China and germany signed six documents during merkels visit. There could be some more exciting news out of that. Also, the premier says he will visit germany in october. This is after president xi jinping visited earlier this year in march. Trade has been the focus so far. Business and investment as well on her seventh trip to china as chancellor. The two holding the press conference now after a full military honors welcome in beijing this morning in front of the great hall of the people in central beijing. She is said to be having dinner tonight with president xi jinping. The pressents before conference, calling china germanys highest and important strategic, cooperative partnership that has developed on a very broad foundation. Again, the pleasantries flowing from the two. China is a key market for german appliances from bosch or sedans from audi and bmw. She has brought with her a whos ,ho of Corporate Leaders siemens, lufthansa, volkswagen, and others. Lufthansa is said to be in advance talks with air china perhaps on a joint venture to increase their mutual cooperation. Merkel was in chengdu yesterday. She toured a volkswagen plant. Startagen had a long head in this market, one of the top sellers in china, without he who has the big fleet sales with the chinese government. Obviously, with these heavyweights, that is what the onus is on. I dont think the german electorate will be too impressed if she did not bring up some of the more sensitive issues. She mentioned it this morning in the brief comments. She actually spoke a little bit longer. Relationship, the germanchina relationship, is not only limited to economic cooperation. Their dialogue will extend to societal issues and human rights. Uighur groups have called on her to raise their human rights issues during the visit. It is believed merkel could also one man to visit. She is also involved in combating pollution. You. Ank lets take a look at some other stories making headlines. Hsbc may exit another foreign bolivia. Shutender previously offices in iraq and japan and latin america. The ceo has been simplifying the Bank Structure and focusing on key markets. Sachs has goldman brought forward its forecast for the fed to raise rates. Says the central bank will raise rates in the First Quarter of 2015. Oforgan chase added the head tokyos mitsubishi revising estimates. The Worlds Largest pension fund has its First Quarterly loss in two years. It fell 0. 8 last quarter. The fund has been under increased pressure to overhaul its Investment Strategy and move into riskier assets. Growth continues to be priority number one for chinas economic policymakers in a bid to post that target. The peoples bank of china is tactics. E where theyuation pick up the slack because fiscal policy hasnt. It is a complicated set of affairs. The central bank does not usually get into setting fiscal policy. You leave that to the government. But in china, of course, the system is a little bit different. There are no limitations on fiscal policy and what you are seeing is the Central Bank Governor stepping in, trying to carry out the communist party order to maintain 7. 5 growth us year. In order to do that, their are a number of programs that do not necessarily harkin monetary monetary harken policy. Another program, nearly three times as large, for lowincome housing. This all boils down to targeted stimulus programs that you would typically expect from the government that are coming from the central bank coffers. That of course is raising concerns. Jpmorgan says there is a transparency issue here and goes push to be more transparent. I talked about the agriculture as well as the lowincome housing. These relating programs are not new. To have been around china since the 1980s and early 1990s to direct credit. They are not seen perhaps is the most efficient. But china is a very different beast. Its economy is very large. Some areas may credit. Other areas need credit to be arraigned in. So it is a recipe to get it growth. Produce 7. 5 lets see how this is all playing out. It is pretty quiet, isnt it, david . It is. Today, the story has been about very thin volumes. You look across basically in red andhere everything in south asia is green. You look at south korea compared to the 10day average, volumes are about 20 cheaper. If you make your way towards market like japan, singapore, it is about a quarter quiet. The hang seng is about 35 lower. Australia is down a 10th of 1 . We are looking at volumes 30 thinner than the 10day average. The other market story is southeast asia. Indonesia continuing their bull run. They had elections this week. Jci up 20 from august of last year. The second best performing market in asia this year. The best performing market since india. That is what we have. We are back about 7000 philippines since may 31, 2000. Indonesias president ial candidates traded barbs in the final debate in this weeks election. Hasneck and neck braces both contenders, saying promising. It turns out the corruption is becoming a key issue in this race. You cannot talk about indonesia without talking about corruption. The issue resonates with investors, with people who have seen corruption, and indonesian voters are saying, no, no more. We want change. We want a cleaner government. Whether they will deliver or not is another story. Illegal logging, mismanagement estimated to cost the government more than 7 billion in state coffers. According to human rights watch, that is more than the countrys health budget. An internal report Shows Government officials took for themselves 20 of total rollback loans in a period of 30 years. This is a country rich in resources. Coal, gas,ing gold, oil. They account for 65 of total exports. Meet its seveno percent growth target despite a commodities boom. Corruption has become a way of life. It has become a way of doing business. If you recall, ministers, ceos coming and even central bankers have been convicted. It will be tough to fight corruption. What does it say for either victory here . What can we expect if either man wins . It will be different for sure. Could mean going back to the past, a more closed society. He is a military man. Some say that he has been beating the nationalist drum. What is curious is that a number of corruption scandals have plagued key members of his party. Is seen aser, he fostering a more inclusive government. Some say his proposed changes are not so much in terms of economic reform by bureaucracy. His campaign has pushed the image of a selfmade man. His connections to the former president and what will she will play should he become president. Thanks for that. In just a few days time, we will know the results of the polls. Missdont want to bloombergs coverage coming up this thursday at 11 30 Hong Kong Singapore time right here on bloomberg television. We will have more on the indonesian election after a short break where are next guest says that all eyes will be on growth. Stay with asia edge. Wednesday, indonesia will be picking a new president. Race is going to be pretty tight. It is. Erin connolly says he has been let down by his own campaign. For him, hisely campaign has done its very best to lose it. It is a poorly organized campaign, poorly funded. It is a First Network of volunteers as opposed to the party infrastructure, which is reluctant to support him because he did not come up through that party for structure. It is not a wellrun campaign. He is good at giving these nationalistic, bombastic speeches. The other is more softspoken and has not excited the sam level of passion campaigning to the countryside. The same level of passion campaigning to the underside. It may take some investors by surprise. They are still probably factoring a likely jokowi win. The election is likely to be too close to call. Fund investors will probably owoba. Hing up on p Mike Matthews says that if okowi is defeated, the market will react sharply. Indonesia is the best emerging economy in the world. It has the huge population. It is underpenetrated and most basic products and services. It has lots of natural resources. It is all good in the long term. Politics are important. Absolutely, as you say, this election coming up is pivotal. If jokowi loses, there will be a sharp reaction in the market. You cant at the moment that a cigarette paper between the polls. Can you do that between policies . There is not an awful lot to choose between the two. Youre not saying they are the same. Not exactly. One is more probusiness. The other represents a more holistic option for all of indonesias population. One represents the masses effectively. Together has entrenched business interests. The Foreign Investors were very excited about a possible jokowi win. It seems that more Foreign Investors would be more inclined to buy in the stock market if probowo. Ns rather than why . He represented a significant change in the way government would be administered in indonesia, moving away from the old gold card days and the perceived levels of corruption. That is the single biggest thing. It is. This movement away from that is the reason why Foreign Investors have put their banner behind mododo. Jobowo able to move away from that . He is connected to the previous president and has been seen as kidnapping prodemocracy leaders. I think to some extent, he probably eat too early. He became everyones favorite very early on. The equity market was moving higher towards the end of march and into april. Ohen along came probow representing the status quo and a country that is very diverse. Them about keeping keeping momentum. He did keep momentum. 5 million followers on twitter now. Has won. A wifes india certainly has. It is india certainly has. It is very excited. The growth rate of india and the opportunities for young people in particular. A resounding majority government for the first time in 30 years. So we will see a new budget from him, the first budget. What can we expect . , some of the subsidy measures fuel subsidies, the imposition of a plan at the very least for reducing fiscal spending. Looking at age of very closely. Yes. Generaltion of gst, sales tax, primus what they are introducing in japan. And there is an infrastructure deficit. That needs attention. At last, red tape. Bureaucracy is a problem. What about investment . Investment is in the cards as a possible option. It is a mixed bag that anyone is looking for. The most important thing is a roadmap of how to bring down that fiscal spending over the long term and make government more efficient. Interesting words, roadmap, considering the infrastructure problem in india. It needs a lot more roads. We need a roadmap for that as well. You have seen in the philippines, you saw the new government come into power a few years ago and how difficult that has been to approve them into place the infrastructure program. Modi hasr a motive to push to speed it up. It is a difficult job. But he has proven that it can be done. We will leave it there. You will be joining us in the allin what they gang. Lots of good stuff. Coming of scum are a look at the carbon tax. All when asia edge returns. Stay with us. Transformers is holding its ground in the u. S. But it is an even bigger hit in china. The paramount lot oster dominated box office for a second week. Over the weekend, it took in 14 million more in china. Willdes will brady bring back one of its best cars. In the cost over a million dollars. They him w has rollsroyce and audi has bentley. But what does the other german luxury carmaker have to offer . After the credit card crisis something, they brought in diameter. Costs more armor, it than a million dollars, more than twice the price of the most expensive rollsroyce. Aimed at the ridiculously rich, the mercedes s pullman is what call ae in america limousine. It will be 21 feet long, about the same size of a great white shark and makes it the biggest production Passenger Car in the world. The cars meant to invoke the famous rose these 600 series limousines for the likes of the pope and elvis presley. It was owned by celebrities like john lennon. Aims to take over bmw is the largest maker in the world by the end of the decade but it produce mercedes to much cheaper cars, like the 29,000 cla in order to induce volume. But mercedes has to be careful to maintain that luxury luster and it plans to do it with the mercedes x class. Work its magic on maybach. Looks like it is a wait and see mode here in asia. Sydney where we see the fifth of 1 lower. In asian stocks are falling with the regional benchmark declining from its highest level last week. We saw asian shares hosting and eight weekly gain. We are starting lower this week. The hong kong hang seng index also slipping 4 10 of one percent. Business tops the agenda as ofela merkel and a whos who corporate execs the sun don china. In indonesia, the candidates are neck and neck. Christine lagarde issued a stern warning to the World Governments while praising Central Banks. At a global slowdown unless investment in infrastructure is given a booster shot. They will come out in july this month with their next quarterly growth predictions. With 3. 6 the came out global. He 15. R when she did say it would be slightly different from april, slightly lower because of this morning. The markets will hold on their own watching for actual evidence. She is speaking in this confidence on the french coast. She talked about the lackluster investment, the recovery in the economy is lackluster. Will publish money and they cant do anymore. Governments need to intervene and step up to the plate and actually invest across education, health, transport, power, electricity, water, etc. A whole realm of opportunities. The manydespite responses to the crisis, recovery is modest, laborious, fragile and also measures to boost demand despite the goodwill of Central Banks will find their limits and she is really saying, come on governments, the pressure is on you guys. Really invest in infrastructure. Monetary policy has been to place. Across the board, doing what they have been asked to do. And the fiscal policy . Exactly right. Ongovernments dont pass it es, it will pass up. Current investment worldwide, she said there should be 3. 7 trillion. One equates to the south korean gdp. Significant improvement in investment or growth will slow. Thank you. Lets have a look at some of the stories making headlines around the world and in israel, sixers suspects have been arrested in the death six jewish suspects have been arrested in the death of a teenager i. Charred remains were discovered shortly after. They say it was an act of revenge after the killing of three jewish teenagers. Officials say the two people have died and another injured in an israeli airstrike. Y belongedsay that the to members of a militant group. Have landed aps major tactical victory over prorussian insurgents after capturing a stronghold. They raised the ukrainian flag. It had been under rebel control since early april. They vowed to regroup elsewhere and fight on. We have thousands of promoscow supporters demonstrating. Ntranets in donets many urged moscow to come to their aid. So far, there has been no word from the kremlin. Angela merkel has arrived in beijing in her trip to china. Is german leaders accompanied by the heads of siemens, lufthansa, and volkswagen. Traveling in china will soon luxury easier to get a ride in downtown. Kuaidi as luxury cars. Its is thissustain into the longterm. It generated sales of 8 million last year. It is putting itself into the higher market. That it does but it headtohead with another company that recently launched its services in thailand, which is uber. Uber a website or does it just look a lot like it . Idi and has the same feel, slip cars and booking service slick cars and booking service. In a similar way, looking with chauffeur services and it will get 20 to 25 cut of the trip. Uberct, the ceo said that has a very similar model or that kuaidi has a similar model to uber in china. It is different from how it operates in the u. S. In china, it is the luxury end. Isnt there already taxi booking apps in china . Vs, one backed by alibaba has been in a fierce thatll with tencent. Ttle with offeries like easy Taxi Services in beijing. The competition is fierce. Is trying touaidi move into the higher end of the market. Appstition amongst taxi are basically trying to expand into pretty much every service. Prebookings,t taxi bookings, thats 3 Million People who access. They are trying to get in there as early as possible and dominate the scene as quickly as possible. The government is looking because of the competition being so fierce, they transport istry may start regulating and have come to and fold thetion services under the relevant government which could cause a serious issue for these companies. Of course, they are keen for this not to happen. Says they are working with regulators to see what happens. Growing too fast, especially when regulators start stepping in. At hong take a look kongs retail sales. This is the fourth straight month that this has actually happened. What happened here . The consensus was not quite up to the mark. One thing that drove retail sales down was jewelry and valuable gifts. That is about 20 of retail sales in hong kong and a decline 24. 5 year on year. It was the second largest decline over the last decade and longer. The question is, if those are ,he bits that perform badly they are under pressure, the look cheery side is under pressure the luxury side is under pressure. It is not all doom and gloom. We had cosmetics and medication up over eight percent. Health and Beauty Retail sales. And we also had footwear and accessories that were up over 10 , 13. 7 to be exact. Talk to me about the nt extravagant policy the antiextravagant policy. What impact did it have overall . It inn you think about the consumers are buying pier watches. They know they are under arutiny if they have 50,000 watch. Jewelry and watch sales, gold prices have declined precipitously over the last two years. They are rich quick on a way up and rich sticky on the way down. Up next, Angela Merkels visit to china and the deals that are being done there. That when asia age close edge returns. Are back with asia edge. About china,ng Angela Merkel. I would have thought the amount of capital goods that germany produces that germany would have a surplus in trade but even they have a deficit with china. There has been a lot of downswing in exports for china because of the end of christmas. Manyhina does not need as goods as they used to. They are making cars there now which they have been visiting among other things. Exactly. Do you think china has a friend in germany in terms of the Political Landscape or do there needs to be a warmer relationship, at least from chinas point of view . I think germany needs china more than china needs germany. Germany is interested in how china did a deal with russia over gas. Making good friends with china right now is probably in germanys interest. Something that happened during the News Conference i thought would really irritate Angela Merkel. Said mrs. Merkel, i would like to remind you that this is the anniversary of the july 7 china byor attack on japan. Has done this before. Jinpings last visit to berlin, there was a request by authorities to visit the holocaust memorial. And it was refused. You are in berlin. It was refused because germany does not want to get involved in this spat between china and japan. Really irritating for misses merkel to actually have this happen right in the press conference while they are talking about the relationship between germany. Germany has repeatedly apologized where is allegedly japan hasnt. Seems to want to draw germany into its political influence and sphere. Haveould think it could more a sphere of influence in eu. To give got germans spying for the americans. Germans spyingt for the americans. The tensions between germany and the United States are really raw. Here she is in beijing. As an investor, how do you view this will thing . Energy security and the development of the b markets and they Financial Markets in europe, liberalization two or three weeks ago. A lot of it is financial. It is not just about politics and it certainly isnt about the holocaust. Even bringing it up, pollution being an issue. This is a longstanding and bilateral trade between china and germany when it comes to energy. When china and germany began their advance with renewable chinese supply for german demand. But if you look at the traditional power grid, there has been a longstanding tradition of siemens selling it to china. Today, if you are in a world in which russia is rotating its gas supply more towards china than towards germany, you have a situation where there is a lot of demand downstream for things that germany can still make, not just the 22 million cars it can sell, but all kinds of environmental goods and services which, germany with its good capital quality and services, can meet their needs. Germany provides the technology that china needs. Germany supplies the market and china supplies the technology. Historically, there is a good bilateral trade. It goes back to what i was saying, trade surplus. Everybody needs china, dont they now . Spain changed a couple of laws. How far do people go down that route . It is going to become the largest market on earth. It will reproduce with the American Market was like in the 1930s. It will be the biggest Consumer Market on the planet, if not now, very soon. You really want to have access to chinese markets. Wantquid pro quo, you trade opportunities for the chinese. In the last three years, china has used as much concrete has done in the last 100. And quid pro quo come in terms of economic dependence means political influence. Yes, we saw that with the opening up of the london markets for the development of the rmb market. Politicaltively as interest because the chinese have a Strong Influence on how that rmb market ballots. Will there be pushed back rmb market develops. Will there be pushed back, do you think . Pushback from . The westernfrom world, quid pro quo with economic and business interests. I think it is interesting in the way that going about influencing or wielding its influence. It doesnt go by the European Union when it was to do a deal with a european country. It goes to wrigley to that country and that country benefits from that. That goes directly to country and that country benefits from that. When xi jinping was in germany in march, he went to cells per, which is the biggest inlet work. Theres a lot of Chinese Business there. There is this desire for the chinese to open up this new sort of trade route that would go straight into the heart of europebecause obviously is a massive market for china. China is a massive market. And clean tech, germany is massive for that. There is a car deal. It was merkel looking to expand ins sphere of influence chengdu. If you want to look at this from a u. S. Side or trade side, there is a microcosm between clean tech. Bickering that happens. Through trade between the two countries. Generally speaking, we can say to mutual detriment. It is better for you as consumers in terms of social welfare that is diminished by not having cheap chinese goods and is bad for chinese produces where, if they want to meet demand of the market, have got to go through all sorts of hoops and legal wranglings or just essentially past posting trade wise and make sure they manufacture bits and pieces all around the world so they can meet u. S. Demand. Some kung pow chicken being cooked up by Angela Merkel. She has been trying her hand at that. I dont think she is really cooking there. Maybe just waiting to be fed. She also visited a market that i like. She is very well known for sneaking out and going to the Al Supermarket incognito not even incognito. It is Angela Merkel in berlin. This is all part of her image of being ess. Er downhomen it is a competition with all the European Countries that david was alluding to. It is a little competition. If you look at what is happening in the middle east or in europe, its the same thing. You have chinese influence in Consumer Markets and. Commodity markets all teaming up. And it is a Global Supply chain. Trade at the a top. There is a whole procession of freetrade agreements and Bilateral Agreements that youre getting in with china in europe, africa, the middle east, forever you can think of. It is a long process of opening up the chinese economy. Thank you very much. Still to come, getting another grand slam. The details of Novak Djokovics wimbledon win. The indian Prime Minister modi it has become the third most followed world leader on twitter. Has 5 million followers. The number one places president obama with 33 million followed by the pope with 14 million. Here are five instances when Big Companies have tried to get a little too cozy with your personal details. To support now and tennis, Novak Djokovic defeated Roger Federer at wimbledon. Reclaiming the number one spot in the world. It was in five sets. It ends a run of five straight defeats in finals. Result, germany, and argentina and the netherlands are left in the tournament. Many are still watching it as we speak. Thee did talk about increased interest from the game coming from america. And average Television Rating is up 39 despite the fact that the digital viewing has been through the roof. This is already the most streamed sporting event of all time. We are now 70 beyond the so chelan picks. We will be the sochi olympics. You can see more of our exclusive interview with john skipper tomorrow. That is it for this monday edition of asia edge. Collects the following program supple. Ht to you by