>> no contest, tony abbott defeats his leadership critics in 15 minutes. more signs of slowdown, china's record surplus highlights weak domestic demand. and thegood, the bad, ugly. asia's winners and losers in sustainability. good day to you. i'm angie lau. coming to "first up," from you in hong kong and streaming on your mobile and bloomberg.com. quick snapshot of the broader

markets for you. let's take a look at oil futures. 52 points, about 60 per barrel on friday. 2.4%, that helped drive the saudi stocks to higher gains, 1.8% higher. s&p 500 ended on a down note, but we did see the dow. falling commodity prices and weakening domestic demand has led to a record high trade surplus for china. stephen engle has been breaking down the numbers for us. this highlights the number of problems in china's economy. had 34, 35 straight months of deflation at factory gates. you have severe deflationary pressures. now you have an increasing export weakness, and an even greater continued weakness in imports, meaning domestic demand.

the economy is slowing probably a little bit faster than many had wanted to. with this domestic demand weakness, that is creating a number of different problems on the currency front as well. china does not necessarily want a fast depreciating currency. we also had weakness in exports. let's break down the numbers first. exports, january down 3.3%. the external picture is not so pretty either. down 3.3% right here. it is the first time in 11 months that we saw a fall in exports. let's change the page and look at the imports. continued weakness in imports. down 20%. 19.9%. this is the most in more than five years for imports. that led to this record high trade imbalance, trade surplus

of 60.0 3 billion u.s. dollars. billion,, and48.9 we got $60 billion. facets here.many you have the property downturn, manufacturing weakness, sharp decline in oil and commodity prices exacerbating this as well. weak internal demand and week external demand, there are a lot of factors. >> you can't focus only on the falling prices of oil as the reason for the depression in imports. you've got to look at domestic demand as well. there's weakness there. >> absolutely. you have the two working hand-in-hand to bring these numbers down. and you have seasonal distortion. there are definite distortions. last year we had the lunar new year in the first week. this time it is in the second or third week of february. there's not a lot of distortions from january, february.

you're coming from an extremely high base last year to this --r, and those exacerbated extremely low commodity prices compared to last year. there's the base effect. we do have to wait a little bit, maybe another month or two, to see if this is significant trend. right now 60 billion u.s. dollars, record high trade surplus is indicative of that weakening demand and the lower commodity prices. >> stephen engle, thank you. you can get more on all the day's top stories at our new digital destination, bloomberg business brings together the best of bloomberg news, business week, bloomberg television, and digital content in one address. that is bloomberg.com. our top story, in the end it was no contest -- the australian prime minister tony abbott survived a leadership challenge from his party colleague.

the whole process winding up in a little more than a quarter of an hour. our correspondent paul allen is at parliament house in canberra. was this as comfortable as it seems? angie, anything less than absolute loyalty is not particularly comfortable. of -- voting against of leadership, 39 in favor having a leadership spill. it was a very short meeting, just 15 minutes. that suggests there wasn't a great deal of debate. ladies and gentlemen, we have had a ballot. it was properly conducted. the result is clear. no's, 61. yes, 39.

that seems to me to resolve the matter. thank you very much. >> this vote was supposed to happen tomorrow, on tuesday, but it was tony abbott's decision to move it forward to today. elementarye first sitting day of 2015. it would have been a huge distraction to have let this go unresolved. it also gave his opponents less time to discuss. a lot of mp's arrived in canberra this morning. it helps tony abbott's cause to get this photo out of the way as quickly as possible. it worked out in his favor. >> what happens next? does this resolve the leadership talks? tt said it was a solid margin, but wasn't enough. it was a secret ballot. questions remain, who voted in favor of the spill, is his cabinet loyal to him? the news polls today, the latest polls to come out don't show a

very happy situation for tony abbott's coalition government. if we take a look at the two-party preferred, the labour party, 57%. this is the same labour party that was soundly defeated in an election just 18 months ago. tony and his liberal party struggling on 43. as for the prime minister, the story is bad for tony abbott. the opposition leader, 48. as for the public's satisfaction with the way tony abbott does his job, dissatisfaction at 68%. satisfaction at just 24%. spilleadership vote, or motion, does buy him some time, but he has to do something soon. one of the things that brought this matter to a head was the queens land state election. the liberal party there was thrown out after a single term, despite enjoying a huge majority. you don't have to be a political

einstein to figure out that the same thing now seems to be happening on a federal level. >> the war rages on. thank you so much for that. paul allen out of sydney. the markets have started trading in australia. let's go there right now. %, thiss falling 1/3 of 1 on the heels of china's import slump. we are seeing weakening of the dollar, as china's imports plunged by the most in more than five years. let's get a check of new zealand. we're also seeing weakness there in terms of equities. new zealand dollar along with a aussie dollar falling on the heels of chinese data. we are counting down to the opening in japan and korea. let's head over to japan.

nikkei 225. futures, 22 a higher open -- pointing to a higher open. a robust jobs report on friday coming out of the u.s. the dollar-yen is strengthening. trends asia plane crash in taipei killed 35 people. how there are new revelations that the airline pushed the government to delay a safety rule designed to prevent such accidents. a story you will see only on bloomberg. what did they learn? pilots andrned that aircraft need more time at the gate in between flights. the logbooks reveal the pilots of this flight were on the ground just 20 minutes in the prior time before the flight crashed. they had made two trips that morning.

this was their second trip to this island off the coast of taiwan. on the return, this is when this problem surfaced. this is not the first time that been revealedt is that their planes do not spend enough time on the ground. in july of last year, when the first crash happened, the crash 48 lives in july of last year, the concern with the pilots of that airline -- [no audio] it allows an airline to be more profitable, but it doesn't allow enough time to do all the checks that are necessary to ensure planes are safe. it's not clear and it's not being attributed at this stage that this rule has been violated, because the rule has been delayed, enforcement of it, until march 1. the airline lobby the civil aeronautics board in taiwan to delay implementation of this rule. this rule applies only to transasia and it's fleet of atr aircraft. >> taiwan's civil aviation board

has singled out transasia's failings. what is the airline doing about it? >> the airline is retraining its pilots. there are 71 pilots who fly this fleet of aircraft. this is the exact same plane that was involved in july of last year. so far, at least 88 people killed in less than one year. that is a very large fatality number for any airline, and certainly a small airline that flies domestic routes. we will be watching this closely. the airline canceled 32 flights today in taiwan so those pilots can head back for training. >> incredible loss of life there. thank you so much for that. agencies, two rating say chinese banks could be facing more risks after the troubled developer narrowly avoids missing a payment on the dollar bond i selling stake -- by selling stake to a rival. moody's and s&p say they expect

to see an increase in bad loans with several other developers reporting week cash flows. strong u.s. job numbers have raised the possibility of fed rate hikes as early as june. the probability of a rise increased significantly. the jump came out after u.s. employers created 257,000 jobs continuing what is the largest -- longest streak of gain [no audio] the files were obtained by several news organizations, including the bbc and "the guardian." in response, the bank

acknowledged control failure, saying the unit had not been fully integrated. we have some breaking news for you. space x rocket launch is on hold because of a tracking issue. in fact, it has been scrubbed entirely today. supposed to launch today. and now it's on hold. hike to come, a fed rate as early as june. guestt what our next expects. after those robust gentner -- expects after those robust job numbers in the u.s. ♪

ministergreek prime outlined his plans for recovery in a speech that puts him on a collision course with the country's creditors. appeals for a bridge loan rather than a bailout extension.

the former fed chairman alan greenspan says the greek exit from the euro is simply a matter of time, because no one will risk lending any more money. north korea has fired short-range missiles off its eastern coast a day after state television showed pictures of with a new anti-ship rocket. the lodges, head of the south korean military exercises which pyongyang says are a precursor to invasion. haveaineers and chile found the wreckage of a plane that crashed 54 years ago. down april 3, 1961. all 21 people on board were killed.

climbers have refused to reveal exactly where the crash site is, saying they don't want it to become a tourist attraction. the big a look at events this week. tuesday brings the results of the election in delhi and eight months after coming to power, the prime minister may have his first taste of defeat. his bjp was neck in neck with an anticorruption party. the internet boom in china, one of the winners has been baidu, reporting fourth-quarter results thursday and analysts expect profit rose 30% on rising mobile ads. the end of the week sees the start of the 2015 cricket world cup. australia will be the stage of the tournament, with india defending the trophy.

australia plays england, new zealand takes on sri lanka. the final is in melbourne on march 29. it's a busy week ahead here. he is global investment strategist. inis usually based singapore, but joins us in our hong kong studio today. it's good to see you. as we take a look at how oil prices climbed back on friday, crude surging 2.4%, lifting saudi equities and lifting , is it timece again to breathe a sigh of relief, or is still more volatility ahead? >> if you look at the long-term in the mid-70's, that is where it has been hovering. i would not be surprised if

things were at this level for a period of time, which is encouraging. the u.s. payroll numbers were encouraging. the key questions have to do with what happens to the dollar and what happens to currency volatility. >> a lot of people have been concerned about falling oil, but certainly not if you're doing a consumer play and consumer discretionary's. if you take a look at even how it has lifted, the ability of asian consumers and more dollars in their pockets along with u.s. consumers, it's quite a good, positive story. said, the currencies and u.s. dollar strength -- does this overshadow somewhat the positive? >> that is one of the main questions. economist it is easy. you plug in the lower oil price and it goes through consumer and

you spit out the increment and gdp -- in gdp. people are used to the idea of a weak dollar. they are used to the idea of, i can borrow large amounts of u.s. dollars. the currency is going to weaken because of qe. when the dollar goes up, all the guys who borrowed in dollars start to face some stress, particularly if you haven't hatched. we have two forces at play. then the impact of a much higher, stronger dollar. we were told three or four years ago that the bond yields would break out. want to accelerate, given on what we saw on friday with the payroll and the rest of it. ,he linear force of oil decline and the financial market shock -- >> the nonlinear u.s. dollar

strengths play on consumers. at what point does that impact negatively on the u.s. economy, and then the ripple effect is felt globally? >> we will have to wait and see how that impacts. a lot of it depends on the u.s. consumer response in the next weeks and months. i think the payroll numbers were encouraging. the main risk for asian markets is going to be the stronger the dollar, what happens to agent turned sees -- asian currencies. >> what is a good strategy? >> one is stay with what you believe long-term structurally that can ride through this. india, we like vietnam, we like frontier markets, and we like the philippines. the other thing we're asking people to focus on is relative values. in asia, some people have played

a couple of trades too long. the relative lu had moved to levels we saw in the tech bubble. thailand.pore, short values have moved to a level that is consistent with near 30 year levels. >> are you still comfortable going long financials in china? >> on a short-term basis, we like that. we want to see the central bank continue to ease. our expectation is the core risk in your portfolio. >> thanks for joining us. coming up, sustainable living. the winners and losers across asia. ♪

soul andcities like singapore have taken top honors in a new report on the world's most sustainable cities. hold the champagne. asia is also home to the worst performers. ruslan chen and bloomberg tv indonesia take a look at why hong kong is getting a cheer while jakarta is getting a thumbs down. jakarta has one of the fastest-growing urban populations in the world, but according to consultants, the city is not keeping up.

attracted jakarta 45th -- it right jakarta 45th -- ranked jakarta 45th. here is where the gain slips away. water, especially in slums like these. nearly 40% of households in jakarta do not have access to safe water for cooking and drinking. iser the president, the goal for all to have access to clean goal which will cost nearly 58 billion u.s. dollars in the next five years. top 10ng made it to the in arcadia's rankings, coming in at number eight. the city is often dismissed as offersn jungle, but it the greatest accessible green space of all the cities in asia, according to the survey. hong kong also scored well in education and life expectancy, as well as being seen as one of the best places to do business.

however, there's poor work-life balance. workers here -- work hours here are 20% longer than the global average. we will have more on the sustainability of asian cities when we are joined by the company behind the report. we will speak to graham kenan. those of you watching in sydney, that is 11:40 this morning. coming up next, helping clients dodge millions of dollars in taxes -- the allegations facing hsbc coming up after the short break. ♪

>> it is the first trading day of the week here in hong kong. a live look as we all get ready ofget act to work, and many us are already doing that. it is 7:30 in hong kong. we are 30 minutes away from the open of trading in japan and south korea. you are watching "first up." ♪ unit alleged to have helped wealthy clients dodge taxes.

tiger, tiger burning bright. singapore airlines' profit surges. first class delivery, harrow airlines are taking over the heavy lifting from the shippers -- how airlines are taking over the heavy lifting from the shippers. hsbc may have helped clients dodge millions of dollars in tax rate that is the picture painted by secret files that could be the biggest banking week in history. sherry and has been taking a look at this. 's swiss army currently helping wealthy clients conceal assets, advising them on how to get around tax authorities. bankers apparently offered them deals with how to stay ahead of the loan. guardianets like the leaked files stolen in 2007 by a computer expert in hsbc in geneva. those files show the accounts of

around 100,000 clients from around the world. they showed a swiss army of hsbc engaging in activities such as allowing clients to withdraw breaks of cash, often in foreign currency, aggressively marketing schemes to help wealthy clients avoid european taxes, also colluding with some clients to conceal undeclared black accounts. the files cover the period of and 2007 and2005 show accounts that hold $120 billion of assets. >> that is a huge amount. what is the bank saying about these allegations? they now are admitting to wrongdoing by its swiss subsidiary. they are saying in a statement that they acknowledge and are accountable for past compliance.

they have taken significant steps over the past year to implement reforms as well as exit clients did not meet strict new hsbc standards, including those they had concerns about when it came to tax authorities. the swiss arm saying they had not been fully integrated to hsbc when they were bought out in 1999. >> these clients, who are they? mix inave a colorful there. apparently there are hollywood stars. there are also shopkeepers, royalty, as well as heirs to some of the biggest fortunes of europe. we also have people like [indiscernible] was convicted. inery colorful mix of people those files of 100 and thousand -- 100,000 clients around the globe. >> time for a look at corporate stories making headlines this

morning. >> jpmorgan's employment practices are said to be under scrutiny. "the wall street journal" says u.s. authorities are looking into the hiring of the son of hiredinese minister, despite a poor performance in job interviews, among other things. is said to berp part of a consortium building. have 29 stations across three major districts. they are expecting to open in two phases. the land rover is recalled after 104,000 cars in north america have safety concerns. u.s. regulators publish notices highlighting brake issues which could increase the risk of a crash. rover modelsfects built between 2005 and 2012 and

is expected to begin next month. singapore airlines opposed -- posted a fourfold jump in fourth-quarter profit or it was still not enough to meet analysts' expectations. still challenging days ahead? >> looks like it. butines profited in q3, that is because it added the earnings of tiger air. remove tiger, and you get the airlines posting a 5% drop in profit for the quarter. it had an $88 million loss from hedging fuel the wrong way. oil is cheaper. it is hovering at six-year lows, which is generally good for the industry. some others have said they will remove fuel surcharges.

singapore says it won't do the same. operating costs remain high. hedging and competition will put a lid on its earnings. air is the third largest carrier by market value. they're pretty much split on their call. nine say buy, four sell. credit suisse and mcquarrie among those not keen on sing air shares. >> singapore airlines has announced plans to introduce premium economy seats later this year. how successful is that expected to be? say. is hard to the premium economy seats are meant to help singair be more competitive. air is betting on its premium economy for a boost, given the growing demand now. it is set to be launched in

august this year. will it work? your guess is as good as mine. it is an $80 million investment for sing air. reviews say those seats are among the best out there, 38 seats versus 32. more leg room, priority check-in, boarding perks like noise canceling headphones. pre-order your meals. we understand premium economy will cost 20% more than economy like tickets, but rivals virgin atlantic all already offer premium economy. sing air really needs to set itself apart. we don't know if that can be done. >> thank you so much for that. on the u.s.spute west coast could be costing the shipping industry as much as $2 billion a day. loading and unloading of vessels grounded to a halt over the

weekend as dock workers and employers fail to reach an agreement. another industry could be benefiting. companies are prepared to airlift cargo now. >> it is called the ship to plane shift. these companies saying, we can't afford to see this cargo divergence to three different ports throughout the world or risk delays right now. they are saying, we can't shut down our factories because at the end, it will end up being more costly for them if they had to shut down an entire production line. they are forced to do this. we are seeing some companies airlifting some other car parts last month. we saw mcdonald's japan do that as well with their potatoes, with their fries. air shipments could end up 20 times more than sea travel. but again, really helping these

asian airlines such as cathay pacific, ana, which is a bigger business than what we have seen in the u.s. 24% of theirc, sales come from freight. compare that to united airlines, 2.5%. take a look at the announcement of air freight traffic we see in the west coast in december. quite major medic boost -- a dramatic boost. seattle up 16%. the largest gain in major u.s. airports in l.a. it is creating a list for asian airlines. how long is this labor dispute expected to go on and create this continued -- >> it has gone on since may already. experts are saying that it could cost about $2 billion a day. we are talking real roads, ocean carriers, and the broader

economy overall. they said in terms of the airlines benefiting, up to three months possibly here. if they manage it well, this could be a good boost for revenue. >> it's an idea to listen to. thank you so much for that. get more on that and all the days top stories. watch us live wherever you are on the bloomberg app. download it to your mobile device. a new world of art, and a stratospheric price paid for a post-impressionist painting. the picture by french artist has smashed sales records, touching a reported $300 million. "when will you marry" was painted in 1892. it had been owned by swiss collector. media there says it has been sought by the qatari royal family. million for a

work. still to come, growing skepticism over gdp data in this part of the world. ♪

>> checking other stories making headlines around the world, tony abbott has defeated a leadership challenge and remains in control of the government. a so-called spill motion sought to have the position of pm declared vacant. that is triggering a leadership ballot. the challenge collapsed after just 16 minutes. abbott had been criticized for a series of policy changes and his decision to award australian top honors to prince philip. a weekend election in delay may show that the prime minister -- in delhi may show that the prime minister is not invisible after

all. official results are due on tuesday. six of seven surveys say that [indiscernible] is ahead. wasnticorruption bill rejected. he has promised to serve a full five-year term this time if he wins. more bodies have been recovered from the transasia flight crash in taipei. 15 people survived. five are still missing. it has been revealed that delay.ia wanted a taiwan agreed to implement new rules in march. transasia had already published a schedule for january and february. concept that governments, investors, economists, even the media obsess about, but should they?

we have been taking a look at the history of the measure, asking whether it represents the best measure of a country's economic health. do you have the answers? >> let's hope so. it is one number to measure everything. underscored, and the need of one number was underscored with the great depression. policymakers did not have national tallies to look at back then. the information back then was fragmented. 1937, that's when the concept of such a measure was born in the u.s. of a nobelbrainchild prize winner. his report to congress was called "national income 1929 to 1935." several decades later, 13 years after moses abramowitz first

warned of the shortcomings of aim isncept declared his gnh,crease gdp -- increase gross national happiness. 10 years later, a report was released which was co-authored by another nobel prize economics winner, calling an end to this obsession for quote, unquote, gdp fetishism. a year later, britain announced that on top of other economic measures, it would also survey happiness. at that time we were talking about austerity and unemployed very much in fashion back then. grew at an, gdp average annual pace of 10% over 30 years, lifting hundreds of millions out of poverty. local government officials and

their promotions were evaluated on delivering high-speed growth. record pollution, corruption, and traffic jams across china's major cities, among other things there. seeyears ago, resident jinping said gdp growth would no longer be the sole measurement of government performance. for all the benefits and advantages of gdp and measuring its growth or contraction, what is still unclear is how one increasing output is a good measure of everyone's welfare and well-being and quality of life. back to you. >> it is a measure nonetheless trade should countries scrap gdp targets altogether? is ang us from singapore chief asia-pacific economist at standard & poor's. you are calling for refocus of what gdp should mean to you and me. what do you mean by that? >> good morning.

what we are really arguing is that gdp is kind of on this pedestal in some countries in asia, including china. we want to downgrade trade -- downgrade it. gdp is a byproduct. firms try to keep their shareholders happy. gdp flows out of that rate is an important number. we need it for planning and budgetary purposes. we should not be targeting gdp. we don't think that's a good idea. >> we always ask the question, which came first, the chicken or the eight -- egg. in this case, where it is gdp fall on this and the importance for this measure. if you can't use gdp is a measure, what can you use? >> you do need it as a measure. we want to know how much goods and services economy's supply. we want to be able to compare across economies in a consistent way. we don't think policymakers

should be trying to pump this up, especially artificially. if we are trying to target gdp and the rest of the world is not doing too well or productivity falling, and we're trying to pump up the gdp measures so it looks good, we don't think that is a good policy measure. >> which country comes to mind most for you when we talk about strict adherence to gdp targets? >> i knew you were going to try to pin me down. china is a country that probably puts too much emphasis on gdp, but a bunch of other countries worldwide tend to do the same thing. there's nothing wrong with generating a lot of income for your population, but we should be focusing on efficiency, making sure things are priced properly, firms are delivering value to shareholders, households are maximizing there

-- so your utility is getting the fruits of your labor. it really is how it's measured as well in terms of the parameters, right? years has revised the cancellations of what really underpins its gdp to include and reflect a much more modern economy for the u.s. india just very recently as well basically adhered to oecd rules when it comes to measuring gdp. how much of it is taking the topline number at face value versus really looking below that and beyond that and what underpins that figure? >> i think you are right. the way it is constructed is important. we have international standards. india is a good example where they have moved to a more value-added base measure of gdp which is in line with oecd.

that allows us to compare indian gdp with other countries. that's a good thing. it takes time and resources and money to put together good gdp series. our rule of thumb is basically you can line it up with per capita income. the richer countries in terms of per capita income tend to have better numbers. the goal is that these countries share notes and get to the good numbers. >> we've got breaking news out of japan, data that economists look at very closely here. current account balance came in at a surplus of 187 billion yen in december. let's take a quick check of the yen right now. this is how it's trading on the back of that trade balance surplus coming in less than spotted, and the yen is at 96, slightly weaker.

this just kind of underscores our point there. got to take a look at a whole host of data sets, and not just the topline gdp, right? >> totally agree. we've got to look at all the pieces of the puzzle. gdp is how they fit together, but the composition is quite important. >> we believe it right there. thank you for joining us out of singapore, standard & poor's chief asia economist. coming up next, how k-pop fever is giving one cosmetics company a boost in china. ♪

>> welcome to the stock exchange. we are looking ahead to the open

in japan and south korea. we have reporters here to tell us what stocks we are keeping an eye on. it's all about [indiscernible] >> especially for south koreans. they saytics maker, they have already a pretty good month, 28% up their stuff. they're saying their sales in china will increase by 30% because they plan to increase the number of outlets there by 15% this year. they already have 2300 stores and plan to increase that. >> wow. maybe it will rejuvenate investments. let's head over to video games. >> online multiplayer games -- stock is up 10% over the past month. it could be set for a big day in today, because another big name maker is boosting its investment. there are talks that there could be a hostile takeover.

watch this stock. >> that's a big game right there. >> olympus, the world's largest maker of endoscopes -- overall, third-quarter earnings missing estimates. the u.s. probe may have impacted as well. inir investigation -- back 2011, in the medical business, they used fraudulent takeover deals to hide losses for 13 years, starting in the 1990's there. they said accounting discrepancies wiped off $1.3 billion from the balance sheet. >> it was a big deal when that's broke -- that broke. >> lots of interviews. >> and still have an impact, apparently. >> we will keep watching it. that is the verdict from a stock exchange. we will be back in an hour.

up in the next hour of the show, the claims that hsbc helped wealthy clients. -- clients dodge tax. we count down to the open in japan and korea.

>> taxing times. hsbc is accused of helping clients hide cash. no contest. tony abbott defeats the leadership challenge in just 16 minutes. more signs of slowdown. highlights with domestic demand. i am angie lau. ," coming tofirst up you live from our asian headquarters in hong kong. hsbc may have helped clients

dodge millions of dollars in tax. that is according to a secret file that could be the biggest banking leak in history. what do we know here? >> what we know so far is that hsbc's suisse arm helped wealthy them to gethelped around tax authorities. this is according to a room or repaired by the international consortium of investigative journalists. they say they obtained a file leaked into thousand seven by an employee who used to work at hsbc geneva. those files show that hsbc to getly allowed clients breaks in cash in currencies and enable customers to get around european taxes. they also colluded with some clients to conceal undeclared

black accounts from their tax authorities. a also apparently provided accounts to international terminals and businessmen. covered between 2005 and 2007. some accounts held almost $120 billion in assets. >> hsbc is among a handful of banks to face criminal prosecution in recent years. what is the bank saying about these allegations now? >> hsbc has admitted to wrongdoing. they said in a statement that they acknowledge and are accountable for past compliance and control failures. and that they have taken significant steps over the past several years to implement exit clientsll as who did not meet a strict, new hsbc standards. they -- their subsidiary was not fully integrated when they bought out the bank in 2009.

since 2007, they have cut back on their client base by 70% in order to it here to stricter standards. >> who are these clients? whence we have some colorful names. not just all the stars, but royalty, heirs to some of europe's biggest fortunes. we see david bowie in those files, although he has not been related to any of those tax evasion issues. but his name does feature there. king mohammed the sixth of morocco, and several people from his royal family. >> thank you so much for that. you can get more on all of today's top stories at our new digital destination. it is right here, bloomberg business. it brings together the best of bloomberg businessweek, bloomberg television, and new

digital content all at one address. it is bloomberg.com. check it out. as for us, let's check the markets right here in the asia-pacific. japan is just opening. you can see the gains there/. -- there. we had some breaking news a couple of minutes ago. japan's current accounts coming 187.2h a surplus of billion yen. that is below what was estimated. the nikkei climbing .75%. we are seeing strikes on the yen right now. in korea, the cost be -- the kospi is just getting underway. it is lower at the start of the session. and to australia as well, where we are seeing equities under pressure. this after chinese trade data

came out over the weekend showing weakness in the domestic economy, imports falling more than expected. most in declining the more than five years. the australian dollar also week chinese data.t let's stay with australia. in the end, it was no contest. the australian prime minister, tony abbott, easily survived a leadership challenge from his party colleagues. the whole process winding up in a little more than a quarter of one hour. paul allen is at parliament house in canberra. was this as comfortable as it seemed? mostll, perhaps the comfortable as tony abbott would have liked. on the surface, that looks pretty comprehensive. there are still 39 members of his own club who would rather .ot him lead the job

the meeting was very short. some 15 minutes long, which suggests there was not a lot of debate and the motion was defeated quickly. gentlemen, the party has met. .t was properly conducted 39. 61, yes onee was one in formal and number away. that seems to me to resolve the matter. thank you very much. was supposed to happen tomorrow morning, but tony abbott decided to bring it forward for a couple of compelling reasons. today is the first elementary sitting day -- the first parliamentary sitting day of 2015. the opposition really would have made a meal of this if it had not been resolved. secondly, it shortened the length of time to get organized.

that probably intermediate to the margin of the vote. strategye for backroom , paul. what happens now? leadershipnd questions for tony abbott? >> probably not. lookedsaid, it comprehensive, but it was not cognitive enough. the rumblings will still be there. particularly in some of the latest polls conducted over the weekend. at the opposition labor party, now on 57%. labor was comprehensively defeated in an election just 18 months ago. it has turned around very quickly. leader the opposition with 48% and tony abbott with a comparatively weak 30%. you look ate when

job satisfaction. polled were old -- just satisfied with the way tony abbott was doing his job. int has been happening recent state elections, liberal governments and tossed out after just one term. you can understand why 39 of tony abbott's colleagues are concerned about the direction they are heading. >> as we know, sometimes it is about the politics of politics. what does this mean for some of the senior government figures that might have played into this? >> the media has been making at of analyzing words of the ministers and their body lynwood. left the party room together this morning. ticket,w it as a joint as prime minister and treasurer. be whetherst will tony abbott's leadership

survives and he stays in the treasury role. we had the situation over the , viewed by many as the abbottchallenger to tony , walking around and appearing smiling and cheerful with the deputy leader. it was not an endorsement, but it was less than wringing. we do not know how many of tony allen -- tony abbott's cabinet backs him and how many opposed him. we will watch the national election very closely over the coming weeks and months. >> you will be watching it for us right there. thank you so much, paul. twoking some headlines, ratings agencies say there could be more risk. narrowly avoided -- moody's

and s&p say they expect to see an increase in bad loans. strong u.s. jobs numbers have raised the possibility of a fed rate hike as early as june. the probability of a rise increased significantly. the jump came as u.s. employers created 250,000 jobs in january, continuing what is the longest streak of games in more than 20 years. withhina is pushing ahead plans to ease trading controls. the move will help investors manage risk in one of the world's most volatile stock market. china has been trying to attract more sophisticated investors by allowing shortselling and marching trading -- margin trading.

demand andomestic falling commodity prices have led to a record high trade surplus for china last month. we are breaking down the numbers. it really seems to highlight the problems we have been highlighting. >> and there are a lot of them. overseasthe weak demand. what really is leading to this record trade surplus is the continued weakness in imports, which means continued weakness in domestic demand. let's bring up exports first-grade we can see the extra picture. we were expecting a gain of about 6% in january. we got a fall of 3.3%. the first time it felt in 11 months. since march of last year. down 3.3%. that is the lesser of the two evils. let's turn the page and look at imports. january imports down almost 20% year-over-year. we were expecting a fall of about 3.2%. it has been falling consistently over a couple of months. there is a general weakness in

imports and domestic demand. 19.9% down. and change the page again to trade surplus. billion dollars in general. we were expecting a survey of $48.9 billion. a lot of factors at play. falling commodity prices, rising u.s. dollar, weakening demand. a lot of things combined. you have weakness in manufacturing, property weakness here. so it is a big cocktail of problems for growth in this economy. let's it is that time of year again. the lunar new year holiday. when you take a look at the year, how much do seasonal distortions play in? falle commodity prices significantly and the dollar as well. i just got this this morning from ubs. let me just read out --

"temporary distortions of the chinese new year along with the u.s. dollars long -- large move upward contributed to the sharp deterioration." here is the key point -- "excluding these factors, we believe that external demand an underlying export growth stayed largely firm." she says the situation is still pretty good. according to her, she is saying that there are distortions going on right now and that she is not changing her forecast for trade at 7.5% for the full year and 3% growth this year. that is ubs in the last couple of minutes. >> thank you so much for that. coming up next, the arm wrestling over greece continues. who is likely to emerge as the winner? we will ask our next guest after the break. ♪

>> welcome back. you are watching "first up." let's check in on some bloomberg world news headlines. three more bodies has -- have been recovered from the taipei,ia crash in bringing the confirmed victims to 38. it has also been revealed that trans-asia wanted to delay the minimum time required for preflight checks. they will women new rules in march because trend data had already published a schedule for january and february. north korea has fired short-range missiles off its eastern coast a day after state television showed pictures of -un at tests of a new anti-ship rocket. pyongyang says they are a rehearsal for invasion.

last week, the north said it would no longer negotiate with the u.s. after president obama predicted the regime would eventually collapse. the latest private enterprise rocket launch has been hit by a problem. town down ofd the the falcon 9 just minutes before liftoff because of a glitch in the radar tracking system. the delay is another blow to spacex after it failed to land a rocket booster on a floating barge last month. markets trading here in the asia pacific and this is what it looks like right now. 225 the only-- bright spot in the region. and australian equities, south korean equities both down. this on worries from china. a big trading partner for both of those countries. we are seeing imports declining close to 20%, more than expected. .2%. down

what does the slowdown and the impending rate hike in the u.s. me for the markets? david, thank you so much for joining us. let's focus on china and the u.s. china coming out worse than expected. it is not good. >> no, it is not. we will see more support from the pboc sometime this year. we would also expect china to go back to some sort of old recipes , helping infrastructure investment because the property market is quite weak. so you need to spend more. we will see a revival in these old recipes. it is not about news from an equity point of view.

the old economies, the traditional stocks had a good run the last half of last year. this will continue on. the trend of new economies is transitioning into a new sector. those stocks have done poorly for the last four months. they are relatively cheap at this stage. both traditional and new segments have good potential. >> good ideas for investors looking for some equity plays an opportunity in china. if you take a look at the exports figure, it was negative instead of the ins -- instead of the expected positive. >> globally, the first cap will be relatively weak. it is a sign that china is shifting away from that export model. once again, this new sector like tourism, health care, this is where the focus is.

unlikely to depreciate its currency. this should be a good news from an investment point of view. the markets should not be too worried about too much volatility. >> it is not in china's best the big fault -- let's take a look. a big arm wrestling match continues here. who is going to win? >> are you talking about greece? >> let's talk about greece. that is the most critical one. >> clearly, the ecb has the upper hand. forcing the greek central-bank to come to the ecb to get financing. the problem with that program is that the amount you may get is

more costlyit is than when they used to go to the ecb directly. the austerityop program if and when it decides to do so. the situation is not easy. this will probably be carrying on for quite a while. there could be some negotiation and decision. in the end, the ecb will not let it go. talks thatut these have been happening with the u.s. treasury? >> difficult to tell if the u.s. will intervene while the ecb is trying to maintain -- that would be a case between the two. it sounds highly unlikely. once again, we feel like the situation in greece, there is further upside.

david, reassuring us with some good ideas there in china and europe. thank you so much for that. still to come, job growth at a faster pace could mean an early rate hike. we will take a closer look at the odds. all of that coming up next. ♪

>> i am david ingles in hong

kong. these are your fx headlines. the strong u.s. jobs report has boosted the us for the first u.s. rate hike in june, perhaps. and more than 25% chance of a by june.ff the u.s. economy adding 250,000 329,000 on top of the new jobs in december. on to china. the trade figures for january were quite a shocker. imports collapse 20%. collapsed a little over 3%. they were expected to rise. a record trade surplus. this creates a problem for the central bank, who will have to intervene heavily to keep the yuan more stable. ubs may find itself in trouble again with regulators.

the u.s. justice department is looking into whether the bank misled its clients over one of its products. investigators have been speaking with several employees to find out if the bank misrepresented the pricing of currency transactions. that is on top of a wider probe into forex manipulation. jobs data. a lot of people are saying, thank you for that jump. it is a bit quiet as far as the dollar index. compared to friday, things are looking stronger. 9.llar-yen spiked up to 11 we are a little bit below that right now. current account deficit came in a little bit narrower than expected. the aussie dollar, we will be checking in on that. trade numbers out of china and

political developments over in canberra. up withust wrap things a couple of currencies. 113.20. those are the stories driving your forex markets. >> thanks, david. coming up, restricting regulations. we take a look at how trans asia managed to delay rules. ♪

>> it is 8:30 here in hong kong on a monday morning. you are taking a live look at a view of victoria harbour. that is a lot of smog greeting us this morning. we are one hour away from trading and you are watching "first up." tragedy in taiwan. transasia lobbied to delay new safety rules ahead of last week's crash. tiger burning bright.

the airlines profit surges thanks to its low-cost carrier. and from economic hero to zero. the imf runs the rule over mongolia. good morning to you. i am angie lau. markets trading here in the asia-pacific. the big picture here, the nikkei the only one seeing gains as we saw a trade surplus coming in, though less than expected. we are seeing pressure for south korea and australia after chinese imports plunged the most in more than five years in january while exports unexpected vfl. -- unexpectedly fell. that highlights the weakness in domestic demand for asia's number one economy. transasia plane

crash killed 35 people. revelation's that the airline push the government to delay a safety rule designed to prevent accidents. a story you will only see on bloomberg. what did bloomberg learn? >> it learned that this new rule, the implementation and enforcement of it was delayed until march 1. it was a rule that was targeted for transasia airways and the zac type of plane that crashed last week. this rule coming into effect after last summer. thisrashes in one year for airline. at least 88 passenger fatalities. revelation comes as the flight logs from this flight have been released. videoic crash, stunning that no one would want to see again. that is what investigators are trying to prevent, another crash of this type it appears that

problems on this plane started 37 seconds into that flight with a warning alarm going off on the right engine. >> the investigation continues. it is too early to tell whether or not those extra minutes in the preflight safety check could have or should have prevented something like this. we will see how this all plays out. it is not really the first time that transasia is being targeted for its failings. the taiwan civil aviation authority really targeting that. what is transasia doing about it? >> they are retraining all of their pilots who are operating that fleet. the plane, which is an italian design, is only a year old. the aircraft is not necessarily old. which suggests that pilot error may be to blame. in the july crash last year, it did appear that pilot error was a factor in that crash.

that theycover later took off for that flight knowing that the weather at their arrival airport was too poor for landing. that gives you an indication of at mentality of some pilots this airline, that safety is not the priority. after a second crash in one year, you might expect that safety is now the number one priority. >> absolutely. thank you so much for that. angapore airlines posts fourfold jump in third-quarter buffet. it still was not enough to meet analyst expectations. let's head over to singapore and our southeast asia correspondent. still challenging days ahead for singapore airlines? >> you bet. the surge in q3. that is only because it included the earnings of tiger airways,

its budget carrier. take tiger out of the equation and it is a different picture. they posted a 5% drop in profit and $88 million of lost from hedging the wrong way. oil is at a six-year low. fuel accounts for about half of overall costs. they are among those saying they will remove the fuel surcharges. not the case with sing air. because of its oil hedge, expenses remain high. it is maintaining fuel surpluses -- surcharges. it does not really have a choice. hedging and competition, it says, will put a lid on its earnings. buy, eightine saying hold, four sell. tough days ahead for the carrier , which is the third-largest carrier by market value.

>> for years, singapore airlines enjoyed a seller reputation in the skies. in recent years, that has been chipped away by rivals. they do not have premium economy seats. at least, they did not have them ahead of the rivals competition. they are now introducing it. how successful is that expected to be? >> it is a tough call. airlines already offer premium economy. favorable.far are buck.ay bang for your you get a lot more room, priority check-in, you get to pre-book your cook. some say this is the poshest

premium economy out there and it has to be if saying air -- if sing air wants to tap these seats. for now, though, the jury is still out. let's hope it pays off. >> thank you for that. time for a look at the corporate stories making headlines this morning. jpmorgan's practices are said to be under scrutiny. the wall street journal says u.s. authorities are looking into the hiring of the son of the chinese commerce minister. the report says he was hired despite a poor performance in job interviews, among other things. neither jpmorgan nor the minister nor his son were accused of any wrongdoing by the newspaper. a consortium building a new subway line in beijing. the metro will have 29 stations across three major districts. and they will open in two phases. the line will bee new

one of four constructed this year. jaguar land rover recalls more than 100,000 cars because of safety concerns after u.s. regulators published notices highlighting brake issues which affect the probability of a crash. the recall is expected to be in next month. -- to begin next month. those are your top stories for this hour. >> mongolia has slumped from being a world-leading economy to one leading for help again -- pleading for help again. what is on the agenda? >> they are looking at a growth plan for policy reform in an economy which is being described as fundamentally inaccurate.

they are taking measures to minimize the downturn of the economy. ministerants the prime , in regard to implementing policy reforms, to hold formal discussions on possible cooperation with the international monetary fund. last week, the government introduced a bill overcoming economic if. this is where the government wants discussions according to the central bank's economist. we do not feel there is an urgent need to implement bailout programs with international financial organizations in the current economic situations. but there are needs to closely cooperate and discuss policy reforms with international organizations. >> the policy change will focus

on restoring mongolia's reputation among foreign investors by stimulating projects like the second phase of the gold and copper mine. the government plans to begin the second phase in the second half of this year and expects to boost foreign investment in more than $1 billion by 2016. this will have to pass through parliament. >> here is the thing. for international investors, this is the critical question -- will policy reform be enough to restore growth? >> decides the recession we have seen in mongolia over the past two years and the collapse of the currency, there has been marked corrections. the devaluation has forced mongolia to import. that has caused a positive trait balance for the first time in a decade. 1.6 billion u.s. dollars is enough to supply imports for

five months. the prime minister is expected to sign a partnership agreement later today or tomorrow. the imf delegation will not meet prime minister or the central bank governor until they returned from a visit in japan. until then, the main economic indicators will take place. much for that. still to come, where can you find the world's most sustainable living? some of the top places to live are in asia. we will take a look at the winners and losers. stay with "first up." ♪

>> welcome back. you are watching "first up." i am angie lau. checking some bloomberg world news headlines for you now.

the australian prime minister tony abbott has defeated a leadership challenge to remain in control of the government. the so-called spill motion triggered a leadership ballot. votes amongst his fellow liberal lawmakers supported him and the challenge collapsed after just 16 minutes. abbott had been criticized for his policy changes and a decision to award australia's top honor to prince philip. >> and now this matter is behind us. we are absolutely determined to work for you, the people who elected us. the disunity and the uncertainty and give you the good government that you deserve. >> a weekend election in delhi may show that modi is not invincible after all.

exit polls suggest a sweeping victory for the anticorruption party. official results are due on tuesday. he ran delhi before resigning when an anticorruption bill was rejected. he promises to serve a full term if he wins. hile has found the wreckage of a plane that crashed 54 years ago. aprile down in the andes 3, 1961 pete all 24 people on board were killed, including eight members of what was then chile's top football team. reveal where the crash site is because they do not want it to become a tourist attraction. asian cities like soul and singapore -- seoul and singapore have taken top honors for most

sustainable cities. hold the phone. asia is also home to the worst performers. we take a look at why hong kong is getting a cheer while jakarta is getting a thumbs down. >> jakarta has one of the fastest-growing urban populations in the world. consultants, the city is not keeping up. 55 onks jakarta 44 out of sustainability. it did well on price of property and literacy. clean water, especially in slums like these. newly 40% of households in jakarta do not have access to safe water for cooking and drinking. under the president, the goal is to have access to clean water by 2019. a goal that will cost nearly 58

million u.s. dollars in the next five years. top 10ng made it to the in our asian rankings, coming in at number eight. the city is known as an urban jungle. actually, it offers the greatest green space of all cities in asia, according to a survey. it is seen as one of the best places to do business. poor work-lifeis balance. work hours are about 20% longer than the global average. and the soaring price of property is a major factor making hong kong and expensive place to live. yeas, but a lot of nays, too. joining us is the head of client solutions at arkady's. tell us about the parameters that you employ here. >> there were many individual

livability,cities, economic development, and sustainability. this is the first time anybody has looked at a whole host of factors. we looked at over 20 different criteria with data available from credible sources like the world bank, united nations, etc. we took the three pillars and grouped them on planet, people, profit. >> that is three p's. some cities are better at it than others. you are really seeing a divergence here in asia, which l, hong kong, singapore, the top sustainable cities in asia. what is the divergence you are seeing between south korea's seoul and everybody else? emergence -- wide

divergence. it is interesting. one we see doing particularly , they have had time to develop coherent strategies and see those strategies through. in the middle ground, we see the very large, very rapid growth like taipei. and then we see cities more in southeast asia where there is growth, but it has been less planned than it might have been. >> more organic growth rather than structured growth. what is south korea doing right and can it be emulated and should it be emulated by other cities? >> absolutely. in doing the background reading, south korea started to make a change. there was a tipping point. people started to believe in

what south korea could do. a set of policies were developed and it was not just about the buildings but the governance, the strategies. from that point onwards, great transportation infrastructure, great education, great health toe all help to bring seoul the top of the table. >> we talk about the rivalry between hong kong and singapore. how can singapore and hong kong -- how can hong kong fare bettter along with singapore? what the rivalry between the two is interesting. is betweenifference are kong and singapore around the efficiency of energy consumption and consumption relative to gdp. hong kong can do better in number of areas, particularly on

environment. singapore, waste management, solid waste management, energy, and recycling. >> good stuff. always opportunity to do better for cities. thank you so much to joining us today and explaining all of that. only the look at not livability, but the sustainability of successful cities. coming up, will the kapok craze craze in china helped unify the prospects from one korean cosmetics maker? we will find out. that is coming up next to. -- ♪

>> welcome to the stock exchange. let's check in on what our reporters are watching this morning with trading underway in asia. looking particularly glowing today. are you using korea

cosmetics? amorepacific down. it was slightly up earlier. it is trading today -- they are saying that china sales are up 30% this year because they are opening new outlets there. 50% more outlets. they already have 1500 stores in mainland china. >> they are very popular, korean cosmetics. in the green. not just your tie -- >> all right. ncsoft corporation. what is this? it is a game maker in korea. they may be facing a hostile takeover. watch that stock. >> will do. and olympus -- we are not talking about the movie.

they posted earnings, missing estimates. saying that a u.s. probe may have impacted earnings. they started discussions with the u.s. department of justice. this dates back to 2011, when they used these fraudulent takeover deals to hide losses for 13 years. 5% stock was down close to at the start of the day. >> still shaking that drama off. thanks, guys. that is the verdict from the stock exchange. ♪ >> we are a must done here for "first up." "on the move" is coming up next. >> we have hsbc. what have we got here? accounts as bank

well. all of this coming from "the garden" newspaper. including evidence that the bank colluded with some clients to hide from tax authorities. having a look at japan trade numbers -- >> it was definitely lower-than-expected. >> but it is still a surplus. there is some evidence of people who are eternal optimists saying the japanese economic recovery could be on track. china, and internal slowdown perhaps taking place. >> perhaps a global slowdown as well. >> exports on the way out. let's turn to prime minister tony at it here. >> doing one of these. >> between a hard place and a hard place. professor saying he squeaked in with two thirds of

the spellers, as they call it here. the question is not if he stays on, but how long he lasts. >> thanks for watching. ♪

>> china's challenges, record trade surfaces highlights weak dependic demand. held nookt, hsbc accused of helping rich clients dodge taxes. the good, the bad and the ugly. asia's winners and losers when it comes to city living. well, the starting gate, the market is about to start off in singapore and another place in