Economy, 51. 1. This, of course, is showing expansion, and lets go over to david. More optimists and pessimists. And a reminder, we also have the hsbc final pmi coming out in about 45 minutes. It is not a lot if you put everything together. This is a little bit above water. This is up about half of 1 , and we will see how this impacts trade. More than to move others, i guess, when it comes to the pmi numbers out of china. With what else is moving across the markets. Yes, david saying 51. 1, and the estimates from the economist was 51. 2, and this was down from the previous figure in july, which was the highest in more than two years, and we will get reaction, and with us is the chief greater economist, and this is pretty much in line, isnt it . Yes, but we need to also pay for the pmi. A couple of weeks ago, it was quite it was significantly lower. Sector, and private we also have to Pay Attention to the other numbers. They were shocking, werent they . You probably do not want to land more. And the demand side, the manufacturers, they are very cautious. Lets just look at this. In 45 minutes, we will get the hsbc reading of the purchasers index, but it does show expansion. We really did not want to read too much into it. I think this official pmi is of the largest listed companies, so it suggests that they are still moving at a pace, and we have to keep in mind that in q3, the china gdp growth tends to be slower, and we also have to Pay Attention to the recent low number. Low number will be very critical, if we were to see another low number, it would suggest that there is real Economic Activity that will be negatively affected. It is something that the government does want to bring down, but it does not want to bring down the rate that we saw. It just fell off a cliff, didnt they . Indeed. Governments need to be very disorderly to bring deleveraging from the Banking System. We know over the last several years, the chinese banking most of theinanced leverage in the economy, and if the Banking System starts landing, then we will see a significant down turning. This is as a result of the keep in mind that 7. 5 growth is still the target. Yes. Now, inflation is not a problem. That is right. The pboc and others have many of leverage to sort this out. That is right. Is time, perhaps, for the pboc to cut reserve requirements for the remaining 60 of the Banking System so that the banks will feel more , and if theyable can land more the overall risk facing the economy, it will be reduced, and so china can continue to engage in its Interest Rate liberalization, the Financial Sector liberalization, so that the economy can engage in all of the deleveraging processes. Ok, lets talk about the export picture. Its trade surplus, that is affecting the room in the. What about that . In deed, if you look at that, since midjune this year, there has been a steady appreciation, and that is largely because it remains substantial. It has been diminishing. And overall, without seeing significant capital outflow from china, the room in the re mimbi is bound to be pushed. Very, veryeen slowly. That should not matter that much pre i think the Exchange Rate does not affect china exports much. All of if you look at the emperical analysis, it is the external demands that is more critical. We are seeing recovery in the united states. Recovering,has been and it has rebounded sharply. Also, the japanese economy seems to be rebounding slightly in q3. Not so europe. Europe is still rather sluggish. Where did we go from here . We will get to the 7. 5 growth rate, but what are we looking at . We think china will probably have to lower their growth target. Ishink that 7 growth target more suitable for the next few years. From 2016 to 2020, the government should end up around 6. 5 to 7 , so that would be a lot of room on structural reform china still has a lot of room to invest, but they need to invest in the right space, rather than more in the property sector. But this is an economy which is still being propped up largely by investment spending, investment of vincent structure of infrastructure, etc. Basically, the Central Government is looking at the growth, because it is driving the overall activity. Rail,llion in highspeed and it seems like the chinese economy has not found a new growth momentum. I think the government needs to engage in reform to liberalize the service sector. After all, if you look at the chinese financial services, the transport, medical, education, there is a lot of potential for investment, but the government should not do the investment. It should ask the private sector to get into there and invest more. It . T was the day, wasnt thank you very much, from anc. The pmi, 51. 1, and this is down from the figure that we had in july, as well. And lets check on some of the other stories we are following for you. Alibaba has delayed the roadshow for its upcoming ipo. And the sec there, they are expecting at the investors meeting, it will start next week, and the pricing is now tentatively set for september, and the highly anticipated offering is expected to be the biggest ever in the united states. And the biggest wireless provider, seeking to sell parts mexican operations. Potential buyers include softbank and at t, and just last month, a scrapped plans to buy tmobile. 4 billion in bonds. It could be used for acquisitions. Scandal,ainted meat tainted meat. They say six in shanghai have been arrested, and these are in connection with a suspected production, and major western companies are involved after products wereef sold past their sell by date. Hong kong is bracing for more political unrest. Democracy in the city. They say they has reneged on universal suffrage with the selection of the latest chief executive. Bloomberg news, david tweed is here. Not a huge was surprise out of beijing . Not really. There are some who may have thought beijing left a little wiggle room, and there is going to be a debate about how the nominating committee might have been made up, and that would have allowed them to actually butoff for the protests, what they are saying now is that beijing has left no room for debate, and so they will proceed with their plan to occupy central, which they have not done yet. They have not even really begun. Apart from last night. Yes, with peace and love. That is what it is. Outsidehing is, given this building, for one thing, they are probably expecting protests to escalate. They will definitely, but we will definitely see an increase in the protests. At least 10,000. That is what the founder of occupy centro is planning four, 10,000 people to actually descend on the streets of Central Hong Kong and occupy them and actually block them. One wonders if 10,000 will be enough, because the South China Morning Post had a report out saying you probably need 20,000 to probably bring real chaos to the center of town. The other thing i think is interesting, if you look closely at the occupy central website, you can see what they are planning, and i think it is interesting because there are three groups of protesting. When they are rested, they will not have any recourse for any defense lawyer. You have a second group who will probably be arrested. And then the third group is going to be probably the most powerful group of all of these. These will be the people standing around giving moral support and handing out flowers. It will be hard for the police to start firing Water Cannons and tear gas on these people handing out flowers, the peaceful protesters. How are they preparing for this . We can see when we come to work that there are barricades going up outside the hsbc building, outside this building it self, and they have lines of communication that are going to be and they are communicating with the police, with email, with other lines of and we can see that Hong Kong Centro is teaming with uniform police. Of intelligence on the ground. Internationally, people are watching this. Are they not . I think it was interesting to see the state department putting out a Statement Last night, where they actually said the universe u. S. Supports universal suffrage in hong kong, with the highest possible degree of autonomy under the rule of law for prosperity. Very, very strong statement coming from the u. S. State department. Not only support for the people in hong kong, but that is a pretty strong message to beijing, as well. And i am sure that beijing will say it is an internal matter. David, thank you very much. David tweed there. Now, some other stories we are looking at, the economy in india showing signs of recovery. Gdp up 5. 7 , and that was above thinking, and approaching nearly 100 days in office. This threatens to stoke inflation. You talk about india, lets look at the prospects of the trading day. The pair to friday, where we saw an uptick, and the nifty was up by one quarter of 1 , 79 54. The singapore futures contract, that is showing a decline. Still ahead, investing in china. Trial linking the Shanghai Exchange to hong kong and back. It is not easy for china governments to borrow money. The direct selling of bonds to fund Public Interest projects. However, daytoday expenses, and that is something which remains banned. They prohibited all bond sales, forcing them to set up financing vehicles to support infrastructure spending. Alibaba,ing out on this is one of the biggest in history. Mnemonic on the exchange is opening the debate. They have issued a concept paper, saying respondents have for certain sectors. Any successful trial of the Hong Kong Exchange is going smoothly. They say the trades are being carried out without any major issue. They say asia financial analysts what else needs to be done now . Midoctobering for for this all to start off formally. What needs to be done before this can officially operate question my they just and we heard the last scheduled would be on september 13, and a total, 96 exchange participants, and about 80 of the market turnover, which verified the trading and a point of completion of this test, i think it will be ready and finalized. And we have the green light. Is october 13. Something which has been taking up a lot of time. A lot of people have been having sleepless nights about this one. And they say that investors have been lukewarm to all of this. There are a lot of forrtunities opening up them. In hong kong, like china mobile or China Telecom corp. Or the nine Nonchinese Companies. . 10 or gamings casinos, and you name it, so the group has really widened. Ok, what about the listed premierwe have got shares. Does this affect that in any way . Premium, for the 76 newly listed stocks, covered by bloomberg intelligence, it is for the past three months. H shares,e material they still have a premium. 10 is accounted for. Gives opportunity. I think this will be for the consideration for investors. Thanks for that, from our bloomberg intelligence. . P next, what lies beneath plastic particles are finding their way into our food chain. A special report from sydney. A special report when we continue. Lets just check on some of the stories making headlines around the world, and the thai Prime Minister has named his cabinet. Officials nowy control many areas, including justice, and there is a civilian that is part of the government installed after the last two in 2006. The general was confirmed as premised her last week after toppling yang luck shinawatra. Turned fatal. About 500 injured, others killed, when the was a clash near the Prime Ministers home near the capital of islam a bot. A cleric accused sharif of raging the elections. And a census carried out in spring has nearly 10 million fewer than estimated. People were denied the right to identify themselves , and they were controlled by rebel groups. And micro plastics are certainly small, but they are becoming big news. Pristine waters, and from there, they are entering the food chain. Surface, Sydney Harbour may look pristine, but ,t is what is underneath pollution kilo small to be seen, which concerns the marine science institute. U. K. Get anything ranging from about 40 to 65 fragments of micro plastics. The smaller the plastic fragments get, the worse they intoe, finding their way the structures of sea creatures, including these sea worms. We have seen some of the animals, and this means we actually know that micro plastics are entering the food chain. The institute took samples from a 27 sites around Sydney Harbour in a study that is the first of their kind, and they find hotspots of micro plastics intimidation. The fragments come from many sources, such as the decomposition of plastic bottles, and others not so obvious, like the tiny beads in some cleansers, and even the laundry can pose a risk. Lots of particles and micro plastics come off the jacket, into the washing machine, and obviously, they enter our waterway. So far, it is not known what impact these micro plastics are having on the food chain. Banned them,eady and others are considering following suit. Bloomberg. Disrupted by a situation in papua new guinea. Bursting back into life, with ash and smoke into the sky. Qantas says it has diverted flights to tokyo and shanghai to avoid the volcano. It destroyed a nearby town in 1994. And they may be a group of misfits, but they have turned out to be heroes of the box office this summer. Galaxy, itns of the brought in more than 60 million over the labor day weekend. And the film has been a hit despite box office sales. Looking forward to the first trading day of the week, and minutes to go before things get underway in hong kong. Also, hong kong coming on stream. And there we go. The futures contract also supporting that we will have a fall at the start. That is to come. The open is next. Dealing with debts. China relaxes the rules on local Government Bonds. ,nd a military mandate dominating thailands new government, and the Indian Economy growing at its fastest in two years as they strengthen ties with japan. And protesters have decided to take to the streets of hong kong is said to have reneged on universal suffrage, and the next chief executive says they only have a line of preapproved candidates to stand in that poll in 2017. Meanwhile, china is allowing local governments to raise money through bond sales. There are debt levels that are built up through more opaque financing vehicles. Lets get to the bottom of all of this. John dawson joins me. Yes, they banned local Government Bond sales. All local Government Bond sales. What happened was the opaque financing vehicles started, which created very high risk debt, and that was a concern. To deal with the high risk debt, they are going to introduce the First Time Ever the local bond sales. The reason for this is to raise projects for items in the Public Interest, and that would clearly give a legal flamer legal framework. And this is back in 2011. Moneyt can they not raise selling these bonds on . They can do, for example, daytoday spending. They cannot do that. And the entities, that is also ruled out. This is 14 of the reasons. Thathave revised a law allows for a more even distribution of risk to investors, and also remove, if you like, again, that high degree of disclosure. Beijing seen clearly through what is actually evolving. It is ok. Clarity and transparency. John, thanks a lot for that. Ok, i think, david, we have got something. Yes, we are not seeing a lot at the open. In fact, i think this story today is about certain markets. As half of 1 , and taiwan, look at the point. Roughly 1 there. Japan seeing a little bit of an uptick. Perhaps it also has to do with the japanese yen. We are back above 104 for the currency. Shanghai is going in the opposite direction, as usual, and, of course, the philippines just opening up in the past few minutes. Withave this opening up australia, mo insulation. And inflation, that one. Now, a few things in hong kong. On friday, and one company is coming out with earnings, Profit Growth sliding to the lowest in half a decade. Again, the same thing. They are provisioning more for bad debt. And then the rest also an increase in the actual dad debt, on its loan portfolio, up to 96 billion remimbi. And china southern, swinging into a net loss, and, in fact, they took the biggest forex hit. That is basically everything, so we are looking at 180 million. This weekend in the first half of the year. And 4. 5 . Remimbi, versus estimates of 5. 5 billion. And this is unchanged. We are looking at credit. Of 262s an overdue loan million renminbi. Remaining overdue, that is the story. Have this. This was raised to buy at jefferies. Of the bigger investment banks in china, for thethe price target stock. Yes, 180 hong kong dollars is the price. They did change the course. There we go. We send it back to you. A minister and his cabinet. Are in charge of almost every key ministry. Haslinda amen. What do we know here . Control Ministry Like defense, foreign affairs, commerce, education, justice. Like you said, the key ministries, more than one third of the 32 cabinet ministers are military officers. One thing to note though, rish, a civilian, part of the government installed after the last coup in thailand in 2006. Now, the new cabinet suggested they are consolidating the position and the position of the military. He will continue to rely on those close to him to revive the economy. Keep opposition to his rule at bay. Remember what he said. Reforms will have to take root before elections can be held, and that is slated for 2015. Rish . Lets talk about the finance minister and the policies they are likely to implement here. Is there anything to get excited about question mark not really. Economic policies will focus on tax reform, boosting of the economy, but few people expect exciting policies from the government. They say what is likely populist policies, not policies that would encourage economic reform. The irony is this. Were adoptedrams previously. A 75 billion plan, and the fund will be spent over the rest of the decade, and that is to make thailand more co