Transcripts For BLOOMBERG On The Move With Rishaad Salamat 20140310

There is no clue as to what happened in the middle east with planes that went missing last week. Hassearch and rescue team recovered a window that may have come from the flight that vanished from kuala lumpur to beijing. China sent rescue teams to the area and there is some evidence that the plane turned away from their normal route and may have been going back to kuala lumpur. The plane had a minor accident. The airline says it was in perfect working order. This aircraft was in the it was11 days ago and checked and nothing untoward was found. 1415 been operating hours a day since that time without any issue. This incident will be discussed through the course of the day. We will be joined in a short while. Lets have a look at the other stories making headlines and 100 trillion that is according to the bank of international settlements. There is a wave of borrowing with corporate and government. Exports fell 18. 1 . That is the biggest cents the financial crisis. Analysts were expecting a gain of 7. 5 . Skewed by the Lunar New Year. Japans current account deficit doubled in january. It is more than what analysts have been looking for a we have gdp numbers and the economy expanding by. 10 . It is weaker than predicted. Lets get a look at the reaction to the numbers with john dawson. It began with markets reacting. Saturday, exports fell the most since inflation and obviously, deficit and Fourth Quarter growth was revived. Figures in the economy, apart from the u. S. , are negative. China was off by. 66 . Is in a bear market and the stocks are falling. Raisere getting set to rates on wednesday. , you can see them down and looking out for that by one third of a percent. I can tell you the look of the currency story and the dollar yen shows a reaction after figures came out and also, the deficit is at record. Keep your eye on that and there is the rate. The rate is rising in new zealand on wednesday. A bit is coming in from germany and shares are rising on very heavy trade. February sales were 12 year on year. Forecast hason been extremely well and restructured with substantially more profits. You get down to commodity and china and copper is down. You can see crude oil is down a bit. Stocks are down the most in australia. Thank you. Still no clues as to what happened to the Malaysian Air to beijings heading from qual lab for. Kuala lampur. What are investors looking at here . Investors are apprehensive and they want to know what happened, like all of us. Im sure that during this time of uncertainty, investors and aareholders will take riskoff approach and sell down stock to keep them away from this. You are not in a position to speculate what happened to flight 378. Airlinescovered the for a long time and this is an airlines with an excellent safety record, isnt it . It is probably one of the best safety records that you can find out there. The last incident they had was in 1977 and there was a terrorist hijacking of the aircraft. Those were different times back then and terrorism attacks and hijacking was more frequent. Since then, the airline has handled themselves well and it that the Airline Staff is professional and have historically tried to do things to the best of their aptitude. It is shocking. However, they are unprofitable, arent they . That is true. The financials are a different story altogether and the notncial strength has been impairing the safety track record for decades and there is no correlation between that and the safety track record. Abouts talk a little bit what you have been calling for, almost a breakup of the airlines, in some respects. Some are unprofitable and others are profitable. That is true and something that has been talked about for has almost come off now and then. The model is exactly what the Singapore Airlines has done over the last decades. Went into Airport Terminal Services and a Leasing Company that has a lease enterprise that a Singapore Airlines engineering that has proven to be a successful model because companies become smaller and if they had worked a Singapore Airlines and the that is a hong kong, reasonable view and reasonable assumption and it could be a good thing, as well. , due tocurrent moment what has happened over the weekend, this will not be in the forefront of managements minds. Airline,not just the are they as well run as the airline . There have been eyebrows raised they are they are not not checking against the interpol list of passports. Understood. They are conducting an investigation and there are questions right now and none with answers. The thing that we can take from this situation, no matter how bad it is, some good can come out of it. The mitzi transport and the Prime Minister mentioned that the view. Investigating the steps from now on, im sure. Of this. Thank you for joining us he was talking about the missing flight. Our next guest will tell you how to hedge your bets against commodities. We are joined next. You are back with on the move and we are looking out for you this week and on tuesday. Sprint faces a regulatory challenge. A clue on howered the regulatory difficulties may come. Borrowing costs as the political turmoil continues. The conflict has been costing the country money in tourism and investment. Are expecting the carrier to see it increase in the year and the u. S. Traffic is on the rise. We will hear from the chief executive right here on premierg all stop the will speak when the closing ceremony is done. As we head to the close, there is more on the health of the chinese exports and the Global Chinese crisis. We are breaking down the numbers in beijing. Year, whichunar new does throw things into a tailspin. Seasonal factors are at play here and also some distortion is caused by over invoicing. The Lunar New Year holiday has shifted based on the calendar and the holiday was in late january and early february. Last year, it was in the middle of february and a little bit later than usual. Trade inflated numbers in between hong kong and china and that made it home harder that made it harder to assess. If you look down in the numbers year,de and exports, this trade between china and hong that had ad 21 and lot to do with it. Still, this was a sharp drop in exports fell 18. 1 . The median estimate was it falling 7. 5 . Fromu combined the months this year and last year, the numbers fell 1. 6 and that is the most for that in five years. That is when growth was in the six percent range and you can see the comparisons. It adds to growing concern about the economy here and there is a credit concern that causes worries. Investors have to possibly worry andt demand from overseas inflation has been much slower and deflation is benign. That is good. Steve, thanks a lot for that, steve. There are concerns about growing is. D joining us now what did you make of that . I do not think we should raise red flags all stop i think it is a good thing. What happens . Usiness is business unfortunately, over the last few years, many bonds out there are backed up by government and now that this has happened, it andled to a proper pricing in the last two years, we had a massive crisis of risk in the chinese economy and a huge miss mispricing. We cannot lose sight of the debt situation in china. But that is right. Hopefully, theyre facing the right measure and they do not get out of control. We see the u. S. Bond yields or four up to about 3. 5 percent. Right now, what is going on is a situation with the u. S. Economy and is the economy ready to take off. Decent 2013have a and recovery throughout the course of the year and that will be reflected in 2014 in the form of higher rates. Is being priced in . In the u. S. Market, i think that markets are still looking for the Federal Reserve to raise rates and what is my opinion is that the market is not pricing. Uch of a recovery in america i think that will change. That is my opinion. I think the u. S. Treasury market is probably pessimistic and still is worried about deflation and forces that could overwhelm the u. S. Economy. Insee things happening america. Where do you recommend that people go at the moment . Australia is a place you like. Hedge towardss a the chinese slowdown and we are not sure how they could do in the slowdown. If anything, they should slow down as they demand less commodities from australia. Where we see the opportunity is in the european credit and that is still the sweet spot for us. Are you talking about corporates . What were talking about corporate. I believe that there is a focus. They can get out there. Yes. Said, there is a focus on maintaining and healthy battle she Balance Sheet. And if anything returns, a possible read leveraging of corporate Balance Sheets. Thank joining us you for joining us. We have to take a break. The biggest drop for chinese exports in five years. More on that and the other stories making the headlines. Good morning to all of you. I am david in hong kong and these are your headlines. Lets recap some of the data. Then markets reacted to latest employment data. The u. S. Economy created 175,000 jobs and that is 25,000 more than what economists had forecast. We also had the trade deficit be over 39 billion. Japans current account deficit has widened into a another record whole. The economy expanded less than expected and the risk is still ahead. Takes effect next month. Whats wrap things up in china. Trade data shows the largest things up let us wrap in china. Trade data shows a lot of just drop index ports the largest drop in exports. Economists cautioned not to look too much of the set of numbers because of the large oneweek holiday. See the japanese yen right really ranged not in the last three or four months. Lets look at the data coming out of china. What we have there . Below 19 andches 19. 50. Those of the stores driving your market. Whats with the other stories making headlines around the world. The boeing dreamliner has more problems and a jet made an Emergency Landing in honolulu after the oil pressure fell in one of the engines. Bedreamliners are going to checked for cracks. People marched through tokyo to call for an end to nuclear power. This was on the anniversary of the disaster at the shema. Fukushima. They showed that the radioactive levels are lower than paris or london. North korea has held a general election and has claimed a turnout. Voters had little choice in there was a single approved candidate. Kim jongun was given divine status because his father was born there. Coming, we have slumping stocks and billion dollars in losses. We have a look at the challenges facing malaysia airlines. Those numbers are coming up when on the move returns. No news, few clues, what happened to flight 370 . Is talk time in japan. Crimea is voting to leave the ukraine. What is going on in malaysia . There is still few questions. The flight was heading to 239 people were on board. For in coal all long lampur. What is the latest that we are getting . No sign of the aircraft. Itt is 48 hours since disappeared and nothing. There have been oil slicks and another oil slick was discovered. No confirmation just yet that it 370. Nked to flight there has also been debris that is said to be the fragment of an aircraft window. At this stage, no confirmation if it is from the missing aircraft. It has been a frustrating search. At this point in time, the search has been expanded to 30 not ago miles and it involves more than six nations. Thailand, singapore, the philippines, they are all contributing aircraft and shift ships. That,ing to highlight is at this stage, there has been discrepancy. Earlier on, it was said that the aircraft had lost contact. This report indicates that they it had only lost contact for one hour. It indicates the location where the aircraft was and whether it malaysiannam or in territory. This has drawn comparisons with an air france plane in 2009 that flew over the Atlantic Ocean and disappeared. Until two not found days later. It was thought that because cause was a thunderstorm and two rs later, with the help of it was discovered that contributed to that incident. Nothing has been discovered and nothing new. That two passengers boarded the flight using storing just stolen passports. A thai and an austrian once. What more do we know . Investigations are ongoing forwe are hearing that passports are being investigated and you talk about two stolen ones in thailand 1. 5 years ago and interpol has created a strong criticism. These should have been checked against that database and it is standard procedure that may have been missed by Malaysian Airlines. They are an international they are checking against this database. Lots of questions about this aircraft. Chip in the be a past four that indicates that it is stolen or invalid. Have thepposed to system in place where they can check against the database and show that no one with a stolen passport gets on that plane. The procedures should have been in place. Whether they were followed or not is the question. What Security Systems are in place . Well, this is a hightech andort with ambitions to be asian aviation hub. When you get through customs, you see records and fingerprinting systems, the same kind of security that you see in singapore and the u. S. Personally, having gone through the system on a regular basis, it seems like some procedures thenot followed and biometric fingerprinting system was not put in place when i came through security yesterday. Needed,een said that if all security will be stepped up. So far, there has been no indication of a steppedup Security System. Thank you. They are scrambling to find the missing aircraft. With talk about the other challenges facing the relatively new chief executive. In making losses for a few years. Three years they have been in the top spot. Missing targets in taking losses for three straight years. There are a few problems i want to mention for the airline. The government does on a big stake in the airline and the have to get out of the moneylosing entity. Is the entry of a lot of these lowcost carriers and they have a bigger fleet. Know that they are planning to order about 100 to start using by 2016. To fullservice airlines and productivity is the other challenge. If you look at the revenue per employee basis, malaysia 220,000 has a mix of per employee every year and that is half of Singapore Airlines and lower than indonesia. Lets start focusing on the government state in this airlines. Airlinesng that the and the operations there are profitable. Having this would point to the direction that they have been trying to carry these airlines in many respects. If you take a look at the terms when they bailed out the airlines in 2000, they brought back at 29 stake and that is double the current stock price. With theto context comment of Standard Poors where they said that the company has forecast lows and they are under heavy Government Support with favorable terms. What it does is distorts the condition that they have to overcome and should they sell or not sell . The minister said that the owner would do a better job if the government tried to turn this thing around and the former executive and ceo was at the helm when they turned a profit back in 2016. He said the government should get out and there is no question right there. The current Prime Minister says that they are not going to sell and they will have time to turn it around. Have a looke on and at some of the other stories that will be making headlines. India biggest maker may be facing rules in the u. S. A cholesterollowering medicine. Doctors found that a 20 milligram tablet was in a bottle of 10 milligram pills. It may contain glass. Theonly shares declined on dow and the company fell short of expectations. She says that they intend to focus more on Cloud Services and stocks have fallen over the last seven quarters. Nissan may see a rebound in europe. To developby 2017 the european markets. They have almost doubled the current pace. Those are the top company headlines. The japanese economy grew less and what are shinzo abes the plan . Einvigorate what are the main factors for the revision . Consumer spending is lower and business spending is half as much as was estimated in the first gdp data. Those the main factors for the expectedand people business spending to be lower. Ands still very weak Capital Investment is showing that it is not confident. Going forward, this quarter is expected to grow a lot and we will tip into a contraction in april as the tax and sales tax be can keepat mr. A it rising through the second half of the year. Country importing less amounts of energy and that is responsible for the account deficit. That is a record. What does it say about the future sale and the Credit Rating . Economy i the only said that if they continue with the account deficits and fall into a permanent account deficit, this would have an immediate effect on the recommendation and the Credit Rating and trust in japan cost debt. Japans the current account position is negative for the nation and for the fiscal year this year, it looks like japan may have their first ever account deficit and that is when they go to have an effect on how people see japanese debt and they japanese Credit Rating. Thank you for that in tokyo. Into the2 minutes trading day here in hong kong. Were looking at the share prices of Malaysian Airlines coming down 11 or 12 . That the current price and the malaysian market is at you can see the market in decline there and this is the china exports. Since fallen the most 2009. Desk willhas george point 1. 5 . Youre the first to message bond default last week. It is the biggest on record. Inflation is a factor in all of them are clearly issues in shipments for china that have fallen. It increases and the chinese stocks fell on that. Andlooking at the pie chart every single Industry Group is down. Exporters are down to and consumer goods and they are falling. There andervices are exports were so disappointing. Russian forces are tightening their grip as crimea has a referendum on leaving the ukraine. Not one, but two countries. We have a look at what is andg on in the ukraine there is a referendum on secession next week. Any resident of the area will be eligible to vote. See fleet isle i based there and russias black sea fleet is based there. The minister flew to washington for talks. How is this playing out with the markets . That is the subject of the global outlook. Somee standoff has exposed economic weakness in russia and growth with the lowest since 2009. The nation is losing to the ukraine in the stock and bond market. 26 onemonth basis, it is and they have rallied since february 21. That was the day before victory iktore coverage v yannukovich was ousted. That one month was off 10 , as well. Linda leaders across the nation try to quell the growing on west unrest. Executives are scratching their heads and keeping the plunging stock prices from going lower. That is going to be tough. Dollar bonds of at a debtof 1. 3 and ukrainian gave investors a gain. Western leaders have certain sanctions against russia. That is according to the ceo of capital management. Winning andg who is who is losing and Vladimir Putin is losing. He is struggling to revive growth that decelerated from last year because investment sagged and investment in russias oil and gas sagged as well. The currency has been driven down nine percent. The Interest Rates are seven percent right there. Whatever happens in crimea, whether they vote to stay with the ukraine or go to russia, they know that reviving the economy is a leading concern for both. Thank you. Lets get the latest on the situation in ukraine right now and we are joined by a University Student and International Relations professor in soviet politics. We have russia flexing a nationalistic muscle. How far will they go . To what theyear as want to get out of this and more muscleses any or flexes any more muscles will depend on what the west does and what happens in crimea on the 16th of this month. It is a delicate balancing at the moment, Vladimir Putin is losing. Is that the verdict from a political standpoint . I think that is wrong by 180 degrees and it is clear that there are a couple of losers. The west is losing because they can be seen as being instrumental in bringing about the situation and president. Bama has laid down a redline anywest has not taken strong action our military action, given the logistical problems. I think that the west is a loser and the ukraine government has seen that they want to hold onto crimea and the likelihood is that they will not be able to. Defend whereen and russians need defending. He has not laid out statements and at this stage, he is in front. Andhere is a vote coming up is that almost issue when that the crimea returns or goes to russia . A majority people who live in crimea are ethnic russians and a lot of people will not dissipate in the vote because they are worried about possible repercussions if they support the ukrainian side. I think the vote will go ahead and the majority will support the return to russia. Had the crimea as a constituent part of the country since 1954. It was part of the russian empire until my 254 when it was taken from russia and given to the ukraine. If the crimea goes to russia or the eastern part of the a sizableat also has part, what about that going . This is the dangerous part and what we could have is the withne structuring a role a western part of the country that was part of poland until the second world war. It is a Strong National hysteria and essential part of the country is a more mixed area and the ukraine is clearly in the majority. Possible that local authorities and ease the country could appeal to moscow and if that happens, it is a new ballgame. Fromey do for joining us the university of sydney to talk about the situation in the crimea and the tensions between the west and the European Union will stop up next European Union. Time. T, it is a talk we will be back in two minutes. For pay talks between management and unions. Lets go to tokyo with craig. How is it over there . It is a little bit higher than what some of the other carmaker unions are asking for. On therage is about 30 month. Toyota is 40 a month. In the increase is annual bonuses that are paid out twice a year and that is seen as be, who is loss for a looking for an increase in wages to offset the increase in taxes. Thank you for joining us from tokyo. Looking forward to the next hour and theres much more. Who can update on the search. This is an up this is on the move. Live inRishaad Salamat hong kong. This is on the move. The search goes on for the Malaysian Airliner that vanished on route to beijing. Chinassure is on leaders as exports see a surprise drop. Bear market,rs a with rio tinto falling to its lowest level in nearly two years. The Malaysian Air jetliner that disappeared saturday was headed beijing. A lumpur to there were 239 people on board. Ur correspondent is in k. L what do we know so far . Little. We know very little. It no sign of the aircrat. That is according to the malaysian transport ministers. There has been a spotting of an oil slick off the thailand. No details have been given. There is no indication just yet if it is indeed from any airplane. Vietnamese searchers have also found some debris believed to be a fragment of an aircraft window. Yet to be determined if it comes from the aircraft. We know very little at this point in time. Rish, the search continues. It now involves more than six nations, including philippines, singapore, and the u. S. They are contributing all sorts of help, intelligence, hardware, ships, aircraft. We know that the search has been expanded to 50 nautical miles as opposed to 20. At this stage, nothing has been discovered. Rish . Passengersre two boarding the aircraft that used stolen italian and austrian passports. How did this happen . No one really knows how this happened. Passports were stolen in thailand about one in a half ago. It is raising speculation of a possible terrorist attack, but having said that, it is important to note that at this point in time, there is no indication whatsoever that a terrorist attack could happen. That is a crucial note to make. We also know from the latest reports that it is not just those two passports that are being investigated. In fact, at least for passports are being looked to being looked into at this point in time. This is what one u. S. Official had to say. There should be a chip in the passport indicating that it is stolen or invalid. Airports are supposed to have the system in place where they can certainly check against the interpol database to make sure that no one with a stolen passport gets on a plane. Rish, interpol made a strong criticism. It said, these passports should have been checked against the database to see what has been lost, what has been missing. Tell me how you fly in and out of kuala lumpur often. What Security Systems are in place at the airport there . To be sure, this is a hightech airport. The Security System that we see in malaysia, similar to the one you see in singapore, even the u. S. You have security checks for the fullbodied. You have the biometric fingerprinting system. All of that is in place. This is a country hoping to be an aviation hub in sixseven years. The question really is whether all procedures were carried out, whether all procedures were looked into. Kl lastly, coming to night, there was biometric fingerprinting, but i didnt have to do a printing of my summer or any fingerprints. There is a question whether fingers whether procedures by thellowed through officers of the security team. Did you notice any change in procedure when you flew in this time . In short, no. There was no change in procedure or heightened security, so to speak. The Prime Minister said he will tighten protocols and security should the need arise. At this point in time, no indication of that happening just yet. Thanks. From kualawas flying lumpur to beijing. Lets get the view of our chinese correspondent stephen engle. What has the reaction been like over there . Obviously, a lot of heartbreak, a lot of questions, few answers still so many days after that accident. Has spokeni jinping on it. He said china will make all efforts to address this missing airplane issue. China has sent at least two ships to the region to help with the search. Premier li keqiang has spoken with the malaysian Prime Minister. Chinas foreign minister has been in contact with his malaysian and vietnamese counterparts, urging malaysia to make an allout effort on search and rescue efforts. That chineseday leaders are very worried, and that the news is very disturbing. The overwhelming majority of passengers on board this flight were chinese nationals. 153 of them. Mysteries, of course, as well, involves these two stolen passports. How could it to passengers fly on his flight to china, of all places, with stolen passwords when china has such strict visa requirements . In the last year or so, china has laid out a threeday visa waiver program. There were reports that those who were carrying these two bookedts had, as well, oneway flights onto europe through beijing. Therefore, they did not necessarily need visas to arrive in china. The whole scenario becomes even more intriguing. Twonow that these passengers bought their tickets through China Southern Airlines Company whether that was online or through a ticketing agency. They dont need to provide their passports at that time. We heard from the China Southern chairman this weekend saying, ground checks at immigration, at the point of departure, that is key. Checking peoples passports is a key element in this security process. As for the human tragedy, obviously, there is one here, so many questions remaining unanswered. I was there with family members on saturday. It was heartbreaking to say the least. They had to fight their way through a throng of tv journalists and at the hotel. No information. There was no information to be given. That was the problem. Thank you for that, steve engel, our china correspondent. Having a look at some of the company news which is been making headlines so far this morning adias biggest cholesterollowering medicine has been recalled for the second time in just over year. It is after a pharmacist in the u. S. Found a 20 milligram tablet in a bottle of 10 milligram pills. In 2012, the same drug was recalled. Ibm shares have been declining on the down. The company felt short of expectations. Virginia rometty says she is addressing ibms remaining businesses. Sales have fallen for the last seven quarters, forcing ibm to sell assets and buy back shares. Nice and maybe seeing a rebound in europe. It will spend close to 3 billion in 2017 to develop its european market. Nissan is planning 14 new models, double the current pace. Those of the company headlines. How is this working into equity trading . The u. S. Jobs on friday, 125,000. If it werent for chinese and japanese data, i think it would have been a significant way different direction. Weve got the Iron Ore Price at a bear market. Iron ore stocks are declining, for example. New zealand, again, set to raise rates. Is on wednesday. Watch the financials for that. About 1 . Own figures from japan were recruited forecast. Japans deficit, at a record. Gdp was revised a little bit lower for the Fourth Quarter. Chinas data on saturday that was also week, together with the first Domestic Corporate bond default. 18 , whilen about forecasts or a gain of 7. 5 . Inflation is at a 30month low. At an 18month low. 2 . Therefore, these, form the background. Hong kong, down. 25 . The cost become a fallen by about 1 . Right across the board, they are all feeling the pressure of the economic worries of the various areas. Quickly, the performance on the hang seng significantly declined today. Having a look at the chinese down again. Every single industry is down. Obviously, the key ones are the industrials, exports falling. Textiles, down 2. 8 . Consumer services, 2 them. The Iron Ore Price at the bear market, miners following falling. The shares of Malaysian Airlines, down 10 . Thats the sort of financial not to negate the human impact. Of course. Weaker than expected Economic Data plane out when it comes to the equity trading session in japan and in china, as well. Lets take a look at what else is going on and what we have coming up later on the program. We have the challenges facing chinese leaders as they continue to mount. The biggest fall in exports in five years. We have the details. On the move returns shortly. A busy week. Lets have a look at the events we are looking at for you. On tuesday, softbank speaking in the u. S. With the u. S. With a possible deal to buy sprint. Some clues about how those regulatory difficulties might be overcome. A rates decision day in thailand wednesday. The central bank is expected to cut borrowing costs, as the clinical term well continues to weigh on growth. The protests have lost a little bit of steam. They are trying to get rid of the Prime Minister. The conflict has cost the country a lot when it comes to tourism and investment. Wednesday, cathay reporting results. Analysts are excepting profit to be on the up 34 . Jet fuel prices during the time, as well as u. S. Business on the rise. Chinas National Peoples Congress Ends on thursday. Premier li keqiang will speak at a briefing once the closing ceremony is done. Weve got these challenges facing the country. Exports, unexpectedly fell 18. 1 last month. That is a ligand the biggest drop the country has seen since the financial crisis. Economists were expecting a gain of 7. 5 . Those figures along with wholesale prices threaten chinas growth target. They are also skewed by the Lunar New Year. This, weveh all of got our guest. He says china needs to ease its growth targets. These certain things in order to make that 7. 5 target. It, shouldhe end of we take these figures with a pinch of salt . This is the same conversation we have every year when it comes to the Lunar New Year. Thats right. We need to see one more month, look at the march data to see if we have a rebound. Then we take the three months in aggregate, dont we . Thats right. It smooths out. When we look at the twomonthaverage two month fell. E, x boards if you look at pmi data, all these indicators suggest that Economic Growth at this moment may be falling below 7. 5 growth. Ok. What is your primary concern when you look at the chinese economy and we go to the data and when you talk to people . My primary concern is that, given the government would still e to stick to 7. 5 growth but they have never failed to achieve their growth targets. In fact, they have nearly always surpassed them. Thats right, but during the course of the year, we may see some more market volatility, and the markets probably will expect more policy easing if we dont see the first two quarters with fulfill the target. And that is something we need to watch. Commodity prices, some other markets, that data be that data will become quite volatile in the first half of the year. Why did people keep on going on about a slowdown . The data does not support that. Our review is that actually for china to grow at 7 7. 5 , it is a very good number. The gdp side, they have 9. 2 trillion. This is already a magnificent number. China already contributes 30 of global gdp. Economy still a big affecting a lot of regional ones. Australia tofrom new zealand, we still see that china is having a very positive impact on both economies. Absolutely. Spendf you sprint three weeks in australia you are meeting clients, it wasnt a holiday. What was the primary concern that kept on cropping up . The primary concern on china is obviously the Financial Trust companies, trust products it could have a ripple effect. The danger is it has a systemic affect. Also, perhaps the volatility of the growth, rather than the overall level of growth in china. This is something that i think requires some consideration of the policymakers. When they think about their growth target, they need to change their policy quickly to reflect the realities of the economy. What next . Easing is one thing, but if you start doing that, youve got the dangers already of sending the house price bubble into a bigger bubble. It is a bubble. Explodes bubble and it i think we need to think about it in a more comprehensive way, rather than just relying on Monetary Policy easing. The pboc has been doing some good work, trying to allow their the roman be to be more flexible reminibi to be more flexible. That means speculating money inflow will decline. sat will then make pboc Monetary Policy easier to do. In addition to that, we have to think about whether china has run into the risk of deflation. A serious risk. If you look at chinas ppi inflation thats not have an impact on the headline number, hasnt . There are signs that demand is slowing in china. Or there is overcapacity, thats the other thing. Or overcapacity. Will pass, deflation upon to cpi inflation. Think investment will slow. Consumption could also slow. We need to think about how to fight the risk of deflation. We will have you on the program should that happen. Anyway, thank you so much for dropping by. Next, it is talking time in japan with the Prime Minister calling for higher wages. We have toyota and the union away apart. We will head to tokyo for more. Init is shinto or springtime japan, and that means it is the annual round of trade talks between management and unions. Prime minister shinzo abe has been wanting companies to raise salaries to help spending and to boost the economy. Lets have a look at what is going on with the overall auto sector. Nissan appeared willing to except its workers demands for ¥3500 andy raises of bonuses worth five months pay. In well, honda is considering as employees request for rise in salaries and bonuses. Toyota is holding out. The company is pushing back, saying that the unions demands are surprisingly high. According to a newspaper, they are likely to accept the rise in bonuses, but a base Salary Increase less than ¥1000. Roselyn chen, hong kong. Lets see how those pay talks are going to play out. Joining us is willie pesek. How important is toyotas wage decision to japan right now . Well, very important. Think about marquee caliber companies, icons of japan who can set a precedent, if you will, set an example, noname tops the list nor name noname tops the list more than toyota. In japan, it is still very much a topdown system. A lot of toyota peers are waiting around to see what this company does. If we see a fivefold wage increase from toyota, you will see not only industry peers but other members of japan moving. You may see Midsize Companies taking steps. What is interesting, we are talking about 40 a month. Given toyotas profits, that is not a lot of money. However, the fact they are digging in, suggests that there is a bit of tension between the corporate sector and the Public Sector here in japan. I do think that this week in general, when it comes to toyota, is a very Pivotal Moment for whether abenomics filters progressng into making on raising wages, which is what the whole thing is about. It is about getting companies to pay people more so they buy more. Therefore, boosting the economy, ending deflation. I know you have your doubts about abenomics. I do. [laughter] it has promised to raise living standards. Why is this all going off the rails, in your view . In some ways, we put the cart before the horse. Many ways, Prime Minister shinzo abe a thought if he unleashed a lot of liquidity through the bank of japan, if you talk about structural reform, that the private sector would follow suit and raise wages. What the private sector is doing instead is waiting for the Prime Minister to move on structural reform. Prime minister abe discussed tweaking taxes, increasing the workforce. None of that has happened. The private sector is looking at the government and saying, it is your move. We are waiting for you. You, willieing pesek, Bloomberg View columnist in tokyo. Up next, Airport Security is under scrutiny with stolen passports that were used on missing flights flight 370. On the move in two. No news, a few clues. The search goes on for the missing Malaysian Air jet. The pressure is on the promised her. Japans economy grows less than forecast. Indias biggest drugmaker may face tighter rules and united states. Are still very far away from finding out what happened to the Malaysian Air passenger jet that went missing over the air over the weekend. There is an oil slick in the vietnamese waters. Search and rescue teams say they have recovered a window fragment that may have come from the boeing 777. Beyond that, very little is known. Malaysia air 777 vanished on the way from kuala lumpur to beijing. China has sent rescue teams to the area off the vietnamese coast. Malaysian air says that there is some evidence of the plane turned away from its normal route and may have been headed back to kuala lumpur. The jet was involved in a minor accident in 2012 but had been fully repaired. The airline said it has been in perfect working order. This aircraft was in the hangar 11 days ago. It went through a check. Nothing was on toured with the aircraft. Untoward with the aircraft. A while rescuers scramble to find the missing aircraft, it all underscores another challenge for a relatively new ceo. Hes having to deal with turning around this airlines fortune. Three years of losses right now. Troubling times for Malaysian Airlines. The biggest loss was back in 2011. They lost three quarters of a billion dollars. They were able to shrink that into 2012. It ballooned last year. In total, we are looking at 1. 3 billion dollars of losses. If you take a look at the cash flows, they are bleeding cash, as well. Here you go, just to illustrate those losses. He was brought in less than three years back to really help turn things around. An easyy, it is not thing to do. Hes also under pressure, given that there is some political problems, the government does own the majority stake. A 69 stake in the airline. Hes looking at the commercial side. Has been operating some state subsidies, as well, which have been removed. That is something that happened, historically speaking. Obviously, they have to depreciate. Then again, he is modernizing that, as well. 100 planes on order is what theyre planning. 2016 is when they will hopefully try to get those up in the air. In the meantime, he doesnt have a lot to work with given the fact that you have losses, and right now, they are contending with lowcost carriers, which have bigger and newer fleets. Also, a very low cost base, as well. Lets go to the Balance Sheet and have a look at the measurements we can look at where he has to make improvements, i. E. Productivity, as well. How does it compare to his to some of the other airlines . Apples to apples, if you want to compare fullservice airlines. We are looking at revenue per employee. This is where it stands out the most. There we go. Malaysia air this is from 2012 malaysia air makes about 230,000 per employee. If you can see, they lag behind the rights the likes of thai singapore air,d just about double that of Malaysian Airways. You do understand why the value of the company, the market cap or the stock price, has really dropped over 80 , but then again, it is your regardless of what the cost may be. They cant find the plane. That is the most urgent plane, obviously, to find the plane. Joining us for more is the International Director of global Terrorism Research in melbourne. His research focuses on terrorism and security issues. I guess the first question, greg, has to be, how were these false passports or the stolen passports not actually picked up . Because nobody was checking, rish. This is not just true of kl, but it is true of most airports around the world. Most airports have a database or you can check for stolen passports. That is pretty standard. Flights into israel come into the u. S. , or china are checked more thoroughly. In this case, this is just a standard lapse. It probably means we are going to have to revisit this question of why we dont check passports more carefully. There are a lot of stolen passports in the region. To have one stolen passport on a flight like this wouldnt be surprising. To have to passengers traveling together is alarming. Not an, i know you are air crash investigator, but some are pointing out at the moment that the ethnic tensions in china may have played a role. Why are things getting bad, especially after the events last week . Well, the way in which the aircraft went down points to something catastrophic occurring, which points to terrorism. , whicha terror attack the authorities were keen to pin on the separatists. They have beenat very slow to mention terrorism. I think we are going to be hearing more about that. Everything about the crash points to something catastrophic only explained by terrorism. If you see it as a target on a most of theet, passengers are chinese nationals , and of course, the Parliament City is beijing that may ill explain what is going on. Yes . , can you just hang out with us a little while, 23 minutes and sort that out . While we do that, lets have a look at the trading day and get back to john dawson. The japanese yen at a very crucial had very crucial data out from tokyo. The japan deficit record widened to a record. Then you had a revised gdp figure for the Fourth Quarter. Individual stocks today, have a look at the obvious ones, but first of all you can see the dollaryen. Aussie, the kiwi. Areednesday, economists forecasting the first rate rise of the developed world from the new zealand central bank. , dentsu up. Parents is the strength of the playstation 4 consular to structure generates substantially more profit. An encouraging story for sony. We can go to commodity stocks. Iron ore, it is in a bear market. You see australian stocks falling significantly. All of these are iron ore stocks or iron stocks. Atlas, examples of iron ore stocks. Here at the pie tribute can see industrials, as i mentioned before, the record trade deficit, industrials falling 8 . Tech currently is the biggest variousaller across the boards, which includes china, hong kong, and japan. Withles really suffering exports dropping. Also, these three. Fujitsu, fujifilm, falling currently. One more if i can quickly have a look at the chinese story i can tell you the Industry Groups so far. Tech stocks are once again the biggest decline there. There it is. Stocks and telecoms for example, tech stocks down a 2. 9 . That is the theme across asia, tech falling. I will show you this fast 25 stocks down. Two are gaining. Tech, falling across the board. Up next, Airport Security under scrutiny with the stolen passports used on missing flight 370. I am Rishaad Salamat it is monday, march 10. And that is a look at our top stories. The pressure is rising on chinas leaders. Exports unexpectedly falling 18 last month, the biggest drop since the financial crisis. It economists were expecting a rise of 7. 5 . The figures were probably skewed by the Lunar New Year holiday. Wholesale prices along with those numbers may threaten chinas growth target. Of 1 on an 10 annualized basis in the Fourth Quarter in japan. That was compared to a pulmonary government estimation of 1. 5 . It risks Prime Minister shinzo abes plans to reinvigorate the economy. He plans to impose a sales tax next month, and that could hurt retail. The search continues for the Malaysian Airlines aircraft that went missing over the weekend. Searchandrescue teams say they have recovered a window fragment that may have come from the boeing triple seven. Still, not known what happened to the aircraft. The flight vanished while flying from kuala lumpur to beijing. There were 239 people on board. Happeningto what is out there in terms of the equity trading session. Economic data of from japan and china, playing out at the moment. Chinese exports falling by about more. Ay economists were expecting a game. Shanghai, down 1. 25 . The hang seng, 1. 4 to the downside. The current account deficit, a record in tokyo. Japans nikkei 225, reacting as one would expect, negatively. We can have a closer look at that story and get to Bloomberg News japan a coming editor james maker joining us from tokyo. Why the revision here . Business spending, and also, Consumer Spending were revised down from the pulmonary numbers. That is the main reason why these numbers are weaker than the pulmonary estimate and much weaker than most economists had forecast the preliminary estimate in much weaker than most economists had forecast. What is growth likely to be this year . We have had disappointments. Tell us about that. Things are not quite going according to plan, are they . No. As you say, the government was expecting growth to be much stronger last year. Were expecting growth to be very strong this quarter coming to april, which is when the sales tax will increase. That is going to tip the economy into contraction from april for three months. The real question is, will the economy grow after the contraction in the apriljune quarter, or will that contraction turn into a recession . I think the government is going to be looking closely at the growth figures this quarter and next quarter to see what effect the sales tax rises having and how the economy is doing with that austerity measure, or doing to overcome that austerity measure. James. Y something, weve got the current account deficit at record. What do people think about that . The other, its got to hurt the Credit Rating of the country. Thats true. The current trend, it looks like this fiscal year is going to have the first current account deficit for the whole year ever. This is a big turnaround for massivehich once had a current account surplus and has kept that for many years. The economy minister said last week that a current account deficit would damage the trust and japans bonds. Movies came out last month and movies came out last month and said, the decrease in wascurrent account deficit negative for the rating. If japan falls into a deficit and continues to be in a deficit, i think there is going to be a lot more pressure on japans bonds and its credit trust. Thanks, james. Other news from japan. 2000 people marching through tokyo, calling for an end to nuclear power. The demonstration was staged to mark the third anniversary of the disaster at the Fukushima Nuclear facility. It is all an important part of Prime Minister shinzo abe is plans to revive japans economy. Historic radiation in tokyo is at the same levels before the 2011 disaster, and in fact, lower than paris or indeed london. The boeing 787 has more problems. This time, it was a japans airlines japan aircraft that had to land in hollow lulu in honolulu. About 40 dreamliners will be checked for crocs in newly built wings. It follows a manufacturing change at mitsubishi heavy industries. The search back to continuing for that Malaysian Airways jet. Joining us is greg barton. He has held on. He has waited for us to sort out some technical issues. Research focuses primarily on terrorism. Thank you for sticking around. You are making this linkage with this code share agreement with China Southern. Do you think that we should be focusing on that, or is it one of many things that perhaps we have to rule in or rule out . Ofwell, i think the nature the aircraft disappearance points to something catastrophic , which could be terrorism. The question is, who would want to attack malaysia . About the groups we know have reasons not to attack malaysia. However, it was an attack on a chinese target because most passengers were chinese nationals flying into beijing. That rather changes things. Still, the group most likely are separatists, but we didnt think they would have the capacity to launch an attack on an airliner. That is surprising. How bad are things in china with regard to the separatist issue . We really dont hear a lot of good of course, we heard about the events last week, but i think authorities in beijing would rather us not know. Indeed, the authorities in beijing have been talking up prospects for the region, and they dont want to focus on the negative aspect. The reality most people would like to get on with life and watch the economy grow. There is a small terrorist group. They seem to have links with an international movement. They have taken on the familiar narrative, associated with al qaeda. It seems overtime they are becoming more dangerous. This if this attack were their work, it would be remarkable. It is a growing problem. The chinese really do have a problem. There really is a wolf in the forest. Are there other issues upping the ante . Thats the thing. Apart from the separatists, it is hard to think that anybody else would want to attack china in this fashion. As i said, it is hard to think of anybody who would attack malaysia. Although this is most peculiar, but of course, we will hopefully hear the flight recorder and see fragments of the aircraft. Going back to the fact that you are not an aircraft crash investigator, but there have been reports that the transponder on this plane had been switched off. If that were the case, that would competition things. That would show a level of perhaps sophistication that we would not be expecting. Indeed. We had a similar incident 5 in 1995 went into the jungles of sumatra. American investigators think it was the pilot deliberately locking out the colleague and deliberately crashing the aircraft. They say that because the transponder was manually put offline before the aircraft dived. Ish a parallel like that, it possible somebody stormed the cockpit and took control of the aircraft and knew exactly what they were doing. Of course, all these details will gradually drift out. We will get this information. It is surprising we cant get to the bottom of this, given where the location of this crash is. 5060 nautical miles. Considering weve got thailand, malaysia, cambodia, and a Chinese Naval presence, as well. It is quite remarkable we havent been able to find this aircraft. It is indeed. Malaysian authorities broadened the search. That seems truly remarkable. I guess the fact that it went down in an area where there is a handover between the malaysians and vietnamese it is sort of a limbo zone. It went offline at just a point where it was hard to track. The waters of the South China Sea are shallow. If indeed it went down south of vietnam as the flight path suggests, it shouldnt be too whicho find the recorder, is sending out an emergency radio beacon signal. We should find something the coming days of this week. Greg, great talking to you, thank you for your insight. Up next, indias biggest drugmaker has recalled its popular cholesterol medicine from the american market. We take a look at why. On the move is back in two. Coming up to 23 minutes past 8 00 over in mumbai, 60 minutes ago before the session gets underway, where weve got the biggest drugmaker facing tighter rules in the u. S. It is ranbaxy we are talking about. It is recalling a cholesterol medicine for the second time in a year. What more can you tell us . Well, let me start off with the good news. The good news is that this is been classified as class two, which means essentially there is a remote no remote chance of any adverse consequences or death resulting of wrong medication. The bad news, of course, is this is just the latest in a fury of inspections that have come against ranbaxy. Ranbaxy has announced it is recalling about 64,000 bottles of the generic version of the lipitor drug. A pharmacist in the u. S. Has aund 20milligram tablets and bottle marked for 10milligram tablets. Has been facing increased ranbaxy scrutiny from the u. S. The u. S. Is the largest market for all indian drugmakers. Earlier this year, we saw the u. S. Fda, which did an inspection of lipitor ranbaxys plants. Right now, only one plan for and is is in the u. S. Manufacturing drugs for the company. They need to go through the entire process of getting reinspected and recertified if they are going to be able to sell the drugs in the u. S. Again. Rarely, it is not good news coming for ranbaxy. They have to put in place a lot of processes to be able to meet the u. S. Fda guidelines. Thanks a lot for that. Elling us about ranbaxy it is one company we will be watching when the trading day gets underway. Lets have a look at what the prospects are. Off ofot the nifty, 0. 5 . Storming session for that index, nearly 2 on the gain in mumbai. What else is going on with have a look at the . Market opens. Hong kong and shanghai looking like this, both down. Weak Economic Data, weak export members nbumbers. Down 1. 3 and 1. 2 respectively. A record deficit current account deficit plane out when it comes to the nikkei, off by 1 . The cost be, also following the asiapacificwide trend, losing. 8 . Thats it for this monday edition of on the move. To recap the biggest stories of the day so far, including being live in kuala lumpur as the search for the missing Malaysian Airways plane goes on. We are live in hong kong and this is asia edge. What happened to kl flight to beijing . Little news, few clues. Six nations are searching the waters of south vietnam. We will be live in malaysia. Hour, itoming up this is shantou in japan with management hammering out there annual deals. We will look at the auto sector, particularly toyota. Smokerscigarette lighting up in public. And every little help for employees doing a good job. A big good morning to you. Economic data out of asia. We have exports coming out. Also, shipments down 18