:00:00. > :00:00.Those are the latest headlines from BBC World News.
:00:00. > :00:00.Now for the latest financial news with Aaron Heslehurst
:00:00. > :00:20.After years of awesome growth and bumper sales,
:00:21. > :00:23.demand for its biggest earner, the most profitable product in
:00:24. > :00:30.And how the speed of Beijing's massive lending to try boost
:00:31. > :00:33.growth has caused the Chinese debt mountain to reach record levels not
:00:34. > :00:46.In a minute we'll give you the latest in
:00:47. > :01:06.Let's talk about the most valuable company in the world.
:01:07. > :01:09.We're talking about Apple it came out late last night to tell us what
:01:10. > :01:12.sort of money it's been making in the first three months of this
:01:13. > :01:17.And as many were expecting, some even fearing,
:01:18. > :01:20.sales of the iphone have dropped for the first time in iPhone history.
:01:21. > :01:23.The technology giant reported a revenue of $50.6 billion,
:01:24. > :01:37.And a drop of 13% on the same period last year.
:01:38. > :01:44.Here's where Apple's numbers took a hit, it was the sales of its
:01:45. > :01:47.flagship product. The iPhone dropped more than 16% compared to
:01:48. > :01:56.Remember, Apple makes nearly 70% of its profits from the iPhone.
:01:57. > :02:15.Three months ago, Apple warned its investors to expect some bad news in
:02:16. > :02:20.the coming months, and this is it. Poor sales performances in many
:02:21. > :02:25.areas. Its MacBook range down 12% compare to this period last year.
:02:26. > :02:30.The iPad, in continued decline, down 19%. On the iPhone, the blockbuster
:02:31. > :02:37.product, and that it relies on for most of its revenue, down 16%. Also
:02:38. > :02:42.to blame for the poor results are dropping revenues in China. The
:02:43. > :02:48.country where Apple has recently enjoyed growth. Apple says it is
:02:49. > :02:55.encouraged by the performance of its services, like Apple music and
:02:56. > :02:58.iTunes, now have more users. But executives are increasingly
:02:59. > :03:01.concerned that without another big hit, the company will be relying on
:03:02. > :03:04.what is now a declining iPhone. In recent months, China's Premier Li
:03:05. > :03:07.Keqiang has been staying Not surprising given that growth
:03:08. > :03:11.in China was a lacklustre 6.7% So how does Beijing fix
:03:12. > :03:19.that boost growth? I'll tell you what it's been doing,
:03:20. > :03:22.it's been lending, massively But here's the problem:
:03:23. > :03:50.Because of that, China's debt has risen to an all time high,
:03:51. > :03:52.almost 2.5 times everything China's debt is far
:03:53. > :03:56.above other developing economies. And all of that has raised
:03:57. > :03:59.the risk of a financial crisis or And now the Asian Development Bank
:04:00. > :04:02.says that over the next two years it's expecting
:04:03. > :04:05.Asia to reel under the effects So,
:04:06. > :04:09.lucky for us I'm joined by Shang-Jin Wei, who is Asia Development Bank's
:04:10. > :04:26.Chief Economist. How serious is the debt? Is it
:04:27. > :04:34.creating a bubble that could one day just pop? If you look at the level
:04:35. > :04:38.of debt at over 230% of GDP, it is very high compared to most
:04:39. > :04:48.developing countries. We need to keep this in perspective. These are
:04:49. > :05:01.gross debts. China has a lot of assets, and net assets are bigger
:05:02. > :05:09.than debts. The government is working on the debt through three
:05:10. > :05:12.channels, one of which is to swap kinds of debt, and the other is to
:05:13. > :05:21.converted into equity investments, and the third is trying to raise
:05:22. > :05:26.growth to stimulate the ratio. If it is being made. OK, so putting it
:05:27. > :05:31.into perspective, if China sold everything it had, it has more money
:05:32. > :05:36.than it has. With what we are seeing in China at the moment, this
:05:37. > :05:39.slowdown, the change in the economy, this is the new normal for China,
:05:40. > :05:46.isn't it? This is what the rest of us around the world have to get used
:05:47. > :05:50.to. It is part of the new normal. We are predicting a gradual slowdown in
:05:51. > :05:57.GDP growth, and that is because China has fewer people working, the
:05:58. > :06:02.workforce is getting smaller. Secondly, because of past success,
:06:03. > :06:07.higher wages make Chinese toymaking, garment making, less competitive,
:06:08. > :06:12.when other countries have lower wages, like India and Bangladesh, so
:06:13. > :06:15.China has to move onto things. The process of moving on to new things
:06:16. > :06:20.is intrinsically harder and it brings growth down. What could those
:06:21. > :06:24.new things beat? If China is not going to be the factory floor of the
:06:25. > :06:29.world, within arm and other countries that can produce things
:06:30. > :06:38.that we like to buy from cheaper. What do all those people in China do
:06:39. > :06:42.for a job? China needs to move to productivity. There are two broad
:06:43. > :06:47.path, one is to do new things, with China starting to produce and export
:06:48. > :06:53.drones, and they are quite successful. We have Huawei in was
:06:54. > :07:04.part of the country producing smart phones and taking out more IND is
:07:05. > :07:10.than Apple. Or providing more service products, has society is
:07:11. > :07:19.ageing, developing better old-age care to satisfy demand. The other
:07:20. > :07:24.part is to reduce efficiency. We have a lot of inefficiencies, and
:07:25. > :07:28.moving capital and resources from low productivity firms to high
:07:29. > :07:35.productivity once allows them to produce more outfit for the same
:07:36. > :07:42.amount of -- output for the same amount of effort. We appreciate your
:07:43. > :07:47.time. We do talk about Huawei a lot on my programmes. Let's get the
:07:48. > :07:53.latest update on the Mitsubishi motor saga.
:07:54. > :07:55.Mitsubishi Motors continue their downward slide ahead
:07:56. > :07:57.of the company's full year earnings due out later today.
:07:58. > :08:01.The value of its stock has lost more than 50% since the company
:08:02. > :08:17.first admitted falsifying fuel efficiency data last week.
:08:18. > :08:22.Sharanjit Leyl is in our Singapore bureau.
:08:23. > :08:28.I don't know how sustainable those numbers, I think it is nearly $4
:08:29. > :08:37.billion that has been wiped off the value of Mitsubishi. A great deal of
:08:38. > :08:43.money indeed. As you say, those shares continuing the downward
:08:44. > :08:50.spiral. But the reason we are on them is because they have their
:08:51. > :08:53.annual earnings due after the market closes. As you have already
:08:54. > :09:01.mentioned, they admitted to falsifying fuel in fish and see --
:09:02. > :09:07.fuel efficiency data, and there were more confessions that they had been
:09:08. > :09:11.doctoring numbers since 1991. There has been a lot of speculation in
:09:12. > :09:16.Japanese media particularly about the future of the company's top
:09:17. > :09:21.management, with some reports suggesting that two executives,
:09:22. > :09:28.including the CEO, could go. They are due to announce their annual
:09:29. > :09:33.results, and we won't see a reflection of these revelations that
:09:34. > :09:38.have been made over the last week in those results. A person close to the
:09:39. > :09:43.company has reportedly said Mitsubishi is unlikely to issue a
:09:44. > :09:46.forecast for the current financial year due to all this uncertainty
:09:47. > :09:52.about financial impact of the scandal. I know you will keep across
:09:53. > :09:54.those numbers and we will bring them out once they are out.
:09:55. > :09:57.Twitter's latest earnings have disappointed investors,
:09:58. > :09:59.coming in below expectations as the firm struggles with weak
:10:00. > :10:06.Twitter had 310 million monthly users in the first quarter
:10:07. > :10:09.while revenue was $594.5 million, which missed analyst expectations.
:10:10. > :10:26.Shares in Twitter plunged 13.6% after the results were out.
:10:27. > :10:31.Don't forget you can get in touch with me and some of the