exports show surprising strength, but imports fall. surplus is at another record. an italian fashion house rises again things to help from china. all of that and more in this monday edition of "asia edge." >> the markets taking the lead from the united states. u.s. jobs on friday were stronger than forecast. way more than the 235,000 that economists forecasted. that is leading to fears that rates will go up soon. the timing of when the next raise will happen -- australia is currently the biggest decline or -- declinedr. -- decliner. the trend is very much not your

friend today. the markets are seeing declines. exporters are drawing -- driving it lower this morning. these are examples at the lunchtime break. australia that is the picture really across asia. there it is, the dow jones off 1.5%. that was the market reaction to the u.s. jobs on friday. that is where asia is taking its lead. >> thanks, john. our top story here, japan came out of recession the last quarter of 2014, but not nearly as strongly as originally thought. let's head over to tokyo to speak to james.

what do the numbers tell us? >> thanks very much. the numbers show that japan did actually come out of recession in the fourth quarter of last year, but it was a revision down. the growth was much lower than the preliminary 2.2% growth we saw. that is mainly due to shaky business confidence. the business investment actually fell in the period. the preliminary data showed that business rose slightly. and cutting down on inventories. business investment has fallen. inventories have also fallen as -- companies are not confident that consumer spending is going to come back, that the domestic economy is going to come back and recover strongly. while we did see a strong recovery -- a recovery, there was a small revision upwards of consumption, consumer spending

numbers are telling us that they are not confident the japanese economy will continue to grow going forward. >> what do you think the driver of the sentiment was? we has seen that sentiment grow ever stronger from japan inc. >> japanese bunnies are doing very well. exporters have got record cash holdings. they are paying dividends, declaring record profits. but it seems to be that the sales tax increase that happened in april of last year was a drag on spending and pushed the economy into recession. it seems that companies are just not predicting that the recovery from that recession will be particularly strong. they are cutting back investment and drawing down inventories instead of producing more expecting that consumers will buy. the economy is returning to

growth, but not as strongly as the bank of japan or the government were hoping for. >> do you think it affects the estimates for growth? >> the bank of japan was predicting that, in the year, through the end of march, the economy went straight through .5%. after we got the initial release of last quarter's data one estimate said the economy would have to grow 9% in this three-month period to meet that estimate. we saw that the growth from the last quarter was revised down. basically, you would have to see growth of more than 9% in this quarter to meet the bank of japan's estimates. obviously, that is not going to happen. the bank of japan, when they revise their estimates again in april, they are going to have to seriously look at the invest -- the estimates for gdp growth and inflation, which is slowing and

has continued to slow as oil prices have on. -- have fallen. some think the bank of japan will increase stimulus again because of the slowing growth and inflation. >> that is the growing prediction. thank you for joining us out of tokyo today. we have been speaking to several guests this morning on the latest economic data from japan. japan strategist at csla says there is too much emphasis on the gdp numbers. >> it is charming that anyone ask this type of quarter-on -quarter number is numerically meaningful. obviously quarter-on-quarter is an unstable number. we cannot buy a piece of gdp. we can buy a piece of japanese corporate profit and they were up year on year in the fourth

quarter. we have good, double-digit growth. the growth looks like it is continuing to come in strong. >> the portfolio manager at j.p. morgan asset management tells us why he is overweight on japanese equities. >> we have seen slow, tentative signs of the economies doing better. we like japanese equities. liquidity across that region. we know that the bank of japan will possibly ease more down the line, if needed. we main overweight japanese equities. the third arrow, many more things to do. again, like the eurozone, it looks relatively optimistic. >> china's exports have seen a massive boost soaring 28% last month. let's bring in and occur in --

enda curran. what is driving this question mark >> strong economic recovery is driving exports from china and japan. because the chinese new year fell in february exporters ramped up production. that is why we see a big jump. >> last year, we saw a big slide downward as china clamped down on export numbers. those were some shenanigans they were trying to keep control of. >> they have tightened up on that now. >> and if you take a look at january-february, on average, it grew 50%. that is above the expectations. >> there is a pickup in exports

for sure, one of the rare good signs from china's economy recently. >> the bad news is imports were really week. -- weak. >> they are skewed due to price of oil, iron ore, and all of the other commodities. but the trend for imports in china is actually quite healthy. it has showed that the assumption is holding up to some degree. it is not as strong as it has been in the past. >> a lot of people reading that week domestic demand is dragging down what the chinese government hopes will be a turnaround for the economy. >> that is part of what they are trying to do, letting the consumer drive the economy forward now. >> taken together, what does the data tell us about china? >> they still need a bit of

stimulus in the wider economy. they are pursuing changes and unveiled a 7% growth target last week. not a major surprise. i think we will get slower growth but for a much bigger economy. >> thank you for joining us. we will get back to the markets and focus on today's economic data from asia. what do you have? >> as you can see, the shanghai composite is seeing a slight decline right now. again, it is off the lows. the reason for this earlier decline was the u.s. jobs figure was stronger than forecast. the shanghai composite was down about 1.3%. but it rebounded. that is the china story. look at the australian dollar. sort of a pickup there.

japan had gdp out for the final reading of the fourth quarter. growth was positive. the first expansion in three quarters. however, the numbers missed estimates. the figure came out with a final reading of 1.5%. the nikkei gets hit at the lunch break. there it is. it is lunch time in tokyo. the japanese yen, there it is. significant change of direction. keep your eye on that. overall, reaction to the china trade. you can see declines right across the board. they are off the lows. the kiwi is now unchanged. all of these are seeing

declines. the strong dollar, a weaker currency. the topix is now rising. it is all about exports in that region. dollar strength, weakness against that in the markets. >> thanks for that. some other strong tories for you. tesla is cutting back in china after sales failed to live up to expectations. the company has confirmed it started eliminating jobs at the beginning of the year. one chinese newspaper put the cuts as high as 30% of staff. the sales team taking the hardest hit. january sales were slow with concerns of charging electric vehicles. class of smithkline is asked -- glaxosmithkline is investigating

misconduct. the british drugmaker has been reviewing its operations after being fined almost $480 million by chinese authorities for bribing nongovernment personnel. and china imports fell today lowest in over three years. shipman's were down more than 30% from january. many factories closed for the weeklong winter new year holiday. china caused nearly two thirds of the world's copper output last year. still to come, an apartment that helps you beat jet lag. we take you inside hong kong's healthiest home. after the break, china trades up strong. they record surplus. we will guess the investors view with our next guest right here on "asia edge." ♪

>> we want to take you live to

these pictures from david -- from abreu dobby -- abu dhabi. this is one of two swiss pilots pioneering the first round the world solar flight. they will take turns flying the single seater 2300 kilogram claim that is -- plane that is powered only by the sun. the trip covers 35,000 kilometers and is expected to take five months. we wish both of those pilots well. some other stories making headlines around the world. president obama says the united states will walk away from nuclear talks with iran if tehran does not accept limits on its atomic program. the president's commitments to

negotiation with ties with israel. benjamin netanyahu says it would take iran closer to nuclear weapons. china's new environment minister has admitted pollution is a huge challenge for the country insisted the government has the will to succeed. president xi has said pollution has become one of the most widely-debated issues on social media. the environmental minister says the battle can and will be one -- won. protesters called on the government to abandon nuclear power forever. all reactors were shut down following the 2011 earthquake that sent the fukushima plant into meltdown. it is a sea of red across the asia-pacific this morning.

let's see what it is all about. let's start with japan. we just left it off there. president -- prime minister abe wanting to restart the nuclear reactors. it looks like he will have a hard-fought battle. they just slipped out of recession, but just barely. what is the outlook for japan in your view? >> they just had the revised gdp numbers this morning. as we look forward we do feel quite confident with the japanese market. we remain overweight japanese equities. there are a number of reasons for that. they are really one of the few developed markets with earnings momentum. we think there is still a lot that can be done that is shareholder friendly from japanese companies. that is what it comes down to. they have a weak yen story.

it now comes down to what the companies can do. >> but they are not spending. that is the problem. >> not at the moment. and you had the first gdp release, there was a model of hope and that was reversed in these latest numbers. although, consumer numbers went up. it is a of a mixed bag. there is a lot of pressure and a lot of work on the cross shareholdings. some of those balance sheets -- >> are you overweight or underweight on china? >> we are overweight china. we just talked about those numbers. they are a little bit misleading. on the export side, you had a case with the chinese new year. more importantly, it also sends a signal that you are seeing a pickup" -- in global growth.

>> that is true. >> the import numbers were related to commodities such as oil and iron ore. >> that explains part of it. the other part is that domestic demand is weak. >> that is true. the chinese government still has a lot of ammunition they can use to address -- they are trying to engineer that soft landing. we will see further interest rate cuts, further cuts in the rrr. we will see reforms pushed through quicker. again, we feel quite constructive -- >> are there particular sectors you are excited about? >> cyclicals, for sure. we are also overweight financials and i.t. telecom. >> despite concerns about shadow banking? of course, pboc cuts help.

>> and a lot more transparency coming through. it is very much a stock-specific view. you are absolutely right. there are some murky activities that still go on there, but that happens in all countries. >> that is why a smart investor always does their homework. kirk west hanging with us. we want to talk about greece. things are a little dramatic once again. kirk west back with us in about 20 minutes from now, from principal global investors. at the moment we have eyes on the future. the italian fashion house rising again with a little help from china. a special report when "asia edge " returns. ♪

>> the luxury fashion market continues to shift from west to east. an italian label is making a comeback this week with a show in milan after being saved by chinese money. >> milan is a long way from china and her roots. the designer and entrepreneur has built a successful fashion company at home in china with

annual sales of $400 million and plans to go public next year. for now, krizia is her focus. >> i will try and keep the dna of krizia. >> krizia was born in 1954 and became famous for bucking mainstream trends. it hit its peak in the 90's -- in the 1990's. this spawned a resort in the caribbean. but the good times were not to laugh -- to last. she swooped in to save the brand. it is her big day her first collection is being shown in milan to an eager audience of fashion press. she does not stray far from the

original vision and does not disappoint. but does she worry about selling the italian vision to a chinese audience? >> the chinese consumer needs to be educated and we need them to have finer tastes. on one side, i tried to express my creativity. on the other side, i have to make sure the consumers like my products. but i balance both of these things, i will be a successful launch of the door. >> if she can nail that balance, she will not be the only chinese entrepreneur making money out of the main italy brand. chinese purchases of italian companies hit it -- hit a peak last year coming from only 14 million euros in 2010. >> after 20 years of reform in china, we have a lot of excellent entrepreneurs who have the capacity to buy brands and

make them grow. >> you can get more on that very fashionable turnaround and all of today's top stories, plus you can watch us live wherever you are. all you have to do is download our app to the mobile device -- to your mobile device. we are looking forward to the afternoons business in tokyo. we had fourth-quarter gdp come in for japan and showed that it escaped recession, but less than robustly as originally thought. the latest on japan's reopening after this short break less than four minutes from now. you are watching "asia edge." ♪

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8. heck. maybe even 9.

make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series. >> one year on and still no answers. the report on the search for the missing malaysia airlines plane. the countdown clock is ticking. just hours to go until apples first new product in five years. and taking clean living to a whole new level. the inner-city apartment that puts your well-being first. one year on from the disappointments -- the disappearance of flight mh370

and the prime minister says the search will go on as long as there are reasonable leads. let's get to paul allen it sydney. malaysia's government also released an interim report on mh370. any new information? >> a couple of things. they ruled out the rogue pilot.. they said there was no evidence to suggest either the pilot or the copilot was somehow involved in the disappearance. they said the battery on one of the underwater locator batteries had been flat for more than a year. beyond that the report told us things that we already knew but very little on wyatt disappeared or it happened to it. the flight path still points somewhere to the southern arc, off the coast of perth.

a very large potential search area. the search has been scaled back. now there are just four ships sweeping up and down the ocean floor, looking for any trace in a 60,000-square kilometer search area. the search is due to be completed in may. tony abbott says that even if nothing is found, it will not be the end. >> as long as there are reasonable leads the search will go on. we have 60,000 square kilometers as the surface of this search. if that is unsuccessful, another 60,000 square kilometers will be searched. we are reasonably confident of our ability to find it. >> it is all terribly expensive. $120 million and counting making it the most expensive searched in aviation history. >> a report out there says the investigation is not intended to blame, but some transcripts

suggest the chaos and confusion the night mh370 disappeared maybe something else happened. quick it is a very long report. 584 ages. i have had a chance to take a look at it. there is a rather instructive exchange between immolation airlines -- between malaysian airlines operations and air traffic control. "nevermind, i wake up my supervisor and asked her to check last contact on this thing." four hours after he last had contact, the shift supervisor was so relaxed, he was asleep. the report says very clearly, a whole page devoted to it, that this is not about apportioning blame but putting procedures in place to prevent a repeat of

this kind of incident. in that respect, malaysia's transport minister says we could see a greater sharing of data. when that kind of thing is buried in the report, you can be sure someone is going to be looking to blame someone. >> absolutely. thank you for outlining all of that for us. protests on the hong kong side of the chinese border. anger is rising over so-called parallel traders, people who snap of goods in hong kong and sell them at a great profit in china. stephen engle joins us here. what did you see and what is at the heart of this rally? >> this has been going on for about four weeks. there is growing unrest among some of the people. are they an offshoot of the occupied hong kong? maybe. it is part of the same discontent that chinese are

coming across the border driving up prices. this is a video we are rolling out. this does not seem to dramatic. the guy in the black suit is walking through these shopping streets, giving confidence to shoppers and shopkeepers perhaps trying to deter any kind of violence. protesters had gathered here. there was a heavy police presence yesterday. i encountered 20 police vans. there were said to be about 500 police officers at another district. this is video not from yesterday, but from march 1, i believe the previous weekend when it got a little testy and violent. the heart of it is the so-called parallel importers from china will come across the border -- it got a bit testy. the hong kong people are upset

about these parallel importers coming across the border. they are not just mainland chinese. hong kong traders taking the opportunity. they use their day passes to go back and forth across the border. those who have residency can do this. they go back and forth with a two-milk powder can limit. it does not matter because they can go back and forth and back and forth. it is angering people here. last year mainland tourists and they do not differentiate between parallel importers and tourists 60% of those 47 million arrivals were day trips. >> that really underlines what we are talking about here. these are not necessarily just tourists. if they are professional

daytrippers which means you stock up here, you are but tries the low prices here, you sell them at a profit across the border, everybody who lives around the border in hong kong on the hong kong -- on the hong kong side, they go to the store and they do not have baby powder for their babies. they go to the stores and all of the prices are jacked up. those are the complaints. >> some of the protesters yesterday were holding signs saying, "if you are so patriotic to china, why your own milk powder." one of the most populous provinces in china was discouraging its people to go to hong kong just to buy milk powder and things like that. >> it speaks to safety issues as well. >> absolutely. the mainland chinese want to come and they want to buy these products, especially after the scare in china in 2008-2009. there are other products as well.

cosmetics, you name it. there is a call for the hong kong government to speak up as well. again, hong kong's economy has been thriving on chinese tourism. >> thanks for all of that. let's get the latest in the markets right now. japan returns from the blood -- from lunch. >> lunch is now over in japan. traders are now back to work, back at the desk. certainly off the lows of the day. at the beginning, there was a decline because u.s. jobs came out friday. reaction in asia. gradually, the morning has arrest -- has progressed. the final reading for the fourth quarter. the forecast figure was 2.2%. so that is below the estimate.

that is the negative. the positive is the fact that there is growth. markets are going with that positive growth in japan. there you can see a little weight. markets in asia are also declining. they are off the lows. >> we will take a look now at some of the corporate headlines making news. [no audio] >> ok we have more stories

coming up for you, including apple. it's first all-new product since the ipad makes its debut later today and has strong ties with asia. we will take a look at what sort of splash it is expected to make it we had trouble with her mic but we have you here, talking about the apple watch. >> you can bet the apple watch will work. it is something that tim cook will be doing later today at that exclusive invitational event in san francisco. the design visionary at apple has called this a personal product. it may hit stores in april with a starting price of $349. it could go all the way up to $20,000. >> is it going to be made of diamonds?

>> the premium price, according to some analysts could begin at $10,000 and go all the way up to $20,000. this is, of course, for gold, the luxury straps that you may be interested in. >> i am thinking $20,000, i want some diamonds on this thing. [laughter] >> what it will feature though, two sizes, three styles. it will tell time within 50 milliseconds of accuracy. the battery may last an entire day. that sets the benchmark. tim cook has been quoted as saying you can charge it overnight him a when you go to sleep, and it can do everything from controlling your apple tv to monitoring how many steps you have taken each day, even telling you when you have been sitting too long. >> will it tell us how critical the smart watch is going to be for apple? that is the thing, isn't it?

it is about strategy. the other thing is when do we get our hands on it? >> april in the u.s. we understand that simultaneous launch is planned for berlin. let's not forget it made its debut on the cover of "china vogue" magazine. >> it is not called the smart watch, by the way. it is just called apple watch. >> that shows you how much i know. i have spent generations with my analog watch here. this is the latest product debut since the ipad. it is not to be underestimated. some analysts have called apple a one trick pony. that is not necessarily a glowing review. it is make or break for apple. they have to get this right. it is critical for tim cook. shares have really rally. >> it is not like a first

adapter move, but let's see if apple can distinguish itself. >> we will know more tomorrow. >> coming up next, the growth of divergence. what is expected of u.s. europe, and asia in the second quarter? we will discuss the issue after this very short break. ♪

>> the stories making headlines around the world. one year after the disappearance of malaysia airlines flight 370, a new reports of -- shines a little light on the mystery. they have released 584 pages of maps, manifests, air traffic control transcripts. there are few new details. the power source on the planes underwater locator veeck and had expired more than two years earlier.

there were 239 people on board when it left kuala lumpur for beijing. five men have been charged with the murder of a russian opposition leader. the suspects are said to be from a predominantly-muslim area. one has admitted to being part of the killings. newtsov was gunned down new the kremlin days ago. he fell out of favor and became an outspoken critique of president clinton -- president clinton -- president putin. at a meeting in brussels today, athens has been unable to agree to terms for a next her $7.5 billion and the eurozone president has said reform plans are far from complete. it threatens to tip greece into default as the only sources of

financing our emergency loans. welcome back. joining me now is stephen eckert , zeb eckert yvonne and kirk. we had the greek finance minister saying they only have enough money to last a week and that is about it. >> we are still of the view that there is as much as a 50% chance that greece will eventually leave the euro. it is not going to happen in the next few weeks. the reality is the numbers just do not add up. i think this theory has a number of episodes to go. ultimately someone has to fall from the program. >> from both sides, nobody ends up a winner here.

>> i do not think there is any where from greece exiting. sometimes, these things just have to happen. you are absolutely right from the euro perspective, it tells the market that someone can leave and the market will start focusing on who could be next to >> they are talking about a referendum. >> you are right. that is just another delaying tactic. they know that they got elected because they were going to fight . they have fought very poorly. they have actually lost ground during the process. through the eye's this of bank deposits, you can see how markets have become spooked. if anything, they have lost in the negotiating process. >> we have mario draghi coming in with stimulus. we have china likely to come up with stimulus, especially after the port import figures -- poor

import figures. quick do they need fiscal stimulus in addition to the monetary stimulus they have been doing the last three months? there have been calls for further easing. do they need fiscal stimulus? >> i think they absolutely do. you are going to see that coupled with a lot of fast tracking of reforms and opening up of the capital markets. there is a lot of stimulus happening from mario draghi from japan, happening in china. what that means is that interest rates in the u.s., which are going to go up, most likely midyear, are going to be contained, at least initially. the good news is that we are starting to see some synchronization with global growth again. when i look at the numbers, it is only russia that has a

negative presence. let's take a look at the central bank policy. the u.s. is the only one raising interest rates versus the rest of the global economy. is this going to be the collateral damage that the u.s. dollar is going to have? >> i do not see too much risk for the fed. you are going to see more pressure on the u.s. dollar to appreciate. the u.s. is going to become a high-yielder. from a u.s. perspective, exports are not that large. they are large enough to be important, but not that large in terms of gdp growth. the more pressure from the rising u.s. dollar will be how that titans liquidity -- tightens liquidity. >> that is a problem as well with some of the chinese corporate that have outlawed offshore debt. a diminishing yuan makes it more difficult for them to pay off

their dollar-denominated that's -- debts. do you think rising bankruptcies are going to continue? >> i think they will. we can talk more broadly about the emerging economies. there are also going to be some winners. the winners are going to become more competitive. as we said, we are in a period of global, synchronized growth. some corporate will have borrowed too much and not spend it wisely and are now suffering from high import costs in terms of rising wages and so forth. on the whole i think we are entering a reasonable time for equity markets. >> among asia's emerging economies, do you think there will be any bright spots in this? we talked about the concern over default we are seeing in china. across the region, who comes out of this unscathed as the u.s. raises interest rates? >> our preferred asian economy

remains india. india has gone a long way quickly and they have to come through in terms of the earnings numbers. we now have a business-friendly government in india and we are seeing a lot of constructive reports. india would be in our emerging economies. again, we are also overweight china. >> kirk west thank you for joining us today. thanks, everyone. coming up next, the inner-city apartment that is good for your health. after the break, a special report from the center of hong kong. this is "asia edge." do not miss that. ♪

>> whether it is hong kong tokyo, beijing, or singapore, city life means space at a premium and prices going through the roof. john dawson has been to check

out a healthy eco solution. >> i am in downtown hong kong. hiding amongst us is a german developer who has designed an apartment that caters to the healthiest allies. last year, his vision was awarded with the architecture and design award. the category, being the most green and sustainable. >> it is healthy because what goes into the flats can create a healthy living environment. this is engineered stone. >> so a kitchen island. >> it has a 50% content of recycled material. what a lot of people do not know is that kitchen countertops out of granite can have radon, the number one cause of lung cancer. we installed professional air

and water perfect haitian on top of that. we have led lights energy-saving lights. light can help you not only fight jet lag, but it can make you much more alert. >> of all these things, what is your favorite? >> if you would want me to pick one gadget it would be my electronic treadmill, which helps me to train and work at the same time. it saves time and money. that is a great way to combine two things. >> and you get fit while you are doing it. >> exactly. it helps. >> none of this is cheap. that is the snag. it comes at a cost. you have to source materials. how expensive is it?

>> if you focus on the basics in order to create a healthy living environment renovations are 10%-50% -- 10%-15% more expensive. >> he is also working his legs maximizing his time. as some would call it, german human engineering. >> before we go, let's leave you with this. a plane powered by the sun has taken off from abu dhabi this morning, the start of a history-making flight. this is attempting to become the first aircraft to circumnavigate the globe without using fuel. two pilots will share the job of piloting the plane which is made of carbon fire and has 17,000 solar cells. if successful, the flight is

expected to last about five months that is it from us in asia. we did those pilots -- bid those pilots good luck.

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