halt. we have reports across the region. .t's a big week for china the economy and the environment top the agenda. we look ahead to the challenges they have to face. the oscars are under way right now. we are going to have details of who has won and who is not winning in l.a. we will have all that and more. >> kiev has put its military on full alert as russia heightens it grip on the crimea. the g7 has suspended preparations for the june summit in sochi. unidentified gunmen have , obama responded to putin and is sending his secretary of state to kiev today. >> what has already happened is

a brazen act of aggression in violation of international law, in violation of the you in charter, in violation of the helsinki final act, in violation of the ukraine russia agreement. russia has engaged in a military act of aggression against another country. >> we are on the brink of disaster. there was not any reason for the russian federation to invade .kraine >> i am watching what we're seeing across the markets because of these geopolitical tensions in that part of the world. it is really about risk aversion. benchmark indexes were off the day's lows, but we are seeing fairly sharp losses.

we get the asia-pacific index up for you. investors are basically scaling back on risk exposure. we are either seeing money profit-taking or some of it was supposed to be going into equities this week going somewhere else. here in the region when you talk about safe haven asset you talk about the japanese yen. you talk about japanese government bonds, and traditional you are looking at gold. is stronger by 4/10 of one percent. you are seeing yields on the japanese tenure at about 6/10 of one percent. i will be back with more later on. back to you. >> more signs of a slowdown in china. manufacturer pmi falling slightly. we have hsbc agreeing with the sentiment. but a bit resilient of a slowdown. >> we take a look at the figures

indicating we are seeing slowdowns by the most in seven months when it pertains to the manufacturing sector are. the final reading for the month of february was saying in line with the preliminary reading, which was 48 point five. anything below 50 indicates we territory.raction anything above indicates expansion territory. the head of china economic resource -- research says there an economic activity component. >> economic activity is weak but still resilient. people are over concern the economy is weakening a lot. the data is patchy during this .ime and highly distorted we shouldn't read too much. >> factory output is going to be one of the main talking points at the communist party meetings going to kick off on wednesday. >> what does it mean for the broader growth strategy.

much has been talked about in regards to this meeting on wednesday. >> every year the chinese ministers gather in march. many refer to it as elliptical pageantry. it's unclear where it's going to fall this time around. what we know is growth is going to be very important. to willle i am talking clarify at these meetings. a growth target is likely to be set. last year it was set at 7.5%. 63% of economists we surveyed say they predict the same number. 33% say between seven and seven and a half percent. number three is pollution. this is self-explanatory. weeks of smog have choked the city. reform, we will hear how they opened up to investment. they alluded to it i can

november. what concrete evidence are they going to provide? lastly, shadow banking is equally important. it is an unrelated -- unregulated industry. we will see if they provide clarity reforms. none of these issues are new. what investors are going to be ofking at, what citizens china are going to look at, and what the world is going to look at is how this platform will be used to escalate these issues, not just rhetoric. what are the actual actions to come out of these meetings. that is what we will watch for. fast retailing is said to be in talks to buy u.s. loathing designer j.crew. fast retailing may face competition from other bidders. them expand help the global presence and give access to funds as it ways the public offering.

shares falling 9/10 of one percent. warren buffett missed his target at berkshire hathaway for the first time while berkshire underperformed. he doesn't expect that to happen .gain berkshire posted results over the weekend. is innual meeting nebraska in may. microsoft's new boss has announced his first major decision. he is shaking up senior management in an effort to reignite growth. the man passed over for the ceo job is leaving microsoft. ukrainianction to uncertainty. at commoditiesg right now. today charts we have.

look at where we are. 103.76. one dollar 30. gold $12. this is where we were when it closed and where we are at this point. above 13.30 an ounce. that is pushing up with a down day. very sharp gains in sydney. here are some of those names. new crest mining and resolute mining. sharp gains. back to you. >> thanks, david. our reporters across asia have been taking a look at the struggles people face getting to work across the region. indonesia's capital has a reputation for having smoke the orst traffic.

tommy takes us on his typical commute. >> i'm about to make my way to jakarta's traffic jam to work. a 9.1 kilometer trip and takes us about dirty minutes -- 30 minutes if there isn't any traffic. our route takes us north to the bloomberg tv indonesia offices in the heart of the city. this is the city of 10 million people, but that rises to 28,000,001 to take on the greater jakarta area. one study estimates more than three and a half million people suburb every day from a area to the city center, creating some of the worst traffic in the world.

now,more than 90 minutes only four kilometers. a quick look around shows you why. total gridlock. buses but not enough. for a limited train service many residents. a metro project is underway in jakarta. there is a popular policy among residents desperate for an alternative to sitting in traffic. it is pretty unprinted to both, but today is one of the it has taken us two and a half hours to reach the speed of 2.6 kilometers per hour. that's definitely slower than walking speed. >> asia's traffic troubles later with a look at what governors

are i -- governments are actually doing to stay away from the gridlock. up next our guest says china is a source of risk when asia edge returns.

>> china has been at the center of discussions this morning. we asked morgan stanley's chief asia equity strategist who began with state earned enterprises. >> we are looking for more enterprise reform, the idea of five and capital. we are starting to see some announcements on that. we are looking for sequencing of interest rates. we want to see the capital account liberalized last, and again, we will see more details on the health agenda.

>> we spoke to the head of china economics, who's a growth will slow in the first half. i think china's economy will continue to trend down. have v-shapeda to growth, which means the economy would trend down because china , and we expect that growth to slow in the second quarter to 30% before the government may have another stimulus measure and boost the economy. >> steve goldman says we're going to see seven and a half percent growth this year. in 2014 are going to worry about the hard landing in china. certainly the data is slightly weaker than it has been in the past. our view is china is still going to see a seven and a half

percent growth umber as the export story still looks relatively good. china ise i would say still targeted to grow at seven and a half percent level. >> we will stay with china and bring in our next guest. in ourjoins us live studio. we got the official figure coming out of china this weekend, and we have/manufacturing, but both down trend. what is your assessment? >> there is this idea that people coming back to the factory, things are tightening up. it hasn't really worked so far. the economy is still decelerating. probably we're going to get soft in numbers. >> how do you gauge the yuan's ?eakness it was a bit of a surprise. >> it was a bit of a surprise

but understanding from the perspective of the chinese central bank. managing had trouble onshore financial conditions. every time they tighten more capital comes in. this was designed to shake out some of those trade, reestablish the central bank or domestic monetary conditions. >> do you think it is a trend or just a one-off? >> i think it is a trend that would be with us for a little while longer. it wouldn't necessary derail the long-term depreciation of the yuan. you need to have strength. for the next two or three weeks two or three weeks we might see more volatility. this is a new goal to reestablish the signal for the market. >> do you think this is coincidental, this communication with the market, that you can't assume what we are going to do, that this volatility could be

laying down the groundwork for what we are going to see in terms of reform for national people's congress? >> i think it is coincidental. clearwhile there is a tension between what they were trying to do and capital into the country. it got to the point where they really had to lay down the marker. is more coincidental than something that is more connected. this? groundbreaking is much is needed, much is wanted. think they will do? >> we know what they want to do. of six them a list reforms in november. now it is which one are they going to prioritize and how do they fill in the blanks? we look for some signals on the fiscal policy side. will they allow local governments to issue more bonds?

what will they do on interest rates, and possibly what will in this system? these are some of the first steps. there is a lot more that will have to come, but don't get too excited. it's not the end of all -- the end all of the process. >> how much credence do you put on the mpc? the uniforms come out, but could this be a continuation of more forceful language question mark is that what you will be listening for? >> we will look at the end of the process and trying to read between the lines at how exactly it is going to sequence reforms. i think that is what this is about. we know what the reform process is, but we don't know the exact sequencing. which reform school do we prioritize? which will be tackled first? which will be on the back

burner? for the past few weeks there is a sense that state owned enterprise reform might not be one of the priorities we implemented this year. this will wait until next year or the year after that, but this year it is financial reform. it is fiscal reform that will be prioritized, but what comes first or second if we have to wait for the press conference? >> there was an entrepreneur importing goods, and he said his clients are concerned about one thing. that's the communist and capitalist system bouncing around. they are worried about the to everythingsed else. >> there are underlying tensions. you have a burgeoning private sector. you still have a state owned infrastructure. tension over where the economy is going to go. we always have a big ideological disagreement and assume the

chinese have figured it out. the reality is they are still discussing the options. how is the economy going to look in the next five or 10 years? is iny are making plan b case it really does crack the system. transparencyhave because of the communist system. is done behind closed doors, so what do you have to look for? is reading tea leaves, and everybody else is guessing. >> it is reading tea leaves, but it's one of the joys of being a china watcher. you need to look at statements by officials. you need to see what has been leaked in the media. you need private conversations with individuals and piece the puzzle together, but it's an ongoing process because it's a shifting target. what china will actually implement is not laid out clearly.

it's as they go along. , and that is a shifting target. >> stay right there because we have a lot more coming from you as well as the rest of the gang. >> next, one of switzerland's banks inhey -- biggest the tax e-mail is in after the break.

>> julie is there. the u.s. investigation is hoping to reach a settlement this year. lawmakers have been looking into whether 14 swiss bank helped americans of a taxes while in an exclusive interview. the ceo says they are currently in negotiations with authorities. we are currently in discussion with the department finding a on ways of settlement. we have been already out there for four years. for us it's not something new. we are looking to find a settlement this year. >> is this the start of a cleanup and switzerland's financial industry? in singapore or hong kong or london. everyone will have higher acceptance, client

of diligence, and i think ultimately this is good for financial services, for the integrity of the system, clients that maybe were working on an undeclared basis in the past are slowly in the age where they are facing succession, and the new , theytion of clients don't want to have anything to do with the money because they don't understand it. they prefer to have less, but that is money that can be moved freely. of the clampdown in secrecy laws, does it seem like swiss banks will get rid of u.s. clients with undeclared assets? the question is will it go all the way. will it also impact clients from other nations? the likes of indonesia, africa, brazil? >> i think u.s. clients have by

and large exited from any other financial center because of the liability risk they can create. in europe as you know the entire european union neighboring countries have entered into a and finding a framework for the future. this effort is mostly done. we are left with france and italy with whom we are in dialogue. singapore itself has come up with a number of rules that should also regulate how clients combine in the region and singapore, and it's the same in hong kong. wax the credit suisse ceo was grilled for about three hours just last week by the u.s. committee. what do you make of his performance, and have you bysonally been approached

the department? >> we have not been approached. it's difficult to judge the performance. i think one should judge only his own performance. ambiguity of how they are to be answered i think it did reasonably well. >> a quick lance at the afternoons business in tokyo. we will get the latest on japan's reopening. down.s were concerns about the ukraine and north korea. all that coming up after the break.

>> the west moves to iceland. stocks are falling on the news from japan. the work of getting to work. bumper to bumper across asia. reaction to the last launch of missiles for north korea. the world has a lot to deal with at this point. we have been reporting all

morning. north korea was confirmed to have fired two short-range missiles. it was confirmed by the defense ministry as well. these things get ratcheted up. daysly we get one or two defenset of these related stocks listed in south korea. they were up. now we are seeing modest losses. means thatred, and is weakening. we are down about a quarter of one percent for south korea. really in line with what we are seeing across the region. we are talking about japan reopening. another big he'll could be brewing. fast retailer said to be in talks to buy j.crew. they say the valuation could top

$5 billion. earnings story. to be disappointed. bringing down the forecast because of a disappointing performance. mazda does a lot of business in europe. the japanese yen strengthening for 30 straight days. that doesn't exactly bode well for profits. jpmorgan with a note of raising the rate on several players. the electric company raised to high perform. term more than anything else. back to you. >> thanks, david. today we are looking at asia's gridlock streets. more than 20 million cars were sold in china alone last year,

leading to clogged roads and increased aleutian. our china correspondent looks at what the government is doing to smooth the road ahead. >> wouldn't you know it. on the day i do a story about traffic, traffic today is not too bad in beijing. perhaps it because the pollution levels are upwards of 400 and people are staying indoors. nevertheless, the beijing government and also the governments of other big cities that have the traffic problem's, they have been restricting the number of cars on the streets every workday. for example, i cannot drive one day of the week. there are a lot of rumors that is perhaps going to be spread to two days a week to get a number of cars off the street. authorities are also tightening the license plate lottery, where they restrict the number of license plates actually issued every month. that was introduced in 2011. i got mine before the restrictions came into being,

but there is a guy. that's another hazard of driving in china. the chinese joke that is more likely to win the actual lottery than the license plate lottery. last year 22 million vehicles ,ere sold in the chinese market and for the fifth straight year that surpassed the united states, making china the largest automobile market. traffic again. we did hit traffic. you cannot go a mile without hitting bad traffic in china. by 2020 this market is going to sell 30 million vehicles. there was a big push for urbanization, making cities like beijing even bigger. the gridlock is going to get worse. >> now mongolia is one of the world's fastest-growing economies, and that brought a wave of cars to the streets.

we look at what that means and the problems it brings. built forinitially half a million people. it is now home to more than a million people, many of whom have little choice but to drive. the extreme winter weather and long distances make walking and unattractive option. the city has no subway, so public transport is limited to buses. the number of cars in the city has doubled over the past three years to 320 thousand. that growth far outpaces the expansion of the road network, which has increased by just one percent on average per year over the past four. authorities recognize traffic is a problem and have taken efforts to tackle the issue. initiated a license plate policy to restrict cars on

the road. cars are banned from the road on specific days of the week depending on the last numbers of the license plate. the nine means they cannot be driven on a thursday. by 30% orc decreased 34,000 cars per day. the government is taking actions to redesign busy intersections and build more highways. >> now to the gridlock picture we are looking at right here. the government introduced a lot of measures to try and deal with the situation but with little of sight. >> most of these are temporary. they just eased conditions. cars goingtill more to be put on the roads. last year 18 million cars around the world. they are pretty thing 120 million cars on the road in 2016. that is just a few years from now. that means more gridlock.

they predict a peak very soon in the next day k perhaps. that means the number of cars is going to crest at about 100 million according to ihs. why is that? there are too many cars on the road. the you in is saying there are going to be 22 mega cities with populations of 10 million or more. what does that mean? cars, congestion on the roads, and it is affecting people's behavior. examples like jakarta, there are reports say more people are shopping at minimart because the traffic is so bad no one wants to drive across town to get to the supermarket. it is affecting people on an everyday basis. >> it is pretty intense. this weeksreforms at him pc. >> that's something they are looking at very closely in china. >> many banks indeed. >> let's get back to what is

happening in the ukraine. an appeal to international help after russert the control of the crimea. joining us is the professor. he is an expert on politics and the often tends relationship .etween moscow and kiev why are things so intense right now between the ukraine and moscow. seen has beene the overthrow of a legitimate government and the establishment of a new government, which has --n unsure of itself, with but which is trying to create a situation in which it can become more closely aligned with the european union that ukraine was -- then ukraine was in the past. president putin is taking exception because he what the ukraine associated with russia, and it seems neither the eu nor

russia are willing to accept a ukraine which is or equidistant from both. >> if you take a look where map of ukraine and crimea sets, it really is integral to russia's naval dominance. it is really their only access to the global waterways. talk about the history of crimea and what it means for russia's ower base. >> crimea has always been important as a military base for now foret union and russia because it provides an outlet onto the black sea. conceivably have other outlets onto the black sea, and it does, but these are mainly civilian ports, where this is set up as a military base and therefore has all the wherewithal the russian navy requires. russia clearly wants to retain that because it provides that

outlet to the black sea and therefore into the mediterranean. if it wanted to exercise its influence in the mediterranean in any other way we would have to go all the way around the european continent in order to do so, so strategically, crimea is important for russia and maintaining its military rights is important for russia. >> it's got 58% of ethnic russians there in the crimea. you have got president obama sending secretary of state john kerry to kiev. impacth is this going to this showdown between the ukraine and russia? >> it really depends very much what president obama decides to do and what president putin decides to do. is there is for sending

ground troops in, and in many ways unless foreign ground troops are going, it seems difficult to see how external powers can exercise any direct influence on what happens on the ground. clearly what the american government would try to do is get russia to withdraw by threatening various sorts of bees of pressure that can applied economically, politically on the international stage. i guess that's what they are going to try to do. signals theto kiev u.s. believes key evidence in the right and russia is in the wrong and will do what it can to bring about a resolution of the issue, but as far as putin is concerned, i don't think this will cut much ice with him. he sees this as being just another instance of when the united states and europe have sought to extend their influence

into what he sees as russia's traditional back yard. >> military presence excepted, we have heard from john mccain basically saying that is off the table. whether or not that was ever on the table. what is it going to take short to leaveo get russia if it is going to work? >> i think what russia is after is to establish a situation in which it's continuing access to is military base in crimea guaranteed, regardless of what happens in kiev, regardless of what sort of government there is, and the second thing it wants is the government will not get into bed with the eu, that it will continue to retain some close associations with russia. if it could get that, i think putin would probably withdraw

russian troops. , thank you for joining us this morning. >> next, taking center stage, we are going to look at what top authorities when china's leaders gather in beijing after this short break. stay with asia edge. ♪

>> welcome back. , head of fred newman economics research at hsbc. are we talking about china, or are we talking about the oscars? >> whichever one you want to start with. >> let's talk about the real-life moviemaking that is films, the in future

geopolitical tension between ukraine and russia. how much of this is going to play into the sentiment we are starting to see today that we saw in the early part of this year and could emerge once again? >> i think markets in asia are getting used to that, that continued noise in the background of geopolitical tensions. we had in january and early february some wobbles globally as they burst onto the scene. now i think it is starting to and the background noise, markets i don't think will be flustered by that. >> the said as the credit issue is a risk. the policy is a risk. there, butrisks looking at the chinese credit situation, we can't really know for certain how bad it is, but how worried are you about it? .> we think it is manageable

china has excess savings. mean chinese policymakers don't want to set a market by having some more credit risk pricing come back into the system, so for the next few months you might see more of that hit the headlines, which doesn't mean a collapse of the financial system, but i think that will continue to be on investors minds are the second quarter. >> what do you think? what do you think are the big collision point for china? >> i think one of the big issues is going to be how do we deal with, how do we see the government deal with local debt? -- does that lay through play through? we were talking about initiatives. one of the elements is opening up the financial markets to local governments to be able to

more a better and sustained that. how are you thinking of that specific risk as it relates to the chinese municipalities and provincial debt issue? >> for municipalities, it is government debt at the end of the day. the fault i brought seems unlikely. there's a lot you can do with credit guarantees using the china development bank, beijing offering credit guarantees. ultimately to the extent infrastructure investors are not too worried for the time being. what would potentially be a bigger risk is if the real estate market starts to soft and often.t and -- s

prices are cooling. that could potentially be a headache for policymakers. >> what you expect us to hear from the mpc as it pertains to these more social issues? whole bag of social issues. i think one that has become more prominent in recent months or years if people are upset about environmental pollution. pollution,on, water etc., and the government has been responsive to these demands. it's a tough balancing act between economic growth and trying to reduce pollution, but at the -- i think at the end of the day the mpc will look at this issue. i think we are going to see more forceful statements about growth. on thatis interesting front. we have clearly seen utilities that are more oriented towards renewable and clean energy technologies to reduce electricity behaves quite nicely.

the market is certainly starting to anticipate some of that. hsing.eard from lee co. he is making a bet in that space. lee featured one of his rising venture fund companies. leaf, and theyna are taking a look at the lightbulb that could emit 100 watts of energy using just 12 watts of actual power. how much do you think these kinds of innovations are going to be integral? >> taking it in a broader really, technology is a intriguing place in china, and historically it was because it was cheap to produce than it was elsewhere. the intriguing part about china now, which is part of the consumer domestic growth idea is

you produce it as well as consume it. whether it is environmentally oriented technologies or whether it is more traditional consumer oriented technologies, it's quite interesting looking. the stock performance looking at revenue growth, looking at earnings growth, we're seeing that with existing chinese stocks. >> oscars. >> gravity already won a couple. have we got best pictures? >> not yet. i got my bets on dallas buyers club. >> it will be close. >> are we going to break it? we might just rate it on this show. stay tuned for oscar winners. thank you to the rest of the gang for today's discussion. still to come, a lot more.

>> it is oscar time in l.a. the winners make emotional speeches. that is when asia edge returns.

>> the academy has already handed out honors this year. there is one of them. techare the less known awards for those who do special effects. >> the man who created the rborator was given the award. >> if you saw transformers dark of the moon you might recall a sea of exploding cars. you can see this ain't cgi. flipping, redars cars flipping, even school buses.

the device that makes it happen is the car flipper. he helped dream it up for michael bay. how it works. a car is placed on top. it is loaded with high pressure nitrogen that pushes into a piston, which then throws the car as far as 25 feet. >> you want to get that error in that cylinder as fast as you can, and that's what makes it work. 3, 2, 1. that's how you flip a car. tool ofe this the choice was a canon. now he rents to productions across the globe for a couple hundred bucks a day. >> this is the most economical way to go. install in the car that is going to cost you $2500 a car.

>> if you really want to get fancy -- >> we take a cable, rapid around the car. you pull on the high-speed accelerator along with the car flipper. it will just hold the car. >> once you flip a car and it is in rough shape, what you do with the car? >> >> these cars will go to a wrecker. -- a >> the academy awards are heading to a climax in l.a., and we have already had some big winners. n'yongo won. >> have you watched that movie? pre-k's it is very moving.

>> we have been watching this actress rise all year, really known for not only her acting prowess but coming on the scene with that smile and her fashion sense as well. best leto picked up the supporting actor for his role in dallas buyers club. inplays a transgender woman the low-budget film. >> matthew mcconaughey is the widely pick favorite to win best actor. disney's frozen has been named best animated feature. it is approaching $1 billion in the box office. only the second animated film ever to do that. the first, toy story three. >> we are absolutely going to be watching and congratulating all the winners. i know this is not only a u.s. event but a worldwide one, and people around the world are watching, including right here

ina. >> i can give you can give a speech. >> thank you. that's it for us. somebody is playing music, and i have got to get off the stage. >> come back for more. ♪

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