Back to you. Some news coming out of the imf looking at their forecast for this year and next. Looks like the Global Economy is going to be slower. The u. S. Economy will be faster. They are forecasting growth of the most in three years. They have cut their 2015 Global Growth forecast to 3. 5 . They also downgraded the eurozone forecast. The only major upgrade is the u. S. , which has gone up to 3. 6 . They do cite a boost from lower oil prices, but there are negative factors. The concern is the divergence amongst the economies namely the u. S. Against japan. A strong dollar against a weaker yen. Rates on the rise. These are the factors highlighted. Meanwhile china growth down for the Third Quarter was also a concern. We will endear you will indeed be hearing from the imf cheese economist chief economist later in the program. Chinas Economic Growth beat Economy Economic estimates last quarter, helping the fullyear expansion remain close to the governments target. Pristine has the details in beijing. This was quite a list for markets. Hi, angie. Gdp grew 7. 4 , a little bit better than the 7. 2 expected and it maintains the same pace of growth that we see in the Third Quarter. For the full year, preliminary gdp was about 63,000 646 billion yuan. That brings fullyear gdp growth to about 7. 4 . A little closer to the government target and a little higher than what economists were expecting. National bureau of statistics report is calling this a new normal of stable growth in 2014. Some other details of interest here in the report. The wages continue to show a steady increase. The economy grew 8 . There is still a huge discrepancy between urban areas as well as income groups. A report also said that the income gap between rural and organ and urban households was further narrow. Inflation remained low. Consumer prices went up 2. 1 in urban areas and 1. 8 in rural areas. There also seems to be some bright spots. Final Consumption Expenditure accounted for 51 for 2 51. 2 of gdp. The Services Industry accounted for 48. 2 of gdp, again higher than the year before. That is the successful shift that the government wants to see. One potential area of concern. Energy consumption is still falling lower. It is hard to tell from one figure but it may indicate lower consumption in some domestic sectors. Overall, it is quite a good picture against the background of the managed slowdown and shift in growth model china wants to enact this year. It will be interesting to see what they do next after these numbers. We had other numbers as well. Other data sets to go through pete how did that fair . To go through. How did that fare . December Industrial Production at 7. 9 . Estimates were a little bit lower. 7. 4 . The previous quarter was 7. 2 . This is a good sign that the targeted easing measures might be taking in. For the full year, Industrial Production came in at 8. 3 . Estimates were for 8. 2 . Investment came in at 15. 7 exactly as estimated. December retail sales, 11. 9 again above estimates of 11. 7 . And higher than the previous months. The interesting part about this number is that the online portion of retail sales reached 2,789 billion yuan. Online retail sales, a big boost to the economy right now. Thanks. Oil prices hit malaysias bottom line and force the government to revise some targets. The Prime Minister has been talking about the debt to gdp ratio revision. Not quite as buoyant a group as they were before. Revisions across the board today. Not entirely unexpected, but there was a question of whether there would be Fiscal Consolidation or Economic Growth. Looking at how oil price consumption is down to 55 55 per barrel, that means the gdp forecast was revised downward. Just to take you through these numbers, gdp forecast was between 5 6 . It is now 4. 5 . So the range has been narrowed down a bit. Revenue will be a little less than it was originally. This is not a reason to panic , is it . According to the Prime Minister, he says malaysia is not in an economic crisis why is he saying it . It looks like the government has had to take some measures. He said if there was no government intervention, the fiscal deficit target would stand at 3. 9 by yearend. They have revised that to 3. 2 percent. How . Spending cuts. They are looking at trimming down operational expenditures. Thank you so much. Some other stories we are tracking for you. Shanghai has retained its title as the worlds busiest container port for a fifth year running. It pushed weather ahead of singapore with more than 35 million containers last year. That compares to its rival doing 3. 9 million. The news comes as shippers meet large demand. More declines for the aussie dollar. Blackrock says the currency may fall as much as 50 . That is the lowest prediction of all analysts we surveyed. They claim the commodity slot which has hit copper and iron ore. It has tumbled trading near its lowest in years. And rio tinto in sydney for you right now. It is just less than. 1 down really paring back the losses of the morning session. Iron or possession production rose 12 in the Fourth Quarter. Stockpiles are growing as demand slows in china. That pushed iron ore prices down more than 40 last year. We have the winners and losers of oils dramatic decline. We will see who is smiling in this region and who has been taking a hit. China gdp in the mix as well. Our next guest was spot on. He will be joining us after this break. Chinese gdp came in close to expectations. We have been talking about it all morning. We are still to see the impact of the oil price drop. We have been tracking disinflation in china since the First Quarter of 2013. We have seen a steady disinflation. None of the data yet reflects collapsed oil prices. In 2015, the disinflation could turn into deflation. What does china do about it . China is a major net energy importer. Lower oil prices and Energy Prices will be a huge stimulus to china. The idea that they are seeing deflationary headwinds should not spur them to do anything rash. The banks chief china economist talking about that. The momentum is slowing. If you look at the quarterly dynamics, the economy is still slowing. Inflation has been very low. A natural response, we are expecting more rate cuts. The dilemma is the structural issues in the transmission. Money is not flowing into the right sectors. Ronald wan says the jury is still out. Gdp figures have been better than expected. In the Fourth Quarter, we expected 7. 1 but they cannot to be 7. 3 . The fullyear figures are slightly below the target of 7. 5 . I think it is still acceptable. Something which we need to look at, for this year, we had yet to see if the performance of the market will remain strong. This year will be subject to scrutiny. That is the word on chinas gdp. Our next guest says china will not be the bestperforming market over the coming quarters. Joining us is Mark Anderson head of Asset Allocation at ubs wealth management. The numbers came in today. Was it a surprise for you . I think we were both surprised by the numbers. Retail sales were 11. 9 . A bit of a shift away from the investment growth into consumption. We think the Chinese Market is highly speculative. It is highly speculative. Take a look at the response today shanghai, as it shanghai composite climbing more than 2 today on the heels of this gdp figure. Is there room to grow when it comes to the equity rally we have seen in china over the past couple of months . I think the markets will move slowly. I think they are telling us there are lots of margin investors which are fully pushing up the markets. Whenever we think fundamentally about chinese equity markets is it on the lowend versus markets like india . The increased volatility we do not like to have as investors. Imf coming out with its report on Global Growth. We are going to break that. The World Bank Revised its growth forecast down, saying that china, among everybody else, is going to be seeing a slowdown, except for the u. S. That was the world bank assessment. When you think about china in that way where can the growth be . I know they are trying to figure it out, but will they be able to control it . I think they will be able to control it in china. The u. S. Is now really the Growth Center of the developed world at this point in time. It is a very interesting world where you can say, on the base of it, we have lower commodity prices. But it is a very diverting world with the u. S. Still on top. Places like japan and europe still on the weaker side. I ask you whether or not they could control it. Yesterday, the markets went a little crazy because the regulators stepped in and put in new rules again. It seems to be that way. Instead of being ahead of the story they seem to be very reactive. Suddenly, new policies come out to a surprise market. That is true. Whenever we see speculation in the market, it is difficult to see before it happens. They are seeing an additional degree of margin lending, which is bringing these speculative drivers into the market which has negative impacts on the economy. I think they were trying to burst some of that speculation and get things down towards fundamentals to let the markets slowly progress. Stay right there because we will get a lot more from you. Not just about china. Coming up, that rich . A new report says the Global Wealth gap is getting wider. A look at the staggering numbers when asia edge returns. You are back with asia edge. It is the richest versus the west versus the rest. The worlds top 1 will control half of the planets wealth by next year. These numbers are more than staggering. You can really see the gap widening year after year. If you look at the wealth of the richest 85 people in the world, they have the same amount of wealth as the poorest half of the worlds population 3. 5 billion people. Impressive numbers. Dramatic numbers as well. Oxfam highlighting this issue at the World Economic forum in da vos. They say the gap is widening. 92 billion for the Worlds Largest fortunes. Jack ma deemed the top gainer after alibaba went public back in september. U. S. Billionaires Warren Buffett and Mark Zuckerberg were also in that toptier. Rising inequality really holding back their push against poverty. They say more than one billion people still live with less than 1. 25 a day. Even in hong kong. That is how we are seeing a today. One out of nine people do not have enough to eat. Oxfam saying that these governments as well as countries have to start cracking down on corporations as well as individuals that are tax dodging. They need to put more investment in the Public Sector in terms of health and education. The u. S. And china they are going to be tackling this issue. It is a hard not to crack. Nut to crack. President obama will possibly set out his plans in the state of the union. He did say he may raise the tax on the wealthy. Compare that to win he took office in 2009. The Capital Gains rate was 28 percent. Essentially, he is trying to double that number since he took office. Tax officials in beijing also starting to to ask people to report earnings overseas. Quietly enforcing these Global Income taxes right now. New rules, apparently, that will ban International Investments that are deemed to be tax shelters. Thank you very much. Housing in hong kong is now the least affordable on record according to a new survey. The medianprice house is now 17 times median household income. But hong kong is in good company. Lets get over to paul allen in sydney. Not quite in the same league, but sydney has the thirdleast Affordable Housing in the world right now. That is right. Thankfully, we do have a lot of catching up to do. Hong kong is 17 times Median Income. Sydney with just 9. 8 times. There are the reasons for this. Of course the cash rate is at record lows. Mortgages and a lot of people have been taking advantage of that to get into the property market. Extended prices rose in sydney by 14 last year. You can also get the tax rate in australia for losing money on your investment property, which does encourage this kind of thing. And supply is limited as well which is something we share in common with hong kong. Auckland, new zealand, coming in ninth place. Los angeles and new york did not even make the top 10. Lets look on the bright side. The survey found 98 affordable towns and cities where the buying is good. Where are they . It is kind of bright. There were 98 cities and 88 of them are in the United States. At the top of the list is detroit. 2. 1 times Median Income would buy you the median house price in detroit. You would probably have a bit of trouble finding a job there because of some triumph of Public Policy or economic miracle. It is quite the opposite. In that context, it is a little surprising. Australia, for the first time in the 11year history of the survey, now has two cities that are affordable. However as a result of the mining downturn, you might have a trouble a little trouble getting a job there as well. That is true for detroit as well, as you noted. Thanks. Lets check in with stories making headlines around the world. Indonesia investigates there was no evidence that the air asia plane crash was caused by terrorism. The flight data recorder does not show that the jet was brought down deliberately. More bodies have been recovered from the java sea. That weather has hampered attempts to raise the remaining parts of the fuselage. United states and cuba are preparing for their highest level of contact since the 1970s. The talks will begin tomorrow. President obama and roel castro are looking to improve financial ties. They will also review its designation as cuba of a of cuba as a state sponsor of terrorism. Washingtons former special envoy to the north and pyongyangs current negotiator told negotiators that they had an Extensive Exchange of views on Economic Policy and ties that have been strained by the sony hack that the United States blamed on north korea. They released documents saying that it started in 2010. That is when the United States broke into pyongyangs computer systems. Technological expertise profit a National Security agency to place in the networks used by hackers. Evidence was gathered by president obama to say that pyongyang had indeed hacked sony. Were going to get to a break. On the other side of it, we will look at the business in tokyo. Today, when we have seen rising equity markets, the nikkei with a bit of a boost. Some renewed yen weakness. The reopen is coming up right after this. From tumble to rally, stocks are turning around in shanghai. Sbc saying it is going to deepen. And growth is uneven. We are all over the map in china. China just missed its fullyear growth targets by a whisker, really. 7. 4 , enough to support job growth. Leaders are always stressing 7. 5 in china. Why dont we talk about it in this regard . 7. 4 is enough to create the vacancies that are needed. All this time we have been talking about 8 . I have been covering china for a long time. A present was the magical number and then it became 7 . What is it now for job creation . That is an interesting question. Looking at it deeper 6. 5 is a new idea from jpmorgan today. I said, why is that . Because the base is getting bigger for the chinese economy. They are trying to rebalance this economy so you get a lot of different distortions. The National Average is coming down, but you are also seeing doubledigit growth coming in some of the poorer regions that are getting a lot of Infrastructure Spending and investment because of cheaper land costs, cheaper labor. This is Third Quarter. We do not have the breakdown for the Fourth Quarter yet profits. Three of the best performing provinces in the Third Quarter were the poorer regions. To that, 10. 7 . Tibet, 10. 7 . These are the poor ones. So it is a base effect. And we are seeing some of the other traditional powerhouse economies, diversification. Lets look at the worstperforming economy in the Third Quarter, a similar transition to what we will get in the Fourth Quarter. These are the provinces representing the old china. Absolutely. mining country. The last one was the face of heavy industry. Munitions factories and armament factories. They had to disinvest in the 1990s. They have not seen the reinvestment if you will, since the 1990s disinvestment. These are the slowestbased for growth. I come back to the developed economies. Very similar to the national numbers. Beijing, 7. 3 . Guangdong 7. 6 . And then the big municipalities. The big municipalities that are performing well, guess where they are . In the west. I started off by asking you about this growth. How much growth is now needed . As low as 6 is probably enough for the kind of job creation that the Chinese Government wants. They probably are not going to set a target at 6 , but he said anywhere between 6 and 7 given the base effect and multiplication, it is adequate. The big question going into the National Congress coming up in march is what did they decide will be the target . In december, they set a target for the next years economy. Is it going to be 7. 5 again . Very unlikely. Perhaps 7 or perhaps they will start adopting a range. That will give them much more flexibility. A hard and fast target is not really necessary anymore. Thank you very much. Japans thirdlargest Trading Company may gain smoother access to china. It is all due to a multibilliondollar deal with the unit of chinas stateowned investment corporation. We go live to tokyo and Bloomberg News reporter yuri. Give us the background for all of this. Good morning. I think while the debate about the chinese growth is happening here are two companies, itochu and citic, a major asian food producer, certainly thinking that chinas growth has a lot more to go. They think what is important is that while the growth might be a little bit slower than four or five years ago, the group now has retail, food, financial services. Companies like itochu a general Trading Company in mining, energy, food, it also owns part of major brands. Now we are seeing that retail growth in china is something they should be part of a lot more. What it is trying to do together with cb group is make a Strategic Alliance with citic one of the iconic names in china. We are hearing that will make a 10 investment in citic possibly 4 billion spent. With that, they will get opportunities to be part of that wider chinese growth in infrastructure, retail, and so on. Why are they interested . Are they new to the china market . Well cb has a very deep roots. I think the owner of cp is possibly known as an old friend of china. He has been investing in china since 1959. On the website of cb group, they claim to be the first foreign investor in china after the reforms of 1978. This is a company that has a lot of roots there. It is also a company that has said china is going to be a major market for them. There is still a lot of businesses in china which Foreign Companies find it difficult to enter. Major Infrastructure Projects financial services. By being a partner with citic i think that will give them a lot more access and certainly a lot more access in the big buildout in the western provinces of 12. Provinces as well. That is really interesting. It would be very interesting to see that tie up. We are going to leave it there. Thank you for that. We have breaking news for you right now. Japans fiveyear bond yield dropped below zero for the very first time in its history. That means it is going to cost investors money to buy those bonds. What does it all mean . Lets get the latest from the markets now. It of yields for fiveyear bonds. What does it all mean . I do not know about you, but i am not going to keep to pay the japanese government to keep my money. You just pointed out the yield on the fiveyear falling below zero for the first time. What i have here is the 10year. This yield was 17 yesterday. We are seeing a slight pickup today. It is getting more and more in the sovereign bond market. Just imagine the potential if and when the market turns and yield start going up. Everything is going down. You look at what Central Banks are doing. It is not surprising we are seeing a further move down. Yields not only in japan, but in france, the u. S. U. K. , are down. Take a look at shares down 2. 5 on the backs of a potential deal. A fairly big one, as we just talked about. Ts tech and melco these two stocks are the biggest movers in tokyo. Jeffries grading this stock is by a buy. Melc 64 improvement in net income. O moving things along, what do we have here . 10 20 improvement for mcquarrie group. Price target, 62 aussie dollars a share. Rated a buy from neutral. Rio tinto down. We are talking 79 Million Metric Tons in the last three months of last year. Speaking of commodities, iron or, there is a glut in the oil market. Take a look at brent right now. 2. 7 drop yesterday. Falling a little bit more. At this point, 48. 75. The latest piece of news production numbers, record output. Nearly 4 million valor barrels a day. That is according to the oil minister of the country. The price of oil is falling from its onewe cut. Back to you. Oils dramatic decline has been hurting exporters with falling currencies and tricking budgets. Shrinking budgets. How bad are things for these producers . It is basically an allout squeeze for all of these crude exporters. 13 countries in the middle east and europe are expected to see Economic Growth above 1. 8 which does not sound so bad, but just two months ago, it was estimated that their growth topped 2. 5 . Russia taking the biggest hit. Their economy shrinking 3. 3 . Saudi arabia, the Worlds Biggest Oil exporter the russian economy shrank a lot more than that. Because of the ruble. They are taking a big hit. Because of the Falling Oil Prices. Of course, not just then. Saudi arabia hosting a deficit at 11 of gdp this year. That is according to hsbc. To string in one country that is benefiting not benefiting but one of the biggest losers. Lets bring in sophie from bloomberg malaysia tv. Immediately, we get reaction from the Prime Ministers office saying that they have to downgrade their Economic Growth forecast. There has been some pressure on the government to revise 2015 assumptions because they were initially based on 100 oil. With todays announcement, the assumption is revised to 55 a barrel. Even that is being optimistic. Currently today, the way it is trading. But they have to say they are going to average out what is going on. Taking a look at their new revisions, gdp forecast have been revised to 4. 5 five. 5 versus the original forecast of 5 6 . A slight slowdown in that ratio. What are analysts saying . There was some speculation before the announcement about whether the government would take on spending cuts. When you take a look at the budget and how much was being parceled out for operating expenditure, that was where some belttightening could be made. Today, it still remains part of the agenda with a deficit target now at 3. 2 . Economic growth is also something the government is hoping to manage. We have a poll that reflects that as well. There might be some initial pain. We are talking about malaysia, middle eastern countries. Malaysia, 22 percent of their exports are oil and gas. They will be hit. The general assumption is that cheap oil will benefit most countries. The imf is not going along with that. They have reduced Global Growth forecast for this year and the next year as well. Three quarters of those surveyed by bloomberg, they think that cheap oil will help the overall Global Economy 75 of them are very positive on cheap oil. Also very positive on another local trend in the strengthening dollar. Thank you very much indeed. Lets tell you what we have next. The imf slashing his forecast by the most in three years. We will talk to the chief economist. Back in a moment. Welcome back. Joining me now is the chief economic editor at ubs wealth management. Lets start with the imf, taking a knife to his former Economic Forecast and saying well going to be much less than they thought. But the u. S. Is strong. Global growth was seen at about 3 this year. A little bit off. Despite the weakness in oil. Places like russia weighing on Global Growth. I talked to an analyst and he agrees that the prices far outweigh the negative. I think the oil prices are positive. I think the Exchange Rate is positive in a more complicated way. The yen is going to help. Clearly there is going to be something. So these are negatives. What about the Falling Oil Price . It is exactly right. The main ones is the decrease in the price of gas. More money left in the pockets of consumers and they are going to spend some of it. Many countries, Oil Consumption is 3 of gdp. 1. 5 can go into the pockets of consumers. That part is good news. It is too bad that there are these other margins. You have downgraded your forecast. You believe this years growth is now 2. 5 . What is the key factor in that . We forecast for this year to be higher than last year. What happens is that our forecast has been revised up. We still think that this year, the World Economy will do better than last year. Why did we revised down west to mark because there is this underlying weakness for mediumterm prospects. That is decreasing investment. We think that this effect is stronger. He said that many economists are downgrading the forecast. The only major economy that got an upgrade was the u. S. The versions economies, strong dollar, and the oil price. Look at switzerland. A bit of a tough spot right now. After some of the depreciation of the swiss franc, deflation will come dramatically lower into negative territory and the economy is likely to grow. 5 instead of 2 . A lot of people are asking themselves how reliant they can be on Central Banks around the world. In denmark, they are speculating if they will hold the euro cap at the moment. Everybody was set to be putting their investment activity on the back of what they thought was very predictable, a central bank policy. Now we are seeing it extreme and emergent again, manifesting itself in the snb. That is increasing volatility, which is the name of the game. You are going to be sad about this, john. Federer was on the back foot of this snb it is sad. He is sad, too. Whatever he takes home from the Australian Open will be less. He is actually building an enormous house in zurich right now. We saw what the danish crown has done since 2004. It is advertised level. I think we had the rate cut overnight. It was the top story worldwide. Why would we care about a currency that constitutes less than 1 of global fx trades western mark is it because people were watching for potential contagion that follows what the Swiss National bank did . I think that is totally the story. It is unfortunately not as important as i would like it to be, but it is which of the next could potentially break out of this range . You might see speculators come in at the moment. There is a large difference between what the snbn did to the danish one, which is pegged to the euro in a tight band. Here in hong kong, the peg to the u. S. Dollar might be interesting over the next year or so. I think that is exactly the case now. Every place that felt comfortable with pegs or floors in place, people can relatively cheaply speculate against it. Some other Investment Opportunities buying eurozone equities. With the euro continuing to fall, it increases competitiveness moving forward. And we talk about the u. S. We do actually hedge our investment positions. We would make money on the equity side and a little bit on the currency side. What do we do with our money . You are the expert in hong kong. What do you say . Is going to be more expensive. You probably saw that started starting. They are going to look to crash your pad, probably, for free. I do not know if there is an open invitation. You are welcome, mark. Mark from ubs, thanks for joining us today. Still to come on the show delegates had to the World Economic forum with a lot to consider. See what are the top things on their agenda. That is when asia edge returns. Stay with us. Business and political figures heading for the World Economic forum in davos. Global economies at the top of the agenda. The icebreaking conversation is going to be about the swiss franc. Also, that greek election coming up this weekend. To top it all, sluggishness in japan. I am worried first of all about european deflation. But look at japan. How do you define global . It is a big risk now in the whole world moving into a cycle of deflation. Security is always tight at the forum. This year, there is also a nofly zone. It is not just World Leaders and billionaires piling into davos. It feels like half of the swiss army is here. Some locals are concerned about safety. Is this meeting any different from the last . No. Since 9 11, we are always prepared for the worse case. A terrorist attack is within something we have prepared. I think the teamwork within the Intelligence Community is very good. So we have, so far, no evidence of and no threat of direct terrorist attack here in switzerland. Swiss Authorities Say around 3000 personnel are expected to protect davos this year. The town has a special nofly zone. Should an unauthorized aircraft and her it, the defense minister would have the power to shoot it down. The january 7 massacre at Charlie Hebdo in paris has led to increased security across europe. In davos, security measures have not been changed. There is no direct threat today. It might change in the future. We cannot endure always 100 security. As long as people are aware of that, i think the life is going on. For the military, it is business as usual in davos. Looks cold. Looking earlier, minus two was the temperature. The high for the day was 11 below. It is a little chilly here in hong kong. That is it for us. The following is a paid advertisement from starvista entertainment and time life. Somewhere beyond the sea bobby darin, frank sinatra, dean martin. Volare tony bennett, Nat King Cole johnny mathis