The economists were expecting to hear. Concern onen the big the consumer side of things. Year to date, 5. 4 . Do we have anything more at the moment . That. A big beat on back to the growth number. Updates fromore the National Bureau statistics, the life press briefing the Live Press Briefing should be ongoing. Thoughts . Not important . Not very important. Not the gdpcus on number but the breakdowns. Industrialrong production number is boosted by infrastructure activities. There have been a lot of investments in infrastructure, especially on transportation projects. And bad newsnews because it means that the economy relies on fiscal stimulus of Infrastructure Projects. Otherwise, regular activities should not pick up that growth. The bigger part of the chinese economy is domestically focus. Look at retail sales, holding up well. You cannot argue with that. It is an improvement. Reallyil sales, not equals two consumption. It is a combination of ofsumption and a combination businesses or Infrastructure Projects getting the materials in the market. Retail sales, a combination of both. Ofhave to see the breakdown how consumption growth is in the gdp. That is why i said we need to look at the details. This is the first thing. The second thing, for fixed asset investments, the yeartodate is lower, a little bit lower, than the previous. We are actually looking for. That sort of picked up in august. Do you think this could because we continue to see that and not really spurring private investment. You are saying they crowd out other investments . I would say other investments are absent. It is market driven. For all the trade war and the ,ech war, if i am a businessman i may try to scale down a little bit and beef up a little in other locations of asia. Sector demand is kind of week, the government doesnt have to worry about risk. How is the Employment Situation . The Employment Situation, unemployment has edged up. If according to the survey jobless rate. We also have to be aware of the salary. In some of the sectors, theyally the tax sectors are usually low fixed but high variable. This year, we expect the variables will be very low or absent. In essence, it means a salary cut for people working in those sectors. It is not good news and therefore should affect consumption. Iris sticks around. Weve talked at length about certain things and will get to other things in a couple of minutes. Rishaad other things to look forward to. The first word news with su keenan. Britains start with the and the eu saying they have finally secured a deal and there is no need for further delay to brexit. Last talks in brussels produced agreement on key issues and the need for customs checks on the i receive rather irish sea. Boris johnson still needs parliamentary backing and his crucial irish allies have signaled they will not support the agreement. I do think this deal represents a very good deal for and there the u. K. , is a reasonable fair outcome that reflects the large amount of work that has been undertaken by both sides. This is a fair, balanced agreement. It is a testament to our commitment to finding solutions. It provides certainty where brexit creates uncertainty. Of ourects the rights citizens and it protects peace and stability on the island of ireland. Su now to the latest in syria and turkey. The lira rallied to a oneweek high on news of a temporary ceasefire in syria. Turkey agreed to halt military actions for 120 hours to allow Kurdish Forces to withdraw. The news was announced by u. S. Vice president mike pence after a hastily arranged talk in on ankara. He said sanctions will be removed if the ceasefire remains in place. With the implementation of the ceasefire, the United States will not impose further once ans on turkey and permanent ceasefire is in effect, the president has agreed to withdraw the economic sanctions that were imposed. Su President Trump has sparked accusations of conflict of them just on news he will host next years g7 summit at his own resort, his golf resort in florida. House announcement triggered criticism he would be violating a constitutional prohibition against profiting from the presidency. The administration said it would in pride invite president putin and Climate Change were not beyond the be on the agenda. The nba describes substantial losses. A hong kongnces of tweet which came from the general manager of the Houston Rockets may drag on and be what he describes as dramatic. We are talking about the tweet that was deleted, but the resulting anger saw sponsors cutting ties. Global news 24 hours a day, onair and online on tictoc and twitter, powered by more than 2700 journalists and analysts in more than 120 countries. Im su keenan. This is bloomberg. Up, the first phase of the tentative chinau. S. Trade deal has brought questions. Half an hour, the federation. They will give us their take on chinas pledge to buy moorpark. More pork. Rishaad five months of street protests. Irish bankasking the of ing if the governments latest policy measures go far enough. This is bloomberg. Rishaad you are back with bloomberg markets. The Hong Kong Legislature was interrupted two consecutive days as protesters shouted down carrie lam. She says she expects the economy to have entered a technical recession in the third quarter. David to ease the slowdown and public disorder, she announced some measures to boost compulsory land purchases for housing, relaxing mortgage rules, and giving cash to students. She says all of those measures ir whether they will work is pang is with us. Could they work . Dara they could work if they can pass the Legislative Council. The first thing is the chaotic situation in the Legislative Councils all over 2019 and even more when misses carrie lam mrs. Carrie lam delivered her policy address. You can imagine it will be really chaotic when those policies are discussed in the Legislative Council later. The question, my question is whether those will be discussed properly and then have a conclusion in the Legislative Council. Believe doubt it and i there will be many, many disruptions in the Legislative Council. Apart from that, if you ask me whether those policies if they pass, whether they will actually boost growth, only one will billedrowth and that is Public Housing. Housing. Public the plant have Public Housing on land is exceptionally long. It is double the time used by private developers. Not to mention after the planning, the building is double the time yvonne 10 years, at least . Rishaad some of it will be 20 years. Iris more than 20 years. They admit it will be more than 20. Rishaad there are 200 islands already. There are loads that could be used, if they want to go that route. It seems to me that is also an obstacle for mrs. Carrie lam. The other policy was i really have negative comment, cash to students. Not all students need cash. This to be aware that money has to narrow the wealth gap in hong kong, not just deliver to everyone. I am actually quite giving firsttime buyers easier access to mortgage, they say you can buy a more expensive house by paying a 10 down payment. Knapp boost buyer demand . Rishaad on top of that, he put down the money but you will bring that much more in monthly mortgage payments. As it is, it is unaffordable. This makes it more self. More so. Doesntat policy support really low income level hong kong people. They target middling come households middle income households. 30,000 a month, they can afford. Even though it is not easier, i suggest people to be very careful on their financing because the protest actually has hurt the hong kong economy. Technical recession, i totally agree. Yvonne how long can it be in a recession . Past 2020 . Iris for example, how long will the protests last . It could be for years. So retail sales, for example, will be really gloomy. A veryuseholds will face uncertain job security nowadays. I would say be careful when people decide whether to own an apartment for now. David the question then becomes is there anything within the for themt control to dig the economy out because it seems we are in a recession now and there is nothing in the data that indicates we will recover next quarter and maybe in the First Quarter of next year . Iris if we are talking about q1, q2, we may have a series of negatives. David a double recession . Iris yes, thats what i think. At least four quarters. What the government can do for the future is, for example, infrastructure investment. Pass is a realn question. David four quarters of quarter on quarter contraction. Does that affect the Financial Health or is that a separate topic altogether . Iris it may affect some retail loans forail levels, fmes. Last week, there has been imposed a policy that released some countercyclical capital buffer for banks and the only hope banks will use the release capital relief capital for loans and i believe the banks wont. This is entering a structural shift in the fabric of this economy. Where does it end up, quickly . That is a difficult one to do quickly. Iris i really cant give you an answer. I dont think it will end any time soon. It will last for years. Rishaad thank you very much. Greater china fund economist. Markets, gdp numbers, retail sales, industrial output, all out of china. David youre watching bloomberg. Hong kongn beijing, coming through at the moment . We are looking at gdp numbers which came up. This is china. Growth at 6 , marginally less than expected. They beat in output industrial output, but ing suggests the number is infrastructure spending. David also coming out of the press briefing, they are saying china in terms of their employment targets for the year, they have basically reached those for the year. Here is where you are on the growth, 6 . Detail sales 7. 8 percent, Industrial Production at 5. 8 at multiyear lows. The economy is 50 times bigger than 1992, so that is to be expected. Yvonne talking more about the Technology Sector growth, the fiscal measures that have been taken this year. Talking the Inflation Numbers we got earlier this week, another example of reasonable and stable data. It strips out energy and food, the surge in pork prices has contributed to the 3 print for cpi, which is the governments target. Look atets have a market reaction, under an hour into the cash market section session on the mainland. We are reversing weaken his earlier and it is not exactly screaming higher. Markets are at least not taking this in a bad way. A slight miss, 78. 50 on msci. That is hong kong on the way up, h shares in hang seng up three point. 3 . The japanese market, we have up arrows for some of these companies. Metals got a big upgrade, 8. 8 . This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. Su it is 10 29 a. M. In hong kong and shanghai, 10 29 in new york. Im su keenan. China says its trade team is staying in close contact with u. S. Negotiators. This, as they work on the text of the draft deal that could be signed at the apec summit. Chinas aim is to trade the end and the trade war and end tariffs. Beijing has indicated it once more talks before it will be ready to sign an agreement. The president of the Asian Development think bank says twitterfits gained from shifting supply lines in asia will be offset by the slowdown in china. We are told although there are clear signs production and trade bills moving out of china, that doesnt guarantee longterm prosperity for a country on the receiving end. Fromlocation of investment china to such countries like gain through negotiations with the United States but they are also suffering from lower growth in china. There can be a shortterm gain, but they are concerned about the future of the economy. Moment. T at this su the acting white house chief deniesf Mick Mulvaney saying President Trump withheld military aid to ukraine to persuade an investigation into democrats. This statement contradicts earlier remarks when he ignored the president offered ukraine a quid pro quo for military help. Ulveney said it was only because of corruption concern and lack of support for other nations. Looking back to 2016, was one of the part of the thing that was he was worried about with corruption with that nation. Su global news 24 hours a day, onair and online on tictoc and twitter, powered by more than 2700 journalists and analysts in more than 120 countries. David we are sandwiched between two key brexit events. Yesterday, a deal. Have a look at markets. Indexoomberg pound giving back after a 4 rise this weekend. Ftse futures, down 13 points as we speak. Rishaad this is the hard part for Boris Johnson. Hes got to get enough support at home in parliament to deliver brexit on halloween. Lets bring in our asia fx reporter. Huge challenges. What are the numbers stacking up like at the moment . It seems like 5050. The dup are against it, Jeremy Corbyn of the labour party says to vote against it. There are members of the labour party who may vote for it. It really boils down to the conservatives. For it andll vote how many will of same . Abstain . Independents, will lay back Boris Johnson or vote against it . It is very tough, if we are honest. No one is sure how many will even abstain from voting in the first place. Yvonne what does this mean for the pound traders given the whipsaw we had already seen . Whipsaw,pect some more because even if it gets passed, a rallies but trade will start factoring in. There will likely be an election called by Boris Johnson leading to uncertainty. If it doesnt pass, you can expect sterling to be weighted down on monday. But supported again by the fact there is a noconfidence vote that leads to an election. The problem is on the eve of an election. That mitigates the up and down side to a degree. We will spend the next few weeks debating on the polls. Who will win the election and how will that affect things . Yvonne what weve been seeing is the chart. Rishaad and the Short Covering story. How much of this rally has been down to that . We were talking about this off air. The market is stillness short on sterling, but that is data as of tuesday to go. How do we square those two things . David i think most of the rallies have the short squeeze, people covering their positions. Very tough to initiate long positions because you dont know how it will play out. I wouldnt be surprised ftc data comes out today. A lot has happened since tuesday, but you would hypothesize the data will show Asset Managers will now not be as short and may even be flat to some degree. That is the potential. Isit goes higher, there potential to initiate long positions. The majority of this has been Short Covering. Yvonne david, thank you. Giantinese Online Finance expects Credit Demand to remain strong despite a decelerating economy. Tom mackenzie joins us now. What was the takeaway . He did talk about the economy, which was interesting given the data weve had under 30 minutes ago or so. Also, he focused on dealmaking and the future for the company. Valued a company that is about 150 billion u. S. Dollars. It has about 900 million viewer users domestically. It spans everything from insurance to the money markets, one of the biggest money market funds in the world. It has partnerships and indonesia, in india, the philippines. We talk about the future of the company and whether they were looking at an ipo anytime soon. Listen to this exclusive interview with the ceo. Philosophy is very straightforward. Strategic doing investment. Investments that align with our overall strategy. We need to focus on strategy development. Can wewe need really achieve the finish together . One of your partners is pay tm. They are looking to raise maybe 2 million. I think they are doing really well. Happy to be a partner of them. When i first looked at the the foundereally and ceo of the company, i told him the first time i looked at the company, i didnt like the business of the company. He is passionate with a strong vision. Overall, the whole economy in is healthy. I think paytm is in a good position to capitalize on that opportunity. Tom when do you plan to opt ipo . Just did a new round of financing so the company is very healthy in terms of cash flows, so we are happy with the business momentum. For ipo,have any plan for now know. For now, now. Would it be realistic to think you could pull the trigger on ipo in 2020 . Eric when the time comes, it comes. Well let you know. It is to add, just one stage of the company. Tom saying hes not in a big rush to ipo. Alibaba group is controlled by jack ma behind the ecommerce giant. Strategic deals are still in focus and primarily around emerging markets. They do see a lot of potential in countries like india where they have this investment with paytm, indias largest mobile payments company. More deals, maybe. No rush to ipo and they are trying to build out west management project Wealth Management projects. Really challenging the incumbents. 6 id on the economy, we had on the gdp numbers, slowest since 1992. He lends to a different part of that economy than the old banking sector. What did he tell you about credit growth and is he seeing a slowdown . Was a key question we put to him and essentially, he thinks it is relatively benign, the environment. He says he hasnt seen a sharp downturn on transactions or credit. Has led 400k billion to small and mediumsize enterprises. He says that growth remains particularly strong as the Western Region and Central Regions of china develop using technology to move up the supply chain. Hes not overly concerned about the strength of the consumer. He does have a pretty good oversight in the data. Ecommerce,border as well so he says he is relatively optimistic about developments in the trade war and the upgrade in terms of technology and manufacturing will help lift. Relatively confident at this stage in terms of where chinas consumer goes from here. Tom mackenzie, our coanchor joining us with that interview. Phase of thest chinau. S. Trade war is raising questions and so far, very few answers. Only key part of the talks, food purchases. We will talk about chinas pledge to boost farm orders next. This is bloomberg. Rishaad u. S. Meat companies changing how they source pigs to target demand from china. African swine fever put a big hit on pork. This comes against the backdrop of pork Price Inflation surging, 70 was the last data point. Timesne inflation, 23 headline inflation in china. Our next guest believes high prices will affect the way pork is consumed to some extent. Joining us on set, joel haggard, senior vp for the Asian Pacific for joel haggard u. S. Meat export federation. We will touch on the opportunities for u. S. Exports but prices are roughly double in china. What is the elasticity of demand, there . How can you see chinese shift from their consumption of pork . Joel that is a key question. There is probably better information on how much the hog herd has shrank, but what is happening in the home, how people are changing their protein consumption habits, very difficult to gauge. You are watching the increase in poultry and beef imports, which have also been massive price increases. The average Chinese Consumer is broadening out their protein consumption to include more nonpork items. Rishaad these dietary habits will change a little bit, and that would take years to do, wouldnt it . Introduce people to different meats, perhaps . Joel spending a couple of dollars for spare ribs and now they are 20, you will look closely at maybe making some protein shift. Yvonne we just heard pork prices could return to a normal range. Theyve talked about poor production pork production coming back in china. Have we seen the worst of this swine flu . Joel african swine fever is a tenacious bug, and our own industrys biggest priority is keeping that out of the United States. There is no cure, vaccine for the disease. It has been difficult for Hog Enterprises to repopulate, so it will be a challenge moving forward for them, but the incentives are so high to repopulate. Apple talking about iphone type margins on pork production. That in itself is an incentive to repopulate. Even if some of your herds dont make it, and get the disease again, the prophet thats being built in the Balance Sheets by some of these enterprises that have made an announcement to expand reduction. Yvonne with your iphone analogy, we get a new iphone every six to nine months, how quickly can you reherd . Joel we are just at the beginning of the process where producers are trying. This is something that is playing out right now and on a mass scale. We just dont have the data points to understand how repopulationose efforts are to date. A look athen you have what is going on in the u. S. And you see tweets china will be buying more agriculture, are you seeing that on the ground in the u. S. Now that they are seeing more orders . Joel absolutely. Rishaad can you put some numbers on it . Joel for a company mentioned last night that has made the announcement to pork producers to change the way they raise hogs, basically for the china business, that is a sign of the potential they believe is out there. Up pork exports to china are despite high punitive duties, and they could go up even more. A couple of days ago, the chinese spokesperson for the Foreign Ministry announced huge numbers for ag purchases, including a large number for pork. We are already seeing that in the trade statistics, so this is real. Yvonne under phase one, they are saying they could double china can double the purchases of soybeans, for example. Do you think beijing is likely to honor those commitments and under what contingency . Do we need december tariffs to be scrapped before we see beijing following these pledges . Joel we have a big handicap right now because of these punitive duties. Assessed 70 duty compared to 17 duty compared to 12 . Share tohas 10 market chinas pork market. We have to price our product incorporating that duty penalty. It is actually a tax on the exporter and u. S. Producer. Rishaad isnt it more than that . Have we got hidden tariffs, tyson foods has removed this drug because that would not fit in with the new food safety laws in china, which are getting ever more stringent . Joel our producers and exporters have learned the painful way of how to meet the and ourrequirement, shipments over the last couple of years have been relatively smooth on the port side. Kt is a challenging por side. The label has to be correct, every container is open, they do a test cut. It is strict, but other countries are strict. David we can talk about other proteins, as well. This trend of going meatless, is that affecting you . Is it too small still . Joel we still think it is pretty small and in the United States total red meat and poultry sales, Something Like 200 billion. This space is growing very fast, it is one billion but it is a trend that is moving around the world, including china. China has had that history of vegetable foods and vegan foods for millennia. It is nothing new on that side, but it is an interesting space we are watching. Rishaad we are watching this space. Are you confident things will be falling into place by the end of the year . Maybe these tariffs will be moved and while they are there, it is difficult, but demand is insatiable for pigs. Is goingcant say what to happen in terms of the bilateral trade relationship. That is difficult to connect yvonne what about pork prices . Joel pork prices in the United States, chinese pork is five times the price of u. S. Pork. We have a competitive advantage. You can see from our trade, we are shipping even under these high duties but we can do a lot more. David they are also starting to breed these pigs. We will talk about that next time. Joel haggard from the u. S. Meat export federation. Rishaad coming up, we return. Up next, it is our reporters going chart to chart and competing for our votes. Cattle of the charts, next. This is bloomberg. Rishaad battle of the charts on bloomberg markets. They will be pitting their best charts against each other. Access charts on the bloomberg terminal running that feature on the bottom of your screen. David ladies first. My chart is about the yuan. Netbars show the daily changes in the pbocs fixings. You can see the pboc has capped, fiscally unchanged until this week. A importantt is signal for traders because that shows the pboc is finally allowing flexibility in the currency after keeping it steady before the National Day Holidays and trade talks. That comes with expectations for further depreciation weighing and comes amid the pboc maybe assuring no competitive depreciation. Weekrzbank told me this investors shouldnt aggressively short the yuan because the currency may break seven again. Advance event instead of plunge behind the point. The chart i have for you today, if we get that on the screen, taking a look at Property Developers in asia. This is against the backdrop of global search for yield. The yellow line is hong kong , the hangevelopers seng index and it shows what a difference for the half months of protest can make. It is outperforming peers and the rest of asia up until june when the protests started and ever since, it has been a Straight Line down. If you look at where the money is going, it looks like it is moving out of hong kong, look at the white line. That is japanese retail on the Tokyo Stock Exchange and it has crossed over and started to outperform its peers in the rest of asia. You got japan generally seen as a safe haven for currency and it looks like it is also a haven for investors looking yield in Property Developers. Rishaad i really like that chart, actually. Reversals. There is something nothing predictive about it, but neither is it with tians. Ofid erics is a statement past performance and whether it continues is the predictive element. What i found interesting about tians, when the yuan was pushing, it made it boring for everyone to not do anything. Dont test it further. Now that we are back below 7. 10, it means they may be happy and are making market forces. The only time to do that is when they are a bit rishaad who has won . David tian won. Would havell, if it been me judging, it would have been a different result. Thems the breaks. Rishaad use the gtv function on the bloomberg terminal. Taylor im taylor riggs in san francisco. This is bloomberg technology. Coming up in the next hour, tech earnings to start with a spark in a thirdperiod netflix lights wall street while ibm fails to deliver. More on the earnings parade, including next week when tesla and microsoft report. And not the police. Mark zuckerberg defends free speech on the internet in a speech at Georgetown University on
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