50

What are we actually talking about in this

2:52

case that may happen? Well, we

2:54

are looking at an effort that had

2:56

been brewing for a while and a

2:59

measure that actually passed the House of

3:01

Representatives, the lower chamber of the US

3:03

government, to either force a divestiture of

3:05

TikTok from its parent company, ByteDance, which is

3:08

a Chinese-owned company, or face

3:10

a ban in the United States. And there's

3:12

the nuts and bolts business angle of this,

3:14

and then there's the political angle of this.

3:16

Nuts and bolts, what they would say is

3:18

that app stores wouldn't be allowed to offer

3:20

the app anymore, and that

3:22

internet service providers wouldn't be able to

3:25

host it. There is another argument

3:27

here where China would have to, by

3:29

what we've seen if passed just predicate, agree

3:31

to that, and it's very hard to see

3:33

China actually agreeing to divest such a popular

3:36

and such a monetarily

3:38

influential asset. So it

3:41

raises the question of who would buy it, and

3:43

considering how popular it is, how expensive it is, and

3:45

the fact that many of the major tech

3:48

companies in the US are facing antitrust challenges

3:50

for their size and their acquisitions anyway, it

3:52

makes it hard to think one of them

3:54

could scoop it up. And so this is

3:56

the sort of quagmire that we find ourselves

3:58

in with that. Is

4:01

this about TikTok specifically? People talk a

4:03

lot about national security here, or is

4:05

this part of the much wider US-China

4:08

trade debate that's taking place in the

4:10

US? Certainly

4:12

you can't look at this in a vacuum,

4:14

right? You can't ignore the fact that the

4:16

US and China are at loggerheads over certain

4:19

things. Some of them are economic and

4:21

business dealings, but at the same time, the

4:23

Biden administration is trying to toe a line here

4:26

and not have quite so much disruption. So

4:28

enter that environment, this TikTok

4:30

debate. Yes, the US government

4:32

says that this is about

4:34

national security and about safeguarding

4:37

user data. That is the

4:39

line about why they think TikTok needs to be banned

4:41

in the United States. Aaron

4:43

Delmore there. Let's pick up on that

4:45

vote that's taking place on the weekend.

4:48

I've been speaking to the Democratic Congressman

4:50

Raja Krishnamurti. He's one of those sponsoring

4:52

the bill. It turns out ByteDance, this

4:54

Chinese company, is controlled by the Chinese

4:57

Communist Party. In fact, the editor in

4:59

chief of ByteDance is the

5:01

general secretary of the Chinese Communist

5:03

Party's cell that's been embedded in

5:05

ByteDance to make sure that all

5:08

of its products, including TikTok, adhere

5:10

to what they call, quote

5:12

unquote, correct political direction. That's

5:15

why we are so concerned about

5:17

TikTok. This is not a ban. We

5:20

hope that TikTok continues to operate,

5:23

but not under the ultimate control of the Chinese

5:25

Communist Party. Okay, let's pick up on that point

5:27

to begin with, the number of points to pick

5:29

up on. ByteDance say they're

5:32

not controlled by the Chinese Communist Party.

5:34

They have categorically denied those accusations. They've

5:36

done it in the Congress, haven't they?

5:38

They have, and they've made a

5:40

number of false statements before Congress,

5:43

which has really caused lawmakers to

5:45

adopt this bill. They said

5:47

that none of their American data is actually

5:50

accessible by people in China. That

5:53

turned out to be false

5:55

because Chinese employees routinely access

5:57

this data, sometimes unbeknownst to...

6:00

TikTok USA employees. If

6:03

TikTok and ByteDance are

6:06

so dangerous, why is the President of

6:08

the United States on TikTok? Well,

6:10

I'm not going to tell him how to campaign.

6:13

It's not on my personal phone. It's been banned

6:15

from all government devices. But, you

6:17

know, I would just say that everybody...

6:19

But surely if it is so dangerous

6:21

in terms of Americans' data and the

6:23

Chinese using that data, he should set

6:26

an example by not being on it.

6:28

Again, I think that this is something

6:30

where it's currently legal. We have 170

6:32

million people using it. But going forward,

6:34

I think that we have to create

6:36

protections for everybody. You are calling

6:39

for the disinvestment, aren't you, of ByteDance

6:41

and TikTok? Why not just ban it?

6:43

Because I think that we would want

6:45

to allow for the platform to continue.

6:47

I think that it still has a lot

6:49

of good content. And of course,

6:52

you know, there's some great dance videos

6:54

out there. But the most

6:56

important thing is that it's not under the control

6:58

or operation of an adversary

7:01

country. The American Civil Liberties

7:03

Union have said quite clearly

7:05

that they think that these attempts of yours

7:07

will breach the First Amendment because so many

7:10

millions of Americans are using it. There's no

7:12

First Amendment right to espionage. There's no First

7:14

Amendment right to harm our national security. All

7:17

of these rights are balanced against each other.

7:19

I think that the issue here is very

7:21

similar to, for instance, what you see with

7:23

regards to ownership of a news

7:26

station or a newspaper in

7:28

our country, as in many countries. There

7:30

are limits on foreign ownership of

7:33

those media outlets. And

7:35

similarly, we don't want a foreign

7:37

adversary certainly to be able to control social

7:39

media platforms. But a lot of people would

7:41

say to that there are a lot of

7:44

American companies that control social media in many

7:46

parts of the world. What is wrong if

7:48

another country controls a little bit of it

7:50

in the U.S.? Well, I think that the

7:52

issue here is that, at least

7:54

from our standpoint, I'm not going to speak for

7:56

lawmakers in other countries. We need

7:58

to enact laws. that

8:00

would protect ourselves against threats

8:03

emanating from foreign adversary countries.

8:06

Each country needs to make its own decision.

8:08

And so when you look at the vote

8:10

that's coming up over the weekend, when it

8:12

comes to ByteDance and TikTok, that is part

8:14

of something much bigger, isn't it? It's an

8:17

important issue in itself, but this is also

8:19

part of that much wider US-China relationship. Correct.

8:22

It's an important part of that relationship.

8:24

It's not the entirety, but it's part

8:26

of a broader pattern where, in my

8:28

opinion, we have to do everything we

8:30

can to stabilize the relationship. So this

8:32

vote that's taking place on the weekend,

8:34

how important do you think it is

8:36

in terms of that wider discussion that

8:39

we're having, not just about ByteDance and

8:41

TikTok, but about the US and China?

8:43

Well, somebody the other day said, this

8:45

is either a Chamberlain or Churchill moment.

8:47

I hope that we remember that when

8:49

we stand up to aggressors, that we're

8:51

doing the right thing and we live

8:53

up to the Churchill moment that it

8:55

needs to be. Congressman Raja

8:58

Krishna Murthy there. There is a business

9:00

side of this as well, though, because

9:02

many small businesses are saying in the

9:04

US, they're worried about the impact banning

9:07

TikTok, even getting it to divest in terms

9:09

of the US market could have on them.

9:12

The message that I really want to get

9:14

home to the American government and everybody

9:16

that is trying to pass this bill

9:18

is, you will be destroying small businesses

9:20

like us. This is

9:22

our livelihood. You will be destroying the

9:25

American dream that we really believe in.

9:28

Let's speak to a small business.

9:30

Jordan Smith runs the Elevated Closet

9:32

in Texas, which provides clothes for

9:34

tall women. Jordan, thanks so much

9:36

for joining us on World Business Report. Tell

9:38

us and our listeners about how TikTok is

9:41

helping your business. Yes,

9:43

thank you so much for having me. So

9:45

I have a very

9:48

niche business. Again, it is for

9:50

tall women and there's no demographics

9:52

to find tall women. And I've

9:54

tried on other social media platforms,

9:57

but TikTok has been really

9:59

helping. me the last two

10:01

years I would say exponentially

10:03

grow not only my following

10:06

and eyes on my business

10:08

but it's now showing

10:11

that in sales. The last five

10:13

months I've had 30% of

10:16

my sales strictly from TikTok

10:18

shop. What does

10:20

TikTok provide to you that other

10:22

social media companies can't provide to

10:25

your business? That's a

10:27

good question. The biggest thing has just

10:29

been their algorithm. They

10:31

are showing the right people

10:33

my content and tall women are

10:36

finding me there where they're not

10:38

finding me on the other platforms.

10:41

Not only that, I now have

10:43

TikTok shop where they're watching the

10:45

clothes on my model's bodies

10:48

and they're able to purchase right there

10:50

and find something because it is a

10:52

very emotional reaction for them. Again, being

10:55

niche, it's something that is

10:57

not out there for them. When they see it, they

11:00

get excited and they buy it. That has been the

11:02

biggest thing for me. When you hear,

11:04

and I know you were listening to

11:06

the US Congressman talking about the need

11:09

to take action against TikTok, does that

11:11

make you worried about the impact this

11:13

could have on your business? I'm

11:16

extremely worried. That's why I

11:18

went to DC. I just got back today to

11:20

talk to my senators about it because I'm

11:23

extremely worried. I just told you the

11:25

last five months, 30% of my sales,

11:27

that's just from TikTok shop. That's not

11:29

the people coming over and finding my

11:31

website that way. I'm

11:34

extremely worried that that's going to kill

11:37

my small business. I am a very small

11:39

niche business and I've barely a little over

11:41

four years old. It

11:44

would really, really impact me. Especially

11:46

with wanting to grow the way I'm growing,

11:48

it's making the decisions to keep growing and

11:50

to keep moving

11:52

in that direction, not knowing where this platform is going

11:55

to be because it's a huge chunk of my business.

11:57

When you spoke to those politicians,

12:00

in Washington and you made those points that you

12:02

are making to us. What did they say to

12:04

you? You know I was

12:06

really really grateful that they were listening and

12:09

they were empathetic. I spoke to two different offices

12:11

and the

12:14

first office was Senator Cornyn's office and

12:16

they were very empathetic and they were

12:18

listening to me as a

12:20

small business in Texas and saying

12:22

you know we understand we are doing our

12:25

due diligence to try and have those conversations

12:27

and so that was nice to hear. The

12:31

other office, Senator Cruz's

12:33

office, was basically they were

12:35

more talking about you know the security

12:39

threats. Do you

12:41

understand that? Do you understand those

12:43

security concerns and the reasons

12:46

why some may say that has to

12:48

take precedence over your business? 100% I

12:50

understand where they're coming

12:52

from. Of course as American I want us

12:55

to be safe but I haven't

12:57

heard anything clear-cut as to what

13:00

exactly those security, like I don't

13:02

understand it, it's not my expertise

13:04

you know. The only

13:06

thing that they were explaining to

13:08

me and my husband was that

13:10

they feared that ByteDance employees and

13:12

TikTok employees were talking a

13:15

lot amongst each other and somehow divulging

13:18

information between each other. So that's the only

13:20

thing that they kind of talked about as far as

13:22

security concerns.

13:25

So here you are coming back

13:27

from Washington, your business growing but

13:29

this huge political debate about

13:32

to take place over what happens with

13:34

TikTok. What's going through your mind? I'm

13:37

just really worried. It's just it's been somewhere,

13:39

it's been somewhere where I've been building community,

13:41

it's somewhere where I'm getting sales from and

13:44

it's been something I've

13:46

been working at so long and

13:49

this last year has just like I

13:51

said it exponentially grown and to see

13:53

that piece of it taken away would

13:55

just really be a shot you know

13:58

in the chest. Let us see what happens. Thank

14:00

you, Jordan, so much for joining us here

14:02

on World Business Report. Let's bring in Chris

14:05

Lowe, Chief Economist, FHN Financial based in New

14:07

York. Chris, always a pleasure to have you

14:09

on the program. Fascinating to hear from the

14:11

Congressman, fascinating to hear from a small business

14:14

as well. This is a complicated issue, isn't

14:16

it? It's

14:18

extraordinary how complicated it

14:20

is. And just for disclosure,

14:23

my daughter is an employee at TikTok,

14:25

so I need to put that on

14:27

the table as well. So

14:31

obviously it's a story I'm watching very

14:33

closely. What do

14:35

you make of it then in terms of

14:37

the impact that TikTok has

14:39

on small businesses? And I suppose

14:41

the wider part that TikTok

14:44

is playing at a time when relations,

14:46

trade relations between the US and China

14:48

are so tense. Well,

14:51

look, it's an absolutely unique platform.

14:54

The algorithm is very powerful. They

14:56

do seem to have better

14:58

luck getting the right content in front

15:01

of the right people. And that's why

15:03

people are crazy about

15:05

it. That's why, you know, emotions

15:07

are running so strong at the thought of

15:09

possibly losing it. That said, I

15:11

work for a bank. We're not allowed

15:14

to have it on our phones because

15:17

our security team believes they can

15:19

mine data not just related to

15:21

the app, but anything else on

15:24

your device as well. And final

15:27

question on this. We've had precedent here before,

15:29

didn't we? We had a state in the

15:31

US, Montana, trying to ban TikTok. That

15:34

didn't go through because of the courts. That's

15:37

right. But doing it at

15:39

the federal level, I think it's

15:42

more likely it will be done in a

15:44

way that stands up to

15:46

challenges. But it will be challenged in

15:48

the court, if not by ByteDance than

15:50

by the ACLU or a similar organization.

15:52

I'm sure of it. Yeah, let us

15:54

see what happens. All right. Then ask

15:56

that what's going on. It's been a

15:59

pretty bad week. Chris? A

16:01

pretty bad week and a pretty bad month. The

16:04

selling began on the 1st of

16:07

April. We're down about 6.5% on

16:10

the NASDAQ so far this month,

16:12

but it really accelerated this week.

16:15

And my sense is there's a couple of things

16:17

going on. One of them, we

16:20

get tech earnings next week.

16:22

People are nervous because the

16:25

story over the course of the first four months

16:27

of this year has been, well,

16:30

rate cuts in the US are a

16:32

lot less likely and if they come,

16:34

they'll be shallower and later. These

16:37

companies are very sensitive to interest rates.

16:39

The other thing, it's tax

16:41

week. And taxes are

16:44

higher this year because people have

16:46

bigger capital gains last year than

16:48

the year before. They

16:51

took a lot of money out of the

16:53

market in order to pay their taxes. And

16:56

I think that's hitting particularly hard right

16:58

now. And final question to

17:00

you before we talk about some other issues. We

17:03

have seen a lot of instability in the Middle East over the

17:05

last 24 hours. That's

17:08

affecting oil prices, isn't it? But

17:12

maybe not the markets as much as people thought they

17:14

were going to be affecting. Yeah,

17:16

we saw last night when the

17:18

first news reports came in about

17:20

an Israeli attack on Iran. Oil

17:23

prices jumped. Oil prices

17:25

jumped. It was a classic flight

17:27

to safety, risk assets on.

17:31

But by this morning's trading, both

17:34

of those were below yesterday's

17:36

close. And I think the

17:38

key element was that the

17:40

attack was small enough in

17:42

scale that it allowed the

17:44

Iranians to save face. They

17:46

claim they stopped all of it. And

17:49

hopefully that means de-escalation. That seems to be the

17:51

way traders are looking at it too. If we

17:53

stay with this, we're going to talk to you

17:55

about a couple of issues. With

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your BBC beat. This is well. You're

19:04

with, well, Business Report here on the

19:06

BBC World Service. Let's

19:08

move to France now because this is an

19:10

important story. The French government has announced a

19:13

new rule on Friday that will require customers,

19:15

require stores to tell customers when a product

19:17

becomes smaller but its price stays the same

19:19

or increases. If you're wondering what that's called,

19:22

well, you may have heard this phrase, it's

19:24

a practice that's known as shrinkflation. I've

19:27

been speaking to Camille Dorrias. He's

19:29

the Campaigns Director at Foodwatch France

19:31

who were amongst those campaigning for

19:33

the French government to take action.

19:36

Shrinkflation is a practice made by

19:38

food industry that reduces the amount

19:40

that there is inside the product

19:43

and increases the price and

19:45

offers the price per kilo. So you

19:47

have a decrease on what you buy

19:49

but you're paying more for it. And

19:51

it has become a huge problem, hasn't

19:53

it, with inflation high in countries like

19:55

France. What do you make of

19:57

what the French government has announced today? that

20:00

going to help tackle the problem? So

20:02

you cannot forbid this kind of

20:04

practice because it's about freedom of

20:06

industry of doing exactly what they

20:08

want on the product. But what

20:10

we want at FoodWatch is transparency

20:13

because we think that consumers have

20:15

the right to know when the

20:17

produce are reducing and the price

20:19

are going up because industry were

20:21

doing it behind the back of

20:23

the consumer. So

20:25

this is what we pointed out and

20:28

this is what we were asking the

20:30

government to do to oblige industry and

20:32

supermarkets to inform consumers. So

20:35

basically there'll be signs won't they're on

20:37

products telling customers now that you're paying

20:39

the same amount but you're going to

20:41

get less than you did before. So

20:43

what we will have will be the

20:45

first of July in French supermarket is

20:47

sign saying this produce has been reduced

20:49

of two grams and increases price of

20:52

50 cents of euro for

20:54

example and it will give the full information

20:56

to the consumer because a consumer cannot have

20:58

in mind what was the price two months

21:00

ago and what was the weight of the

21:02

produce two months ago. So it's important that

21:05

it's the supermarket or the industries that give

21:07

this information. The retailers some of them are

21:09

saying this is going to be hard to

21:11

implement and they're also saying that it's not

21:13

the retailers who are the problem but it's

21:16

the food manufacturers who should be doing this.

21:18

What do you make of that? It's always

21:20

the same it's kind of a of a

21:22

ping pong or tennis match between retailers and

21:24

industries that for one year and a half

21:27

saying it's not my fault it's their fault.

21:29

At food what what we say we don't

21:31

care which one is the fault is what

21:33

we want is information for consumer and they

21:35

should deliver it on the package if it's

21:38

industries that want to deliver it or directly

21:40

on the shelf for the supermarket. So at

21:42

the end we want to a consumer to

21:44

have the information they can discuss about how

21:47

to do it but it's not our problem.

21:49

If a retailer doesn't do this what will

21:51

happen? So as it is being

21:54

decided by law by the Ministry

21:56

of Economy they can have fine

21:58

they can be recovered. that

22:00

they should do it. Now there

22:02

can be control on this inflation

22:04

practice where before, as it was

22:06

not illegal not to inform consumers,

22:08

they could not be even controlled

22:10

by the states. Now there is

22:12

a control and now when Foodwatch

22:14

will find new inflation produce without

22:17

information in the supermarket, we will

22:19

be able to complain also to

22:21

the government. This has been a

22:23

huge problem not just in France

22:25

but across Europe. Would you like

22:27

to see other countries following the

22:29

practice that France is now putting

22:31

in place? It's a practice in Europe but

22:33

all around the world. In the United

22:36

States also there is a lot about inflation.

22:38

It's even where I found the first example

22:40

and the idea to look at it in

22:42

the French supermarket. So I think this is

22:44

kind of a practice you can find everywhere

22:47

whether it's food products and companies that want

22:49

to do benefits behind the bite of the

22:51

consumer. The best way to fight this kind

22:53

of problem is really to give transparency because

22:56

I'm pretty sure that now that they are

22:58

obliged to tell they will never do

23:00

it again. You have been in discussions

23:02

with the French government for some time

23:04

about putting this in place. Has it

23:06

taken too long? Should they have done

23:08

this a long time ago? Because inflation

23:10

is beginning to fall now, isn't it?

23:13

Yeah, but inflation was a risk that

23:15

inflation happened in the supermarket but it

23:17

happened before and will happen after. So

23:19

it's okay that it took a bit

23:21

too long. It took too long. It

23:23

could have done it faster but we

23:25

understand also that they wanted to see

23:27

and consider every possibility. Is it industry?

23:30

Is it supermarket? What Europe authorized you

23:32

to do or not when you're

23:34

talking about labeling? So it took a

23:36

bit too long but at least at

23:38

the end we have the information and

23:40

consumers will have the information in the

23:42

shelves. You've been speaking to the French

23:44

finance minister, haven't you? Bruno Le Maire.

23:46

What does he say to you? So

23:49

it's a problem that they understand and

23:51

it's really interesting to see that the

23:53

French government even took the word of

23:55

the food watch to say it's like

23:57

misleading. It's not a practice that should

23:59

be done. And consumers are right

24:01

to be angry about this practice.

24:03

And I think the French government

24:05

really understood that. And that's why

24:07

they put this transparency. But we

24:09

know at FoodWatch that this won't

24:11

solve inflation problem. It's important because

24:13

it's about transparency and right to

24:16

consumer to have information. But it

24:18

will not solve inflation issue and

24:20

food precarity in France. So we

24:22

still have a lot of discussion

24:24

to have with the French Minister

24:26

of Economy. Chris Low still with

24:28

us. Interesting to hear from Camille briefly, if you don't

24:30

mind. A problem in the US as well, Shrinklais. Yeah,

24:34

that's right. And listen, I

24:36

think this is a really sensible

24:38

solution. You can't fight the laws

24:41

of supply and demand. It's like

24:43

fighting the law of gravity. But

24:45

consumers should know what's going on.

24:47

They certainly should. Let's go back to

24:50

talking about China now. Because China has

24:52

seen a growth in wine sales over

24:54

the last few years. But in the

24:56

last few months, we've seen full in

24:59

the demand for imported wine. Jennifer

25:01

Pack from our partner's marketplace has been

25:03

looking at this in Shanghai. For

25:05

more than a decade, Shanghai's Sun Yanjian

25:08

operated as a wine bar, where folks

25:10

could sit and relax with a glass

25:12

of wine. But the business

25:14

was hit so hard during the pandemic that

25:16

last year the owner, Léon Léon, hivoted. And

25:18

he turned it into a shop where people

25:20

can buy wine by the bottle to take

25:23

out. When we rent a wine bar, every

25:25

month we can sell roughly around

25:27

1,500 bottles. But

25:30

now every month we can sell, let's say, over

25:32

2,500 bottles per month. At

25:36

a big wine show in Shanghai,

25:38

vendors complained they were hurting and

25:40

had been since before the pandemic.

25:42

Australian wine exporter Vikas Gupta outlined

25:44

part of the problem. You

25:46

walk here and count the number of labels. There

25:49

are two, 300,000 types of wine here. Vikas's

25:53

China's wine market is crowded.

25:55

His sales have dropped 60-70% from pre-pandemic levels. Then

26:00

there's China's economy. It's still growing,

26:02

but not as fast as before.

26:05

And that hurts wine sales, says

26:07

Sebastian Carrot, a seventh-generation winemaker from

26:09

France. The wine here

26:11

is used for business. They use

26:14

the wine to give some presents

26:16

to good clients. And

26:18

when business is slow, he says, there's no need

26:20

to do that. His sales are only 40% of

26:23

what they were in 2019. The

26:26

wine industry is also vulnerable to

26:29

geopolitics, like when Australia's government wanted

26:31

to probe the origins of COVID

26:33

in 2020. Soon

26:35

after, the Chinese government investigated

26:37

Australia for unfair subsidies and

26:40

dumping, says wine consultant, Ying Kai.

26:44

China increased the tariff on Australian wine by

26:46

as much as 200%. So

26:49

sales of Australian wine in China fell off a

26:51

cliff in 2021 and 2022. China

26:56

has now listed those punitive tariffs, but

26:58

the tariffs on American wine are still

27:01

in place because of ongoing trade tensions.

27:03

Even so, says Ying Kai, there are many

27:06

reasons to be hopeful about the wine industry

27:08

here. China still ranks among

27:10

the world's top 10 wine-consuming nations.

27:14

But he says wine makes up only 2% of

27:17

the country's alcoholic drinks market. The

27:20

preferred drinks are beer and a

27:22

fiery grain alcohol called baizhou. China

27:26

is still largely untapped market for

27:28

wine. There's still a lot of

27:30

potential for expansion. That's

27:32

what's brought up to Kalilov's respect

27:34

to start importing wine from his

27:36

native Moldova. We

27:39

want to enter the Chinese market mainly because of the

27:41

war in Ukraine. We used to be

27:44

able to sell 15 million bottles a year to

27:46

Russia and Ukraine. Once the war began, we lost

27:48

both markets. Back at the

27:50

Sanyan-Jin wine shop, owner Lian Liang

27:52

says he's opening another branch in

27:55

Shanghai. He's crunched the numbers. It's

27:57

around 300 ambioms per person.

28:00

He's setting up in an area where there's

28:02

lots of restaurants with very poor wine lists.

28:04

He reckons if diners see his shop, they

28:07

might buy a bottle of fine wine for

28:09

$40 and take it

28:11

to the restaurant. Many don't charge extra

28:13

for bringing your own bottle. So

28:15

how do you see your business in the next three to five

28:18

years? I think all the Chinese market

28:20

is recovering and

28:23

more and more people, they're still drinking wine. And

28:26

what they would like, he says, is

28:28

fine wine at an affordable price. Jennifer

28:31

Pack reporting this. News just coming in.

28:33

President Biden has said he will restrict

28:35

new oil, gas and mining operations of

28:38

more than five million hectares of land

28:40

in Alaska in a bid to protect

28:42

wildlife in the northernmost US state. We'll

28:44

have more on that story coming up

28:46

in business matters in a couple of

28:49

hours time. But that is it for

28:51

this edition of World Business Report.

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