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tv   With All Due Respect  Bloomberg  June 7, 2016 8:00pm-9:01pm EDT

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angie: signs of stability, revised figures showed japan grew more than 5% this quarter. mixed messages. asia-pacific markets are in weight-and-c mode. he aussie weakens -- wait-and-see mode. the aussie weakens. and hillary clinton set to make history.
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welcome from our asian headquarters here in hong kong. japan's economy looking slightly stronger for the first quarter. : that one point & figure looking in the bit better at -- better than economists were expecting. we broke the numbers last week. it was rising 1.4% in the first quarter from the previous quarter. suggesting here that the business sentiments were stronger than previously thought. slightlynsumption rise in the quarter.
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there's still a lot of headwinds coming through for the japanese economy. when we talk about this current account balance, it dear thierry it quite a bit. that is weighing on japan.
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pointing to some positive growth even after you subtract the first percentage point contribution from this leap year affect that we did see. this probe has been mainly driven by the fact that we do see this rapid reduction in real imports. that is not necessarily a good sign of good growth. of course, with this sales tax ite being postponed now, lowers japan's growth trajectory in 2016, unless we do see more fiscal spending. of course, there is plenty of headwinds. the yen back to 106, it has been hovering around 107. he didn't see much reaction with these latest figures. the nikkei reported when it comes to economists, we are
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going to see some easing this summer. 3% of economists surveyed on the day have it in june. july --k in some time think sometime in july. look out for that, of course.
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the kospi just slightly off. holding on to very solid gains in the asia-pacific. we saw the yuan strengthen against the greenback. new zealand a little bit weaker. have a look at the commodities players as well. we are asking -- crudely onto those gains. -- crude holding on to those gains. having a quick look at the currency board as well, we have seen the reaction to the japanese yen coming through after the gdp number. still continuing to .the aussie dollar a little weaker.
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we had home sales come out of australia today. but the name number investors will be focused on is the china trade exports. having a quick check now, we have seen the nikkei go into negative territory. the nikkei down by 12 points. that is probably a response to the fact that we have seen the yen strength and after the gdp numbers. as expected, downward pressure through australia as it continues to open up. korea holding on to those very solid gains that we saw during tuesday's session. a bit of a mixed picture. for wrappingyou that are for us. wanting a foothold in america, but sparring over steel and aluminum. all allow it would foreign institutions raise $40 billion in the u.s. to be spent in china.
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saysn stanley and [indiscernible] the fed rate decision more than ever. [indiscernible] the two countries also announced a deal for westinghouse electric to develop india nuclear reactors. .ndia is a growing market modi wants american investment to kickstart a manufacturing boom. david kamman has accused leaders campaign-called brexit of lying to voters. cameron says the leave campaign has caused people into taking a
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leap into the dark. different opinion polls give both sides the lead. undecided voters hold the key. today could be the endgame in the battle between democratic presidential contenders hillary clinton and bernie sanders. have justew jersey close while voting continues in five other states. margaret has been tracking this for us. any really -- any early indications for us? margaret: hillary clinton has long believed to have had the luck on new jersey. it won't be a big surprise when the results come in. california has been the contest. it is still a couple of hours away. that has really been in doubt. it is more of a question of momentum, energy, support, and how hard it may be for her to unify bernie sanders supporters behind her.
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angie: margaret has been reporting on this all week. how soon will we see endorsements from president barack obama? margaret: president obama's endorsement may be the first expected to be imminent once the results are kind of in the on any reasonable doubt. .t may come tomorrow it may come the day after. it is possible we may hear something short of an endorsement, but a congratulations between now and then. at some point, we do expect them to appear together. what we don't know yet is how long it will take for bernie sanders and the clinton campaign to have a meeting of the minds. that may be a lot a process. angie: what should we spec to hear when hillary clinton speaks later? will beginning a speech in brooklyn at the navy yard. she will be both acknowledging the moment come in terms of believing she has the votes not to clinch the nomination, but also talking about the significance of this from an
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agenda perspective. she will be the first female nominee for the u.s. presidency from a major political party. this will be something that she will be embracing, highlighting not running away from. her company -- or campaign has only released video that will be shown to supporters to make him a showing some of the greatest hits of the women's rights movement in the united states, from the suffragettes movement to, you know, the civil rights and farmworker battles of the 1960's, 1970's. continuation of that in her speech tonight is what we are expecting as she expects a moment's us night for her. angie: yeah, how far we've come, right, margaret? let's talk about the gop side. trump getting slammed for his comments about mexican heritage of the u.s. judge. this is just growing print has he responded yet? know, thiss you involves litigation over one of his businesses, trump university. and the judge involved in overseeing the case is of mexican dissent. donald trump saying he is concerned he can't get a fair
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hearing before this judge because of his heritage. and that has created quite a backlash inside republican leadership circles comically house speaker paul ryan, who repudiated those comments, disavowed them, urging trump to take them back and apologize. and saying that they are sort of the very textbook definition, if you're saying that someone would do something a certain way because of their race come a textbook definition of a racist comment or criticism. there are others -- a senator today i'm a public in markert says that he has rescinded --orsement because he is mark kurtz says that he is rescinding endorsement because he is feeling pressure now. angie: thank you so much for that. coming up, unreasonable expectations. find out why our next guest says there will be another 10% market rally by the end of this year. you are watching "first up your
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." ♪
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angie: the king of thailand has undergone surgery in his heart. he has coronary artery disease and this procedure was satisfactory. is the world's longest running -- reigning monarch. he is also suffering from food on the brain as well as a knee problem. hong kong has killed thousands of birds over fears of the bird flu. authorities expect around 5000 birds to be cold -- culled. china is speeding up efforts to build a [indiscernible] the platform would be used to search for minerals and could be
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as deep as three kilometers below the surface. out itsas been building presence in the south china sea. angie: stocks are trading in the highest levels of 2016. it's not unreasonable to expect another 10% rally by year-end 10% -- year and. of 10%, that sounds so nice. more like him a few you are not losing money, you are a winner. guest: that is spot on. the 10 plus rally in some market today,boards, not your but the correction that happened in january, figure,: too much
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downside. get it -- credit spreads etc., so the rates we've had insecure markets, like the s&p 500, parts of europe and australia, for example, that's not to continue. is aber, rule of thumb tight a tighter return of dividend and capital gains. is don'try to say here expect another 10% rally between now and year-end. however, you can get between 3% and 5% in a tighter return. that is an annualized level. that is still constructive. but have reasonable excitations when employing risk and building your portfolio. angie: that's the thing. where do you go? commodities looks good. oil. but then you have the fed deferring probably until december. then you have divergence.
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then you have all the fx volatility. what is an investor to do, george? george: you need automatic stabilizers in your portfolio. you are right. there's complexities. we know the fed has five foc meetings. the doves at hawks have said that. unfortunately my of the payroll does not help the narrative. the u.s. dollar has helped other , yen in part.orld global growth is not a very weak. it is subdued and there are pockets of a pen and there's pockets of stimulus coming from parts of china and different parts of asia. but the way to look at it is we still have energy and infrastructure and [indiscernible]
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time, we employ the risk into other things, like diversified financials that have an eps upside in the broader market. large energy and resources, we started accumulated in those -- accumulating in those levels early on. the rationale behind that is that energy resort companies still have -- historical benchmarks. partly because of energy prices and resources aren't as low as the beginning of the year. it's not fantastic. a small underway is probably warranted. but not the large underway that we have been running the last two years. the earnings are starting improving in the next coming years.
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the portfolio, depending on where you are in the world coming for structures really expensive. allocate risk or you feel comfortable and take profit systematically through the cycle. angie: should one take profit right now? it feels that way, especially with dow within striking distance of 18,000 again. george: that's true. we are taking profit on health care your today and gold. gold produces in aussie dollar terms. some of the stocks are holding up for five times just in the several but -- the last several months. we continue to take profit from those. a little volatility -- earlier. angie: great ideas, george.
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thanks for sharing them with us. up, the forecast from the world bank. what is behind this latest downgrade. ♪
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clouds are gathering over the forecast for global growth after the world bank downgraded its outlook on sluggish corporate spending. this is a bit depressing what the world bank is seeing right now. ramy: yes. the global economy not growing as fast as forecast. the old forecast back in january was coming in at 2.9% in terms of global growth here in the revised forecast is now 0.5% lower at 2.4%. .hat matches gdp growth
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it is calling it an insipid pace , that means lifeless, that means dead. what is causing that? half of the downgrade was because of a 0.5% cut in the outlook for advanced economies. world bank lowering its forecast for here to 2.9% from 2.7% that it's on january. when economist said that, eight years since the start of the crisis in 2008, the economy seems like -- seems trapped in a low growth equilibrium. other reasons for the fall in global growth is about commodity exporting countries that have seen a slump in their prices. the world bank cut growth in those countries to 0.4% from 1.2%. board inok across the terms of industrial metals, as
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well as group, they have been falling in the past year to date. about 18% in the last year. copper has lost about a quarter rich price to be a is down 11%. platinum down about 9%. another reason for falling growth is that other emerging markets have private debt linked to financial stress. brazil in contraction at -2.5% for 2015. they have now lowered the contraction even more to -4%. and for russia to -1.2% from 0.7%. there is one silver lining in the report and it has to do with china. the world bank cap's forecast unchanged for growth at 6.7%. the ultimate takeaway, looking at everything across the board and around the world is that global growth is expected to slow down. so i guess we have to hold on to
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our hats for that. angie: thanks so much for that. elsewhere, goldman sachs is giving the new president of the philippines a thumbs-up. the bank is expecting him to be a boost for the economy. you to haslinda is goldman's optimism they surprise? yes.nda: in a way, there was so much apprehension before within the investment community. that heman pointed out is looking at 5% gdp. and also promised to invest more in farming come almost 50% of filipinos are in agriculture. so that is an important incentive. if these fossils -- if these policies are effectively put in
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place, it could lift the economy. 2.5% growth. we are looking at 6.9% growth for the philippines in the first quarter. one thing that is encouraging goldman is sharing positive feedback on the president in will,, strong political all pointing to growth and business-presently -- business-from a policies. is up.m all you has to do is build on that momentum. angie: all right. but it is all about perspective. glass half full. what about if it is half empty? what should investors look out for? haslinda: a few things. to plannedrs respond tax changes.
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as for the world bank, as is often the case, the speed and the implementation remains highly uncertain. an indicator would be world bank ranking of ease of business. next year, keeping track of that. some say that it also depends on is,reliable the president talking about shutting down congress if he doesn't get his way. washington being a very close ally to the country, these are possible risks standing in the way of an economy that is becoming one of asia's rising stars. and make or break, they say. angie: yes, that's what they say. we will be watching. thanks for that. look at -- let's take a look at the markets trading this week. .1%.ikkei to 25, down pretty much red arrows across the board.
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we all await the report on chinese trade coming out later today. up, agree to disagree. china and the u.s. find some common ground. but industry remains a something block. we will look at their two days of talking beijing coming up next.
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angie: we are talking about singapore. not a cloud in the sky. in the asian markets, it is a different story. top stories this hour, asian stocks are fairly flat at -- after the open, after new data shows the japanese economy grew more than expected in the first quarter. it's the yen strengthening again that is of possible concern here. markets are waiting for chinese
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trade info out later. finishing two days of talks in beijing, china said it would raiseforeign institutions $40 billion in the u.s. to invest in china. expected toton is wrap up the democratic nomination and in the next few hours. she is leading bernie sanders in nearly counting in new jersey, while voting continues in four other states. linton has already been named the winner by the associated press but has not declared the victory herself. bernie, he is refusing to quit. asian stocks are mixed as investors react way raft of data. iet: we are seeing a
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little bit of mixed movement, flat on the nikkei. stillgional index is holding your the six-week highs. that is a fairly positive session coming through from global equity markets. we are seeing the yen strengthened. so that is having an impact on exporters in the nikkei, which is why we see the slight movement there. japanese stocks in the last half-hour have been in between positive and negative territory. a little bit of a flat movement coming through on the cost be -- the kospi. new zealand down a 31%. i want to show you the us role in market because this is the one that will react to the most of the china tread -- trade data. we are seeing quite a lot of down pressure with key mining
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.layers led by bhp billiton rio is also off by 2%. we have seen quite a bit of weakness coming through from some of those coal players as well. we are expecting the export number could have been a little bit weaker. a quick look at the japanese yen in response to the first quarter gdp, 1.9% annualized quarter on quarter, bearing in line with estimates. with a big spy coming through when the data was released. angie: japan's economy grew slightly more than expected in the first quarter. faster than a preliminary figure of 1.7%. to put that in perspective, let's bring in brian fowler. does this revision .40 trend? this revision point
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toward a trend? brian: it does point to a trend. one of the important things from today's figures were the revisions. of course, the upward revision is one of the reasons why the whole figure rose. capex still rose. companies are still quite concerned about the outlook for the economy. as long as that's true, think we can expect wage growth to remai a bit subdued. -- to remain a bit subdued. consumption accounts for about 60% of gdp. i think that is sort of a cloud overhanging today's figures. angie: what is the take away decision to's postpone the sales tax hike and the timing of it all? i think that decision was one he felt he had to take the i
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don't think he is going to second-guess himself. .oncepcion last year fell 1.2% that was a bigger dip than the year before. if you look at the long-term trends, consumption still looks like it is under fire. as i said, with wage growth as they as it is, i think the outlook remains a bit bleak. i don't think he's got to second-guess that. i think he is also going to thing now, further out in the year, he will want to put together a fiscal stimulus package, probably announcing the details sometime in september. goingise, i think he is to say, well, these numbers are nice, but they are not quite enough. angie: so what's next? what's next for the boj? will we see another move? if so, how soon can we see it? brian: boj, one of the interesting things about the boj is it's kind of fallen off the radar. so the of bp released its -- the released its manifesto and
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there was no mention of the boj. the last three years, that was a big pillar, one of the original three arrows of our abenomics. away, but iot going think it will not be the star performer in terms of policy over the next year or so. angie: thanks for doing that life for us in tokyo. : thai airways is taking on an alliance with as many as 10 other asian carriers. plan would boost connectivity in india and china as well as smaller markets, such as vietnam and myanmar. the idf follows last month's formation of the value alliance coalition of eight budget carriers spanning japan to australia. profits.p in four-your
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though world's largest publicly --ded jewelry blames the saw the slump on a lack of enthusiasm and a lack of tourism from mainland china. tesla shares surged in u.s. trading after ron baron predicted the company will become one of the world's biggest over the next it decade or two. reaching a market value of about $700 billion. barry capital management holds 1% of tesla shares, valued today at $325 million. the 23-year-old says there is no competition for the electric carmaker and he expects a return of six to -- 6 billion dollars to $7 billion over the next 20 years. the new zealand interest-rate cut this week are waning.
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economists' views are also makes come expecting the rate will be held to 2.25%. that is a look at some of the stories making headlines. angie: the u.s. and china have wrapped up two days of talks in beijing, agreeing to give the yuan a foothold in america. they also sparred on excess capacity in chinese industries. ok progress, but still -- ramy: there are so many issues between china and the united states. economic.tegic and the strategic side, they talked about north korea up and they talked about a lot of geopolitical issues. they talked about the south china sea, but nothing in the committee k. on the economy, -- the communique.
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on the economy, they talked about what the fed might or might not do. but the backdrop of all these issues is mutual trust, how they need to gain more mutual trust through better communication. on the yuan, you mentioned about this quote that china is giving to the united states. basically, hong kong is the rq fee are q3 center -- center. the u.s. is going to get a to beof 50 billion yuan invested in securities, bonds and other instruments. of will also allow undisclosed banks to be the clearinghouse to clear you on transactions outside of china.
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basically, jack lew, the u.s. secretary of says this opens an important door. so they agree on that. they don't yet agree on the value of the renminbi. china says there is no basis for sustained depreciation of the yuan. that is about all we are going to say about that. there was less agreement on other issues, and particular you mentioned it, over capacity. the overcapacity in areas like steel and aluminum, they distort global markets. this is what jack lew had to say. secretary lew: coming out of these discussions on steel is a good agreement. the end, iment at did express some disappointment that we were able to reach similar conclusion on aluminum, but we will continue those discussions and continued to press forward. we have many opportunities to do so. stephen: the success on steel,
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china has pledged to reduce next still capacity. angie: what about reducing its presence on the -- in the south china sea. -- there are very stark differences between the two. so many other nations claiming parts of it. china has long said their claims are indisputable. they did not include a single word about the south china sea in the 32-page final outcome document. but that says a lot, that they have a long way to go before -- to go to reach any kind of agreement. this is what secretary kerry had the same. i think it isy: important, and we have said this many times, that no claimant, none, not any country in gauge in unilateral actions that could be deemed by some of the else to
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be provocative and therefore problematic. stephen: by not mentioning it, i think we need to say watch this space. it will be a hot one. the yuan is back in the spotlight after talks in beijing. it also just posted its biggest two-day decline since february. does this mean that the pboc is guiding the currency to the downside again? heidi: that is a concern of some market participants. this is where we are at. has fallen 0.8% against this basket of currencies, the lowest since october when he 14. if you look at this chart, the white line is the bloomberg
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rebecca of this basket of currencies. fixpboc weakening the daily in a week on tuesday. we are watching for that coming out in about 45 minutes or so. all of this coming in behind that 6.6 declined in the month of may which was the biggest monthly fall since the august evaluation. it was stronger against the dollar and weaker against the basket, allowing it to control outflows. saying, for one, the sweet spot we have seen has faded. the weaker yuan from here on in risks these capital outposts. the other side of the story is weaker currency affect really playing at when it comes to china's foreign exchange reserve. these are the main numbers.
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the yen and the euro weakening. it is the greenback to put pressure on the value of these reserves. since 2014, we have seen a decline of some 20%, falling from $4 trillion. movement in the dollar will continue to play a key role in driving these outflow pressures. when it comes to china, we will be looking at these trade numbers coming out. see a dropcting to of 4% when it comes to may, extending those losses, falling performance out of five. internal demand pressures will be weighing as well.
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singapore saying there is a preference for under appreciation. at how can they push it without getting into concerns of these competitive devaluation, currency wars, etc.? expecting growth to accelerate slightly, but there is a bright spot coming up next right here on bloomberg television.
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our next guest says growth in the region will be mildly. all right, let's start with the good news. you say it is vietnam. why?
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guest: the key here is that rich countries are -- rich countries are -- n vietnam has seen a good flow of fdr based on domestic .undamentals the philippine seems to be a conception-led economy, both of which are better poised than the rest of asean. link toet's -- let's external factors, but worry internally. he saw the devaluation of the dong a couple of years ago. how have they turn things around? and why do you think this can be a sustainable story here? a right spot,say it's relative to other economies. singapore has actually seen a veryq1 gdp as opposed to a
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strong one in q4. backdrop thatthat they say vietnam is a bright spot. be 6.5 percent, which is still shy the target of 7%. so it is a relative story playing out here. angie: what about philippines here? we've got a regime change. goldman sachs coming out, littleing investors a bit by saying that could be a potential for growth. how do you see it? guest: he has a good track record. tom offers a sense of the premier. he did boost his capital growth prospects by playing it off of prime. many are expecting him to repeat the performance at the national level as well. he has surprised on the upside
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by coming out with an economic agenda that says he will continue the strong investment policies put in place by the previous government. about aseanwe talk economies, we are really talking about the potential growth. watch country -- which country is performing better and switching from manufacturing to agriculture? if we just do a breakdown versus two other factors, we do see that vietnam has seen almost an equal contribution from sectoral shifts to productivity. lastly, we are expecting
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data out of china. they are the big customer in the region. it is slowing down. yes.: that's true. the year started on a positive note for china. and hard landing fears were scaled back. data coming in on a weaker note. there is a creeping note of risk coming back into the play area that said, my view is that their commitment to their overambitious growth targets, if play aay so, is due to role in propping up china. i think a 6.5% growth will be achieved. angie: thank you so much for joining us. ahead, stalling in the midst of slow down.
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the final in our special three-part series coming up next. ♪
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angie: has china rebalance is manufacturing to consumption --
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one of the largest coal producers, producing more than the whole of the u.s. last year. but it's mines are loaded up on debt and most are unprofitable with 80% of gdp tied to coal. shanxi is in trouble. according to people we spoke to, more than half the population is unemployed. ; most of us are out of work. none of these people have jobs. where can we go? we have no other skills. those with jobs are suffering. >> i haven't been paid for several malls. the boss can't make any money so he can pay us. business hasn't been good for the last few years. reporter: it is a bitter new reality for a coal rich province that was one of china's fastest-growing regions.
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now massive overcapacity and the week price of coal is shanxi'sng sh prospects. the minehe part of where the coal is washed. it is then loaded onto trucks like the one behind me. and then shipped out. this coal mine produced 100,000 tons of coal in april. that is just a third of their potential capacity. the workers have seen their wages cut by up to 50%. gettingf they are even paid. some told us off camera they haven't had a paycheck for five months. -- the domino effect of feeling coal mines isn't hard to find. this diner was open to cater to coal miners. >> five years ago, we can still make money. wages were high. now most of us in town our out of work.
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reporter: samardzija to adapt with varying degrees of success. this is a more unusual attempt to diversification. you take an old coal mine in turn it into an museum park. a former mine boss who cashed out of cold to focus on tourism. >> there's no further development for the coal mining industry in this area. we are going to transform the environment and make it a greener place. this resort is doing great and i expect more businesslike -- businesses like this to open. reporter: beijing wants more than 500 million tons of china's annual coal capacity shut down by 2020. that is a lot of minors and associated workers out of jobs. great series by atomic mckenzie. that is it for us and trending business up next.
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: looking at economic data coming out of china. really getting a position on where they are in terms of experts and him -- exports and imports. exports may well have weekend a little bit and that could be reflected in what is going on with a slowing economy. we are talking airline alliances as well, talking about thai airlines that looks to hook up with something like 10 carriers in this part of the world as they tried to take on the threat coming from the middle eastern carriers and also from some of these low-cost ones as well. and move over star wars. war craft, the movie, may well be the thing to watch. ♪
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♪ wednesday. is it is the eighth of june. withis "trending business" haad salamat. ♪ rishaad: melbourne, tokyo, and singapore. strength to the yen, exporters under pressure. oil stabilizing, trading near a 10 month high. the latest export news out of china in the next hour. signs of stability, but also in


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