stephen engle in shanghai. angie: we will have more later in the show, including stephen joining us live to show us the latest gadgets and discuss how china's appetite for innovation is changing the face of technology. coming up, mixed signals. what will the latest round of trade data tell us about japan's recovery? will speak to ubs after the break. ♪ angie: checking headlines around the world, malaysia's prime minister is shocked by the discovery of mass graves near the border of thailand which appear to contain hundreds of remains of muslims from denmark. -- myanmar. southeast asia is struggling with an exit of refugees. many are taking to wooden boats with thousands stranded at sea. in southerntorms and central china have broken a 40 year record for rainfall in may. authorities say 57 people have died since bad weather arrived last week, mainly from car crashes. to hundred 50,000 others have soft temporary shelter. inspections have been stepped up at reservoir. put some dams could collapse. forecast is for

stephen engle investigates.the this woman is stocking up on apple watches from resellers in this computer ball to give as gifts back home. >> the watches are more expensive in china. plus, i couldn't find any in my city. >> i didn't expect this to happen. i didn't think it would be such a hot item. i think people are going after the apple watch because there is limited supply. >> i want to give you a sense of the gray market prices. the most expensive one is 10,000 hong kong dollars, about 3000 u.s. dollars. the list price is 700 u.s. dollars. if you want to pay double, you can be an early adopter of the watch in hong kong. which is why want to try it. but i will have to pay about $2000 more than the original price. and 1300 u.s. dollars, if that is too rich, you can down scale for the cross border version. they are not knockoffs, they are more a phone on your wrist, if you will. it has a simple card you can put in there and you can talk on it ,uch like old dick tracy did and they come in multiple colors. the be

we got stephen engle taking a closer look at this. it is telling you one thing and doing another. >> i will boil it down to a nutshell. the last six months, we've had interest-rate cuts. the cap, the amount of interest rates. that's what they've done. now we're hearing from people close to the situation. don't offer higher rates to depositors right now. there are deposit costs going up. they are a risk to the banking system. they are negative for chinese banks because they will narrow the spread between lending and positive rakes -- rates. it means raising the cap. pressure march. a banks are a bit risky. angie: but was the point of raising deposit rates if you are just not going to enact them in real life? >> if you are going to raise the ceiling and not allow the banks to compete, they are offering higher returns. obviously much riskier and shorter returns. it goes back to the heart of the question about reform. how committed to reform our not allow they will the market dictate what the rates should be? let me read you something fro

stephen engle's looking at this. le--stephen: familiar with the situation says we may have to take this with a grain of salt because of the slowing economy. this is what we know. thef monday, the pboc for third time since november, cut the key lending rate and the deposit rate but raised the ceiling, allowing banks to raise rates to attract savers and give them a better rate on deposits. but we are learning from people close to the central bank that pboc is instructing banks to hold off on setting their own deposit rates. we know the pboc in the past, including the governor, has said that deposit rate reform and removing the cap altogether is one of the riskiest forms of rate liberalization in china. he did say that could happen in the next couple of years. this is the next step as we face a steeper slowing of the chinese economy. how far to the reforms go at this time? banks have some risk right now, the slowest profit growth in a decade and that interest margins being squeezed. the central bank wants to see those fu

electronics show comes to a close, but they say shanghai is officially the city of the future, so stephen engleto see the coolest innovations in china. stephen: this chinese unicycle goes zero to the hospital in akin's, but they make people having it look so effortless. ok, you are going to show me how to do this. i think it is a fast way for me to die. >> you just need several hours of practice. stephen: all right, i went about five feet. i think that is probably good enough. >> young people will like it. en: i think we had better find something a little safer. ok, gabriel, maybe you can tell me a little bit about this smart safe. it is the first in the world? stephen.yes, it is, it can actually communicate with you and tell you when it was opened, who opened it, and what has been taken out of the safe. en: ok, what is 70 tries to physically get into it. gabriel: i will show you something really cool. that is what i normally try to do. going to stick to the security feet and talk about surveillance cameras, and, believe me, china has a lot of surveillance cameras. this is vickie li. what kind

stephen engle take a look. ind a huge markup, china is stocking up on apple watches to give us gets back home. >> the apple watches are more expensive in china. i couldn't even find any. >> i did not expect this craziness. i do not think it would be such a hot item. i think people are going after the apple watch because there is limited supply. stephen: a sense of what the market prices here. the most expensive one he has sold is worth 10,000 hong kong dollars. 1300 u.s. dollars. the list price is $700 u.s. dollarwant to pay almost -- open w can be an early adopter here. >> it is new, that is why i want to try it. but i will have to pay $200 more. $500-$1300 isen too rich, you can always downscale. they are not really knockoffs, more of phone on your wrist here -- it has a sim card. 780 hong kong dollars. most companies -- customers were focused on the apple watch. this sounds a lot like scalping, but it is legal here. that is why a number of different vendors are lined up along the sidewalks. they are not selli

stephen engle took us for a spin.r: a connected car is a major theme of this, the first ces for china. unlike its bigger brother in las which attracts 176,000 attendees, this show will get about 20,000 participants. virtual driving capabilities, the market potential for ces -- consumer electronics sales in china is a huge. it will not let me crash this thing. gadgets that were not even on the market a couple of years ago , we will see in some sectors a doubling of sales around the world. to 3-dmera drones printing. it is one way for china to mass-produce cars. and wearable devices like smart watches and ultrahigh definition television and video devices. in china i only time can really stick a camera and someone spacelike this. -- someone's face like this. and then there is twitter, relegated to the back of a help. they have an inbox and they have mail. you better be careful in opening those attachments. engle, bloomberg news, at ces asia in shanghai. rishaad: up next, japan's trade is back. assess the numbers after th

we are joininged with some of the details by stephen engle. stephen: it looks like some of the property curves are starting to take effect. downpayment rules have been relaxed in a number of cities. we are starting to see as well as developers have been working off all their excess inventories. new home prices, month over month is improving. the scenario. in march the number of cities that saw month-over-month price gains was 12 and in april it rose to 18. the number of cities that saw decline 47 out of 70. that's declining. that's a better situation. we were talking 66 in february, 64 in january. so it is significantly better. among the better improvers in month-over-month performance, shanjen. a whopping 8% price gain month-over-month. shenzhen was the first city to turn the quarter in december. we have seen five months of month-over-month gains. beijing 0.7% gains after 0.3% in march, which was the first month in eight months that saw month-over-month gains. only one city saw continued month-over-month gains, and that is shenzhen. all other

stephen engle is joining us with more on this. how did this trip cement putin's ?nship with the east stephen: absolutely. that is the relationship. gave theet -- putin understatement of the year, saying "the energy sphere is key to our relations." they need the legitimacy, if you will, with ties to russia and financing from china. and the state-run oil giant in china extending their partnership for five years. they agreed on daily delivery volumes, gas quality, and the pipeline entry point from china into siberia. they planned to raise the target of $30 billion higher from the pipeline. no later than 2020, they will have 38 billion cubic meters a year. interesting though, no crude oil deal was announced. in november, there was a deal to buy a 10% stake in the bank or oilfield, one of the largest oilfields in russia. no deal signed at this point. still, negotiations going on right now. the inbound sovereign wealth fund for russia, they attract investment into russia. they have been having a number of deals with beijing as well. they signed a deal with china construc

we have stephen engle's reporting. ared that when china and india speak, the world takes notice. but the two have been dogged by imbalanced trade. importantre the most economies in emerging markets. the biggest markets in asia. but they trade little with each other. stephen: china's trade with india is lower than what china has with brazil and russia, roughly $70 billion last year. 38 billion dollars trade deficit with china in 2014. that deficit has surpassed $13 billion in the first four months this year. if there is a bright spot ahead of the visit, it is that, despite the slowdown, china-india trade is up this year. while china-russia and brazil shipments are following. people looking at "chindia," but they are the two key focus countries in emerging markets. stephen: the key to boosting trade may be breaking down barriers to investment. both blame the other for red tape. india has complained of unfair access in china for i.t. services, pharmaceuticals, and meat, while the global times needs to sort out a way to boo

stephen engle joining us with the more. stephen: he is on environmental mission.ts to get the sustainable energy project really going. china builds so many of apple's projects -- products through those a joint ventures they have. apple arem cook and going to have big demand for the apple watch and big demand for the iphone 6. more shipments in china in the first quarter than the u.s. even though smartphone shipments overall in china sank for the thet time in six years in first quarter. they had those problems with the china,r watchdog in which prompted tim cook to apologize to the china market but the is pushing these environmental issues. he met with the highest ranking female in the chinese government and he will work with the world wildlife fund two-minute one million acres of forests across china. they will fund a five-year project to plant trees and implement standards that use less land and water. they also named more local project for their solar .n western china a shanghai listed company is part of that power. both of these stocks we have the share prices.

stephen engle has this report.tors have long used hong kong as a proxy to invest in mainland companies but they are now calls for money managers for even tighter oversight and investigate possible stock manipulation allr three listed companies tumbled more than 40% in a single session of the past couple of days. these stocks have surged more than five full each over the .ast year energy remains suspended. the head of energy lost $15 billion in a single day. now here are some of the top stories crossing the bloomberg terminal. agency says the uncle of kim jong on attended and eric clapton conference -- concert. it has been the first time he was seeing in public since his younger brother took power. in london, a frightening reminder of the second world war, and unexploded bomb was found near wembley stadium. evacuated officials workers and residents. it is believed to have been dropped during the nazi raids over london. the eiffel tower is closed to the public, the reason -- pickpockets. tourists are locked out of th

we have stephen engle on all of the. is it a good deal for russia or china? pressure leads the alliance, and chinese -- china needs the energy assets. what we got over the weekend with xi jinping in moscow china extending a strategic partnership for five years been agreed on the daily gas delivery volumes and pipeline entry into china. there is also the power of siberia and volume. basically, crossing the t's on the various pipeline deals. no deal on the shipment of oil to china. even though there was a 10% stake that cnp took in one of the largest oilfields in russia. that may down the pipeline, if you will. angie: it is interesting it is a dedicated pipeline to china. that deal is very much in play. but maybe china has the upper hand. stephen: there are some price issues. we will see. angie: the two did meet for the 70th anniversary of world war ii. what do they have to say about that? stephen: it is significant in that there were the two gentleman, moscow inviting the other allies from 70 years ago, the u.s. and u.k.. those leaders respectfully decline the

stephen engle taking a look at the discussion stephen: cooler heads prevail in publicly, but behind theto brass tacks. that is china being much more assertive in the south china sea. sayinghe united states we are going to fly where we want to fly in international waters. at the backdrop is china's threat to potentially label the area defense identification zone, which amps up tension. was a bitl last year more terse in comments. so they dial back the rhetoric this time. ashton carter is relatively new as defense secretary. and the chinese admiral, they couched their words. but the message from both sides, including secretary carter, was clear. states is deeply concerned about the pace and scope of land reclamation in the south china sea. the prospect of further militarization and the potential for these activities to increase the risk of miscalculation or conflict among claimant states. stephen: i mentioned the airstrip. -- admirable sung address that. here are his words. justified, legitimate, and reasonable. i think the u.s. would disagree. the dialogue is trying to build a consensus,

stephen engle joins us on the undercurrents of south china sea. n: it is part of the pacific ocean but it's the south pacific see that china claims 80% and quadruple the wreaths and small islands. 2000 acre spree and is a concern, not only china claiming key maritimet is but also fishing grounds and said to the oil and lots of geopolitical tension among six different complaint is. the united states, john kerry, the secretary of state was pressing for restraints. building an airstrip so there will be military purposes but also maritime issues and a lot of concern that john kerry had it when he met with xi jinping as will his counterpart. the foreignold of minister of china he is concerned china is to establish de facto control of the south china sea by controlling the scholls. china rebutted by saying it was national interests. it is what the things they them said repeatedly. they are indisputable sovereignty over areas of the south china sea. verye always been interested in that claim, indisputable. it is disputable because there are five other nat

stephen engle asked tim pinsky for his views. >> what is a car doing at an electronic show?emiconductors? >> you're talking millions in his vehicle. we are seeing the convergence of technologies. this is one more of those. are wer: how far away from having pilotless cars on the road as a mass product like the smartphone? look at global trends, we are seeing urbanization, congestion. when you take those problems and look at how you solve them, a vehicle like this does fantastic. because every time you stop, the engine is not running. the braking energy is going back into the battery. it is available the next time you accelerate. looking at trends globally of these cars with congestion, this is a vehicle that does very well. reporter: as we get more interconnected with our appliances, whether it is a kitchen, living room, garage with smartphones? how secure is it? better security than a bank. encryption is everywhere. reporter: what are you doing as you lead the innovation at ford to reduce range anxiety and get faster charging? >> batteries are getting lower cost and more cap

over to stephen engle. recovery is housing taking hold at least a month over month.t of the year over year numbers because they came off a low base. i want to look at month over month. almost at the bottom from a number analyst for you will prices falling and 47 of the chinese cities. that is better than the 49 cities. falls month over month in february. 37 is an improvement. the number of cities that saw prices gained increased, 18 out a 70. it was 12 in march. also unchanged from 9 down to 5. beijing is seeing a civilization. month over month prices are up 0.7%, the second month in a row. shanghai also for the first time in many, many months seeing a month over month gains in prices up. it had a no change in the mother before basically stabilized last month and now increasing to 0.6%. what we are seeing is the three interest rate cuts since november and relaxation of the mortgage rules on second homes really trickling in. perhaps with found the bottom month over month for new home prices. rishaad: thank you for that. we will more later in the show. ok, a look at ot

leslie liu told stephen engle that the company wants to be far more than just an online retailer.have created an open ecosystem. partnersrking with our to bring new products. we are not making any new products by ourselves. we are working with our partners. stephen: what kind of products are we talking about? has made an investment in a voice recognition technology company and smart home appliances. how do those mesh? there are already 400 products sold on our smart home website. we will keep adding new products into the pipeline. announced our joint venture from ifly tech. a voice controlled speaking system that allows you to use your own voice to give commands to speakers and have instantaneous access to millions of hours of content. additionally, you can use your voice to talk with this smart speaker. ask what the weather is tomorrow, what is a stock's price. alibaba,you know that your main competitor, has been criticized for allegedly facilitating a platform for the selling of counterfeit goods. even jd.com was in the news for allegedly selling refurbished iphones that were pa

stephen engle went out for ray market watches -- gray market watches. >> stocking up on apple watchesas gifts back home. >> the apple watches are more expensive in china. plus, i could not even find any in guangzhou. >> i did not expect this craziness to happen and i did not expect it to be such a hot item. i think people are going after the apple watch because there is a limited supply. >> what are the gray market prices here in hong kong? the most expensive one is 10,000 hong kong dollars. about 1300 u.s. dollars. the list price is about $700. if you want to pay almost double, you can be an early adopter of the apple watch here in china. >> it is new. that is why i want to try it. i guess i will have the pay more than 2000 hong kong dollars more than the original price. >> if that is too rich for your blood, you can go down scale with the cross-border version. they are not really knockoffs they are more a phone on your wrist. it has a simple card that you can put -- a sim card you can put in and talk. the best part, just 780 hong kong dollars. that is $100. most of the customers wer