Organization can play a bigger openness andting development. So that the multilateral trading regime can be more authoritative and effective. Later this afternoon, the chain the china side will host an informal wto ministerial meeting. We look forward to candid exchanges that will lead to globalctions to improve economic governance. I am happy to note that yesterday, 15 countries taking part in the original comprehensive economic concludedp or are cep textbased negotiations. I hope the agreement will be into fourthntered added early date. At an early date. [no audio] applause] china will be happy to include free agreements with countries. China r. O. K. Fta and a China Cooperation council fta. Will stay actively engaged in cooperation within the united and , the g20, a pick, move economic globalization forward. China will continue the belt and road cooperation. Today, with 137 countries and 30 international organizations, sign a has signed 197 documents on belt and road cooperation. China will follow the principle of joint contribution and shared benefits. Follow the philosophy of open, green, and clean cooperation, and a high standard, people centered, and sustainable approach. Highquality belt and road cooperation. Ladies and gentlemen, friends, looking forward, china will follow the new development and the strategy of Innovation Driven Development and redouble our efforts to foster new Growth Drivers by shifting the growth model, improving the economic structure, and creating new growth momentum. Such efforts will not only bring china highquality development, but also new Growth Opportunities for the Global Economy. I have faith in the bright prospect of chinas economic development. [applause] development, viewed through the lens of history, makes an integral part of the lofty cause of human progress. Arms will reach out its and offer countries in the world more opportunities of market, investment, and growth. Achieve, we can development for all. [applause] gentlemen, friends , the chinese stabilization has always valued peace under heaven and harmony among nations. Spiritall work in that and contribute to an open, and to aonomy community with a shared future. Thank you. [applause] so, that was president xi jinping finishing his speech at the China International expo. There was nothing major in terms of new announcements from the president. There was a reiteration of some of the initiatives that have already been outlined by chinas policymakers, a reemphasis on stances in terms of the need for globalization, the need for countries to work closely together. Will run through some of the more important lines that came out of the speech even if there was not anything that really shook things up. He talked about the need to remove barriers around tech exchange. You can see that as a nod towards Companies Like huawei and other firms in china. He called on countries to deepen their economic cooperation. He said china will focus more on imports, particularly the imports of quality produce. Again, talked about intellectual property protection. That is in focus in these trade negotiations with the united states. Saying china will create a better intellectual property environment. He also mentioned the trade deal that has seen some progress in the last 24 hours, saying he wants to hopefully see that signed as early as possible. He is also open to more free trade agreements with countries around the world. This was reiterating that china is a supporter of free trade. It is ready to welcome foreign investment. Many will look at this and say, we still need some details to assuage the concerns about Market Access and other issues. Sophie as you say, no major announcements from xi jinping. Y subdued reactions in among the better performers on the large cap update. Boosting imports and lowering tariffs. Foreign buyers have been piling at the chinese equity. Chinese cuts. On reverse moves we saw earlier. Reversing buses. The 10 year cash shield has come down three basis points. This is the pmc lower the cost of loans for the First Time Since 2016. Cutting the mlf to 3. 3 . This is bloomberg. Welcome back to Bloomberg Markets asia. Lets bring in kelsey brodrick, who believes china hopes to use the expo in shanghai to diversify away from the u. S. She joins us from washington, d. C. Lets start with you were with your views and what we have heard from washington, d. C. Has anything he said not really. China is ready to open. China is ready to help other countries. China wants to import a lot of people. Sign a to go ahead and special agreement with e. U. He said a lot of great things. There was nothing that was very concrete. There was nothing that was new to kickoff the import event for china. He talked about the need and the desire to cut tariffs goodsr and import more from foreign markets. Are there beneficiaries that are going to likely be positioned for that . We have seen over the last few years around the edges, tariffs reduced on some products. He you expect that will continue, and are there going to be beneficiaries beyond the u. S. . Likely, that will return that will continue. One of the biggest audiences for him is that you is the e. U. Particularly, for Emmanuel Macron, who is currently visiting. That is what he would like to attract. That is the market he wants to engage with more. This is his opportunity to reach out to Emmanuel Macron, will be increasingly important next year. It is a big deal for china. Last year, around 60 billion purchase agreements were signed. The e. U. Has said only half of true. China is going to want to show them they are serious and they are going to make some deals happen. If that is going to be the case, it remains to be seen. That is the message they want to portray. Trading negotiations front, we have the reporting suggesting the u. S. Might remove tariffs to get this phase i deal over the line. We think that is being seriously considered now by those in washington . How significant would that be in terms of how chinas policymakers would digest that move . It certainly would be good for the chinese side. He remains to be seen at that is actually true. What is on the table right now is the october tariff rate and the december tariffs. Beyond that, it does not seem to be worked out. A number of comments in a peg aussie on talking about how they were whether both sides understood what was on the table. That signals there is perhaps not as much alignment on some of these issues. That is what will have to be worked out before the heads of state meet. He also mentioned a november deal could now be a december deal. If xi is going to come to the u. S. , wheres it going to be . Does that by them more time to work out some of these issues like, what exactly is included . What did we say about phase two . Lastly, we have huawei, which is a whole separate issue. Whether thatar will be included as part of the phase i deal or if that will be before or after. A lot of details have to be worked out. While we do think a deal is going to be signed either later this month or early next month, there are still there is still some negotiating to be done for sure. Absolutely. Out beforebe ironed you get phase one of the deal. We have been discussing how difficultis becoming or impossible depending on how you look at it. China is concerned about the trustworthiness of President Trump in terms of the ability to sign off on a copper hands of deal. There demand that all tariffs are removed. That is something that is a risk on sentiment. The u. S. Adding new highs. All of this is part of the mix. Absolutely. I want to get back to kelsey. His me a sense of what you took away from give me a sense of what you took away from him mentioning highgrade tariff agreements. It does seem as though he is trying to create a framework where huawei and other hightech companies in china have a way of exporting without having to exceed u. S. Demands. It certainly does seem like he is trying to reach out to a nonu. S. Audience. He mentioned the e. U. , he mentioned the gcc. These are places where china has been pushing hard to make sure that huawei is not locked out of 5g build up. That is who he wants to appeal to. He hopes to build a coalition of at least friendly countries are friendly towards chinas tech ambition. He also mentioned the wto reform. China will be having a mini ministerial on wto reform with some of the countries present. China wants to form a community where its views can be thought fieldon an equal playing or with more ways than the u. S. He didhat vein as well, tout the benefits of this agreement. What he did not mention was indias lack of participation in indias pullback. Does this lend more to the torative that he is trying create his own economic ecosystem, which is perhaps free of u. S. Influence . Certainly in asia. Been, asia for asians. The u. S. Should not have a role in south china seas. The u. S. Should not have a role in setting the internet rules in asia. Is a loss not to have india. In some ways, perhaps a sigh of relief. Given how much countries were having to accommodate indias interest. China will paint this as a win. Ean and the rest of asia that china is there. Be seen as something of a win even with indian out there because china did, ahead of the u. S. In these regional forums this week. Thank you very much indeed. Joining us from washington. Going to leave things there for a couple of minutes. We have the french president , Emmanuel Macron, talking. We are to leave you with these images of shanghai. This is bloomberg. Your black you are back with Bloomberg Markets asia. U. S. And china signaling more progress towards a trade deal. Jonathan, we heard changing paying speaking. He did sort of glean the trade deal a little bit. What is your take on this . The 13th of october, we published a note we pointed out the phase i trade deal was becoming likely. We talked about tactical upside around 5 . As of this morning, we achieved the levels we were looking for, about 27,000. This kind of idea we are going to get a mini trade deal focused on agriculture, some pullback of tariffs perhaps as well, that is in the price. Where do we go from here . One trade a phase deal look like . Nobody quite knows is it effectively the status quote . Or that it does not get worse. It is more that it is not get worse. And that the december tariffs, which would have been quite significant for the Global Economy, they seem to be off the table. That gives time for policy stimulus to give traction. We had the third fed rate cut. The market obviously will come back to earnings. With her after two very bad years for emerging markets in asia, whether earnings can actually grow next year. That is the thing. What is your take away from the earnings season, which leads you to optimism or otherwise . We are watching it very closely. So japan, it is about a 1 far. About 1 net income beat. That is after downward revisions. What is interesting is that the i. T. Hard court i. T. Hardware sector is starting to see some specific beads. Ironically in relation to the trade tensions, a lot of that has been around and acceleration of chip sales into china itself, which is the localization of chinese i. T. Production. Come back to that two years we had of zero earnings growth, the market consensus bottom up is for a stellar year next year, 14 earnings growth. It is possible we could start to see Something Like that, particularly if the trade situation starts to heal. There are bays effects. We have never had three years in a row of flat or down earnings in an emerging market. The problem is, valuations. If you look at how the markets move, particularly in the last six to eight weeks, we are trading well above average. Much less so for china. Particularly a market like taiwan as we rate it. The question is, is going to be 14 are less than that . Echo r less than the then that . Tom here in shanghai. In terms of what we have seen from the pboc, we have seen the one year mlf cut today. Does that strike you as appropriate or does the central bank need to step up its efforts in terms of supporting this economy . This is a much more calibrated policy using cycle then what we are used to in china. In q1, look more like a traditional easing cycle. They have been more cautious about the amount of military stimulus. The fiscal stimulus, the tax bracket adjustment, those are all feeding through. The net and action of credit is less then we have seen in previous cycles. Stimulus to the housing sector is less. It is calibrated in relation to trade. The worse the trade situation has gotten, the more china has needed to accelerate easing at home. The better the trade situation has gotten, the more it has doubted back. It has doubted back. We had a pretty poor headline pmi, reflecting the overall economy, recently. There is some sign of life in the private sector and in our own survey of multinationals, which we published under the last couple of days. We can see that multinational sentiment towards china has begun to improve in the last couple of weeks. Recount linesto from president macron who is speaking in shanghai. He says he hopes there are agreements that are reached to ease trade tensions. He is saying trade tensions between major nations hurt the Global Economy. Wherere looking at asia, is your preference at this point . We have had a preference for ashares over the offshore china industry. Kingis h and the hang seng the age share market has performed well. The stimulus has come through. Please hold that thought. We have a lot more to discuss. Acquainted with what Emmanuel Macron is saying in shanghai. There going to have more from jonathan on the way. This is bloomberg. You are back with Bloomberg Markets as we have a look at what is going on market wise. We havee a chip to catch up. Lets have a look at what else is going on. Shanghai weakening a little bit. The hang seng, which is coming off at about two tens of 1 . Jonathan is with those from morgan stanley. Tell us how you perceive the world now, looking at 2020. It is nearly upon us. Talked about earnings growth. What about the sectors and Industry Groups are going to do better than others. You mentioned i. T. Jonathan you had all of these many cycles since 2009. We have the the euro zone Crisis Energy doesnt 12. We have had this trade and tariff tensions that have driven the Global Economy into a bad place as recently as this summer. Now, the debate is, do we escape yet again . Do we have a synchronized global upturn . Or, does the cycle eventually catch up with us . That is where the debate is in the market. As recently as the end of august, u. S. Bond yields were setting new alltime lows. The talk was around curve inversion. Now, particularly as i as we are getting this earnings season come in em, we are getting optimistic. If the u. S. Tenyear hits 10 , can we think about any furthered rate cuts . On top of that, how come equity markets globally are up about 19 today against this backdrop of all of this terrible noise, instability, the trade work, you name it. There is so much going on. We are still leaking out doubledigit gains. Jonaan as Global Equity index has yet to get above the january 2018 hi. December last year was terrible. The s p photo 15 . It makes it look much better than actually has been in it has been a difficult couple of years for equities. Very consistent with the decline in pmis we have seen. Now, the question is, are we going to breakout to the upside . We have not seen the break yet for the country index. We are closer than we have been at any stage since the 26th of january 2018. Mx w d. Do you expect Central Banks in that part of the world jonathan sorry, go ahead. Dear expect the banks in do you expect the things in this part of the world to take away the punch bowl or maybe the trade sentiment is starting to improve around the edges. If you get a deal to Central Banks in asia, press pause on their attempts to cut rates and stimulate. I think the most interesting 1 is india. Had its own problems other than global trade, particularly around shadow banking. We think india will be able to cut Interest Rates more. There are three big drivers. The ad states, china, and india. They dominate the Global Growth story. It has had a bad couple of years. Prescriptions put in place by the Indian Government enough to get the Government Back on track and deal with some of those issues . Jonathan i think after mr. Modis new election and that finance minister, and the five minutes minister, we have had an adjustment on Corporate Tax rates. There coming down by 10 percentage points. We are getting a recap program. The r. B. I. Has the facility to make it easier to support the shadow banking sector, which has been in trouble and has affected auto purchase, finance, real estate. After a poor time were policy lagged, we are getting to a better place. This is all part of the debate around, is the policy cycle enough . What is going wrong with the Indian Economy . Jonathan that is the thing. The problem is credit. At their peak, the shadow banks were extending credit and accounting as much as 40 of new credit growth. The reason the expanded is that state owned banks not have enough capital. Were not able to support Credit Demand in the economy. The creditdependent sectors, real estate, and autos really suffered. Persistent doubledigit declines in auto sales. Truck sales have been exceptionally week. The exceptionally weak. Trying toagain about get the Credit System aligned with the real economy, which is the debate in china and the u. S. Last time, you said you are bullish on india. Is that your position now . Have you become polish given that things have come to rockbottom have you become bullish given that things have come to rockbottom . Jonathan it has had a choppy year. It has recently begun to outperform again. I think the argument around valley asian is that valuations a