y chief accused of spying on the top leadership. >> also coming up this hour shanghai surprise. china's biggest motor show is set to open. billion-dollar baby. furious seven could drive a record-breaking summer at the box office. and north korean officials say kim jong-un has scaled the highest peak in the country. >> asian stocks today trending lower, falling -- causing -- following a selloff in the u.s.. leaders are fleeing into stimulus mode. shanghai rising 1% for the first -- for the third consecutive day.

people are saying, analysts are saying that this uncertainty over the chinese stock market is weighing down on shares. south korea's indexes all the -- index is also down. rishaad: for those unconvinced by china's stimulus a chinese economist joins us from beijing. what is the motivation behind all of this? >> i think there is two factors at work. firstly, as a practical matter, china is seeing funds flow out of the economy. affect reserves are -- for exchange reserves are shrinking so lowering the reserve

requirement ratio is necessary just to replace the funds that are leaving. secondly, the bigger consideration for chinese leaders, is concerned that growth is too weak and that previous rate cuts and reserve requirement cuts have not been enough to revive loan demand. the price cuts in the reserve requirement ratio that we saw on sunday, a four percentage point cut, where normally the central bank moves in half a percentage point in -- half a percentage point increments, really shows it is a big move. rishaad: because of the larger than expected magnitude here, it could be seen as things being worse than people actually think. >> $200 billion is a large amount of money. if you look at the gdp data 7%

year on year growth in the first quarter, it looks pretty solid. in fact, it is in line with what the premier said he wanted for the year as a whole. but i think you'd -- but i think if you look beneath the headline number and see things like industrial output which slowed significant land march, loan growth which is at a decade low. some momentum is ebbing away from the chinese economy and i think that is what has pushed his accelerated shift into easing by the central bank. rishaad: the question is here what happens? really be in interest-rate cut property time around or what do they do? >> i think that is the real question. it boosts the supply of credit but doesn't do anything for the demand of credit. the issue there is that chinese

companies that are already carrying a lot of debt and facing a legacy of past overinvestment overcapacity they are uncertain about the future. what that means is that loan demand remains a little bit tepid. the solution to that could be to reduce the cost of credit and cut interest rates, and that is why most analysts think that this isn't the end of china's easing cycle and that the central bank will move again sometime in the near future likely with a cut in interest rates. rishaad: thanks tom. >> troubled property company kaise has until today to pay $50 million or become the first chinese real estate firm to default. monday marks the end of a 30 day grace. on its u.s. dollar bonds. katrina, can you tell us what the latest is?

>> at the moment there is no definitive clarity on whether this $52 million payment has been paid or not. we spoke with investor relations official at kaiser -- official at kaisa who said he wasn't sure. the company has until the end of the day to make this payment. there were two coupon payments that were due on march 18 and 19, and when they weren't paid that triggered a 30 day grace. . -- 30 day grace period. still not a great deal of clarity. if the dollar bond coupon payments aren't made, and that doesn't mean kaisa defaults on that u.s. dollar debt, the broader issue is that that could trigger cross defaults on kais'

a's other obligations which could have ramifications including pushing up its borrowing costs and making it much harder for other chinese property developers to access these capital markets. >> there are other default risks also no? katrina: kaiser is based -- kaisa is based in shenzhen but we are talking about dollar-denominated bonds. another group has until tomorrow to find about 14 million u.s. dollars to pay interest on some of their you want denominated bonds -- some of their yauan denominated bonds. if they don't make that payment, that could become the first state owned company in china to default.

the important distinction here is that there have been two other defaults before in china's onshore bond market. there was one a little over 12 months ago and it was one a couple of weeks back with cloud live. the distinction there is that they all were privately held companies. we have heard the premier say on numerous occasions that there may be painful state sector reform that is to play out. people are watching very, very closely to see whether officials in china actually allow this state-backed company to default on its debt. shery: if china slows, we could be seeing a whole lot more. thank you so much for joining us on the latest for kaisa and others. rishaad: let's take a look at

what is moving as far as the markets go. >> it has been like a yo-yo. this morning, the rrr cut was the big talking point today. we had this high-volume as investors weighed new restrictions and used leverage. trading volumes were more than 90% above the 30 day average well 100 a volatility was the highest since 2010. one stock not trading in hong kong today hutchinson has suspended trading. their shares dropped on friday but they are holding a general meeting today that will be going on as they wait for the court.

dongfeng is up 9/10 of a percent. great wall was slightly up. rishaad: thanks for that, sherry. looking at our other top stories here as well. the security chief in china has been accused of spying on other leaders. he reportedly put phone taps. he is the highest official caught up in the president sweeping cap -- sweeping crackdown on graft and abuse of power. the central bank finds he had no direct role in how much a family member was awarded in bond sales. he has been on a leave of absence since allegations that his son-in-law unduly benefited from the auction.

findings to be reported to parliament in the next few days. the bank of japan believes inflation will reach 2% by the end of this fiscal year but the imf is not so sure. they say it has become harder to estimate the timing because of uncertainties in oil prices and wages growth. they expect japanese prices to grow by 1% this year and .9% the next, only halfway to the boj's target. >> we have been live all morning from the world economic forum in jakarta. >> we are feeling pretty good about the outlook of the bank. what we are seeing is strong domestic demand especially in markets like indonesia, the philippines, the greater indochina region. you also have to remember that

on the other side of some of the currency strength, you have opportunities. we are feeling very optimistic about the southeast asia region. >> is all about the consumer for marriott international president who told us that the outlook is strong despite changes in government spending. >> clearly the government has put their foot down, but the chinese consumer is still going out and buying. 400,000 went to japan. you line up in the duty three, it is all chinese buying duty goods because the yen is so low to take back to china. the consumer is will a thing the government as a buyer of luxury goods. maybe not quite the same percentage but certainly very strong. >> air asia ceo tony fernandes says there may be big

announcements on the horizon because philippines and indonesia are doing so well. >> certainly very bullish about both countries. i think we will make an announcement in the next couple of months. i imagine the ipo would be early next year but i am very confident. the mood in southeast asia is good. very good discussions on the aec which is very good news for air asia and i feel the optimism in the end -- in the economic community. rishaad: more from the world economic forum still to come. the cochair of the event will join us live about 40 minutes from now. that is 1:50 p.m. in sydney if you are watching their. up next, china is heading into stimulus mode.

♪

>> checking some of the stories making headlines around the world. rishaad: a boat packed with migrants capsized off the boat of libya. an estimated 700 people seeking refuge in europe were on board and if confirmed it will be the deadliest such tragedy in the mediterranean. an emergency eu meeting has been called for on friday to deal with the issue. >> christians appear to have been executed in libya by the islamic state. the victims were christians belonging to " the hostile ethiopian church." rishaad: leader of yemen's who the rebels have -- houthi rebels

has said he will not surrender and has accused saudi's of being servants of the united states. the u.n. is looking for to enter $74 million in humanitarian aid. >> our guest, mark anderson from ubs wealth management. it is not necessarily stimulus as much as it is a replacement of the capital outflows from china. >> that is certainly the case. they are placing a lot of liquidity into the system at the moment. i think it comes on the back of what was more than expected weakness in the chinese economy over the first quarter, where we saw industrial production -- rishaad: it was only underlying data. the magnitude of this move

wouldn't it suggest that things are worse than we are actually seeing? >> we are seeing negative electricity consumption as well. i think suggesting that the growth might even be weaker than the official numbers are stating. they are coming in with a big message here that they want to support the economy. the big question, is liquidity enough? they should be cutting interest rates as well with some targeted stimulus measures around the property market. >> what is more effective in your view, a rate cut or lowered reserve requirements? >> i think they have to do both but the rate cuts should be a little bit more effective. i think we have to see more attractive investment opportunities that they will create by cutting interest rates as well. by seeing cheaper -- seeing gdp growth falling as well as inflation, you will have to make rates lowered to see some of those investments be attractive. >> could this be the fuel to the

fire that we see in the stock market their -- stockmarket there? >> i think we are all in confused about which thing to look at here because on friday we had the announcement after the market closed. now we are seeing the market trying to look at either one or the other and it can't really decide which one to look at. >> but also, taking up from chinese regulators saying, wait a second, perhaps people are way over leveraged and what happens if it all goes awry? are we going to see retail investors suddenly losing their shirt? >> i think they want to make sure that there is no large risk. if we're going to see a bubble in the asian market, that could put the chinese market at risk so they probably want to wait a second and make sure that the

market is still fine. >> how does it sit with the people's bank of china doing the reverse? >> does the right hand know what the left hand is doing? >> i certainly hope that they are. they want to make sure there's enough liquidity but on the other side that they don't see excess speculation in terms of the equity markets. i certainly do hope that they will speak to each other. >> after the break we will rejoin and talk about greece. this is mark anderson from ubs. a lot more to come. you are watching "asia edge". ♪

rishaad: we're joined from -- joined by mark anderson from ubs. you are going back to europe so we will get her used to it. let's talk now about the greek default that doesn't have a grexit. all these permutations are coming out right now and it is ridiculous to try to even guess what is going to happen at the

end. >> is incredibly difficult at this point in time. hopefully they will come up with a deal so we can see greece not defaulting or leaving the eurozone. we think it is a more than 50% chance that they will default. we saw spanish and italian yields move up a little bit over the last couple of trading sessions. but with 10 year around 1.5%, it is far from the 7% level we saw a couple of years ago. >> it is, because people have years to prepare for such a possibility and the states the nations are much better poised to deal with something like this than they were in 2011. mark: places like spain and ireland have their houses in order and have a good growth trajectory. i think it is a much better place.

economic confidence is at a 7-8 year high when it comes to consumers. it is our favorite equity market and we think it has for the room to go. >> what is your gut feeling? is it good for europe long-term when greece or somebody says it is probably better that you guys aren't around. mark: i like to be intuitive in my thinking, but the germans don't actually think that the greeks are going to reform and now more than 50% of germans want to see greece leave the eurozone. they have had a little bit more of an aggressive tone recently. i'm sure it won't be boring moving back to europe. >> we talk about government bonds in greece. overall, they said they really want to step away from this game of chicken now.

do you think this is really going to happen when they say, someone's going to give it? mark: i don't think it will be that -- i'll be looks like we are fully there yet. in a meeting on friday, i would be surprised to see if they are fully ready from the greek side. it seems like lagarde and the imf are not down to the details yet. >> as they say, default to our own people, defaulted the external world, and they say we will never default on our own people. mark: it looks like they are managing a little bit of cash from elsewhere, but the question is exactly how hard they want to play with external financing. i think they are most likely to try and stay in that it is obviously a high-stakes game for greece at the moment. rishaad: how much of this is actually baked into the euro

already? mark: we have seen tremendous falls against the dollar down to the $1.08 and we see at the moment. we could go down a little bit lower. since the economic conditions a relatively strong, it is interesting to see that the euro is weakening. things are slowly starting to stabilize on the european side. >> don't charge, that's what he said. mark anderson, good luck to you as you move to europe. rishaad: coming up next, it's china's biggest car show and it has a distinct the local feel to it. ♪

♪ >> shell is what you have got. can greece deliver a roadmap to reform before it gets more aid? deadline day will trouble chinese popular -- chinese property developers, can kaisa come up with $50 million? and could be a $5 billion summer for the box office? shery: asian stocks trending

lower today. analysts say uncertainties surrounding the chinese stock market could be weighing on shares. japan is coming back from their lunch break, japanese stocks fell marginally in the morning session. we're going to see how they do in the afternoon session. they have been falling now for the second consecutive day. the japanese market falling today, but there are some clear winners. panasonic is trading up 1.2% because its net profit likely climbed 70% for the year ending in march. that is according to analyst forecasts. ishizuka glass is up 11%.

lmi think is also up -- elematec is also up 5.6%. their preliminary yearly profits coming in at -- coming in higher than the company's own forecasts. suzuki motor up 5/10 of a percent there. they are expected to raise annual dividends by two yen, so the stock is currently up half of a percent. mitsubishi motors is currently down 1.8% and they reported they will cut production in russia on this sales slump they have been seeing. just for that production, that would account for about three to 4% of total annual production. yamato, the delivery service in japan, is down 1.1% although

they beat their profit forecast by $2.5 million. back to you. rishaad: greece is a remaining defiant. they show what they can deliver by mid-may to unlock new aid payments and avoid default as well. it is being default -- it is being defined as crunch time by many. >> they are saying they really don't have that much time left and they're saying that this emergency aid should not extend past the summer. we are for this summer that they have made some progress but we have that big meeting in riga on friday among the finance ministers. it is predicted that the dutch finance minister says he wants to step back from this game of chicken and that grief these to repay about 80 million euros in interest on bonds held by the ecb.

they say it is a chance to lay out this path for a may agreement. we have been talking about it for a while now. one way that alexis tsipras can show that his government is serious is possibly to win a signal of support from greek lawmakers. we have seen the greek bond yields up about 13%. it has doubled since september. overall, we will see what happens. they say that we don't want anymore redlines there and they have been standing there grounds on measures such as cutting wages pensions, and selling assets. the ecb says that you need to move and do something as far as economic reform. rishaad: what about the possibility of snap elections? yvonne: snap elections or a referendum are possible here if the talks continue to stall, but the finance minister yanis

varoufakis says that absolutely not, we will use this as a bargaining strategy. we also heard over the weekend that as it comes to a default, he doesn't even want to contemplate such an event because he thinks that greece will honor the payments. rishaad: let's have a look at some of the stories making headlines today. >> kaisa will become the first chinese property developer to default on dollar denominated bonds of the doesn't pay $50 million by the end of today. the 30 day grace. expired over the weekend. the company owed $10.5 billion to local and overseas lenders by the end of last year. taco bell is back in japan. for the first time this 1980's. a new store set to open in tokyo on tuesday. taco bell will also cater to

japanese tastes with such opera -- with such offerings at the shrimp and avocado arrigo. -- avocado burrito. puget and --peugeot and chinese motor group will work to develop 20 new models from sedans do suvs. those in the latest corporate headlines, i am and krueger in hong kong. >> general motors plans to spend another $16 billion by 2020 along with its chinese partner, to boost market share. this comes as sales growth in the industry slow along with the economy. stephen reports from the shanghai auto show ahead of its official start later this week. >> no need to adjust the color on your screen.

there is a murkiness in chinese cities that permeates more than just the environment. economic growth is slowing and the auto industry has grown to a point that there is not as much visibility on the road ahead. they are looking to grow 7% this year, is half of what it was in 2014. tension is revving up at them dealerships that can't meet lofty sales targets and are asked to skim their margins. >> the markets reached what they like to describe now as a new normal. the growth rates have slowed down but the growth is still strong. >> we are talking 25 million plus vehicle deliveries this year, still the world's biggest car market. >> this may be 16th auto shanghai, but beijing and shanghai alternate every other year hosting china's largest car show. it seems every other year the to try to outdo each other and host

the show in an ever larger swing here new exhibition center . one thing that is not new this year is china's continued love of suvs but not necessarily foreign suvs. eight out of the best-selling suvs in the first quarter were chinese brands. bw, gm, and for all reported record deliveries in china last year, but for the first time they are being outsold in the hottest segment. >> they are priced themselves in the top end of the. -- top end of the pyramid leaving an area for chinese suvs to occupy. that could give them an opening to prove that they have really evolved from being bottom feeders to making good quality cars. >> great wall 86 is about half the price of bmw's t1 suv.

chinese brands like brilliance have narrowed the quality gap. instead of just copying therefore in -- copying therefore in competitors they are proving to be much more confident at the imitation game. rishaad: the seventh installment of the high-octane film franchise has now brought in a record for the film studio. >> a cool billion dollars now for ticket sales for the seventh installment of fast and furious. "furious seven" is what we're talking about here. we're looking at a record that this movie is breaking. when it opened, it was the biggest ever opening for april.

also the biggest opening so far this year. according to universal, "furious 7" is actually the fastest movie to go from zero to $1 billion in ticket sales ever. what analyst weighing in on the implications says it bodes well for the industry as we move closer to the summer months especially. the summer, he says makes up about 40% of ticket sales. we could actually see us break the $5 billion mark come summer which has never happened. the record was $4.75 billion in 2013. we are poised to break that. rishaad: have to ask, is there

anything out there that can stop them? >> the last weekend you had "unfriended" and "mall-cop 2." i was the not too much competition. in may is "the avengers." that could be some competition. >> coming up next, signing off. set up to make what could be a very valuable visit to pakistan. ♪

>> go back, you are watching "asia edge".

a chinese official illegally spied on top leaders according to an investigation. the former security chief may have even collected information on president xi jinping. andrew, why is he spying on his bosses? >> is pretty interesting. we not 100% sure, but if you're the top spy chief, i assume that you want to know what everyone is up to just in case they start coming after you. >> that would be good ammunition to have politically. but what was the privy to? >> he controlled the national security apparatus. he had access to everything whether it was wild taps -- wiretaps or any kind of technological surveillance including the entire spy network of china. >> he is a top guy here a tiger

amongst the tigers. >> he made a pledge that he was going to take down both tiger and fly. and he is the biggest tiger on the standing committee. he is the highest and in person to be taken down from corruption charges that we have seen in china in decades. i think xi send a very powerful message and they were clearly some signs that he was looking into and concerned for just this region -- for just this reason and in the end looks like xi came out on top. rishaad: let's get a check on some of the stories making headlines around the world now. more than 90,000 people have left their homes in the iraqi province of andy barr -- province of anbar. u.n. is looking to provide food, shelter, and water. the region is just to the west of the capital of baghdad.

no exclamation of moscow by a visit -- no exclamation by moscow over a visit to the arctic. a day earlier, they posted pictures from the norwegian island of small barred. he has been banned from visiting norway under eu sanctions imposed over crimea. farmers have protested against plans for government land purchases in india. rabble gandhi made his first public appearance in all two months and promoters -- and accused prime minister modi of giving away land concessions in exchange for his -- in exchange for those who helped his campaign. president xi jinping's visit to

pakistan starts any hour now. david tweed is with me now with a look at the sale of these chinese subs to pakistan. -- subs to pakistan. >> the reason why -- there are two reasons why this is a concern to india. what is the fact that in the era up its own summary force. they have one nuclear submarine which they are actually hoping to convert so that it to get have a nuclear strike capability. the pakistanis will have eight that will more than double their pet -- double their sacrament -- --double their summary force. they will have submarine's from which nuclear missiles can get fired.

the question is, can they fire from conventional submarines? a conventional submarine is a diesel electric submarine and they don't have the vertical ballistic missile firing tubes on them. they do have torpedo tubes and they can be modified so that you can put in a missile with a nuclear warhead tip and that when the submarine is at service, you can fire that off. that is a big concern not only for the indians, but for the entire geopolitical atmosphere and environment. rishaad: talk about the security. lemma, which is in south asia historically -- david: we could have an indian nuclear carrying submarine pakistani ones there. rishaad: let's not forget that china has a stated aim of having a blue sea navy. david: and they should actually

do their very first nuclear submarine patrol any time. it has been predicted for some time. rishaad: let's look at this whole visit by choosing thing to pakistan has been this whole corridor of trade. david: the indians are concerned that this could become a chinese funded naval port although chances are it will never become such a naval port where you have permanent navy staff. but it will certainly be a place where the chinese navy docs. as much as they would like to do in sri lanka. it is strategic, though, that particular point. it means that oil that can cover the middle east doesn't need to go -- it can actually go by

pipeline which they are planning to build straight into china. >> coming up next, we will be returning live to the world economic forum in jakarta to hear from our next guest who said that china and india are leading the way when it comes to global growth. ♪

♪ rishaad: going back to jakarta now with the world economic forum on east asia having now. our next guest is from boston consulting group where he is chairman. thank you so much for joining us. what is the question you are being asked to the most at this forum? >> well, people of course asked about future growth and whether their current softness will be

also true over the coming years or whether growth will again accelerate. >> and is there a sense of how china's role is going to expand their with a iid? -- aiib? hans-paul: aiib is a topic to discuss too much. i was in washington last the -- last week at the imf-world bank meeting. they made it very clear that there is a lot of opportunity for investment in infrastructure. enormous needs and it needs the financing and funding from many, many institutions. the world bank, the aiib and others will cooperate in order to make those needs work. rishaad: they should be seen as complementary, shouldn't they?

do you think the united states has made a bit of a mistake in not getting involved in this? hans-paul: we should not see these things as competitors, but really as cooperative. partners i think it is so important to really deal with the infrastructure in asia and therefore i think that the more institutions really have to make this work -- the more institutions that we have to make this work the better. there are so many countries involved around the world in the aiib that the standard should be as high as the world bank or the asian development bank. >> what are other academics and economists thoughts of who will take charge when it comes to growth in this region? will it be china or india going to overtake them in terms of

faster growth? hans-paul: actually, it is the people in asia. when you really look at the sentiment of the people in asia they are quite optimistic about the future. they think they are the future -- they think the future will be a better life for themselves and their children and they are willing to work hard for that. that is why me and -- we at bc g are optimistic about growth around the world, the kospi people in the asian markets are driving this. it is not a question of china versus india because in both countries more than one billion people are trying to build a better future. most of those people here playing enormous role and southeast asia has to come together with china and india. a lot of expectations set on

southeast asia and rightly so. i think the opportunities are there and the chances also there but overall we remain optimistic that growth will be 5% and more over that -- will be as high of a percent and more over the coming years than the past. rishaad: the corporate leaders and chief executives will drive this growth, do they have the right skills? ceo's must fight corporate hubris and actually follow the perpetuity principle. hans-paul: yes, i think it is very important that people have ambitions. i think the people here in asia have ambitions, they have the courage to try out new things and push forward and not to rely on old business models and not to get complacent when they are successful. that is why i think there should also be change in leadership after a wild in order to hand

the responsibilities over to the next generation. it is very important to make sure that people keep on pushing forward and not look back to past successes but really build a future and try out new things. >> thank you very much for joining us out of jakarta. he is the chairman of boston consulting group. rishaad: north korean leader kim jong-un at sign list of special achievements by scaling north korea's highest peak. >> one step at a time perhaps? did he get any help? reports from north korea's they climbed the peak along with members of the armed forces. rishaad: many of questions if he did so given his attire and the

overcoat he was pictured is wearing at the summit. corrects kim was -- >> kim was quoted as saying that climbing the mountain gave me feeling more powerful than any nuclear

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