up this hour, monsoon disaster in kashmir. we have the latest on the rescue operations. and jakarta markets turned a record. it with one about of indonesia's biggest conglomerates. and tapping fashion for electric cars. all that and more in this monday edition of "asia edge." >> a very encouraging piece of data out of china this morning. trade activity continues to be robust. david is here with another china surprised to the upside. >> we will get to that in just a bit. we are seeing that continued sluggish picture. imports exports better, not so good. surplus.ade another record, in fact, for the seventh straight month. for august.

that is about $100 billion over the past two months. if you go back to january, we are looking at about $200 billion in total. just to give you an idea of how large that number is, i inc. the the one in asia -- i think next one in asia is korea. china is 10 times larger. imports down 2.5%. ist you can't take away here that things are chugging along slow, but it is the old engine of growth that is helping keep the economy moving along. not exactly a bad thing. if you look at exports, that gives you a snapshot of how other economies are doing. especially trade with developed economies like the u.s. >> didn't they see a fall in u.s. exports compared to the previous level?

>> it depends how you look at it. two-way trade. obviously, the u.s. still has a trade deficit for china. china does export more than advise from the u.s. what you are looking at is the biggest export markets of china. the u.s. is still number one. it is always very close. thatkong, when you look at , -- asean region have been growing leaps and bounds. it is growing quite substantially. very small relative to china. japan has been quite stagnant. south korea, which is included , trade witharea

south korea has actually fallen. if you look at the countries that are enjoying a closer trade relationship with china, these are the first two. philippines and vietnam. these two countries are the ones with these tensions in southeast asia. then you look at how trade is doing, it is growing by leaps and bounds. .n russia, 17.6% that has to do with a lot of these energy imports. >> they signed those big deals a couple of months back. >> these big deals usually reflect the month after. and the u.k., 14.3% and 12.3%. the of america is saying new version might boost china's exports by 1% a month for the rest of 2014.

so thank you, tim cook. >> that is an extraordinary moment for china. thank you so much for that. abenomics, aook at little bit more pressure. japan's economy contracted more than initially thought. let's get the numbers from james in tokyo. not quite the sort of news that shinzo abe wanted to hear. >> that is right. the second quarter contraction was larger than initially estimated. larger than our economists forecasted. it contracted 7.1% annualized, the biggest contraction since the first quarter of 2009, just after the lehman brothers collapsed. one of the biggest economic japan's economy is contracting again. looking forward, the economy is expected to grow in the third quarter.

recent estimates have not been very strong and economists have revised the down there estimates for the third quarter. the government was hoping for good economic data in the third raiser so that they could the sales tax again. so far, we are not seeing strong indicators of that. here.l me something do we have any good news? >> not from today's gdp data. capital spending was down. private consumption was down. in the current account data that , the tourismy surplus, for the second time in its history, the amount of money that tourists are spending in japan is more than the amount of money that japanese tourists are spending overseas. japan had a record number of tourists in july, which is responsible for that surplus. , not really good

news for the government at all. week, -- >> sorry, james. let's get reaction and find out more. we are seeing what happened in the morning, which wrapped up about 35 minutes ago. see, markets going down. it has bounced back and is now 25 points that range to the lighter side, but it is still holding here at the moment. consumer stocks, the tax rise weighing on those stocks. , consumerervices stocks are seeing declines.

which stocks are falling the most? autos, for example. goods.ld a ton of stocks are falling. risealling because the tax . long-weighted ipo nears closerd ipo as it begins its sales pitch to global investors. a global roadshow that starts in new york city. >> that starts later today at the waldorf-astoria hotel. it is starting in new york because this is a new york stock exchange listing. it would make sense that they there.eed investors we do not know exactly when the stock will start trading. we do know it is being priced on

september 18. the valuation here is really stunning. $163 billion. that is how alibaba values itself. many in the analyst community say a 100 billion dollar valuation is not enough. they say alibaba's real potential has yet to be realized. very interesting. 60 times those of amazon.com. times more profitable. can you believe that? really strong numbers for the company. we will see how this ipo fares. the debut might not match the hype of what we have seen. bookmakers and the will try to get a higher valuation, as they always do. >> let's look ahead on this program. apple expected to launch a wearable device. we will check out some of the smartest gear already competing for your cash. after this short break, we will be back at the business forum.

and we will talk to the head of one of indonesia's biggest conglomerates. "asia edge" is back after this. ♪

>> you are back with "asia edge ." we are going to head over to singapore. we are going to return to our coverage of the asean business club form. we have the chief of one of indonesia's biggest conglomerates. take it away. is on the cusp of a leadership change. joko widodo about to be inaugurated. that will happen in november. he wants to boost investment in the likes of infrastructure and health care. ceo joins us today. good to have you with us. what jeat are you about

okowi has promised? excited aboute him. hopes,ction gives new new ways of doing things. he has promised that he will free up the economy so that investment will come in. infrastructure is a priority. he wants to increase the welfare ,f the people, health care putting in infrastructure. >> health care a key issue. joko is also after free health care. hospitalsce private like the ones that you run to provide free health care. would you see that happening and what impact would that have on companies like yours? muste standard of living rise. to do that, he is talking about

improving health care. the government focusing on universal health care for all the people but allowing a forate-public partnership the private sector to invest in health care to supplement for the middle income people. what kind of investments are you looking at making in the area of health care. how can you expand? >> we are looking to expand quality health care throughout the whole country in the way in a wayuild scale and that is also compassionate. at this time, we are not just talking about middle income, but we are also excited to participate in the government public hospital program. andave built the first one

the government public hospital program works. >> do you foresee competition from the region given that asean is a single market? oneave seen at least singapore operator getting into the indonesian market. >> globalization is about competition. competition drives efficiency and productivity. must give an advantage to the early mover. indonesia is half of asean. we are more familiar with how things operate in indonesia than other people. so we want competition. competition over his -- opens up the whole market. so we like that. sharesmust be liking how are doing in a company that you run. currently trading at 150 times p.e.

think investors have been way too optimistic and running way ahead of fundamentals? investors arehat looking at who will be the driving force for indonesia's health care. gdpt now, less than 3% of on health care. over the next 10 years, 15 years , it will go up at least 8%. so the growth is just fantastic. hardware as well as software. year, the company will grow 35%. in the next two years, it will grow another 40%. , there is a deficit in health care. >> so there will be growth in the health care sector.

countries, growth will be in the health care industry. >> the other area is infrastructure and property. is there already a bubble? >> when we look at bubbles or manywe have to see how total property is a percentage of the gdp. right now, it is still a 33%. when you get to 10% of gdp, then you start getting worried. the total public sector is still less than 3%. outstandingans versus household income is still very low. >> james, we have to leave it there. james is upbeat about the health care sector, in particular.

back to you. >> bloomberg has been at the asean global business forum all morning. among our guests is the head of one of indonesia's largest telecom companies. he recently said the incoming administration just takes steps to boost competition. >> we have been waiting for consolidation the past few years. one of the first steps was last year. acquisition,t there are too many players in the market. there are now eight players in the market. the idea is for the government to come in and make sure that certain levels of competition take lace. -- take place. the best way is an environment where inflation is required from ourselves. of the bank was

looking at the future. -- progressing to create a much larger operation is going well. >> we are in discussions to put bankher a much larger going forward. negotiations are going well. i think that there is momentum in the management teams of all three institutions. proposals finalizing a that will be accepted by shareholders. >> and looking at the aviation tonytry, air asia's fernandez said regional carriers need to integrate further. >> we should learn from europe. do we need 10 flight carriers? do we need 20 local carriers? ownershipt common

will be around. i think aviation has moved forward. tiger wasthailand, indifferent countries. aviation has probably shown the way in terms of asean integration. >> and that was the word from asia on the asean business club form. next, hundreds on both sides of the disputed border and the latest on the rescue operation. that is coming up next. ♪

>> this is "asia edge." we are going to check on some of the stories making headlines for you. the cease-fire in the eastern section of ukraine is under strain. the rebels agreed to a truce last week. president poroshenko and putin talked last week and. there is no talk of ending the cease-fire but martial law may be imposed if it does fail. calling a member countries to find the political will to confront the islamic state and other militant groups. they denounced the killing in iraq and syria.

they said that members often fear to act for fear of interfering in another country's affairs. president obama will lay out his strategy later. this week. >> this is not going to be an announcement of u.s. ground troops. this is not the equivalent of the iraq war. what this is is similar to the kinds of counterterrorism campaigns that we have been engaging in consistently over the last 5, 6, 7 years. minister isn prime facing the first major natural disaster of his administration with at least 120 people killed by floods in kashmir. he has ordered millions of dollars of emergency aid and has offered help to his pakistani counterpart. has -- haveains caused flooding. the forecast is dry weather over the next couple of days.

>> for more on the floods and the rescue operations, we have the latest. >> the forecast is expected to be no additional rain over the next couple of days, but this is the worst that kashmir has seen in the past six decades. theential rains bringing death toll to more than 150 people. here are some more stats that we know. 250 villages have been submerged. nearly 300 of those completely cut off from relief efforts. thousands of people still stranded. thousands have been rescued. they have announced special assistance for those affected. prime minister modi has offered help. we understand he has offered

assistance to pakistan for relief operations. on sunday, a statement released by the prime minister's office and later on in a letter to his pakistani counterpart, he offered assistance to islam about -- islamabad. islamabad reciprocated, offering its own support, but has not responded to the offer made by prime minister modi's office. >> thank you for the latest. >> 19 minutes away from the start of trading in mumbai. let's look at the futures. futures, the nifty futures up by .3%.

could be erasing the loss that we saw on friday. no trading today in china. surprise,e that big trade data coming out for august which showed a nearly $50 billion surplus. seng in the doldrums a little bit. even though we have the positivity on wall street on friday, did not translate to positivity in the asia-pacific. most equity markets on the way down. nikkei, looking at the which was positive after its morning session. ♪

>> mind the gap. china cracks down on bankers pay. they will not sidestep bonus rules. and stocks in wellington and jakarta at record highs. a bit of a sinking feeling elsewhere. getting the japanese reopen as well. markets thate the are closed are china and south korea and taiwan.

three markets are closed. nikkei holding as it comes back from that lunch break. singapore, and the hang seng seeing declines. mainmport story is the one. the hang seng is one of the top three decliners. diversion's -- a bit of a diversion's -- a bit of a divergence. the overall picture from the intraday chart, that is the decline from the gdp out this morning. numbers are falling.

the hang seng, this is more of the reactive part. , the australian dollar did not react at all. in this case, look at that. >> top salaries are a fraction of those of their american counterparts. aging is cracking down on executive pay. bloomberg intelligence banking analyst francis chan is here with me. let's talk about the thinking behind driving these top salaries down. icbc chairman gets paid 2% of what jamie dimon does. icbc is at the pace in

june of 2014. you can see the difference in the asset pace. salariesutting banks is mainly for lessening the public discontent regarding the paychecks. >> so it is political. >> that could be the case. atond of all, if you look the point of view from the --ernment, these executives it does not take too much expertise. itwhat you are saying is does not make too much of a difference to the operations of the bank. >> in fact, to cut their , giving themher

incentive to manage the banks better for the shareholders. if you look at their counterpart in the u.s., the compensation for major bank ceos in the u.s. was 7.8 million u.s. dollars in 2013. china,look at banks in they were at least 2.3. the chairman making only 2 is inconceivable. >> what about the idea of incentivizing? it is something which has not been the norm. that is another way of getting around. it was the first state bank to announce the plan of stock

incentives. ways toone of the offset the probable pay cut for executives. it's you look at trends of china banks over the last four , they are rising fast. the bank executives -- >> thank you so much. >> european union regulators are warning banks not to sidestep rules on bonus caps. the stern words come as banks say they need to retain crucial staff. zeb eckert has the story for us. what are banks doing here? >> the banks say they need to be competitive in terms of pay with their peers. regulators say it is too much of banks are on a course

offering allowances. european regulators taking a very close look at this. some financial regulators in the this is a politically-important matter, calling for a new attention to the issue. banks like hsbc, barclays, lloyd's of london, royal bank of scotland among those that have introduced allowances in response to the bonus limit applied by the eu. that bonus limit says you cannot make more than twice your fixed annual pay. the banks say this is not fair. certainly, heightened competition in the marketplace for bankers and the regulatory environment is different. and the uniteda states. the bankers have many options and many levels of pay. the fear among the banks is that they will not be able to be competitive. the eu might be introducing new rules to try to catch those banks that are invading.

>> the news this morning is more positive for the italian banks. what is going on there? >> this has to do with their capital position. if you years ago, they were among the most troubled banks in the euro zone. it looks like they have gotten their financial house in order. at least according to the minister aheadce of an evaluation by the european union. ,intesaook at unicredit saopaolo. the finance minister in italy saying the italian banking system is in a very healthy position. a lot of effort in increasing their capital. interesting turn of events. italy leading on the banking capital rules. >> thanks.

some of have a look at the other corporate stories we are following with you today. win approval to open its first branch in london according to the financial times. a clearing bank in london for the u.n.. -- the yuan. says that fuel cell technology is unlikely to succeed outside of japan. the government offered subsidies of as much as $200,000. any, countriesf would be able to afford it. alibaba's roadshow starts today. executives are meeting investors , hong kong, and new york. he listing may raise $21 billion in the biggest ipo ever. it is scheduled to price on september 18 and make its trading debut the following day.

does then alibaba, how offering stack up? takes a look at the biggest listings in the u.s. ♪

>> when tim cook introduces the latest iphone on tuesday, it is not just a new smart phone that will go on sale, but a mobile payment device. visa, mastercard, and amex are

forming partnerships with apple. researchers say the mobile payments market is expected to increase severalfold in the u.s. by 2017. themberg checks out competition for wearable devices to see why the market is heating up. ♪ hottest spaces in the market right now is wearables. this is the epicenter of hype. of the consumer electronics companies are piling into this space because they sense opportunity. next year, there will be 1.3 million smartphones sold. it is going to be a huge market. has been relentless in the wearables space. only this time last year, they announced their first product, the galaxy gear. here they are and they have announced their fifth rodarte in 12 months.

it has a simple built into it and a curved screen. it is trying to do something different. lg burst onto the scene with their first android watch. they have followed the trend that was set by motorola and gone for a round face. that is interesting because it echoes the view that we feel, that fashion is very important in wearables. if people are going to wear these products, they have got to look good. the round face seems to be resonating with consumers. sony announced two new products. they have a new smart watch and announced an evolution to their smart band product. life but also allows you to talk into the device. one of the other companies is asus.

they have arrived with a watch at $199. is, who is challenge going to buy all of these watches? so many manufacturers. a lot of it is going to come down to the price. i am not sure if someone like asus can invest at the kind of levels like samsung and sony can. and if apple enters the space, who knows what kind of impact they will have? >> watch this space. a recordchina posts trade surplus as exports surge. what are lots of economic challenges ahead read we are going to discuss all of that in our group discussion when "asia edge" returns. ♪

>> we have an update with our guest. thanks for joining us. what do you want to start with? let's have a look at the story we have been doing, banks in europe under pressure. chinese banking executives with pressure on their pay. they get paid so much less than their american counterparts. storyrt from my personal -- >> what is your personal story? >> i wish. >> you would like to have this gap widened. think the bank business is getting tough. regulations are a real issue for banks. of course, it is done for the greater good of financial stability and systemic .tability, but it is tough

being a european bank is even tougher. so the road to make banks safer, to be run inaving a very difficult environment for banks. >> in 2008, no one liked bankers back then when they realized that if they had their job today, they might not have it tomorrow. areuple of years later, we in a global recovery. yet that perception still remains. what is the reality out there in terms of competition for talent? >> bankers have never been very popular. theperception is that burden now on banks is significant. i am not sure that widespread opinion agrees with this or is

aware of the significant pressure that banks have. from one side, support to their economies is waiting. especially in the euro area. side, you have the cleaning up of balance sheets. it is very tough. operating in a much more regulated environment. when you look around, one of the ingest periods of hiring is appliance. do you think salaries are justified? >> there are a lot of young people who continue to study finance. yeah.he hope of, and itnce is difficult means that your processes are going to be heard.

it is the stability that you have in business -- >> it is fear, isn't it? >> i went to journalism school. no one ever said we would make a lot of money. no one ever told us we were not going to make any money. >> people will go to finance. they assume they are going to make a lot of money. entering in the business world in five or six years, a situation in which banks will be very tough in the market will be dominated by some >> there is one thing that i want to touch on here. on the one hand, we have in solvency ratios, all of them requiring money to get back on the balance sheet. on the other hand, you have mario draghi going, borrow money and spend it.

>> that is very interesting. your example of the problem of the ecb is also a financial market right now. they have conflicting objectives. in europe, this is particularly failed. mario draghi with an instrument that is really direct at creating lending in europe. on the other hand, you have the pressure and regulation. this is a puzzle that has not been solved yet. plenty of credit in europe reflects this. >> is it fair though? everyone is complaining about the regulatory environment. it was the lack of a regulatory environment and the deregulation previous two 2008 that led up to the global financial crisis. so this is a new day and a new age. it is what we all have to deal with.

how does this move forward for banks? >> i do not know if it is fair or not. what we have to decide is whether or not banks have a role to play in pushing the economy forward. -- i think they still have >> i do not think anyone is debating that. >> they are debating it. have lost sight of this over the years. rules -- ic >> where i grew up, we had a community bank. that is where you went to get a loan. if you wanted to start a business or go to school or by a car. -- buy a car. >> i think small and medium-sized enterprises are still the kingdom of banks. they have an advantage in doing this. how thens to be seen

banks will deal with this and then you will determine the real role of banks in the next decade or so. , it alsogulatory side beings on the buy side more regulated, which we do not know yet. have stands for banks, we kind of an unfair disadvantage. >> getting ready for the next battle. you do not know where it comes from. thank you very much. , green,g up next, clean racing machine. >> coming to beijing. >> this is "asia edge. we will be back for you in a moment. ♪

>> the chinese government says it is committed to green

technology to clear its polluted cities. >> subsidies for anyone buying an electric car. could be an ideal time to bring clean and green -- >> motor racing to china? try to race in places where there are famous landmarks. in beijing, we have an amazing location, which is the olympic park. it is very difficult to set up races. you need to build the whole infrastructure around and then it will happen very quickly. because it will get back to its normal use. for our team to win, we are based in london and many people thought, why are you doing it in beijing? why aren't you doing it in london? we thought the message was important. china is a country that is pushing for electric cars.

we made the effort to do our first race here. >> how long is the track? >> this track is 7.4 kilometers. it has 14 corners, a lot of action. i think it will be very difficult for drivers because they have never raised in this place. no one has. witho one has ever raced electric racing cars. what we are doing here is history. >> people know that they are electric cars on the track and will probably be more quiet. how are they going to be charged? how many pitstops are there? how long are the pitstops? give us an idea. >> first of all, the noise is going to be completely different, but it is going to be there. second, every driver has two cars. and they stop when the battery is down. they go race with the second car.

this is the original or extreme idea we had to make the race longer. do not want to watch a half hour race. fight as much as they can to win the race. this to help the consumer market move forward. how do you see that happening? there are areas completely open for development. one is battery technology. second is the electric motor. third is the charging system. all three can be tested in our championship. we want the big corporations to compete and fight in the championship. they will will win the race with a fantastic battery. it will be put to the road cars. that is how we see the process. >> did you come to beijing and say, i want to have the race here? >> we did.

we wanted to raise here. know wey behind us will are in beijing. i think that is very important.

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