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tv   Trending Business  Bloomberg  January 18, 2016 8:00pm-10:01pm EST

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rishaad: this is "trending business." i am rishaad salamat. the slowest pace of growth. the premier is admitting the economy is under pressure. down but facing the possibility of a second gain this year.
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and putting the exxon iron ore production. iron orerakes on production. china hong kong markets underway in half an hour. singapore just coming online. heidi is having a look at that as they moved to that all-important data point. heidi: we are getting some weakness from southeast asia. seeing noble group, one on the backainers of the losses but we are seeing some weakness across and these oil related offshore businesses. we are seeing a little bit of a change in sentiment.
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we have the aussie up by point three of 1%. things are starting to look up. the moment.flat at tokyo stocks are in the green as you say. all eyes on this chinese gdp number, not just gdp but the array of domestic activity data. all of this will give us a demand not just for commodities exports which is what we are seeing in australia but also consumer exports and we are seeing a little bit of a makes when it comes to some of these names. trading in asia ahead of that data release. ofwill take you through some the biggest movers. also trading in tokyo, nintendo outperforming and surging by over 7%. that is a six month high. by 3.25% onlying news that the innovation network
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fund of japan is mulling a higher offer. that deal is ongoing. is lower.ery for retailing. the names are rallying. , itof the earlier gainers was up by 4.4%. it is giving back quite a bit of that, leading the weaker consumer stocks listed in sydney. blackmores is another one. selling on the back of chinese demand for australian health care. and a much better picture when it comes to the miners. one of the leading gainers on the sx. gold prices are stable but they have had quite a year outing of
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the five-year lows. demand among all the fear feeding itself. rio tinto, the production report out as well today. bying off the earlier losses .2 of 1%. quick look at how the currencies are sitting. we are seeing stabilization when it comes to the commodities related currencies. lenny -- thenadian canadian loonie coming off those lows. we did have continued weakness when it comes to commodities. at $29, oil trading still under the $30 a barrel mark. that weakness continues but it does not seem to be the oil story. these are on china and as long as we do not get too much of a downside. getting to that data,
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it is not just gdp. steve: the chinese leadership is talking down expectations ahead of that key economic data dump as you put it this morning including fourth-quarter and full-year gdp numbers, both expected by economists, the medium forecast is for that to come in at 6.9% as well as the full year of 2014. that would be the slowest case of for your growth into an f decades. the premier saying the economy is under increasing downward pressure and both li and xi jinping are vowing reforms. also the developing of new economic try verse to fuel what they have said is their goal and that is medium to high pace of growth. xi said china must push forward --ates apply side reforms
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push forward supply side reforms. peedreconfirming the two-s economy. like a -- likely weakening in december. and also at the slowest pace growth.00 and 2% the consumption story continues as retail sales are expected to have seen the fastest rise in 12 months in december at 11.3%. as china's stock market entered another bear market we are watching closely reports the head of the securities regulator in china may have offered to resign. reuters reporting he offered to step down as chairman but the c fsrc denied that report. he has been critical of the regulators' ability to oversee the market turmoil that last year saw wild roman bust swing.
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-- a wild boom and bust swing. critical of a talent shortage at the cfr see. -- csrc. rishaad: thanks. at thatbe looking through the course of the program. numbers coming out and 53 minutes from now. travelers may be one of the big winners for oils 12 year low. some have dumped fuel surcharges. the decadesye to where high jet fuel costs added more than $500 to the price of a round-trip ticket to the u.s. or europe. words,anks to two singapore kerosene. the price is currently below the
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minimum level for adding surcharges. the threshold that was set by ana and japan airlines. we are seeing a bit of a bump today but we have seen the one-month contract down close to 44% on that kerosene price. these oninated the flights originating from overseas in december and it is expected to do the same with plates from japan starting next month. japan airlines dropped fuel surcharges. the airlinesg are cutting fuel surcharges ascease. but expect a pop in supply from china's slowdown. they are playing catch-up. creating operators -- operators and budget carriers, they have dropped fuel surcharges. qantas also began folding the surcharge into its base ticket place a year ago. adding that international fares would not change as a result.
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a welcome sign for travelers f fuel prices could give a boost to our wallets. haven inlooking at a the currency world. >> not surprising the japanese currency has become popular as a safe haven selloff. mr. yen will not gain enough to hurt the country's exporters. whens given the nickname he oversaw currency policy in the 1990's. he says there is a high probability the yen will shift to a range between the -- 110 and 115 per dollar by the second half. he says that as long as the yen does not break 100, it will not be a problem adding that if it is at what hundred five or 110,
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japanese exporters will still be highly competitive. use clashed with another former finance official who said the yen strength beyond 110 per dollar might be problematic. the bank of japan says that japanese manufacturers assumed ¥118 per dollar for their business plans on average in the six months through march. the commodities rout is taking its toll on the world's second largest iron ore exporter. it will increase to 350 million weaker prices and the market glut. this is down from the 11% expansion in 2015. the company will freeze salaries for this year and limit travel expenditures to help weather the rout. and fell lastunk
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month to the lowest in daily prices since 2009. analysts say rio tinto is output back -- the cutting back is good news. it will continue to put pressure on iron ore prices this year. other top suppliers including bhp are continuing to raise output as well. carmakers are stepping up their game as tech firms such as apple vie for a piece of the industry. they're doing everything from finding a nearby restaurant with free tables to booking seats and finding the best route there. a connectedsays service will be available in the next two months. the system will include applications such as home heating remote control. carmakers are under pressure to develop digital features through
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retaining customers as, gas companies such as apple and entering theer automobile industry with connected vehicles. mobile to medications is in a new business opportunity with revenue from connectivity components estimated at $196 billion by the year 2020. back to you. rishaad: we are at what is preventing drones from taking over. coming up later on the show. the rise of the robots. they may take our jobs. we will stick around to find out. 2008 -- remember 2008. market volatility is not nearly as bad. right after this. ♪
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rishaad: 45 minutes before get the china crucial gdp number. you are probably saying markets bottomed out. you for coming in. last time you were on this program was three years ago. how much has the world changed in your view in that time? guest: we are saying progress when we look at the u.s., it is kind of a self-propelled growth. we are seeing in the meantime europe coming out of the doldrums. three years ago we were talking about debt prices. goodurope is at a very point. that is the rice of interest. we have to do with that. action.eeing the policy it has led to a strong basis for consumption. that will probably save the
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world in the months ahead. .ishaad: that is a hope let me ask you something here. we get this number, the tea figure. we have markets which have been weeks of the first two january. what kind of number here, i am sure that whatever number this is no one will believe it anyway but is there a line in the sand? guest: what is important is we have driving forces in china that are propelling the changes toward the service economy. we are -- we know that they are in an industry recession. the important element is behind what is in the numbers. it is what is in the chinese economy that is important. the number itself is a must irrelevant. rishaad: everyone says we are moving toward a service east economy -- based economy. it will be a painful process. guest: the piece of the action
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where the investor should consent -- concern trade is where there is stimulus from the chinese. telecom railways and and also airspace. that is the area that should benefit. and also the consumer. the consumer is doing fine in china. is part of the problem we have had, what is going on with the currency. just getting this breaking news coming in. 6.5 against the dollar. what is more important is they are injecting 80 billion yuan. and that is injecting liquidity into this market. is aiming toity
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stabilize. stabilizing oil and other two key factors for the big picture. we see the cards falling in place. volatility should come down if you look at the next -- the vix. rishaad: you bring the other leg here. th other toe drop was oil. you said there was not stability. there are loyal -- lower oil prices. guest: the consumer is enjoying the low oil prices and th energye consumers. it is good for the overall system. also we could aim for some form of stabilization because we are at the early age for the winter and we are seeing a very mild winter. also a negative impact on oil. the position on iran is it has been announced that it will come
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progressively into the game. most important will be the next opec meeting. probably it will be a very different picture than what we saw in december. have theypec has -- been making themselves irrelevant? guest: they are never irrelevant. seen oil prices getting down like this, the incentives to cheat become huge. guest: that is for sure but there is the strategy and the adding to there strategy are the people that can turn the market. rishaad: you said the investment landscape is changing. you do not think the bond market is one that should be looked at given the liquidity which you say is no longer cyclical. it is structural. guest: it is part of the market have it now.
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that.ors can benefit from in the low investment grade segments, illiquidity is an issue but you can catch a very interesting yield at weak moments as well. also liquidity is a double sword anyway. rishaad: trying to get rid of the bond at the end of the day, [indiscernible] .hat is has rebuffed a rare attack from the u.s. as president obama's envoy question settlement policies and its commitment to the rule of law. washington was concerned that israel's strategy of building in the west bank and its restriction of palestinian economic development. prime minister benjamin netanyahu said the comments were inappropriate. >> too many attacks on palestinians, lack of vigorous investigation, too much vigilantism goes unchecked and there seem to be two standards of adherence to rule of law, one
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for israelis and one for palestinians. >> 33 people are killed from attacks. most were police officers along with rebels they support. 30 people may be trapped in the rubble. the saudi arabian sunni led --lition began a talking attacking the hood sees and their supporters in support of recognizedtionally government. and mourning the loss of another headline act. the eagles' cofounder len fry has died from competitions of ammonia and other ailments. frye formed the eagles and theirmily posted
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acknowledgment for what he has given them and millions of fans. rishaad: up next, a new challenger emerging in tech. more on the changing direction for venture capital. "trending business" continues right after this. ♪
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" right now.siness venture capitalists pouring billions into mainland startups. what drove this boom in 2015? >> there is opportunity. more peoplertainly
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making startups. the other thing is alibaba showed that you can make big money off of chinese tech area the world's largest ipo. he saw the domestic stock markets until summer. that drove a lot of interest in the chinese tech industry. rishaad: the boom was felt everywhere. unicorn has come along. last year was a boom worldwide. $136 billion globally. everything you had a record number of privately held companies worth $1 billion or more. the weird ring as well you have so much money going to the private sector you will see exiting of ipos. we had a record amount of money going in and you have the lowest number of access since 2008. rishaad: but we have witnessed with market gyrations and currently is it may be the
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result of some of these venture capitalists. >> that remains to be seen. vc guys have a longer outlook. getexpectation is they will multiple 100 x. the vc might have that outlook but the people investing in vc might not. s.\t are the lp' will they have an appetite for current -- continued risk? they are optimistic. they see continued strength. i spoke to a handful of guys. there have been a number of startups that have imploded because funding is running out. the picture is unclear because there is a different set of forces happening. searching for the
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bottom. oil seeing a no and to the slide as iran reenters the market. konghe shanghai and hong market open ahead. the growth number we are seeing out of china.
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water ahead ofng key economic ada in about an hour. japanese analyst really equities remain on the edge of their market. regional benchmark down almost 10% this year. analysts seeing no early and to this current volatility. the chinese premier admitting the economy is under pressure,
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increasing pressure ahead of growth figures. gdp of 6.9% is expected for the final quarter of the year, in line with the stated target. that is about half an hour away. -- crashing crude prices. non-opec production will fall by 660,000 barrels a day as it usa of producers will be the worst hit. opec also acknowledging they are over supplying markets. a day when we are going to start off fairly light with light move towards this avalanche of data coming out at the top of the hour. haidi: markets are treading water. everything could change. we are seeing a sense of stability and calm ahead of that
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data dump. trading earlier in the red and they are now treating in the green. one of the most heavily exposed economies when it comes to how the china slowdown is a managed. data, but also industrial production and retail sales will give us a better idea of the demand going forward. australian exports not just commodities. have the chinao open trading under way. flat atading is pretty the moment despite the rally yesterday. hong kong, about .4 of 1%. southeast asia, the philippines are coming online coming back after yesterday's hefty losses. swings andn big roundabouts all morning. i suspect we will see more stability at the data drum -- data dump comes from china.
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for the mainland markets, we are seeing a mixed picture. -- real estate property development component. on the back of the recovery or stabilization in rubber deep races across china's eddie's. weakness across the health care and tech stocks. continue to be beaten down. let us take a quick look at some of the movers in the asian session. today but this is the biggest gain in six months. is also up on reports that the investment fund in japan could be upping its offer to be out a competitor's offer. that is up by 2.5%. kirin brewery a little bit lower based on expectations.
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in ulster rally up, we saw the consumer stocks gaining yesterday. they are giving back a lot of his advances today. is all about gdp and the economy in china looking like it is under increasing pressure for the time being. the premier has even been talking about it. -- joined by deep angle steve angle. theyou see anything on streets that would give you an idea of where the economy is? getting am kind of bit of a better picture that yes -- some companies are under pressure. in previous trips to the mainland, you still got a sense of optimism. rishaad: it is good to go away and come back and get a snapshot. steve: we are seeing some concerns that this may be prolonged.
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the leadership team, the premier and the president talking down and ratcheting down expectations as they usually do before it this data dump. gdp for the fourth quarter. they are bowing for the reform and the development of new economic drivers. they need to fulfill their promise which is medium to high level growth, no less than 6.5% for the full year. what we are expecting is 6.9% in the fourth order and for the full year and that is still below the psychological 7% level. it would be the slowest pace of since 1990. we talked earlier this morning to andrew sean -- sheung. he is a chief advisor to the banking regulator and he said we need to be -- we need to put this slowdown in perspective. >> china is slowing and it is understandable because the $10.3 trillion economy.
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it will grow somewhere between 6%, just slightly south of 7% which will be adding to an hundred billion dollars to the world economy. that is the size of switzerland. you are adding an economy of switzerland to the global economy. that was the amount the united states poured into rescue the banking system. a doom and gloom story. run through the other data we will get. industrial production, factory output expected to be down to about 6% growth. development,urban a down to 10.2%. the slowest pace since december 2000. the economy will be represented in retail sales which we expect to be at a 12 month high, 11.3%
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in december. rishaad: 24 minutes to go until the data dump. if they are on time for a quick word about the market regulator. there has been a lot of pressure. with theuters came out report that he had offered to resign and his -- over his critical remarks regarding the capability of the csrc. he talked about enough to do, loopholes, talent shortage to cope with the open market. however, the csrc came out last night through social media in china saying the report from reuters is not true. there is still a lot of uncertainty as to whether he offered to quit. onhaad: quickly checking some of the other stories. companylargest chemical expanding into energy despite the resource long. -- thisa buying a 12%
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deal was first reported. the western investments included are really -- perelli. and syngenta. it could be the biggest ever acquisition by a chinese company. south koreans still expecting to is still- posco expected to post is lost. excess applied by chinese mills and weak demand. posco shares in new york, no insult sharing -- trading at 1.5% down so far. rapidly shrinking industrial base in china. south wales will bear the brunt of the loss. tata announced the closure and the loss of 1200 jobs.
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let us have a look at crude oil. 12 year lows and the supply glut shows no sign of drying up anytime soon. -- tell us aing bit more about this opec report. it is a most like they are bribing -- rubbing their hands with glee. the country that it is specifically targeting, the u.s. the interesting thing was that they mentioned themselves they were over supplying the world by no commentary on iran and what that means for the market but if you cast your mind back to last year, there was a point where some in the market were saying $60 a barrel oil is where shale would crack and it has not. it has proved to be resilient.
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oil has dropped below $30. supply is slipping. keep your eye on that one. rishaad: let us take a look at that. 600,000 -- iran makes up for that and more. >> only yesterday, the oil ministry in iran issued orders to start pumping. to lift that right to 500,000 barrels a day. thefirst errol from iran -- first barrels from iran are stored are in takers. -- tankers. the problem for iran is the price. they have a price problem. ist they need to be offering incentives to get those barrels into refineries. that is what we are hearing from refineries, as ashley in asia.
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since iran, before sanctions were identified -- intensify. barrels have come off the market and refineries have turned to change their configuration in order to get those barrels back into the market. having a look at what is going on in the oil market. let us have a look at how this is playing out. it is getting a lot of traction and reaction on social media. shery: what is trending right now is what cost more than a barrel of oil given that oil is around $29 a barrel. it is not hard to find some items on that list but you would be surprised at what is making that list right now. is saying on twitter a barrel of crude is three times cheaper than he's deal drum -- a steel drum to put it in.
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on facebook, another person saying -- a barrel of oil used to get you an hour of's in the four seasons in new york and now it gets you only an hour tie -- thai massage in bangkok. just for fun, take a look at this list of things that would cost you more per barrel petrol size. printer ink. $800,000. if you use perfume, mark jacobs much more expensive then spring oil on your self. when $20,000 a barrel. catch up is also more expensive than oil at $46 a barrel. ketsup. up --
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talking about how this will affect them directly as consumers at the pumps. one person on facebook saying that he does not expect the benefits of oil's collapse to be too large or as large as many expect. the reduction of pump prices, there are other components. for an increase in pump prices, the oil price is the other -- the only component. a lot of people are talking about oil collapse. we are looking at china's one belt, one road initiative. what does it mean for business in this part of the world and how particular can places like hong kong and singapore benefit. we go more when trending business returns. ♪
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some storiesing making headlines. hong kong police say they have received a letter from a
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security agency about one of the cities missing booksellers. he disappeared last month and his wife said he was assisting an investigation on the line china. the daughter told the guardian that her father was abducted while on holiday in thailand. he appeared on state television handed himself into to police over a drunk driving incident. joint venture it new in 2013 that a dam at its iron ore mine was at risk of bursting. from more than two years ago warning about safety. the dam collapsed in november killings haven't seen people and polluting hundreds of bloggers up waterways. brazil is suing bhp and his partner for $5 billion and has indicted both companies and seven staff on criminal charges. ceremony has come
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under criticism for nominating only white actors. spike lee is boycotting the event. it is not clear if they had any impact, but the viewing figures l 60% to eight with your low. the organizers have declined to comment. rishaad: as we await that big data from china, let us get you back to the coverage of the asian financial form. david: absolutely. datanutes left until the dump kerry one of the things that is expected to show are lawe widely --, is that the of mathematics still apply to china. it cannot be growing at exponential speeds forever. joining me right now is someone
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who has covered china for 15 years in various atrocities. cap inou -- in very us various capacities. >> the economy has changed fundamentally and that partially explains the slowdown in growth. reliesnomy increasingly -- david: it is hard to measure. >> especially when the productivity gains are coming from the services sector which is tough for any country to measure. number thaty get a is soft, 6.9% or lower. there are some parts of china that are still growing, maybe even double digits. matters from a
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commercial perspective. you have almost a 10% percent -- cap between the fast and slowest parts of the country. which part of the country are you operating in or investing in. , youu are in the southeast may be still enjoying some robust or threes. -- growth rates. bigger -- there is no way the country can export its spare capacity to the rest of the region. generatedts will be eyes single companies, leading construction companies railway companies. there may be an impact on stock performance that it will not support gdp growth from slowing below the 6% growth rate. -- youeuro saying it is are saying it is too ambitious.
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he seemed very excited. about this last week looking at the number of times he mentioned it during his policy speech. how does hong kong fit into this? >> it is an intermediary. we have real capabilities to offer. the point is that there is a lot of talk about what we can offer in posix down. that is missing the point. -- in kazakhstan. we have real strength in other markets. they are significantly bigger than entire regions whether that is central asia or eastern africa. we have to look closer to home. david: what are we looking at? if i am an investor, how do i benefit from this? perhaps we are looking more at fortune 500 companies.
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on the big global market. they are most likely to benefit from this strategy. regional opportunities. are they thinking about asia or south asia or the middle east. and how they cap those linkages between countries. and it may perhaps take several years, but you mentioned earlier that there may be a portion of this meant for china to export some of that excess or overcome out -- overcapacity. do you think this is meant to solve some of those problems? is an anticipation that it will but the reality is that it will not. manufacturers have said that they do not want to just produce products for a multinational, i want to be the brand owner myself.
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these are the sorts of companies we should be excited about because we are talking about the markets that account for two thirds of the world's population and china's emerging champions have an opportunity to make significant amounts of money. david: put your economist hat back on. very quickly, 6% this year. is that aspeaking, growth target china can reach with a minimum amount of -- of effort? >> it is but again growth gaps are widening. and we talk about the 6% figure, only small parts of the country will be holding growth together as other parts begin to slow down significantly. but we need, fine to see some serious reform to sustain growth. david: that is all we have time for. thanks for joining us. founder of silk road associates.
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counting down to the numbers. we are running after that huge data point. set -- we take a look at the future, the future of robotics, next. ♪
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rishaad: "trending business" coming to you live from hong kong. we have research from the world economic for an saying developments in robotics and genetics will mean the loss of some 5 million jobs by the end of the decade. uefa saysrom the developments in these fields could really start to kick in very shortly. the futurealled -- of jobs and surveyed some 15 economies across the country covering 65% of the global work horse. many jobs will be created but
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many more will be lost. it blurs the lines between sectors, resulting in a fourth industrial revolution. this is a humanoid and could eventually work on the front line in dangerous places where humans cannot go. ♪ drc hubo. he can things where the human being cannot go.
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in 10 years, and 20 years, he can do everything in mars or in other dangerous dangerous places. we expect he will do well for us. towards we are moving the avalanche of data out of china. let us take a look at what is going on with markets now. the shanghai composite is still below the psychologically important 3000 level. kong, also moving to the offside.
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the nikkei 225 is also moving to the upside by .25 of 1%. gdp of courses to come out at the top of the hour. looking at retail sales will reflect what is going on with the consumer as well as industrial production. positive if not what we would we haveen with volume, china's 2015 growth next. ♪
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rishaad: this is "trending business". growth numbers. out of china. they are due out any minute. we are watching the opec countries forecasting more pain
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for the industry. non-cartel rivals will cut oil output this year. says american shale producers will suffer the most oft trending water ahead those. early declines are being erased. we are flirting with only the second game in 2016. -- second gain in 2016. we are art expecting to see the confirmation of the slowest growth in 20 years. follow me on twitter. do we have this breaking news or not? steve: the numbers are worse than expected. 6.8% gdp growth year-over-year in the fourth quarter for the chinese economy. we were expecting 6.9%. quarter,ver sequentially, also
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understandably a little bit below expectations. 1.6% quarter over order. we were expecting 1.8. 6.9% gdp growth for the full year in 2015 for china is an conference what we have already known, the slowest pace of growth since 1990. when china was going through a lot of industrial restructuring especially in the industrialized northeast. december numbers were also below estimates forecasted. production, december year-over-year coming in at 5.9%. we were expecting 6%. fixed asset, urban investment coming year to date year-over-year number, 10%. we were expecting 10.2%. retail sales below expectations. we were expecting a 12 month high of 11.3%. they came in at 11.1%. gdp in the fourth quarter, the headline, explain 8%. my calculations tell me that
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fourth order, that would be the slowest paced of quarterly growth since the first quarter of 2009. that is when china and the rest of the world was grappling with the outbreaks of the financial crisis. getting reaction from the markets. haid: we are getting a little bit of reaction particularly when it comes to the chinese sensitive markets like australia and new zealand. fewness in those first countries after the news broke. chinese gdp and domestic indicators just missing the mark. not by a lot though. the fx is still up by .601%. .6 of 1%. shanghai holding steady at .4 of 1%. mainland markets do not tend to be economically driven.
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southeast asia, malaysia is flat. singapore up by .4 of 1%. a bit of a measured response when it comes to the equities seen here in asia. we have had a few days of a pretty horrible selloff happening. looking at currencies. the aussie, a little bit of weakness when it comes to the aussie dollar. we had data release. i want to check in on how the yuan is doing. the pboc setting that daily fix. trajectory of stable -- a little weakness for offshore trading. down by .1 of 1%. i will hand it back to you for some more analysis of these numbers in china. chief of the china
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economist is here from j.p. morgan. what is your reaction? --the first quarter numbers the fourth quarter numbers are not that surprising. we are a bit lower. -- don'tain reasons forget the financial service sector, it has been coming down with a stock market crash. that is an additional part. second, the bigger question is still on the investment side and recentin november policy support but december, raising the alarming sign that this is not sustainable and the impact was still modest. rishaad: what about the other data? retail sales. industrial production. ip --you compare to the
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it is still more resilient. auto data also came out very strong. 70% higher than the same. 17 percent higher than the same period yet -- last year. for this year, the big question for the government is overcapacity or reduction is the number one economic task. how to manage the growth side. rishaad: is it time they stop targeting growth? they say the number is a good thing to see the trajectory as a guide. they thought it would be around 7%. we got around that. the only country in the world when they tell us at the beginning of the year what their growth target is and it is the same at the end of the year. that is probably easier to support the economic restructuring and tone down the
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emphasis on the gdp gross number. rishaad: it also causes other problems. some people end up needing to cheat. across theetition province to some extent is the feature of china's high-growth story. incentives from local government officials. at this stage, your multiple targets and you want to tone the that growth is not single most important target. you have the environment, equality and other targets. if you keep on stating the gross target and with limited range, that will put a lot of restriction and constraint on the actual policy. risks thisat are the year? wise, itselloff equity could be that people are very not just about the
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global economy but also about the chinese economy. maybe they are seeing things that we do not outside. >> we have different sources saying -- the fed rate hike and the pace of the hike and what is the implication on the global currency market. risks are also coming from the chinese market. the financial market included. the government talks about the overcapacity reduction, the traditional sector and investment activity will continue. where do you bring news sources to stabilize the economy and avoid unemployment problems. at theancial market beginning of the year, we only see china's currency market and the stock market has a global impact. mistake or poor
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communications, this could become a source of unrest in the global markets. rishaad: the service side of the economy is doing well. it is the manufacturing side which has not been holding up even though today's numbers were in line. what happens if we see a lot of job losses taking place in manufacturing? many people are suggesting that needs to happen. happens, there is a spillover affect that could take place when it comes to the other side. the service side. >> you talk about overcapacity reduction. off the redundant workforce. unemployment in the shouldturing sector increase. that is part of the story. i don't worry that much. what the government can do is provide more fiscal support. the retraining of the working, and help people to find a new job.
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have -- reasons why we if you look at the labor market condition, china no longer sees endless supplies. the population is shrinking and the -- and there is no longer an oversupply. if you look at the overall size, the manufacturing sector, employment is not that big. the service sector has been creating all of the new jobs in 2015. encouragings is all but it is also an economy that many people have been concerned about. reliant oney are too housing and increased housing prices. that seems to have receded. >> we do have concerns. the market has different views. some say if you look at housing transaction and housing prices, they keep moving up especially in the tijuana's cities.
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inl that cause a rebounding real estate investment? we think the answer is no. the smaller cities, if you look not haveice, we do significant rebounds. and commercial real estate. especially in the tier two and tier three cities. rishaad: these has so much construction. market, theential problem is oversupply. don't forget, tier three and tier four cities account for more than 50% of the market. rishaad: it is staggering when you look at the figures. one bit we have not touched upon is the target, of the currency as well. to 2015, look back whichsly, the dollar peg was adopted last year causing a
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lot of problems. it caused a lot of pressure on the best spot. -- s spot. the more flexible exchange rate to correct for these cumulative errors that we have seen in the last 12 i couldn't 18 months. 12-18 months. the more flexible exchange rate regime will help china avoid repeating the same mistakes. rishaad: how far is china a victim of its own success or a victim of what is going on globally speaking? >> if you look at the current situation, it is a more dominant problem. we have seen the overcapacity problem. rishaad: 46 months of the pmi number or the ppi number being negative.
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negative to quite a big extent. probably take a longer time to adjust for this problem. back to the question we talked about including -- in terms of gross target. china should be getting used to these normal business cycles. china is used to the expansion story and now is the time to slow down and focus on the quality and the structure of the country. economy it is a command at the end of the day. be all over this story through the course of the program. we want your opinion. please use that #. coming up, we are looking at -- forget about silicon valley. withng is booming innovation. we will find out why venture capital firms are racing to put their money into china. china's developers going off the beaten path to world a growing
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middle class. we will get a special report from the border with north korea. ♪\
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we're back with "trending business". travelers may be one of the big winners from oils 12 year lows. they are going to dump their fuel surcharges. they are not the only ones but it is quite extraordinary how long these fuel surcharges have been in place. tonne: we talk about goodbye the days or decades where we have seen these high jet fuel costs adding $500 to a round-trip ticket to the u.s. or europe. that peoplething are talking about which is singapore kerosene. look at the price of that. analysts say the price is
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currently below the minimum level for adding surcharges. this is a one month contract around $35. it has fallen more than 40% in the last year. the threshold set by ana and japan airlines. the two-month average, fuel price falls below ¥6,000 or $51 for a flight from japan so there is no fuel charge. below $60 for flights originating elsewhere. do the math if you want to see -- if you want to get more bang for your buck. also, you talk about these airlines eliminating the ease on like originating over his these in december. ana is going to do the same with flights from japan starting next month. japan airlines did the same thing regarding flights out of japan and it is now reviewing the fees. inse surcharges introduced 2005, that peaked around 2008. that is when we saw jet oil
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prices at $145. we are far from those levels now. asia, they have already gotten rid of their surcharges. if i am not mistaken, some south korean places as well. unadjustedth korea it based on the international price of crude. we are expecting to see this in supply from the china slowdown as well as i ran coming back online now that sanctions have been lifted. south korea was one of the first to do so. the budget airlines as well. qantas started folding the ticketges into their price. a welcome sign for travelers as we see these oil prices drop. one of the few benefits. this could be a boost for earnings. rishaad: thank you very much. let us talk about some of the
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other stories. more as we have a look at what is going on. to some extent the story is about the yen. currency haspanese again become popular as a safe haven. that is surprising due to the recent market selloff. mr. yen says it will not gain enough to hurt exporters. the former vice finance minister earned the nickname with the currently policy in the 1990's. a high probability that the yen all shift to 110-115 to dollar by the second half. as long as it does not break 100 it will not be a problem. 110, japanese exporters will still be highly competitive. with anothersh former finance minister official he says, yen strength beyond what hundred 10 or dollar might
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be problematic. the bank of japan says deputies manufacturers assumed 118 yen per dollar for their business plans on average in the six months through march. you would think that oils collapse would be great for consumers but this is not always the case. analysts are saying that the biggest losers from current low prices are chinese consumers. chinaay that is because is subsidizing oil companies shielding oil drillers and producers from the global price collapse. retail fuel prices across china are regularly adjusted to butect crudes fluctuations the government has suspended further cuts. that profit is being funneled into a fund to promote energy conservation, reduced pollution and improved fuel quality. the country's top economic planner says the benefit of oils pressure starts at $40 a barrel
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for chinese consumers. carmakers are stepping up their game as tech firms such as apple vie forle bie for up -- a piece of their industry. bmw is launching a digital helper. and now finding the best route to their destination. the company says a cloud-based bmw connected service will be available in the next few months. it will include applications such as home heating remote control. a look atet us have some of those stories making headlines around the world. -- itsrael rebuffing settlements policy and his commitment to the world of law. ambassador danny schapiro says israel's strategy in holding the west bank and restriction of
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economic development in palestinian areas. prime minister net-net -- netanyahu says the comments or inappropriate. airstrikes in the capital of yemen have a number of victims. said about 30ials people may be trapped in the rubble. a coalition led the attacks against the houthis last march. as well as the supporters of the internationally recognized government. oscars are coming under fire for only nominating white actors. spike lee is boycotting the event after a second year following the all white list. 16% towing figures fell a six-year low. the oscars organizers had declined to comment. next, oil under pressure again as iran opens up the tabs to exports.
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we look at opec's forecast when we return. ♪
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crude oil remains at its 12 years low. the glut is showing no signs of drying up. all despite opec's latest resort -- report. bloomberg news analyst is with us. it is almost like they are willing the market to do something. ben: when they think -- speak about those nation a are speaking specifically about canada and the u.s. they are targeting them in their efforts to keep their market share by keeping the foot on the pedal when it comes to the pumps or oil production. rishaad: 660,000 barrels a day.
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that is what they are targeting from the u.s. and canada. they are talking about themselves producing more than 600,000 barrels or than the market needs at the moment. they made no mention of iran in that report. iran -- they are lifting their output by 500,000 barrels a day. the other interesting thing is that -- $60 a barrel last year where they the point would crumble. production though is resilient. rishaad: let us talk about iran. what are the challenges facing them? there is a massive problem of investment there. they have had a lot of time in which to talk to producers and those oil companies that can help them out. the biggest problem is price, low price in getting back into the market. some refineries are saying they
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will have to offer incentives to get back into the market. in 2012, when they were the second-biggest producer in opec, that is when they had a hold on the market but now, we are finding configurations have changed and those that want to buy the crude, they have an incentive. thank you very much. looking at the oil market. oil is also trending on social media. everything that cost more than a barrel of oil is trending on social media. take a look at this. a barrel of of uti crude is three times cheaper than a steel drum to put it in. another person is talking about crude oil, it is cheaper than walmart's cheapest value brand drinking water. someone else is saying that a barrel of oil would cost an hour
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massage from bangkok. a lot of things that are now more expensive than oil including human blood by the barrel. $60,000. rishaad: up next, china's economy growing at the slowest pace since 2009 is a cause of concern. we will try to answer that next ♪
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♪ rishaad: they look at our top stories. china figures coming in below expectations or the last quarter . gdp rising 6.8%. the economy expanding 6.9% for the year as a whole, the slowest since 1990. it signals further stimulus may be needed after a record year that saw the u.n. valuation plunging, and the $5 trillion stock market rout.
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a crash in crude prices hits canada in the -- and the u.s. in particular. by-opec production will fall $660,000 -- 660,000 barrels a day. the man they call mr. yen says that japan's currency probably will not gain enough to hurt exporters. between 110 and 115 by the second half. all right. let's have a look at what is going on. let's have a look at that china data and how investors have digested all that news. >> a lot to get through. overall, we are seeing sentiment a little bit negative as
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investors digested the details of that china data, which was a miss, bit of a mess -- though not as bad as some china bears had been expecting. as a lunchtime, down by .7%. a number of these china-exposed stocks,consumer electronics, exporters, seeing quite a lot of weakness. shanghai is still pretty flat at the moment. it also gave back some of those earlier gains, perhaps not faring as badly as the rest of the region. we did get some lines from the mbs saying that the sector will continue to sort out its issues when it comes to overcapacity and these companies will face somewhat of a downward spiral
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into 2016 and their are deleveraging issues. international situation, the volatility, the slowdown, does not make it easier for policymakers in china. a bit of weakness coming through from southwest asia. jakarta off its session highs. the tsx still -- asx still up by .3%. the aussie dollar has been rebounding from seven-year lows over the past week. a bit of weakness when it comes to the yuan as well. just marginally weaker today. nothing to write home about, but we are seeing the u.n. off by about .2%. off by about .2%.
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rishaad: what are people making of this? they have had a bit of time to reflect. >> the quarterly number was a soft number no matter which way you look at it. it has slowed -- it is the lowest since the first quarter of 2009. we are going back to the global financial crisis. 1990 was widely-anticipated. it shows you that this transition that we talk about going on in china's economy is going to take a while and cause a bit of pain along the way. oldoleeing left by the growth drivers just is not being filled. in china,e woes retail sales doing well. $1.5 trillion was wiped off the
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stock market. the question is, what is next? we look at what is going on equity-wise. people say there is a correlation between the fundamentals and the economy. ,erhaps they are seeing things that not necessarily other people are. enda: there is a disconnect between what is happening on the stock market versus the real economy. you cannot totally negate the impact it has on sentiment. when you have the negative , it isnt hanging over bound to have some kind of global effect, whether it is at the corporate level or investment level. we cannot discount it altogether. that said, as we head into 2016, analysts were pointing to some signs of stabilization. they were showing a pickup in the amount of loans in december, for example, perhaps hinting that they are starting to get
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traction. we saw house prices doing ok. while there is overcapacity and the manufacturing overhang, there are signs that the market and economy is stabilizing. debt.d: but do not forget there is a huge amount of debt. have it as high as 300% of gdp. enda: it is the elephant in the corner and lost in all the noise about the stock market. the debt that was created from stimulus in the 2008 crisis, that is constraining policymakers. they want to do more to stoke growth, but they cannot pile in more spending or leverage because they realize that would only make the problem worse. it is narrowing their options. sector, the debt is a major drag on growth. thank you very much indeed.
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let's check on the other stories we are following for you. a china securities regulator denying a report that its chairman opted to resign last week. ,he report coming from reuters saying that it was not clear whether the government had accepted his offer to step down. flawsently acknowledged and loopholes within the regulatory system following the turmoil in the chinese market. china's biggest chemical company expanding into energy. in mercuria.stake it does add to their western investment. buy are also in talks to syngenta. if that went through, it would be the biggest-ever acquisition by a chinese company. companyh korean soup expected to post its first-ever annual loss today.
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demand behind the anticipated reverse. shares are falling 1.2%. cutting more than 1000 british jobs in the latest blow to the u.k.'s rapidly-shrinking industrial base. south wales will bear the brunt. they announced a closure of their plant in the northeast and the loss of some 12,000 jobs. china is producing about half of the world steel and they are selling cheaply overseas. says it is changing its output target because of the global glut in iron or. let's get more from this as we head over to david stringer. o telling us about production plans going forward? are they the first ones to blink after going nuts, producing as
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much as they could? tinto telling us their production from 2016 and forecasting out to the coming year, production rose about 11% in 2015 and while it will rise this year, it will be at a slower pace. they are forecasting it will rise about 7% in 2016. that is similar to the reduction in the case of spansion from bhp , their competitor. those companies slowing the pace of expansion. of course, they are still expanding. they are still putting more iron ore into the market. we have seen rices klein and that -- we have seen prices climb and they are betting lower costs to help them squeeze out competitors, whether in chinese domestic mines or higher-cost rivals in australia.
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they are betting they can win a larger share of china imports with their low-cost product. rishaad: what are people telling you here? what about the outlook and it comes to iron ore prices? david: sure. we have seen the price of iron ore decline around 75% from its people in 2011 -- from its peak in 2011. we are not seeing any indication of that stopping in a meaningful sense. citigroup said last week that they see iron ore possibly trading below $30 a ton. the weaker chinese gdp figures have not done anything to reassure people that there will be any growth in demand from china, where we are seeing steel production falter. rishaad: what did rio say when it comes to its copper business? ast shifting commodities for
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second. david: copper a key part of their strategy. as the iron ore by him stabilizes, they are looking increasingly to copper as a source of growth. from theproduction copper division rising as much as 24% this year. it has been constrained the past couple of years by declining afterin south america and one of its mines in the u.s. suffered a wall failure in april of 2013. you might remember those dramatic photos. they are saying they expect a recovery there and they will be winning a share of reduction from the joint venture with report -- freeport. rishaad: david stringer looking at what is going on with those miners in australia. we are looking at the legality
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of drones in india. that is at bloomberg.com. have a look at that. up next, should china rival the to discover the next major startup? the money trail seems to think so. find out why next. ♪
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>> welcome back. these are the stories making headlines around the world. hong kong police say they have received a letter about one of the missing booksellers. he disappeared last month and his wife later said he was assisting an investigation in mainland china. the daughter of his business partner has told "the guardian" her father was abducted in thailand. he appeared on state television over the weekend saying he handed himself in to chinese police over a drunk driving
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incident. a brazilian tv report says bhp venture, a damt was at risk of bursting. documents from two years ago worried about safety. it killed 17 people in november and polluted hundreds of kilometers of waterways. bhp and his partner are being sued for $5 billion. the music world is mourning the loss of another star. the eagles cofounder glenn frey has died at the age of 67 after complications from pneumonia and other ailments. he formed the eagles with don and they wrote a string of hits before splitting up and performing. in a post on his website, his
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family, bandmates, and management, express their sorrow and love for what he has given them. frey dead at the age of 67. china is emerging as a legitimate challenger to u.s. leadership of the technology industry. $37 billion in mainland startups last year, more than double the previous year. what was behind the boom last year? >> a lot of interest in chinese startups because there is a lot to be made in the exit. the alibaba ipo, you can find the winners in the chinese market. the e-commerce numbers in china are mouthwatering. from $4 billion to $15 billion to $37 billion. rishaad: we have seen this boom
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continue elsewhere and the growth of so many companies. shai: exactly. there has been a boom globally last year with the highest amount on record, about $136 billion. unicorns, companies worth $1 billion or more, were at 140. last year also saw the lowest number of exits of ipo's or sales in the tech sector since the financial crisis. there is concern that there may be a bubble forming, a mismatch between the amount of money going in and that money coming out, so no returns from investors -- for investors. how do vc's respond to these wild gyrations? their timeline is much longer. shai: it depends on the ecosystem. guys who do funding of $100
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million are fine. they are looking at a 5-10-year timeframe. people coming in later, like if you are an investor in uber, which is a startup, but bigger than most companies on the stock market, they are looking for a much shorter time frame. the picture we are getting, there is some concern. vc's are saying they are pulling back on investment. that said, they have a lot of dry powder. i think they are looking for the companies that are sure bets. rishaad: there is no such thing as a sure bet at the end of the day. 2016, what does it hold? shai: some worries. last year was go, go, go. anyone holding an iphone could get funding, it seems. this year will be much more challenging for the entrepreneurs to get that funding. i think it will be wait and see for a little period. rishaad: thank you very much. let's take a look at what else is going on in the world.
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development in robotics, artificial intelligence, and genetics will create 5 million jobs by the end of the decade. the reporters -- the report calls it the future of jobs. it says some jobs will be created, but many more will be lost. demand will essentially mean a fourth industrial revolution. one of those jobs-stealing robots is strutting stuff in davos. he is a humanoid and could eventually work on the front line in dangerous places where humans cannot. ♪ >> his name is drc hubo. he is the latest version.
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tasks in dangerous ways that a human being cannot go. rishaad: coming up, we are going to be hitting the slopes of china's so-called powder
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paradise for some stocks of a different kind. that is when "trending business" returns. ♪
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rishaad: this is "trending business." china's rebalancing of the economy towards consumption is being taken to new heights in the countries far northeast. the country's first backcountry ski operation has just opened. engle strapped on his skis for an exclusive first time look. stephen: call it a backcountry bucket list must for this thrill and chill seeker. a north korean volcano in a -30 degrees deep-freeze. it is not often you can say you
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are skiing on the border between china and north korea, but that is what we're doing here. i guess it is a good thing that i can still feel pain in my toes, but they are on the border. is china'sradise first ski operation, meaning there are no chairlifts. you are taking up the mountain in a comfy, heated snocat. the backcountry here has close to one million square meters or 250 acres of skiable area. the top run starts at 2600 meters or 8500 feet at the summit and skirts the rim of the volcanic caldera. primarily a residential homebuilder is diversifying to meet the needs of a growing middle class.
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it is following the trail map of larger developers going into tourism. they built this more mass-market there is veryre, little skiing and some very odd rules, like closing down the mountain before closing down the gondola and chairlifts. we got stranded up top. >> there is a huge opportunity. the real estate industry needs to adopt a more sustainable model in order to boost profit and revenue. >> they are looking to offer the next level of experience to developing markets and the interest is growing. >> over 300 million people are expected to get into winter sports in some fashion. china industry is doing it in a fraction of the time. so there are growing pains. stephen: just like there are with the rebalancing of china's economy, which could go from highflying to hard landing in a
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flash. the economic chill would go down and have everyone flipping out. quickly, let's have a look at some of the other stories today. countries, companies, and individuals have been hit by the slump in oil. but he is not one of them. his net worth actually increased so far this year. that is the most on the bloomberg billionaires index. he is benefiting from cheap crude and margins at its refining complex. out with its results later today. china's biggest chemical company expanding into energy. reporting to buy a stake in mercuria.
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it is in talks to buy perelli a nd syngenta. if that goes ahead, it would be the biggest-ever acquisition by a chinese company. the richest 1% is now wealthier than the rest of the world combined. the anti-poverty charity made a claim in a report released on the eve of the annual meeting in davos. that the 62ulated most affluent people was the same as the world's poorest 3.5 billion people. that is it for this edition of "trending business." a day when we saw those growth years come out of china slightly weaker. the slowest growth since 2009. i have angie joining me as we recap the big stories of the day so far.
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our guest will have a few thoughts when it comes to china and its growth. he is going to be joining us when "asia edge" returns a couple of minutes from now. the only way to get better is to challenge yourself,
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and that's what we're doing at xfinity. we are challenging ourselves to improve every aspect of your experience. and this includes our commitment to being on time. every time. that's why if we're ever late for an appointment, we'll credit your account $20. it's our promise to you. we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around.
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angie: it is the middle of the asian trading day and that is a bright look of victoria harbour. a little bad news coming out of china, but in this world of ours, that could mean good news when it comes to stimulus. we are live in hong kong and this is "asia edge." ♪ the top stories this hour. feeling the heat. china's growth has slipped to the lowest in a generation, including the weakest quarter since the global recession. into the future.
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the premier admits the economy is under pressure and pledges more help and support. and then started to give up games. asia's benchmark has still only risen once this year. flicking the switch. iran giving the order to boost production as sanctions are lifted. awe. and rio tinto says they will scale back the pace of expansion. in a movebalancing from property to tourism. a special report from the slopes on "asia edge." haidi: and i am keeping an eye on the asian markets today. we are seeing a variety of reactions across asian markets. shanghai is holding steady.

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