Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713 :

With beijing and washington talks. We are waiting for had for that. The hang seng raising some of the losses we have seen. Mckay up three quarters of 1 . Asx, which has had a rough time of it. Up 6 10 of 1 . A bad day for manila. David yesterday, we were down 1 that is standing on the screens. Rishaad lets have a look at some of the other asset classes. This is a position we have had. Nickel has had a torrid time should it has entered a bear market. 20 down since the beginning part of september. Prices may snap back next year if the conditions start to reemerge. A bit of a loose side of things that has driven things downward. Investors have continued to grapple with the uncertainty of trade. Lets have a look at what is going with the australian dollar. Just up a fraction at the moment. We had the commonwealth of australias pi numbers. Inwed manufacturing contractor he services. Picture,t the crude . 25 toks at 20 the barrel. The 10 year yield on the japanese bonds. The are yielding eight basis points in negative terrain. We have key gauges of price taking up slightly. It all follows last months sales tax. A further weakening of coin inflation. This illustrates the difficulty the bank of japan has been facing as it struggles to boost prices higher. To su lets get it over keenan. She is in new york. She has an update on the first word news. Withe are going to start President Trump who has signed a four week spending bill that puts off a possible Government Shutdown until december 20. The senate cleared the measure earlier after it had already passed the house. This stopgap measure became necessary because congress once again failed to complete action on the 12th annual spending bills that were needed to keep agencies operating by the october 1 start of the fiscal year. The former governor of the peoples bank of china says policymakers still have room to act providing monetary and fiscal work in unions. He was speaking at a new Economy Forum in beijing amid continuing debate on how the government will handle chinas widening slowdown. His comments underlined the Central Banks concern about letting borrowing costs fall too much. Avoid still try to into the negative Interest Rates area. Wewill be a success if manage it. To consider that much unconventional policy. Su Prime Minister Benjamin Netanyahu is to face trial for corruption. He has been charged with bribery, fraud, and breach of trust in move that could halt his career. He is the first sitting israeli leader to be indicted as the Justice Ministry painted the picture of a politician who abused his position and sacrificed the integrity of his office. He says the investigation is tainted and did not pursue the truth. Morningresident obamas advances in obama is morning advances in technology is creating a splintering world. At a salesforce. Com conference in san francisco, u. S. Former president said new technology is allowing companies and citizens to do more, but it is also feeling more extreme inequality and contributing to the growth of public anger and anxiety. Global news, 24 hours a day, on air and on tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. I am su keenan. This is bloomberg. David thank you so much. Trade tensions and a shaky outlook for the Global Economy continue to dominate the conversations at the Bloomberg New Economy Forum in beijing. Lets hear what some of these influential names have had to say. Foothillsstill in the of a cold war. We should pursue common comprehensive cooperative and sustainable security and reject zerosum game and cold war mentality. There is a period in which there is a piece because nobody wants to fight the country. There is a new world order. Only cooperation as the answer. Worry some of the percentage will be irreversible. The confidence of supply from a Single Source for anybody in the world has reduced. You see supply chains moving customers move production. We continue to serve our customers in china with our plans here. There is a good chance we will see some progress on the trade discussion. I have been fortunate to speak to policy makers on both sides. I am encouraged. Rishaad we can get over to the Bloomberg New Economy Forum in beijing. Apparently, the u. S. China tech bribery is the greatest threat to globalization. I want to hear about how this manifests itself. Haslinda that is the general sentiment here. Founder and ceo of the Eurasia Group days here. Theeard views about in foothills of the cold war, cold war mentality. The largest two economies in the world. We have been talking about a trade deal with them for two years. They are getting tired, the chinese. They are getting angry even though they are fairly quiet about it. They also think they are in a better vision to wait a better position to wait the americans out. We have trump very focused on the market and the implications of further trade escalation. And, we have Economic Impact that in 2018 2019, 2020, it plays out to her the americans more. We are of the reasons, far from a significant breakthrough. We might be able to get to the of the chinese being able to buy the big, but we are far from anything that looks like trust. Haslinda the phase one deal is more symbolic than significant . How much is the u. S. Getting in the phase one deal . Trump around the world is looking to get some announcements done in advance of the election. Whether it is bringing the taliban in to camp david, whether it is having a new summit with the north koreans, whether it is having a phone call with the iranian president , on all of these things, he has tried to, lets make a deal. He has failed on all three. On china, he is closer. If there is going to be a deal, it is going to be one that is not going to look good for the americans. The chinese are no closer today to the structural demands the americans have made for removing subsidies or changing the legal system in terms of intellectual property. The chinese are not prepared to do those things. They feel the americans have less ammunition than before. Xi jinping feels like he has already given Political Capital to trump, and it is not worked out. If there is going to be a deal, the will be doing most of the the americans will be doing most of the giving. Haslinda we are hearing from chinese leadership that they do. Ot know what the u. S. Wants that erspective is would like to get to a place where he would agree. He is not at all confident. The markets are reacting. Even though i would be 6040 that we get phase one done ever that means, it is slipping just like the u. S. Mexicocanada agreement. Haslinda our conditions changing . China does not know what the u. S. Once . It is the things americans have demanded that core are redlined for the chinese. They are not going to change their state capital system. They are not going to engage in political reforms. For decades, the American Perspective on china is as they get wealthier, they will adapt to american norms and values. They are not doing that. When other countries do not do hat like a ron, like iran, we basically say we are going to beat the crab out of you. China is a country that is not adapting to american exceptionalism. They are big enough to say no. We do not have the ability to force them. To the table the cost of not compromising is more borne by the chinese than the americans economically ultimately, but still, politically, americans do not have as much stomach for that fight with a four year election cycle. Xi jinping gets to be president for life. He just has more resilient in that guard. Haslinda add to that the hong kong bill. How is that complicating the u. S. China trade war . It is an annoyance. Certainly, the chinese do not want to be in a situation where they are whirling tanks through hong kong. They understand the implication that would have for the views of china internationally. Actual peaceful legislation is an embarrassment for the chinese, but it will not have meaningful economic implications in hong kong. The much bigger issue is on technology. The decision by the Chinese Government to consciously leduple from the american set of standards, from our internet, the world wide web, from our data systems, the cloud , i think, is the most meaningful geopolitical decision that has been made by any country since the soviet union. One of the reasons we are here in china today is because of globalization. Goods and services and ideas moving faster and faster. Doing extraordinary things for humanity. The decision to decouple in technology is the first major step away from that where you actually are going to have a critical component of the 21st century economy no longer globalizing and being split in two. Haslinda the question is how real is the threat of decoupling . In the conversations at this conference, a lot of people say they envision that. Interconnected, you cannot decouple. I think the commodities market is global and getting more global. The goods and Services Market is global and getting a little less global because we do not need as much labor in the supply chain and emergingmarket labor is more expensive. It is not becoming radically less global. When we talk about big data and how people are going to have information ecosystems around them and 5g, decoupling is happening. Facebook is not here. The Chinese People do not have access to facebook. We in america are not going to have access to huawei. We are building a virtual wall. The question for the next generation is where is the wall going to be. What countries will be included in how high is it going to be . There will be decoupling on the database. Haslinda you talk about 5g and huawei. Is it failed to say that the economies will gravitate towards huawei given that it is cheaper and of good quality . I think it is fair to say that south east asia, subsaharan africa, much of south america, and some of Eastern Europe is going to be much more aligned. The question will be, are the americans able to get a unified, multilateral blog with all of the wealthy countries in the world together . If you do that, ultimately, the chinese will not want to be excluded. That will be your liver and a five or 10 years time to say, we are happy to bring you in, but you will have to adapt your standards to those that are held by the west. Trump is not aligned towards multilateralism. He has america first. The europeans do not trust him. The europeans, this is a challenging moment with brings exit and a lot of populism happening. The chinese are waiting check. Italy joins belt and road. Eastern europeans are using huawei. Why are we concerned about National Security . Pay foreuropeans will nato but not a lot for National Security and technology. The americans are going to have to be much more strategic. It is hard to tell trump looking at 2020 with a lack of solid Strategic Advisors around him, you need to get this right. Haslinda you talk about tech, you have to doug about Data Sovereignty more tomorrow. People are wanting data to be localized. How will this play out . What does this mean for the world . It means Less Efficiency for the companies. Higher cost. Europeans do not have these companies themselves, but they do have regulatory authority. Particularly in technology, their views of privacy and copyright and Data Sovereignty a much more robust than in washington, d. C. They are doing a lot of the driving of these policies. If you are in american tech company, you cannot give up access to the Worlds Largest market. We are seeing in california, it is the fifth largest economy in the world. They are aligning with a lot of these standards. I would pay more attention to what is happening in brussels and berlin. Haslinda one final question. Of all the risks including brexit, what is the worst . The worst is what we are talking about. The fact that henry kissinger, 96 years old, this talking about being at the foothills of the cold war, youre not going to fight militarily against the chinese because they do not have Global Military capabilities. We are right now in cold war. We want them to lose. Even though we are fighting, ultimately, we know that hundreds both of us. Where you have separate technology architecture, the americans and chinese will want to defeat the other side. That is how you end up with a lot of depredation for humanity. Haslinda everyone is in a loser of this. En from eurasia here at the conference in beijing. Back to you guys. David great stuff. En burner at the new economy form. Rishaad we have a load more interviews live from the new Economic Forum taking place in beijing. This is just some these are just some of the people we are going to be talking to in the coming hours. This is bloomberg. Rishaad you are back with Bloomberg Markets. You also back with the new economy form taking place in beijing. David solomon speaking to us exclusively a bit earlier. There has been significant shifts in Market Structure and regulation over the last 10 years. We have not had a lot of market stress. Other things we think about from ifisk perspective is that there was more market stress, where could there be liquidity issues . The events in the repo market a month ago are an indication of the fact that when marks are that way Market Structure changes, and for some reason the supply and demand dynamic changes, you cannot have tightening liquidity. That is something to watch. Can you protect yourself in some way . I do not think it is so much about goldman sachs. Generally speaking, investors liquid securities, they are looking at the amount of liquidity available today. One of the things you have to do period of stress, you have to expect there will be less with Bloomberg Markets liquidity. Powe you have to have enough liquidity to expect. What else as a text is it shadow banking for investors looking for yields or Something Else . It is my job to worry. It is my job as we think about our clients to the good about things that could affect our clients. I think in a lot of ways, the benignment is relatively from an economic perspective. In the u. S. , the economy is doing quite well. One of our lead u. S. Economist was talking about the fight we might make some progress on trade and Monetary Policy has been more accommodative. A expecting in 2020 expecting an acceleration kit he commented that in the u. K. , there is more confidence there will be a path out of brexit. Could see a slight acceleration in economic activity. If you look across europe, maybe growth. Vement on slower economically, we are doing ok. Is there anything that is positive out there . What youre describing are things that are getting less bad. The world is growing at three and a half percent. That is not bad. I think you have to everybody is looking for what is wrong. There are a lot of things that are going well. Are there issues . Sure. Chinau. S. Relationship a headwind . Yes. We need to make progress . Yes. A few step back at a high level, things are going ok. The economy is moving forward. Ande are lots of issues political processes that need to be dealt with. They can all we can all find places where we need to do better. Generally speaking from an economic perspective, we are doing ok. Latestlets get to your business flash headlines. International plan to close not onlyeport says they will consider renewing its leases if the rents are cut in half. The company had 118 stories in hong kong as of september. Shares have slumped 40 this year alone. Rishaad chinese contract drugmaker pharma in beijing is said to have raised almost 600 million after praising it hong kong listing at the top end of range. Kong listing come in less than a year after pharma completed the sale in shenzhen. The stock has risen more than 600 since the listing. David tesla says they aim to start belaboring made in china model threes as it moves towards more production moves toward full production. Elon musk says he hopes customers receive their cars before spring festival. Last month, tesla said it expected to begin delivery in the fourth quarter, but did not in the First Quarter did not specify when. Speaking of deliveries, delivering on earnings. Cn is one stock we are watching closely. Trainer 30 recovery. We were down 90 yesterday. We started out yesterday at 450. Keep that in mind. T bank rishaad if you look at west bank again, down. You were talking about this earlier. There we go. That is west bank after 22 million cases of Money Laundering can lets have a look at some of these stocks, which are moving to the japanese lunch break. Bizarrely down after the ceo says he is getting serious about profits. Also announcing the end of production of some products such as liquid crystal displays. Other units may be combined. Nintendo now at 2. 9 down. 2. 8 lower. This, stanley downgrading saying it expects a low in a l switch generation growth. Softbank, this is connected with wework. Suzuki and other automakers are making headlines as we have another recall taking place. Of the suzuki between 2000ctured and 2013. David after the short break, we are heading back to a cold november morning in beijing. Lots of interviews still coming up. This is bloomberg. Rishaad chinas tech sectors flourished over the past decade. The tech wereas target some high profile names. David lets get back to beijing where the new economy form is taking place. Selina wang, our china correspondent, is standing by with our next guest. Here with selina im the chairman and ceo of china renaissance. Your firm has grown by advising new startups. As the overall sector has cooled, so have your stocks since going public. What is your view on the state