Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240712 :

Am Kathleen Hays in york, welcome to daybreak asia, related stories this hour, monthly suggests the recovery is continuing. The Bloomberg Economic saying recovery above three point five percent. Nancy pelosi says a deadline for stainless steel well President Trump calls for a big spending package. Central bankers worn support will be needed for some time to come and new zealand stocks rise in the kiwi strengthens after the historic victory. Labor has the seats to govern alone, but she is considering a new coalition. Haidi taking a look at markets in asia we are setting up on a pretty cautious note when it comes to trading in the trading week here in asia, however we are looking ahead to Third Quarter gdp out of china with investors and traders came to see what the expectations were for this study growth were to continue. We are expecting numbers of about 5. 5 when it comes to economic expansion. This is our way of seeing into the first couple of minutes here in sydney just about two pence of 1 , we had an incremental opening i should say in lifting of restrictions in victoria and of the city of melbourne over the weekend, though theyre all calls for that to happen quicker given the decline in cases. New zealand stocks are trading softly at the moment, down by 1 10 of 1 despite a great deal of economic and Political Uncertainty being removed. Massive ing to a [indiscernible] kathleen alright heidi, thank you very much, we will get to Karina Mitchell with first word headlines. Stimulushank you, the saga drags on with nancy pelosi setting a deadline for a white house offer if President Trump wants a deal before the election. He has indicated he will go further than the 1. 8 trillion dollar package put forward by republicans despite Senate Majority leader Mitch Mcconnells block. The president says he is confident he can convince critics. On theirus remains high agenda for global Central Banks with fresh warnings about government restrictions, their fragile recovery and 30 jobs. U. K. , the euro area and were united after an online seminar hosted by the g 30 saying support is going to remain vital for some time. That governor warned warned again that japan is at risk of recession. Japans economy is likely to follow in improving trend, however, this is highly uncertain and for the downside. If growth is locked and Financial Systems become unstable, the economy could fall into a recession. The global Coronavirus Infections are approaching 40 million with the u. S. Reporting more than 50,000 new cases, the most since july. France had another record with 32,000 new infections as italy continues the tightest social restrictions since the lockdown ended. German chancellor Angela Merkel is encouraging people to stay at home as the u. K. Added 100,000 cases in just a week. The u. K. Is set to rewrite its lawbreaking brexit legislation in a move that could revive failing talks with the eu. The government says it wants a deal and that the goal door is still ajar. Michael golf told sky news he is keen to it takes two sides. Boris johnson said the talks are over and that the eu must compromise. Opec and its allies meet monday with the researching coronavirus demanding threatening demand for energy. No supply decision are expected until december. Saudi arabia and russia are already upping calls to stabilize the market with oil stuck in the low 40s and more supply from libya, the cartel is under pressure to its operatives. Opec inmates demand is at best anemic. Global news 24 hours a day on air and on Bloomberg Quicktake powered by more than 2700 journalists in more than 120 countries. I am Karina Mitchell. This is bloomberg. Beijing has passed a new law aimed at restricting sensitive exports in order to protect National Security, the law gives beijing countermeasures against the u. S. Aztec tensions rise. Lets get the deck details from Tom Mackenzie. A if youeijing see the titfortat leverage we have seen similar restrictions from washington, what are the implications for the company. Tom certainly there are implications and it follows this rule that it was implemented over the weekend. On decembermplanted 1, it follows the restrictions of the u. S. Putting on chinas biggest and most import and companies. Smic,rse huawei but also and also tencent and bytedance. China has been watching the u. S. Put in place these export controls on its own technology which has impacted Chinese Companies which rely on the supplies of some of these key components. Now they have drawn up their own export controls to try to use something as a countermeasure. Back in august they effectively stepped into those negotiations over the fate of tiktok by wrote the export of sense sensitive algorithms would be restricted as well. Also for foreign invested Companies Based here, it is more narrow the list of controls that china has set up versus the u. S. , but they could expand in the future. These will come into play on december the first, we should see what extent there and permitted. Thirdquarteras gdp out later expected to show rebound, look at the latest activity and a lot of people are wondering is the consumer finally starting to do its part in the recovery . What is the focus . Tom absolutely and that is why we are here at one of the biggest Logistic Centers in china, it is the biggest which is run by jd. Com one of the Top Ecommerce Companies in china. Beijing, the workers have started to file an and the reason were here is to get a sense of how much demand there is from chinas consumer. We saw a strong response over the golden week holiday, but you are right to say it has been the piece to the puzzle here in the economic recovery that has not kicked into full gear. The expectations are you will see expansion in retail sales for the month of september close to 2 potentially. You also see a pickup in Industrial Production and fixed asset investment. The headline number we are looking for is the gdp as you say, an increase for the Third Quarter, the estimates are 5. 5 . Making up for all of the lost ground in the first half of this year, a big reason for that we talked about retail sales being lackluster, but on the other site, exports have been strong. Haswork from home move driven that demand for Technology Products being shipped out of china, but also medical equipment as well as a virus continues to have a strong grip in places like europe and the United States. We are going to look to see whether we see something of a transition away from Infrastructure Spending which has been the other strong component of this. Exports and Infrastructure Spending and real estate, whether there is now a shift to retail sales and a shift to manufacturing investment as well an economistof suggests. If that happens, the rebound here could be on sustainable footing. Kathleen Tom Mackenzie thank you so much, joining us from south of beijing. We will be discussing chinas economic recovery more and the data coming out today in just a hours, alsors ahead a study shows china is closing in on the United States as the most powerful country influencing the asiapacific. As americas handling of the pandemic tarnishes its reputation, we discussed the latest. This is bloomberg. Kathleen china is set to show the world its economy is pushing ahead and the coronavirus recovery, the latest reading on gdp is due in a few hours. Governorate spoke about the expected growth at a Virtual Panel organized by the g 30 and that china has basically put covid19 under control. Growth formulative the first three quarters of this positive, i mean that the gdp on the year on year basis is much higher than the Second Quarter so that for the whole year this year, they predict that chinas gdp growth rate will be around 2 . Joining us is a senior economic at oxford. One of the officials speaking at the World Bank Meetings this week said talking about the fact that china being the only economy showing positive growth this year set of course, they were first to go into the virus, first to go out of the virus and reopen. They are saying it is surprising they would be leading the world, is that the proper way to look at this . Some ways yes, they have the lockdown and so gdp plummeted. We are starting to see the rebound with a fairly strong recovery ongoing in the Third Quarter. I think the policies have been quite supportive in the fact they have come out of lockdown in the government seems to be supporting the exports. Exports from china have been up. That has been a boon for the economy and has helped that recovery. They have had numerous challenges most notable being they are seeing around the world made breaks and its in its Major Trading partners. Is sayingeveryone watch the consumer closely, we know that the economy is coming back, but, if the rest of the world is going to have to lockdown again and if we look at the fact that chinas economy is very dependent on exports and manufacturing, is that the biggest risk or is the consumer just not getting over its fear of getting out and shopping enough to move things ahead . [indiscernible] we are looking for an ongoing recovery and for an improvement in gdp. There are social distancing especiallymeasures for social consumption and also employment has remained at a steady rate. Confidencengoing continuing to see the uncial on a plymouth trans pickup which you would expect. Unemployment trends pickup which you would expect. A look atif you take the implications coming out of asia and china for the u. S. Election, what are you seeing as the biggest likely result . Of tears being held back under a biden administration. I think whoever does when the u. S. Election will not change, the u. S. Will be on china. We are not looking for any rollback, but that does not mean tensions between the u. S. And china are going to by any means dissipate. Anyl though we not see terrace increase, we do not look for them to be rolled back anytime soon. It takes a while, we have seen this, it takes a while for tariffs to be reduced. There continues to be a drag on how much chinese imports exports can actually increase. In the meantime the expect resilience when it comes to the chinese recovery to propel asian economies in particular we are getting south koreas 20 day export numbers this week, do you expect that to continue to list some of these other regional data points we see . Sian it is going to provide , and south korea were not looking particularly [indiscernible] undeniably, the increase in china production will increase support, so asia through the rest of the world. Hat is real challenge there is so much focus on hong kong now, but we look at the economic focus and jobs data on the hong kong travel bubble, broadly, how do you assess the momentum of a hong kong economy and what you expect on those fronts . We are expecting a pickup in september, employment the employment rate will stay elevated at this point in time. As we go into the last quarter of the year we should see significant rebounds. That said we are still looking. Oward gdp to contract we will not be returning to precovid levels next year, and the travel bubble is quite positive. I think it is positive in the sense that it is taken away from other travel bubbles across asia. We need to put into context, the number of from both countries looks fairly small, unlikely to be significant [indiscernible] haidi i would appreciate your time with us, coming up next on daybreak asia, another deadline shift in washington, we ask if congress is anywhere close to in agreement with his latest deadlines. This is bloomberg. U. S. To most talks enter another week as the world and markets watch on, nancy pelosi now says tuesday is the deadline for an agreement before the election over the weekend, President Trump said he can convince republicans to back a socalled good deal. Lets get more in this from our news editor in washington. Im wondering, a couple of democrats criticized nancy pelosi last week for not getting some kind of deal to put in front of Mitch Mcconnell, Mitch Mcconnell says if nancy would just let a bipartisan deal to the house we can vote, is she starting to feel pressured to get something done before the election . She certainly is and as you say, whether it is the coalition problememocrats or the caucus within the house, they want to be able to go to the voters back in the home districts and say look we passed this new stainless bill. Stimulus bill. Of course the democrats passed there is month ago and theres been no action in the senate. It seemed like it would be in everybodys interest if they are running for reelection. Parties remain very far apart in terms of what washington wants, in terms of what republicans will except, in terms of where the democrats bottom line is at the moment. It is interesting because we had our two comments from President Trump this weekend, one just about an hour ago talking to reporters and one talking to a tv station in wisconsin yesterday saying he democrats but the suggested. Even though most republicans do not want to spend that much he said i can get them on board. That somewhat muddies the waters i think, we do know that pelosi and Steve Mnuchin were negotiating and what we believe was goodfaith yesterday, they talk for more than an hour and that is where this 48 hour deadline has evolved from. And thethose two sides Senate Republicans who are going billte on their own tuesday and wednesday, it is unclear what is going to happen. I think well hear more in the next day or so. You do here mnuchin and pelosi are supposed to talk again on monday. Their staff are basically talking all weekend. One final thing, not to delay, but even the dollar amount is one thing, but it is also the and democrats are determined all along to get a lot of Financial Aid to state and local governments, that has been a nonstarter for republicans. They see that as a bailout for what they described as poorly run democratic states and cities. It is hard to see how that can all be wrapped up and finalized before the election. Our Bloomberg News editor there in washington as we get another deadline for the u. S. Stimulus negotiations. In the meantime, andrew of the Johns Hopkins Public Health says mask wearing is hindering every to reduce infections just as u. S. And europe are facing a resurgence in cases. Weit is quite clear that know how to reduce cases, mask wearing is one of the critical things, social distancing is a second thing that can goes handinhand. It seems to be more of a politicized issue these days and that is turning back in terms of reduced compliance for something that we know is a rather straightforward way for us to reduce cases and keep our economies open. If you look at that week there is been, theres been several pauses and Clinical Trials for vaccines. Is that part and parcel of what was expected or is this concerning news . There is two things important with that, one is, when these trials are stopped, that is a sign they are monitoring well andadverse effects independent review boards have been looking at the data trying to assess whether these are random events that are happening. When you do studies that involve 10,00030,000 people, or whether it is something to do with this treatment itself. That is a good thing we are catching these things and they are analyzed. I think it is a reminder that as we have gone far in terms of development of vaccines, we are not there yet. Bit of studies are going to be important in terms of proving safety, proving efficacy, and then gaining the public trust so that when vaccines become available and they will be available, we know they will be a good number of people willing to take it because if a majority of the people will not take asrs covid vaccine, we are in the same situation as masks. Will be using something as at a less effective rate and will not have the impacts we need to keep our economies open into keep life back to some level of normalcy. Trialslarge treatment were also published, what did we learn in those . One actually work, remdesivir, and one doesnt. Trials weresivir published and they are encouraging, they support some of the treatments that the president received. The remdesivir trial showed not only getting the drug early helps, but if you are suffering severe disease and will had virus in your system the drugs seem to help. Final nail in the coffee coffin for hydroxychloroquine came in and it is clear that there was no benefit to treatment and in fact, there were increased amounts of adverse effects. Wea great example of use similar compounds like that in my laboratory and they work wonderfully in tissue culture dishes. Has never translated into an effective antiviral populations. It is why we do Clinical Trials, it is why we cant assume the something that works in a laboratory can work in the human population. There are a number of countries in europe that have gone into further restrictions, what is the right way to actually Balance Health and economic concerns . Are we better at reading covid19 then we were in march or are we going to see less deaths even if people still go out . The severity of the disease seems to be changing, but that may be links to w