:00:16. > :00:24.Apple forecasts its first sales drop in years because of slowing iPhone
:00:25. > :00:27.sales. And as Vietnam hosted Communist Party Congress, we look at
:00:28. > :00:39.the future of the country's state owned enterprises. Good morning
:00:40. > :00:44.Asia, hello world. Glad you could join us for this Wednesday version
:00:45. > :00:47.of Asia Business Report. We start with technology and for almost a
:00:48. > :00:53.decade the iPhone has been Apple's golden goose. One of the most
:00:54. > :00:58.successful products in history, but shares of the tech giant are nearly
:00:59. > :01:01.2% down in after-hours trade in the US after reporting lower than
:01:02. > :01:09.expected iPhone sales and its slowest ever gross in shipments. --
:01:10. > :01:14.growth. There is concern that Apple is indeed losing its appeal. Earlier
:01:15. > :01:22.our correspondent gave more details on the results. That is a big worry
:01:23. > :01:25.for investors, they are depended on the iPhone sales and it is the first
:01:26. > :01:31.time ever that they are predicted to be down. It has always gone up since
:01:32. > :01:36.he came out in 2007 but now it seems to be going down. When of the other
:01:37. > :01:39.problems Apple is facing is with China. Tim Cook said that China
:01:40. > :01:43.wasn't going to be a problem six months ago, that people were still
:01:44. > :01:48.going to purchase luxury gadgets, but it seems even they have been hit
:01:49. > :01:53.by the worries in the Chinese economy. They're predicting loss,
:01:54. > :01:57.particularly in Hong Kong. I spoke to an analyst and investor about how
:01:58. > :02:03.worried Apple should be about China. Really what the focus now
:02:04. > :02:07.is, is China remaining strong? If China falls, so does Apple. They
:02:08. > :02:10.have really got the house on the Chinese growth opportunity. The
:02:11. > :02:14.concern people have on the economy, I don't get really applies to
:02:15. > :02:18.Apple. You were talking about a different kind of consumer when it
:02:19. > :02:23.comes to Apple. Although there have been lower income levels, you're
:02:24. > :02:32.still talking about what would be here, mid to upper class. Apple is
:02:33. > :02:36.starting to feel the pinch, particularly in the softness of the
:02:37. > :02:41.Chinese economy and we have also seen over the past year, weakness in
:02:42. > :02:45.the Chinese currency against the US dollar. According to many analysts,
:02:46. > :02:55.the lackluster revenue is also because of the volatility.
:02:56. > :02:58.Absolutely. Tim Cook is trying to encourage people to look at the
:02:59. > :03:02.benefits that will come this year from Apple, who can hopefully turn
:03:03. > :03:07.around their fortunes. They are hoping that things like the iPhone
:03:08. > :03:11.seven, despite China having problems, that people will still
:03:12. > :03:16.purchase new phones. They still have loads of space to grow in China,
:03:17. > :03:23.there are only 30 Apple stores in the country compared to 53 just in
:03:24. > :03:26.California. Investors are worried, shares are falling at the moment but
:03:27. > :03:37.there is a lot Apple can do to turn around. Vietnam's Communist Party is
:03:38. > :03:40.meeting in Hanoi to discuss the next five years. The Congress has been
:03:41. > :03:48.unusually divided with the reformist Prime Minister aiming for the top
:03:49. > :03:52.position. And he has been blocked by his conservative rivals. But he has
:03:53. > :03:58.driven the opening of Vietnam's economy, in particular pushing for
:03:59. > :04:01.the selloff of the country's state-owned sectors. There will be
:04:02. > :04:10.questions as to how far it can go. Now we go to our correspondent.
:04:11. > :04:15.Factory fitness, Vietnam style. Workers on a men's suit assembly
:04:16. > :04:20.line take these brakes to keep themselves fresh and efficient. Most
:04:21. > :04:23.of their output goes for export to the United States or the European
:04:24. > :04:31.Union. Quality is critical in a cutthroat industry. But there this
:04:32. > :04:38.is a very old company. It was founded 70 years ago and it is part
:04:39. > :04:43.of a much larger umbrella company which, like so much of Vietnam's
:04:44. > :04:47.corporate sector, is state-owned. The company has done much better
:04:48. > :04:51.than most in reforming itself and may well be able to compete in what
:04:52. > :04:55.is a brutally competitive global market. But the health of other
:04:56. > :05:00.state companies, still a big chunk of the economy, is a lot more
:05:01. > :05:05.shaky. This company has spent the past ten years restructuring
:05:06. > :05:08.itself, getting rid of unprofitable subsidiaries and slowly reducing the
:05:09. > :05:13.level of state ownership. But it hasn't been easy. As a state-owned
:05:14. > :05:19.enterprise, we were bound by many conditions and regulations. A lot
:05:20. > :05:24.more than a private company. You couldn't just go in and shut
:05:25. > :05:27.factories down? No, we can't. And yet he still had to try to be
:05:28. > :05:34.competitive and profitable at the same time. That is why I say it is
:05:35. > :05:39.remarkable for us to be able to do what we have done and remain
:05:40. > :05:43.profitable. And it is worth remembering what the victorious
:05:44. > :05:46.faction said that the Congress party conference last week. That socialism
:05:47. > :05:52.and the state must remain a part of the economy. A pledge critics
:05:53. > :05:56.believe is unrealistic in the 21st century. If the state sector plays a
:05:57. > :06:03.leading role, it is not a competition. In Vietnam is already
:06:04. > :06:15.deeply integrated into the world economy. Except the TPP and the free
:06:16. > :06:20.trade agreement, and there are many changes Vietnam most abundant. This
:06:21. > :06:25.company may be an exception, a state industry that can be competitive and
:06:26. > :06:30.make money. It may also be privately owned one-day, says its manager, but
:06:31. > :06:38.it is hard to guess right now whether their Communist Party rulers
:06:39. > :06:40.will allow that to happen. The end of China's government statistics
:06:41. > :06:52.bureau is under investigation for alleged corruption -- head. The
:06:53. > :07:00.national Bureau of statistics head oversees the data on the GDP,
:07:01. > :07:04.consumer prices and other economic indicators. Staying with China, the
:07:05. > :07:11.Shanghai composite Index took another beating yesterday, closing
:07:12. > :07:16.6-.4% lower after oil prices dropped again, reviving concerns about their
:07:17. > :07:30.growth. Let's look at where markets are at this hour. A volatile day so
:07:31. > :07:37.far. The -- let Ross over to Hong Kong, where we are joined by our
:07:38. > :07:44.Asia correspondent -- let's cross. A lot of volatility? That's right. It
:07:45. > :07:49.looks like it is going to be another one of those days. The Shanghai
:07:50. > :07:54.market gained at the open but have since surrendered those gains. There
:07:55. > :07:57.are now in negative territory. A slightly better picture in Hong
:07:58. > :08:04.Kong. It looks like it is rebounding with the Hang Seng up more than one
:08:05. > :08:09.and a half %. We will have to see how investors in China and Hong Kong
:08:10. > :08:13.respond to those industrial profits come at the figures of which have
:08:14. > :08:17.just been released. Analysts are saying there is not a lot of
:08:18. > :08:22.conviction in the markets. Generally there is a feeling that they want to
:08:23. > :08:29.sell on any bad news, and they are not buying on good news. So,
:08:30. > :08:36.certainly that is why China's markets are down more than 20% so
:08:37. > :08:41.far this year and it has only been a few weeks of trading so far. Only
:08:42. > :08:45.yesterday, Shanghai markets ended at the lowest level since December.
:08:46. > :08:49.There is no obvious reason for it. Traders say it may have been driven
:08:50. > :08:55.by the fact that oil prices were down again. Low oil prices are good
:08:56. > :08:59.for consumers, but it suggests continuing weakness in the global
:09:00. > :09:04.economy. No positive economic fundamentals to support the mainland
:09:05. > :09:08.market at this point. What about the probe into the data chief and his
:09:09. > :09:17.practices? Is this impacting the market in any way? This is really
:09:18. > :09:23.not helping at all. The news that the head of the China National
:09:24. > :09:26.Bureau of Statistics is being investigated for alleged corruption
:09:27. > :09:31.came as a real shock and it was especially shocking because he's the
:09:32. > :09:38.phase of the Chinese statistics bureau and all the data releases. He
:09:39. > :09:42.was presiding over that GDP Presser last week and barely two hours
:09:43. > :09:47.before the announcement came that he was being investigated, he was
:09:48. > :09:53.presenting a summary of 2015 data to journalists in Beijing. There is a
:09:54. > :09:56.lot of surprise over what is going on and there are perpetually
:09:57. > :10:00.questions being asked on the accuracy of Chinese data. This news
:10:01. > :10:07.is definitely not helping the markets. Thank you. Before we go,
:10:08. > :10:11.here's a quick look at the regional stock markets. It is a tale of two
:10:12. > :10:14.markets at this point where you have the mainland markets in negative
:10:15. > :10:24.territory but most of Asia in positive territory. Thank you for
:10:25. > :10:31.investing your time with us. Goodbye for now.