china worries that china would fall behind again. aboutis is a concern technical lagging. 1980's when we began to ,o research on missile defense the goal was to understand missile defense technology rather than deploy the system. because this concern is based on the chinese understanding of the paradigm. in the u.s.-china nuclear dialogue, we do not have much discussion on these concerns. here and ihould stop very much look forward to the comments of my colleagues. thank you. -- >> thank you. chinesehighlighting conceptions of security and safety, the difference between nuclear deterrence and compellance. -- the focus on security situations. that is fascinating. i would encourage folks to read the article. there is an additional issue in that there is a way that chinese equal weightiven to security concerns and economic concerns as they make national security decisions which i found to be a very fascinating insight. what we saw in his presentation of what an institution like carnegie cap reduce. how many other institutions can americ

in china. we have two, one international and one domestic. today, basically i will explain the two issues. i will begin with nuclear terminology in china. the first group of nuclear terms i want to explain include security and safety. in english, security is about how to avoid who we attack. safety is about how to avoid accidents and natural disasters. in chinese, however, there's only one word. it includes the meanings of the two words. so in china, the assumption is that the consequences of secure problems and safety problems are very similar. so we should treat them together. we should use the same system to deal with two different kinds. here in the united states, people treat two the issues separately. nuclear safety is a safety issue. nuclear security is a security issue. in china, we consider that -- we look at the similarities of the two kinds of issues. so in china, this is caaccordin theory, we should not only emphasize one side. for example, it allows china to optimize its nuclear we

in china.he likely sales driver. and japan has g7 finance ministers for a two day meeting beginning on friday. this includes sluggish local growth, rising currency tensions and the limits of monetary policy. but there would be furthered to miskick -- there might be discussion of further spending. the president of taiwan has refused to adopt a 1992 thing about the status of the island, if there was only one china. beijing has warned any breakdown in relations will be blamed on her. my next guest has downgraded japan as a stronger-than-expected yen. the earnings and markets lose e-nomics. in ab we have the head of equities in asia. you downgraded your stance on japan after that in action with the boj. >> a bit of a surprise, but it was on the downside. we downgraded japan at that point in time. he sullied the market, and central banks are not helping as we thought they would. reduce japan the neutral position. angie: what does abe need to do to regain confidence? >> central banks for injecting li

not only in china, but globally as well.hat are not clear category leaders are finding it difficult to raise capital today than one year ago. >> on that point, over the past eight months or 10 months, we have seen some high profile names, without getting into specific ones, have seen their valuation taken down significantly. what does that tell you? we were in a bubble and it is slowly deflating real-time at the moment? >> what you are referring to is a specific case of u.s. mutual funds marking up and down investments based on public market comparables, so you have private companies and the mutual fund managers -- and by the way, when the market went up without a lot of attention, they were marking up these investments. down,th the market coming they have to correspondingly marked down those investments as well. the needre to do with to reflect market valuations in the private holdings you haven't port -- you have in portfolios. i don't think it affects the overall tide. you really try to do under analysis of the company yo

china would be in a more dangerous situation, china would face or lose them, my guess is china wants to off stand the technological first. second, i believe china would develop countermeasures and one of those countermeasures is deploying decoys. some call decoys or would have. they would not. a real warhead and many, that does not change. this is a comment. >> in the corner. >> in carnegie, to american -- this kind of nuclear dialogue, the chinese and american side to make the distinction for security threats and challenges, i wonder how will america respond to different ways, what kind of condition will you think the challenge would transform? >> over to you. >> having a hard time grasping the question. let me say a few words about how i thought about these issues and the value of these discussions during the cold war with the ussr, and cumulative process for developing understanding on both sides i would say again, and mutual predictability as being a benefit to ability, strategic stability or stability period or stability period, and over time, there will be a body of concern sha

as china conflicts with vietnam over the south china sea. warns that this visit between the u.s. and vietnam should not disturb regional relationships. obama in hanoi as he is being greeted by vietnam's prime minister. minister wasprime replaced by a much more hardliner. this is regarded as a very important meeting. now -- now going into the presidential palace. how integral -- >> for japan, it is also important they have the backing of the u.s. -- they wantthat to make sure for future economic policies. >> how significant do you think this agreement is between japan and the u.s. for the yen? >> to japan, it is more significant. whether japan will be able to get unconditional support from the u.s. that is one of the pieces they have to make sure, although they have some different opinions, they are still working to get. >> we have seen the yen strength and quite significantly -- strengthen quite significantly. have you got any call on the yen? >> the yen should go lower. the u.s. does not agree with the path. i suspect the minister of regard

as china's group of car -- uber

china. and let's contrast that with a local labor market that's at the 75th percentile. high exposure versus low exposure. that difference in exposure amounts over the period we examine the '90s and early 2000s to an increase of about an extra $1,000 in imports per worker. what's the consequence of that greater exposure? so in manufacturing industries, it's a decline in employment as a share of the working age population of about 0.6%. that might not seem like a big number, but this is the share in employment in the working age population, which has changed over time by a magnitude of 3.5%. that's decline is a big number. now if workers were smoothly adjusting between regions, what should have then happened is they moved into other industries. you move in the activities or leave the region entirely. we have seen neither of those things occur. what has happened is a movement out of the labor force and increases in unemployment that persist over periods of a decade or longer. not surprisingly,

jack didn't start out to create the amazon of china and it is into the amazon of china because there was a company that did try to become just the height in meters of mount everest except that it isn't that it was convenient and there was an unlucky name for the company. jack didn't want to do this in 1999 when he founded the company and he was right because the market wasn't mature enough for three important reasons including he didn't have enough money. he also couldn't pay for the goods and he couldn't ship them reliably. if we fast forward one of the reasons it is so successful is that he sought peace problems and he created what i call an architecture of trust. those of you that visit china know that the rarest commodity oother than the fresh air is trust. it's just the society developed in a certain way and trust with preserved within the family and then theoretically it was going to be the state and the party but those other things are broken down and to ultimately create a successful trading environment he understood he had to close that loop so heated and innovation some peo

with china as well. one of the things that we have spent a lot of time on is the deep concern we have with the use of the cyber rome to steel trade secrets and to use cyber for commercial gain and this is an issue that the president engaged directly with president sian and we got an agreement with the chinese that they will do that. others say that has to be enforced and implemented. at the same time throughout the region and around the world we are trying to stand up every day for enforcing the property rights of our companies and every industry including the pharmaceutical industry so this is very much at the top of the administrations agenda and i think when i hear my colleagues from treasury, from commerce from ustr they are intently focused on it so i do want to give you the assurance we are doing everything we can. >> thank you, and north korea keeps invading our computers and our systems here. i was just wondering, are we reacting back or are we just trying to put up a wall so they can't do it col

dollar on the back of the china data.k to the disappointing china data, highlighting the challenge facing policymakers trying to reform the competitive -- economy, and curb excess credit. let's bring in our china correspondent from beijing. what does the data tell us? what it tells us is some of the major drivers of the economy here are slowing down. we track the gdp on a monthly bimonthly basis. wasame in at below what it from march here it is. we have some more details over the weekend, breaking the numbers down with industrial output coming up 6%. in march.low the 6.8% the national bureau of statistics saying that is likely due to a slowdown in the coal and steel sectors, suffering from overcapacity and weak demand. then there is retail sales. the chinese consumer, keeping their hands in their pockets, particularly in automobile sales. way below the 12.3% rise in march. then there was the fixed asset investment which missed forecasts as well, suggesting business leaders do not have confidence in the economy at. -- yet.

that is china.peaking at the symposium in hong kong heat of is that despite reforms, china's debt remains a worry. >> i would give the chinese leadership some of the best marks and trying to transform their society. we are on the fourth year of the china awayriented and from an export dependence economy into a much greater service economy. that is a very hard thing to do. it takes many countries 50 years to do that and countries generally have recessions as a transition. so, to say to china most recently, as for policy behaviors, the market is saying that china's dependency on debt and the leverage of the balance sheet and a continuation and investing in some of the companies is not a good long-term solution. i would say, indeed, it is not a good long-term solution. hopefully, this is only a short-term remedy and they get back to the basics of trying to build a better domestic economy. anna: larry fink there, clearly worried about debt levels in china. andrew parry is still with us in the studio. yo

again exceeding china.india is the place that will be stocking up any extra supply that is out there. yvonne: is this a larger trend? what is really driving the growth? dan: it really is. if you look back about 15, 20 years when china's huge growth spurt started, they're about the same place india is right now, about 4 million barrels a day of oil demand. what china did was embark on an industrial revolution and india is doing the same thing. the prime minister is trying to increase manufacturing jobs. that drives oil demand in two ways -- one, you are making more goods than he to be trucked and shipped which requires oil. you are giving workers better wages. they have more money to spend on flights, cars, things that drive oil demand growth. yvonne: you mentioned cars, i guess you can see a lot of the growth out of the car lots in india. what is the auto market looking like? dan: it is booming. the total domestic vehicle sales growth rose by 5% last year to more than 20 million passenger cars, increased by

chinao be china -- beat to mars.nother official has been fired after an internal investigation found that he accepted millions of dollars. sources say he took cash from 2008-2014. it is not yet clear what they were linked to. he may face charges of conflict of interest. this is bloomberg news. rishaad: coming up on "trending business," is it the end of a love affair for a hedge fund manager dumping shares of chinese technology companies? ♪ rishaad: this is "trending business." hedge funds are shifting away from china tech stocks on rising concerns about their growth outlook. in beijing.s tom is this the end of a love affair? >> maybe not the end, but there is not a lot of sizzle in this romance. dumped chinese textile holdings in the first quarter, down about 12%. 10 of the biggest holdings were in internet-related firms. in a traveloldings company were sold off in the first quarter. you have other tech companies , and another, almost a third of both of those companies were sold off by hedge funds. one of the biggest

we have this engaging china but it's time for national security -- china.the way i think of it as this. jack is very dominant. it has to move into new areas. sometimes 70% or 80% of the market. the area he's chosen to expand two, two of the biggest star finance and media. both of those are factors for the state plays a very big role. i talked earlier about how jack created this triangle of logistics in e-commerce. and as a currency for digital things in china, but increasingly for everything. when jack launched a fun, if you have money in your account, you can put it and pay 2% more than the state bank and he caught a leftover treasure. $100 billion went immediately into that thing. the banks were scared. even though the banks control hundreds of trillions, they never experienced competition like this and they been pushing back. you go to the bank and say are you sure this company is an upstart. the banks are fighting back in the same in media. in fact, xi jinping is increasing state control. a lot of journalists are quitting, things like that. but on the o

we have to be worried about the debt in china.the economy can continue to grow 75% you can grow out of your problems. havean't grow at 6% and your balance sheet growth faster. the future i would much prefer seeing the economy growing at 6%. trying to reorient their economy. empty suitcases and gilded hong kong and tokyo new york london. they come back with full suitcases. can you imagine if there was a better service economy for tourism in china. can you imagine the china will reimported goods at that rate. as it is in hong kong. that is one of the structural problems with china today. this is what we need to do. china has been so reliant on importation that they are going to have to reject how they get the revenues and they needed china in which those things happen. yvonne: you were just in japan yesterday. you've been very critical of negative rates. have the politicians abdicated reform to monetary policy. larry: what we've seen a last three months his last action in instituting negative rates was negative results. an increase

you have to understand china. china is curbing costs.crease in for the past seven years. china is curbing growth. haidi: that was the story. nothing seems to be able golds shine.ll yvonne has been taking a look for us. yvonne: we have seen the momentum really build on the metal this past month. if you compare the dollar index to the gold rally, you can see this divergence has widened here . we did hit 12.99 on friday. dollar has hit that 11 month low. ont all started happening april 28. we saw a double whammy on the dollar. to fed and the boj continued keep things unchanged. also, the boj stunt markets by doing absolutely nothing so we saw the yen spike and there was more pressure on the dollar. those are huge issues that are going to be supporting the price of gold as well as other alternatives in terms of the raw materials. take a look at silver. it is just skyrocketing. seeing it at 17.82 an ounce. it has reached a record. we have reached the highest sawl since last may when we the price of silver around the current price right now. t

we continue our expansion into china. we are filling quite bullish on china.top of that, we believe that us,a is a huge growth for 90% of revenue comes from china. india is only 3%. we believe that india will be the next big growth for us. you have long wanted to consolidate the group into one single airline. how far are you are away from being able to do that? what does such a carrier look like? >> well, the dream is to be like a ryanair or easyjet with one corporate structure. forum, weeconomic persuaded them to rename it. i think we will make some announcements at that. i've had good meetings with the prime minister's of thailand, indonesia, malaysia, and singapore, so i believe the potential for creating single ownership of airlines is not far away. it requires companies like ours to keep driving it, but i do see some light, and it is exciting times. haidi: do with this. after the break, joining us to continue the conversation on "first up". ♪ set to acquire for $1.1 billion. that is according to the daily inquirer this morning. they are expecting that dea

li was china's richest man.was wiped off and half an hour last may before shares were suspended. making --ight stop the brazilian playmaker says it is considering closing its factory in will make a final decision later this year. it says it is falling due to a lack of falling incentive and tax laws make it cheaper to import planes anyway. g ona is making -- takin elon musk and jeff bezos in the space race. the mini-shuttle is set to blast off before splashing back down in the bay of bengal. it is supposed to be more cost effective. they point to spend only about spacelion on its entire point. that is a fraction of nasa's $ 149 billion -- $19 billion budget. for china correspondent has been taking a look into this. of forgetting my homework of all and the dog ate it. my homeworkte excuse being used by a chinese company. they mysteriously go missing just before repayment is needed to be made. there is a shuffling of assets that happens as well. of course we have heard, we had headlines earlier this year when certa

exports to china and to first approximation the china trade shock was an import shock. in the long run we expect an adjustment that will allow u.s. exports to expand and create new job opportunities in the industries that export to china. we would have thought i think if you were asking us this question in 1991 that 2016 would have been the long run, but you look at u.s. trade accounts today and we aren't there yet. >> if i could just say a word about that, if that's okay. >> sure, jared. >> just quickly. you know, the trade deficit as a share of gdp is about 3% right now. that's about the average over the last 15 or 20 years and that's a considerable drag on gdp. neil irwin wrote a smart piece i shouldn't say this but in "the new york times" where he said the trade deficit is not a scorecard. it doesn't mean big trade deficit, bad. trade surplus, good. and, in fact, we've had periods of full employment with large trade deficits but we've gotten there through bubbles and these dynamics i tried to describe in the slide on global macro suggests to me that those phenomena

and he also had a very close relationship with marjorie tucker, a nurse with yield china, video china association. tooker, shown on the left as a nurse and on the right after the japanese occupation in june of 44 she decided to join the u.s. army and serve as a nurse. she was in the philippines at the end of the war. later photos much attracted to this young man with his devotion to china and his burning missionary zeal to say nothing of his charm. birch worked with radio intelligence teams. here he is right there. at this point he is a captain in the u.s. army. he coordinated bombing missions for us pilots. he and his men assisted with the rescue of downed us pilots from us wires. recruiting coordinated with chinese agents intelligence agents, provided weather reports, gathered intelligence information, and while birch was not in combat, it was nonetheless risky and dangerous kind of work, often close to, sometimes even behind enemy lines. at the end of the war or towards the end of the war as the japanese were withdrawing birch move from the south of china really was behind japanese

china,on the subject of it is clear that there is some source of cyclical recovery underway in china. you still have the very severe structural headwinds, which may well impact the country for a number of years to come. but cyclically, china is recovering. the marketsting how always tends to focus on exports for china. they always say that is the best indicator of what is going on in china. rubbish. imports tell you how much demand there is within the domestic economy. the import growth a year ago was -20%. it is now getting close to zero. -- there yet,y or but we are getting close. it will continue and there are signs that it can continue. dealthat provides a great of order for the global economy. i am not sure enough to send oil prices that much higher. anna: where do you stand on the eurozone growth at the moment? germany factory orders in march. exports picked up. it seems there was a bit of a domestic demand falling a little bit, orders for outside the eurozone surging. getting that kind of a boost to the german economy. it is a very volatile status. where do you think the eurozo

into china. and other sorts of changes. you had a sharp backlash. and this backlash entered into a new time of japanese-east asian relations which was characterized by the history problems. department, we refer to that as the history problem. why did this happen? this is the point that becomes interesting. he had changes in the way in which national identity was being defined, especially in south korea and china. which made for heightened sensitivity. in china, the post-maoist era. it was looking for a way of holding the country together and legitimizing the chinese communist party, which was no longer wedded to the forward-looking maoist ideology. taking pride in china's past, the glories and accomplishments but also came questions about the tragedies. a more retrospective view of chinese history. theflection of this was -- there had been no memorial until 1982 commemorating the nanjing massacre. , who was friends studying chinese history at nanjing university, he participated in an oral history

but in recent years, china and the u.s. has become increasingly active in the efforts to win indonesia over to their own side as tension increases in the south china sea. chinese president xi jinping and indonesian president joko widodo agreed to step up cooperation between their country's supply industries. china provides anti-missiles to indonesia. the countries are also discussing radio equipment. meanwhile, u.s. president barack obama promised to cooperate in developing equipment for indonesia's navy. the u.s. has already supplied it with fighter aircraft and attack helicopters. japan is also reaching out to indonesia. last december saw the first meeting of the foreign and defense ministers of the two countries. japanese self-defense force personal visited an advanced service belonging to the indonesian navy. japan offers to help the force develop the nautical charts it needs to deploy submarines. >> translator: depending on what the indonesian navy wants, we will consider helping them develop new skills. >> reporter: c

as well as china falling. exports to china falling 7.6%.did see some supply constraints during april after those earthquakes. that might have restricted or effected some shipments when he came to car parts and electronics. it was the drop in oil prices that dampened imports even more, 23.3% down in imports for the month of april. oft leaves a trade surplus 7.5 billion dollars, bigger surplus and we saw in march. that is nearly 2.5 billion dollars more than what economists were expecting. this goes to show the pressure that the prime minister has to revive growth, especially after he did not get the blessing from g7 nations when it came to what policy levers they should pull next to revive growth. of tensionn, a lot about that over the weekend on what to do next since it has appreciated so much this year. the u.s. not particular convinced when it comes to intervention. we did see some fiction bween the u.s. and japan, the sharp at dissonance and views in some time. the finance minister of japan reiterated that the recent moves in the yen hav

and a bit short in china. the last bearish bets were so high, that bull markets turned into a $5 trillion rout.; also, version australia chairs take off as they take the stage. it would take a look at why the billionaire founder is on a global buying spree. and i am keeping my eye on what's happening with your money this tuesday. it's the last trading day of may, and despite what will be a monthly loss, it is shaping up fairly decent, a fighting chance, across asia-pacific, especially midday. the markets that are lower are off the bottom. what do we have? china is the outperforming market -- 2%. shanghai composite, other metrics, also showing very sharp gains. the index gaining the most since march. the story is coming down to speculation that the msci, the index compiler, will be including a shares in the reaching of these indices. they includewon't it? investors are choosing to focus looking at how these brokerages that financials trading on the chinese markets. currencies, the past four days, what's been ha

is only 1/10 of china's. the u.s. released the data after bloomberg submitted a request under the freedom of information act. global news, 24 hours a day, powered by our 2400 journalists in more than 150 news bureaus around the world. you can find more stories on the bloomberg at top . francine: thank you so much. we should all be worried about china's debt. that is the message from larry fink, the ceo of blackrock. he spoke to bloomberg earlier. >> we all have to be worried about it. but keep in mind, if the economy continues to grow 6%+, you can't grow at 6% and have your balance sheets grow faster. muche future, i would prefer seeing the economy grow at 6%, without the same time some form of deleveraging. francine: larry fink'commentss -- malcom scott joins us. it seems the pboc is gearing up for a bigger world. >> it does. it seems the pboc is among those people who are worried about china's that. broadening, looking at areas of formerly didn't. little nitty-gritty instances. credential framework it has set up

's moves in the south china sea. theatic pictures capture moment and overcrowded migrant boat capsizes off the coast of libya. five people died. also coming up, the price of oil has passed $50 a barrel for the first time this year. we will tell you what is behind the move. of the disappearing act louvre museum. you could be forgiven for thinking the famous pyramid had simply vanished. we will tell you more about that. france has begun to dip into its emergency fuel reserves to deal with gas shortages as hard-line trade unions slow down the oil sector. it's not just the oil industry. electricity production could slow down with strikes and most of the country's power plants. unions are also calling for mass protest across the country. all to kill the government's reform plan that aims to make french labor laws more competitive. the government's main adversary is the hard-line union known as the cgt. they have a lot staked on this fight with the prime minister. for the only day union still defying the government in an i

to deal with china. duterte and binay, on the other hand, say they want to build ties with china through dialogue. >>> japan's foreign minister has laid out a development assistance plan worth billions of dollars for some southeast asian countries. kishida is currently touring the region. he laid out japan's policy in a speech in bangkok, pledging to set up a new framework for the so-called five mekong states. they include thailand and myanmar. kishida said it's aimed that helping them build infrastructure, improve customs procedures, and develop workers skills. the day before kishida met with his thai counterpart and they agreed to develop areas along the mekong river. >> translator: thailand holds the key to developing and linking areas along the mekong river, because of its location in the center of the river's basin. >> kishida noted the rapid economic growth projected for the region. his thai counterpart called for japan's support for his military government. it plans to transfer power to a civilian

brad: apple is not doing poorly in china. 59 billion dollars in sales last year in china.eally better than any other american technology company and there is a history of failure there. the iphone sales are down in china. you mentioned services being closed down there. what is the state of the what do in china and you think tim cook is thinking there? >> apple has enjoyed stratospheric growth in china. it has hit a hurdle. growth has slowed. this is clearly a play on one level at least to build the services revenue in this country, if they can push apple pay. we don't know the details. if they can push apple pay, and can help drive the growth. brad: what are we likely to see? apple services like apple pay. what else being pushed out to didi users? hans: you campaign for products, .- you can pay for our ducks you can pay for services utility bills, and we pay or we have alipay. with didi, there are millions and millions of ride today. that the payments and apple is part of that. for apple pay to be more popular in china, it means and at where people will want to use a payme

china, we have a trade deficit with china of $505 billion this year. we have a trade deficit with mexico $58 billion. they are killing us at the border and everything else. we all know that. the drugs are pouring across. people are coming across. everybody is coming across. they do nothing to help us. they will. they lend up being good neighbors. we'll have a good relationship if i'm in there. but when we have a trade deficit with china of over $500 billion a year, i say let there be something. they are taking advantage of us. we can't do any worse. if we had a trade war, to be honest, it can't be worse than having a trade deficit of $505 billion. i say that loud and i say it clear. let me tell you what will happen. when we get tough with china, they will stop devaluing their currency. they are absolutely killing us by devaluing their currency. they are making it impossible for our companies to compete with china. and by doing that, it's taking our jobs away. look at our country. lock at the jobs. the real job situation, not the phoney job with the 5%

anna: trouble in china. a top analyst says the country may need a bailout worth trillions of dollars but the morgan stanley ceo says he is up beat. >> the second largest economy in the world and growing at 6.9%. it is certainly growing at a rate demonstrably faster than the rest of the world. preparing for the u.k. referenda before a pre-vote, that as the corporate bond market suggest that don't accept a brexit. one of the world's most showinge hedge funds is a great\showing backlash. ♪ welcome to countdown. anna: a very warm welcome to the program. it is past 6:00 in the morning. here in london. let's get to a very interesting chat. a reminder of where we have been in the dollar over recent months. fed chat boosting the dollar once again and that has been the story for the past month. we have here in the blue a chart that is showing what is happening in the dollar to dollar index which is sinking. a bit of a boost as investors increasingly factor in june, withas possible meetings the fed getting a boost fro

are going toallets be encouraged by china but only on china's terms.y could be in the works. the authorityf has pretty much said it. bitcoin is definitely not in their idea at the moment. transfernables you to money without the monitoring of the government. which is precisely what they don't want to do. rishaad: what is the technology and how does it work? alex: block chain is a huge phenomenon of 2016. 40 of the major banks of the world are getting together and trying to come up with block chain standards. the opportunity is that if they don't get into it now then the market may pass them by. if they don't do it now they would never do it. it is encrypted and distributed ledgers that banks can use to ,ransfer money and trade immediate settlements. reducing the execution risk. paying the banks money. rishaad: thank you very much. up, the golden opportunity that the hedge funds have coming up. we'll tell you what that is. we will tell you when trending business returns in a couple of minutes from now. ♪ rishaad: asian equities dropping again today for t

china's leaders, even as china's economic growth decelerates. in march, china announced its military budget will grow 7.6% to $144 billion in 2015. for 2006 - 2015 china displayed military budget an average of 9.8% per year in inflation-adjusted terms. china's publish military budget, amid several major categories of spinach or such as rnd, the procurement of form weapons and equipment. the true expenditure dod estimates in terms of total military spending for 2015 if they exceeded one 80,000,000,000 dollars in 2015. 2015. as a result of these investments, they continue to make strides. for for instance, china's military. last year china unveiled the day of 26 missile, a system that could produce ground straits to the asian pacific. beyond beyond this there program entered a new phrase phase in 2015. i will highlight three key security department. the first is that the first is there maritime activities. in 2015, china used tactics to assert its claim in the south china sea reclaiming vast acreage on existing outpost and instructing military fac

in china. one is that the u.s. missile defense system would neutralize china's retaliatory capability. and we can understand china's -- this chinese concern by both the chinese security paradigm and the u.s. security paradigm. so, in the u.s./china nuclear dialogue, we have had some discussions on this concern. but in china there's another concern, that is, the development of missile defense in the united states would bring united states a lot of new defense technologies, new ideas, you know, new systems. they may not be missile defense. they may be something else. but they're new technologies. so, china worried that china would fall behind again, so this is a concern about technical lagging. so, from the mid-1980s china began to do research on missile defense to understand the technology. the purpose was to understand missile defense technology rather than deploy a missile defense system. because this concern is based on the chinese security paradigm. so, in the u.s./china nuclear dialogues, w

twice nominal gdp in china and one of the risks is that china is growing too quickly and credit growth is too high. i think china is still a domestic story as well -- as far as the authorities are concerned. tom: does that spill over into the other economies we can say not only in china but in malaysia, taiwan, singapore, real rates do not matter? paul: i would not put the spillover from chinese rates to the rest of the area. the chinese tried to loosen up the exchange rate a little bit. the market got freaked out and a 6% blowout, low volatility in the markets, and they shut it down and we go over again. it is kind of an exchange rate reform channel, kind of a domestic story. francine: when you look at e-commerce, and alibaba is coming out with figures, is it a real proxy for the chinese economy? they disappointed in terms of expectations. paul: i think we have the old , the old economy looks like it is flat or low single digits, and the consumption side looks like it is chugging along pretty well. evaluations go up and down but that part of the story, if we ,ook at retail sales or to

from japan to china, analysts concerned about the rising risk of a default chain reaction in china.away. we talked something about last week when i was at the morgan stanley china summit, the risk to the banking system, and is a banking crisis possibly looming in china. and influential ratings analysts talking about the nonperforming loan situation in china being much worse than the government figures of 1.75% of outstanding lending. she says it could go nonperforming by the end of the year. why is this tied to the possible default? a lot of these liabilities are tied into wealth management products. guy rock a did last year, issuing 3500 new wealth management products every week in china last year. the industry went from 23.5 trillion -- excuse me, 7.1 -- and basically they are taking individual's money and traditionally they invest in bonds, equities, and derivatives, but now what we are seeing is cross investing. wealth management products investing in other wealth management products, layering on top of each other, and often times only on single underlying assets or shaky assets

for aesident urge peaceful resolution and that tensions between china and vietnam, china and the philippinesns between china and any other nation for that matter, are not of our making, he says. he says it is within china's power to resolve these issues. here's how they responded. the g-7 summit should be focused on global economic management corporation. hosting country, japan is being selfish and playing petty games. the failure of japan to perform properly is not an interest of the g-7 and appease peace and stability of the south china sea. we keep the basic principles, which is the strategic relationship based on mutual interests. to bring have already committed to this principle, and we are seeing the gradual improvement on every aspect of relations, so we will keep this going. it raises the question of how relevant is g-7 now when you don't have the second largest economy joining in these talks in these discussions. china being one of them. india also not part of the g-7. rishaad: thank you very much. we will take a look at air asia, drawing up plans to expand to meet rising travel dem

ultimately china if you think about china it's standing on an sca -- escalator. despite slow in the economy there's still rising, there's a consumer class. so you're right, nike, for example, will they don't have the limited edition high-end stuff but they'll have frankly sometimes like inventory clearing and things like that. but it's more than that in china. it is actually the most attractive way to connect with digital -- for the middle class through platform. when i say digital. it's really cell phones. it's way over half, 60% is on the cell phones. so useful, you're right. it's another site. virtual supermarket. it's brands that have those stories or very large merchants. towbow. they just started the cycle and that's when small merchants and they're 9 million merchants, so when i say 9 million merchants, a lot of those are individuals. so my friend ms. wong might be government official and she's trading so maybe an idea for bureaucrats in washington, but basically there's a lot of underemployed people in china as well as unemployed people or people just nee

and the south china south china sea and the philippines. in 1999, this is about the -- this is the relative strength of china in the red and united states in the blue. it's about equal. let's go to the year 2015. this is the chinese build-up with ships, ships, submarines and planes, and the united states' military strength in the area in 2015 -- i got this from pacific command -- is about the same. and pacific command expects that in 2020, if i can get the poster, it's going to look like this. that china will have in all of these planes, intercontinental ballistic missiles, ships, submarines, and the united states' strength in the area still is going to be just about the same. without going into the details of how much of everything, do you agree that that is what is occurring in south china? >> thank you, congressman. we've certainly seen a significant buildup in china's military capacity over the last couple of decades and in recent years. some of that, i guess on one level, is not surprising as china grows and is more engaged in the regi

laura: wrote china and india have large militaries.rs with united states in solving global problems? >> >> india very much is a partnership. and it is becoming more and more so. our military already exercises more with india than any other country on earth. that is quite surprising. it worries me a little bit that there is so much increase in military expenditure all over asia. so 50% of the new arms imports around the world in the last few years were just in asia alone. and china, i think the obama administration and the bush administration has done a lot to try to increase the communication we have with the pla, the chinese army. it's not always perfect, and tensions remain. so we have a lot of work to do. laura: thank you very much for joining us. >> thank you. laura: being showcased, havana, whether a visit by the kardashians or more, cuba has for more.lace from havana, our report. report: in a fast-moving cuba, some things never change. the annual mayday parade is a show of strength by lower -- loyal revolutionaries, especially th

part of one china. likely that china is not going to like what they don't here. a military parade starting as we speak. the stock markets there, we party scene big outflows this quarter. sorry to bring you back to business, but what is the story there with the iphone? end ofiphone at the april, tim cook said the smartphone market is no longer growing it they've had their first quarter-on-quarter sales decline in over 10 years, so that will weigh on taiwan's corporate profits for one thing. exporthe entirety of the sector, which makes up two thirds of gdp here, so she is facing some dire economic conditions. she has three quarters of negative growth, so it's going to be a really important first year for her. rishaad: thanks very much indeed. right, quick look at what's at this ceremony taking place, this dance performance taking place ahead of a military parade. we have the first female president of taiwan being sworn in as the new president. she let the democratic progressive party to a landslide win in

a country competitive with china in the south china sea.ance and how will china view this? >> reporter: china is never happy when the u.s. strengthens ties, especially militarily with its other allies in the region. allies like vietnam that have current dispute was disputes with china. the u.s. doesn't like to take sides on that particular issue, but supports freedom of navigation and freedom of over flight and acknowledges that china doesn't follow those rules. this is a way to counter china without doing it directly. strengthening ties with vietnam gives vietnam more of a chance to oppose china. >> traveling with the president. cnn's michelle kosinski. thank you. >>> a shocker in oklahoma city. the golden state warriors blown out in game three of their series with the thunder. are the defending champs in trouble? coy wire with this morning's bleacher report coming up next. listerine® kills 99% of bad breath germs. this is 100% useful for a 100% fresh mouth. what's it like to not feel 100% fresh? we don't know. we swish listerine®. as do l

and a bit short in china.arish bets were so high, that bull markets turned into a $5 trillion rout.; also, version australia chairs take off as they take the stage. it would take a look at why the billionaire founder is on a global buying spree. and i am keeping my eye on what's happening with your money this tuesday. it's the last trading day of may, and despite what will be a monthly loss, it is shaping up fairly decent, a fighting chance, across asia-pacific, especially midday. the markets that are lower are off the bottom. what do we have? china is the outperforming market -- 2%. shanghai composite, other

succeed in china.ld they do the same thing to uber? eric: i think here there is a huge economic need to this when there is a lot of economic anxiety in china. this is an industry that is creating a lot of jobs. that is to uber's advantage. this isn't one of these critical industries. it's not a media company. it's about transportation. wilbur sort of hopes it won't get categorized the same way facebook and other countries are. emily: as someone who has run a private company, do you think didi should go public in 2017 or as soon as that, or should they continue to raise money? cyriac: i think it depends on their international plans, whether they only want to focus on china, or whether there are other markets. it also depends on, at some point, what is the financing need? they are supposedly burning, both of them, uber and didi, $1 billion a year. cyriac: they are both burning a lot of money. that is just in china for uber. uber is probably approaching or going above $2 billion last year in losses. they

after china, mongolia is the second largest producer of raw cashmere in the world, responsible for 40% of the global output. however, many of the buyers visiting the company's booth were unaware of this. >> translator: whether the cashmere comes from mongolia or whether it comes from china, that's not really the sort of thing i've ever really thought about. >> although mongolia produces large volumes of raw cashmere, it doesn't have sufficient facilities to manufacture it to finished product so 5% of the output is exported to china. however, work is currently under way to ensure that the production and sale of cashmere products becomes one of mongolia's core industries. mongolia's largest cashmere manufacturer privatized in 2007 has actively striven to introduce the latest technology from japan and italy and develop products for overseas sales. leading this effort is the company's ceo, one of mongolia's most prominent entrepreneurs. >> translator: monday goalia has around 600,000 house holds and a population of 3 million. roughly 147,000 of the households are involved in cashmere produ

. >> here's what i see in china, we see in china, the middle class there is booming.o you look back just five years ago, there were about 50 million people in the chinese middle class. five years from now, that number's going to be almost 500 million. i mean, this is an as is unprec growth. >> i parsed every comment. you did not talk about middle class. which made us feel that something was wrong. >> no, it was my error for not talking about it. >> okay. >> i could not be more optimistic about china. i think the long-term thesis is in tact. there can never be anything in the history of the world. and i'm still as optimistic as i've ever been. >> cook tells us that companies love the product growth. i know we were watching it separately, feeting about it almost at exactly the same time. the most interesting point compared to this the comments on china. >> i agree. >> i think it's important that was very much a long-term view that he was more positive. that doesn't change the answer before that sales declines have happened this year in china, down 70%. and over the year

he had been in china for five years. he had suffered from malaria, he he had refused a 45-day leave to return home. he wrote to marjorie tooker, "when the first wild thrill swept through this little river town where i was as the radio said japan was trying to surrender, i realized for the first time how utterly weary, even heartsick this war has made me." almost no one could imagine the horrendous civil war would result in a communist victory within the next four years. birch, however, was not permitted to just turn around and go home. by this time he's working for the oss, the office of strategic services, which is the forerunner of the cia. the oss asked hum or told him -- ordered him, i should say, to take a final mission from his base in -- whoops. up to the city of xiuxo, and this is where bill brown's parents and grandparents were presbyterian missionaries. and on the way there he and his team of ten chinese, two koreans who presumably spoke japanese and could help translate and three other americans -- so a total

china has been criticized for building military facilities. the draft reiterates the importance of maintaining peace and stability as well as upholding freedom of navigation in the sea. china has been stepping up maritime activities in those waters. u.s. navy has increased its monitoring patrols. why that -- it's not clear if asean members will agree this time. they have drawn sharp criticism from some like the philippines and vietnam that have territorial disputes with china. >> he talked about china's activities and its territorial disputes. he said the international community is concerned about china's unilateral attempt to change the status quo. last month two japanese destroyers made a first stop at vietnam's most important naval base which faces the south china sea. david cameron agreed to discussing whether the group of seven nations should launch a fiscal stimulus to stabilize the global economy. we are joined from the business desk. the two leaders met in britain. tell us more. >> it was the last lag of his european tour. he wanted to