27/04/2016 World Business Report

Those are the latest headlines from BBC World News.

Now for the latest financial news with Aaron Heslehurst

After years of awesome growth and bumper sales,

demand for its biggest earner, the most profitable product in

And how the speed of Beijing's massive lending to try boost

growth has caused the Chinese debt mountain to reach record levels not

In a minute we'll give you the latest in

Let's talk about the most valuable company in the world.

We're talking about Apple it came out late last night to tell us what

sort of money it's been making in the first three months of this

And as many were expecting, some even fearing,

sales of the iphone have dropped for the first time in iPhone history.

The technology giant reported a revenue of $50.6 billion,

And a drop of 13% on the same period last year.

Here's where Apple's numbers took a hit, it was the sales of its

flagship product. The iPhone dropped more than 16% compared to

Remember, Apple makes nearly 70% of its profits from the iPhone.

Three months ago, Apple warned its investors to expect some bad news in

the coming months, and this is it. Poor sales performances in many

areas. Its MacBook range down 12% compare to this period last year.

The iPad, in continued decline, down 19%. On the iPhone, the blockbuster

product, and that it relies on for most of its revenue, down 16%. Also

to blame for the poor results are dropping revenues in China. The

country where Apple has recently enjoyed growth. Apple says it is

encouraged by the performance of its services, like Apple music and

iTunes, now have more users. But executives are increasingly

concerned that without another big hit, the company will be relying on

what is now a declining iPhone. In recent months, China's Premier Li

Keqiang has been staying Not surprising given that growth

in China was a lacklustre 6.7% So how does Beijing fix

that boost growth? I'll tell you what it's been doing,

it's been lending, massively But here's the problem:

Because of that, China's debt has risen to an all time high,

almost 2.5 times everything China's debt is far

above other developing economies. And all of that has raised

the risk of a financial crisis or And now the Asian Development Bank

says that over the next two years it's expecting

Asia to reel under the effects So,

lucky for us I'm joined by Shang-Jin Wei, who is Asia Development Bank's

Chief Economist. How serious is the debt? Is it

creating a bubble that could one day just pop? If you look at the level

of debt at over 230% of GDP, it is very high compared to most

developing countries. We need to keep this in perspective. These are

gross debts. China has a lot of assets, and net assets are bigger

than debts. The government is working on the debt through three

channels, one of which is to swap kinds of debt, and the other is to

converted into equity investments, and the third is trying to raise

growth to stimulate the ratio. If it is being made. OK, so putting it

into perspective, if China sold everything it had, it has more money

than it has. With what we are seeing in China at the moment, this

slowdown, the change in the economy, this is the new normal for China,

isn't it? This is what the rest of us around the world have to get used

to. It is part of the new normal. We are predicting a gradual slowdown in

GDP growth, and that is because China has fewer people working, the

workforce is getting smaller. Secondly, because of past success,

higher wages make Chinese toymaking, garment making, less competitive,

when other countries have lower wages, like India and Bangladesh, so

China has to move onto things. The process of moving on to new things

is intrinsically harder and it brings growth down. What could those

new things beat? If China is not going to be the factory floor of the

world, within arm and other countries that can produce things

that we like to buy from cheaper. What do all those people in China do

for a job? China needs to move to productivity. There are two broad

path, one is to do new things, with China starting to produce and export

drones, and they are quite successful. We have Huawei in was

part of the country producing smart phones and taking out more IND is

than Apple. Or providing more service products, has society is

ageing, developing better old-age care to satisfy demand. The other

part is to reduce efficiency. We have a lot of inefficiencies, and

moving capital and resources from low productivity firms to high

productivity once allows them to produce more outfit for the same

amount of -- output for the same amount of effort. We appreciate your

time. We do talk about Huawei a lot on my programmes. Let's get the

latest update on the Mitsubishi motor saga.

Mitsubishi Motors continue their downward slide ahead

of the company's full year earnings due out later today.

The value of its stock has lost more than 50% since the company

first admitted falsifying fuel efficiency data last week.

Sharanjit Leyl is in our Singapore bureau.

I don't know how sustainable those numbers, I think it is nearly $4

billion that has been wiped off the value of Mitsubishi. A great deal of

money indeed. As you say, those shares continuing the downward

spiral. But the reason we are on them is because they have their

annual earnings due after the market closes. As you have already

mentioned, they admitted to falsifying fuel in fish and see --

fuel efficiency data, and there were more confessions that they had been

doctoring numbers since 1991. There has been a lot of speculation in

Japanese media particularly about the future of the company's top

management, with some reports suggesting that two executives,

including the CEO, could go. They are due to announce their annual

results, and we won't see a reflection of these revelations that

have been made over the last week in those results. A person close to the

company has reportedly said Mitsubishi is unlikely to issue a

forecast for the current financial year due to all this uncertainty

about financial impact of the scandal. I know you will keep across

those numbers and we will bring them out once they are out.

Twitter's latest earnings have disappointed investors,

coming in below expectations as the firm struggles with weak

Twitter had 310 million monthly users in the first quarter

while revenue was $594.5 million, which missed analyst expectations.

Shares in Twitter plunged 13.6% after the results were out.

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