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CCTV Script 13/08/15

– This is the script of CNBC's news report for China's CCTV on August 13, Thursday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Stock markets around the world were shaken Wednesday on news that China had weakened its currency-for the second time in as many days-in a step to boost a slowing economy.

The People's Bank of China set the yuan's official rate at 6.3306 to the U.S. dollar, down 1.6 percent from the previous day and following a 1.9 percent devaluation on Monday. According to Reuters, government officials have been seeking a devaluation of as much as 10 percent to help the country's struggling exporters.

Now is a convenient time for the government to allow the currency to fall. By linking the yuan to the dollar, the government forced exporters to ride along with the strong dollar, which is up almost 20 percent from a year ago, relative to the basket of world currencies in the U.S Dollar Index.

That means that as the U.S. dollar has risen, China has found itself becoming a less competitive exporter to some of its most important trade partners.

Europe and the five countries above bought a total of $1.1 trillion in exported goods from China in the last 12 months. That's 45 percent of all exports from the country. Most are also buying more than they did the year before.

But those countries have also seen their currencies plummet by an average of 20 percent relative to the yuan, making goods from China that much more expensive.

Chinese manufactured goods have also suffered in recent months; data released on Saturday showed exports were down 8.3 percent in July from the year before.

Economists are wondering if China is simply using the pretext of market liberalization as cover for devaluation designed to boost exports.

Now, steelmakers around the world have criticized China, which they have blamed for having as much half of the world's steelmaking overcapacity. American steelmakers on Tuesday filed another petition demanding tariffs on imports of foreign steel, and warned that China's devaluation of the yuan could have severe repercussions on their industry.

But for the rest of the world, who are the winners and who are the losers?

Let's take the California State market as an example.

In California, exports to China amounted to $1.6 bn in 2014.

Main products are being exported to China include ...

CNBC interviewered Jeffrey Williamson, Director of California State Trade & Exports. Here's what he had to say.

[Jeffrey A. Williamson California State Trade & Exports Director] "It just became very difficult for California wines to compete on the cost basis into China. So I mean, wine is a different story than a lot of other products the California exports, but overall, when we look at RMB devaluation that happened in the past few days, we really think a lof of what has happened in terms of currency adjustments and price competitveness have already taken into place in regard with the Euro."

Meanwhile, some analysts are concerned about the impact on California's tourism industry too. These tourists are spending now, but anxiety is high throughout the state that tourists, home buyers and investors from China will lose interest if the currency keeps falling. Retailers and shopping centers could take a hit as well.

CNBC's Qian Chen, reporting from Singapore.

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Alibaba Ceo pkg transcript

We do it like all other companies do, and we closely monitor the Chinese economy and consumer behaviour. And as we reported this quarter, we have active buyers of 367 million. When we further analyse the consumer behaviour, we observe that people, averagely speaking, they buy more than 50 times a year on our platform. Basically, what they buy covers a large variety of product assortment. They buy all these things for their daily lives. And most important thing, they come to our platform not necwssarily for a specific shopping purpose, but more like a lifestyle. So our company has a very clear long-term growth strategy, and we believe this short-term movement won't affect our long-term strategy.

Q: For those that think the devaluation of the yuan will make goods on T-mall more expensive, is that going to be the case, and do you believe that that will have negative consequences for your ability to grow sales?

As I said before, we are confident for long-term growth, but at the same time, we will closely monitor consumer behaviour and Chinese economy as a whole.

Q: GMV was a bit below in some estimates for some analysts that follow you; some were wondering if that was due to your continued crackdown on counterfeit goods. Is that the case?

Actually, we reported a strong growth, and our GMV grows by 34% year over year. If we exclude the effect of the suspension of the lottery sales, our gmv would have grown by 36%. On the other hand, we continue our on-going efforts on anticounterfeit and antixxxx, we believe that this is for the long-term benefit for our consumers. We want to build up a continued growth and maintain healthy and high-qualty marketplaces.

Q: There is always interest in your take-rate. As the business migrates more and more to mobile, can you tell us wha your expectations are on the take-rate on mobile, and what that would mean overall?

This quarter, we observe an increasing shift to mobile, and actually we made very big progress in our mobile transition. In this quarter, we reported a 55% of GMV, of our China retail market places was from mobile. And 51% of revenue are from mobile. But today, if you look at the take-rate, our mobile site will have made very big progress in the mobile take rate, but still has a small gap between PC, but we are confident that mobile take-rate will continue to grow. I will not be surprised if at the end of the day, mobile take rate is close to that of PC, or even surpasses PC take-rate.

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SOT 1

[HANY NADA] "Well, you know, it's interesting. I'm not a big fan of buybacks in general ... typically, based on xxxx of pressure from shareholders xxxx higher price, so, it always seem to be one of the ways that companies can support the stock if it goes down. So, it's xxxx to buy back shares. And certainly, I'm not sure what we're gonna do with the stock price. But fundamentally what I really like about Alibaba is more... how they're thinking about the e-commerce or the colours of market in general in China, and that's why we xxxx from shareholders. I don't think xxxx support of a share buyback, really matters to us ... whole stock in three five ten years."

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SOT 2

[SKIP AYLESWORTH] "Much like Amazon where earnings were lagging even though revenues were growing, is to really show that you can bring these increased revenues to the bottom line and show profits. but a company like Alibaba, much like Amazon, takes time, there's many avenues they're investing in, cloud computing being one, the mobile area. They just recently did acquisition which is going to allow for the retail space to integrate with online biz which should also help. So many of these takes time to invest and to mature, to bottom line profits - but thats the challenge, how to get these sales to the bottom line profits."

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