Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240713

President trump is expected to sign the bill into law. Jay powell saw elevated threats including Global Growth and trade. Sophie macro uncertainty over trade in hong kong certainly looming large, given what we stocks. N so far in ozzie shares opening to the. 1 after being tracked lower wednesday. Aussie bonds are climbing for a Third Session tracking the rally we saw in treasuries overnight, to flatten. Ontinued the move to the downside while treasury futures a fourthing a bid for straight session. All itsstronger against peers. Checking in on what is going on im actually looking at the terminal right here because i wanted to show you it is testing the 100day moving average, some that level. We are hearing google is changing its political add policy, limiting audience targeting. We know twitter has been political ads on its platform. We know facebook has not, but we google will no longer allow political advertisers to target voters because of political affiliation. The company said it was updating its overall add policy to restrict claims about the process. Di it is really honing in on the idea of fake news and restricting fake news. Really interesting considering facebook is really doubling down on its position going into the 2020 election. We have heard similar changes from twitter as well. We hear google no longer allows political advertisers to target users based on political affiliation. In the meantime, lets get her first word news with ritika gupta. tromso fire is expected to sign legislation from Congress Supporting led supporting protesters in hong kong. Were told to build may go to the president as soonest thursday. That could escalate tension and confrontation with china that threatens the longawaited trade deal. The latest fed minutes show policymakers saw elevated risk to the economy even as they agreed to keep Interest Rates on hold after a third cut this year. The threat ofy weakening Global Growth and trade with the concern a general slowdown would weigh on the domestic economy. The fed signaled rates will remain on hold until there is any Material Change in the outlook. Of the opec plus oil cartel are drifting apart on pricing and oil strategy. Saudi arabia and russia have led the campaign to boost prices which are increasingly taking different approaches ahead of next months meeting. General motors has unleashed a racketeering lawsuit on fiat andsler, alleging a bribery corruption scheme cost gm billions of dollars and tainted labor contracts as far back as 2009. Shares in both carmakers slumped in u. S. Trade. Global news 24 hours a day on air and at tictoc on twitter powered by more than 2700 journalists and analysts in more than 120 countries. Im ritika gupta. This is bloomberg. Thank you. Lets get back to our top story President Trump is expected to sign a bill supporting protesters in hong kong. Congress voted overwhelmingly in support of it. The move is expected to lead to confrontation with china. Crucial timing. Are we expecting President Trump to sign it, and how would that affect trade deal . It is going to hit his desk tomorrow in washington. China has already raised warnings that they consider this an intrusion on their internal affairs and against international law. This is as the administration and chinese negotiators are trying to close a first phase of a trade agreement. They have been making some progress, but they are still stuck, and is looking increasingly like it could push past the end of the year, but they are trying to make some breakthroughs on issues. Of china trade experts we have talked with have said that in the end, it may not be an impediment by itself to reaching a trade deal, but this will add some friction into the relationship. The bill itself actually gives the administration some flexibility of what it would do. It requires the state department to certify that china is not interfering with hong kongs autonomy and is not suppressing democracy, so that does give the administration the ability to modulate the actual impact of the legislation, so in the end, it may not be as big an impediment to any sort of trade deal, despite the rhetoric. Haidi are we seeing a more aggressive or is the white house gearing up for a more aggressive front . They have been pretty aggressive already and this will actual to some phase of articles of impeachment being drawn out. They have claimed that todays testimony from gordon sondland, the European Union ambassador for the u. S. , was vindication for trump, but at the same time, democrats are saying that improved their case. Ndlandue, sans been did testify that was a quid pro quo to pressure ukraine to open political investigations of joe biden. The u. S. Was holding up a meeting for the ukrainian president at the white house in order to achieve that. He said that it was done at the direction of Rudy Giuliani who was working at the behest of trump, but he did also testify that he did not hear anything directly from trump suggesting that there was a quid pro quo, that in fact, trump had told him at one point as this story of his phone call with the ukrainian president was about to break, that he did not want a quid pro quo. Republicans in the white house have seized on that as being vindication for the president , but there are still a number of hearings yet to go and more witnesses as the democrats try to build a case. So far, republicans have not broken ranks with the president and are keeping up a pretty solid wall of support for him in congress. Haidi appreciate your time. Still ahead, delegates from around the globe have come to beijings new economy for them. We are kicking off our coverage in the second year. Shery later in the hour, we flashpoints. Ical this is bloomberg. Shery im shery ahn from the new Economy Forum in beijing. Haidi we get back to Market Action in the u. S. Fresh concerns about trade deals adding to risk of sets. President trump said to be signing a bill supporting hong kong protesters into law. Even though we are pretty close to alltime highs at the moment, theres a lot for investors to be concerned about right now. Absolutely. Its actually the worst month we have seen so far with stocks close to record highs. The pullback was relatively minor, but the real story was bonds. Lets go to the market snapshot if you can. The market for the most part has been trading off the trade news. Moving towards an interim deal, this was a reality check. Said thestrategists biggest move for bonds, down six of the last 10 sessions. Go into the bloomberg if we can because the panics index has been on the rise. Note this blue is the s p 500. This is the panic index rising while the vix has been lowered. Weree some of the moves extreme. Lowes hitting a record high, reversing weakness from coles ls ande depot koh home depot. General motors suing Fiat Chrysler in a blockbuster racketeering suit. Lets take a look also at some of the big after the bell dealnews. Lvmh said to be in talks with. Iffany paypal and a deal to acquire Honey Science and quickly to oil which broke its losing streak on u. S. Inventories, actually rising less than expected overall and falling, the biggest decline in months, helping push oil futures up about 3 , snapping their losing streak. Back to you. Theres no shortage of projections of the forecast with the Global Economy and trade war here at the new Economy Forum in beijing. The founder and president of the center for china globalization, also top advisor to the government in beijing, thank you for being with us this morning. How is beijing going to take this bill signed into law by President Trump . Reallyink this was unexpected. We were thinking the senate would hold it for a while, but if he signs the law, that would greatly impact relations. You advised the cabinet in china. Have you heard of any potential retaliatory measures that could come . Mediacould see from the and chinas reactions in general that they take this very seriously. Almost every organization has issued statements. Shery we have not really seen strong action coming from beijing despite all the trade measures taken by the u. S. The bill has not been signed yet, so we will see what will happen. Think it dampened the public hope of reaching a deal and made people very unhappy. Is it possible for policymakers to be pragmatic, still forge ahead for a winwin solution on trade, or is it too . Ensitive i think its really great if we can make this a deal. President trump needs a deal to go into the election. Course, we china, of want good relations with the u. S. As well. Such a bill having passed that raises the , i really think this is good. I see hong kong is already in chaos. Haidi you have investor signals and retail sales, but the biggest problem with hong kong as there does not seem to be a natural way to end this the standoff has gone for about 25 weeks now. When can they step in . It does not seem like carrie lam is entering anything new in the. Onversation the violence is still going on. I think we have to stop the violence first. I think the most important thing is restore order. In the meantime, what does it mean for the chinese economy . We continue to see trade tensions, hong kong tensions. Where is china headed . They had to cut lending rates again and again because they are not doing as well as people might think. It is not as bad as people thought. Almost 19the last , still adding gdp to australia. I think it is relatively ok really anyre is not big impact. The efficiency of the system. You have the longest highspeed railways, you know . Beijing can keep rolling at a moderately high level. What about the deeper structural reform issues . It just keeps getting pushed down the track. As the window closing for them to be able to make some of these painful reforms . I dont think so. Bylementation regulations so january 1, that new law will come up and then they will address a lot of other structure issues. Taking aally already lot of measures to address structural issues. One of chinas strategy is was growing by making acquisitions abroad. How do these businesses grow now . I have International Organizations they have International Organizations and infrastructure taking off in many countries. Ou can see the criticism is china is exporting its debt to other nations. Not really. Its very few. Most have been repaid, and a lot realem forgiven, but the debt problem is minor. The good news never travels. We always hear bad news about that. How does the belt and Road Initiative play into the broader strategy of china, and how does oft play to the dynamic china 2025 given that we are seeing this trade war spread into a tech war . War, silent war. Need a Major Economic war. But are we already there . Think phase one, we stop the downward spiral and keep uplifting the confidence. Of course, the stock market has fluctuated the last couple of years because of this trade i think but itt would be a new initiative on a Global Development plan. And westernu. S. Countries are participating. If we get phase one is still up for contention, but this is more difficult than even coming to an agreement on tech. The sort of greatest competitive strategic competition. Is there an answer to that . And china really coexist productively together . Absolutely. I think they have to. The World Bank Just released a report. 70 , 80 of the product was totally produced in one country. Nowadays, 70 or 80 of the product is produced by many countries together and then exported to another country. We are stuck in this trade war. U. S. Companies will be greatly affected and then make be out of business in a few years time, so President Trump may not have the money to stimulate the u. S. Economy. ,f they continue like that there will be no more money to send back. Thank you very much for joining us in conversation here in beijing. And a reminder, the new Economy Forum is being organized by the blumberg media group is a division of bloomberg lp. Shery we have some big names coming up at the new economy i andincluding the ceos of the president of the Asian Infrastructure investment bank. We are live in beijing. This is bloomberg. Shery im shery ahn from the new Economy Forum in beijing. Haidi lets get you a quick check of the latest business flash headlines this hour. A new survey puts citigroup at income. For fixed deutsches, ubs tying for third. The fixed income rate include Services Related to credit in developed government bonds. Telco increasing topries in a bid to attract talent. It says annual pay for scientists and engineers at up to 1 million more than the ceo takes home and that he is regrouping to focus more on Cloud Computing services and less on mobilephone operations. Haidi alibaba has raised more than 11 billion u. S. Dollars in its longawaited sale, shrugging off worries. The offering was covered multiple times and more shares were allocated to individual investors due to strong demand. Alibaba will begin trading in hong kong next week. Coming up next, fed officials stressed threats to the economy remain elevated when they agreed rates. E this is bloomberg. When you rest on a leesa hybrid mattress, bedtime is no longer simply the time you go to sleep. Its time to switch off and catch up. Enjoy me time, and we time. 40 winks or 8 hours solid. 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The impeachment hearings have been told President Trumps personal lawyer demanded a quid delayingith ukraine by a meeting at the white house until they announced an investigation into joe biden. U. K. Prime minister Boris Johnson is being accused of making election promises on the run after a chaotic day of repeatedly where he got tax cut policy details wrong. Several hours later, the conservative Party Headquarters clarify johnsons comments and corrected his figures. Google says it will no longer targetelection ads to voters based on political affiliation. They will only be able to use age, gender, and location by postal code. Google is also updating its ad policy to prohibit misleading and demonstrably false claims. Platforms have faced criticism for running messages with misinformation and twitter has banned political ads and response. Boeing is facing more pressure to decide on the future of the the Southern California factory that has produced fuselages for every 747 so far is closing down and being sold for parts. Triumph group operations, the largest supplier to the program. His decision to wind down work iser years of losses expected to force boeing to consider scrapping its most iconic plane. Carol ghosn says japan has what she calls a hostage Justice System that considers suspects guilty until proven innocent. Lasts ghosn was detained september, and his wife fears his trial may be postponed until next years olympics. Weit destroyed our lives and are scarred forever, and over what. If you think about it, who has won in this . Nissan, you saw how badly they are doing. Reputation is ruined. I dont know what foreign businessmen with think twice about working in japan after what happened to my husband. News. global 24 hours a day powered by more than 2700 journalists and 120 countries. The aussiee how dollar is faring, just hovering while bonds are climbing, pushing the 10year yield closer to 1 . See bshares falling for a second session. For financial watchdog made the yen onng course for a second weekly gain while the offshore yuan is testing a key support level, just trading above 704 this morning after the s p clocked the worst day of the month, sliding while treasury futures remain big. Whatck reminder now of else is on the ecoagenda, we are still waiting on south korean exports for the first 20 days of the month. Shipments have fallen on a yearly basis for south korea every month so far this year and trade figures later will also offer a pulse check on the impact of the ongoing trade war. Experts are forecast to drop 3. 7 year on year. Indonesia largely expected to hold the key rate at 5 today after four straight cuts this year. Bank indonesia at its october meeting with a fed stance leaving less room for the fed to maneuver. It is already 25 basis points ahead of the fed in terms of easing this year. Shery the Federal Reserve agreed to keep its key rate on hold for the for seeable future, but minutes from its october meeting show officials on guard for signs is three cuts have not been enough. Kathleen hays has been pouring over the documents. What is their disagreement . Was there any surprise coming out of the minutes . Kathleen what is important about the minutes is we listened to jay powells press conference, and he came out in the meeting and after making their third rate cut in a row made it pretty clear the economy is in a good place. We are going to wait and see what happens, basically. He never used the word pause, but that is exactly what everyone concluded. In the minutes, there were divergent views, there was a debate, but it looks like the majority came down on jay arells side because many elevated Downside Risks underscoring the case for a rate cut. In other words, they have paused, but they are waiting to see what happens and if they need to move again. Here is a very important sentence risk outlook associated with Global Growth and International Trade were still seen as significant. The risk of a global slowdown remains prominent. At the end of last month, i think people were more confident about the trade deal getting done, phase one deal. After what we heard today from President Trump, maybe it is not as much of a done deal and maybe this is something that this could eventually push the fed toward another rate cut, but of course, its going to have to show up for the domestic economy. Another thing we are showing you here is again a breakdown because when you read fomc minutes, you have to understand what most means. Said they did not think the economy needed this cut. A few were worried about financial instability, the risk of that. Keep rates too low too long, there has to be growth again from the boston fed, maybe from the kansas city fed, because they dissented from rate cuts all year long not the main thing to come out, but it eyecatching. Negative rates have been rejected by the fomc. They do not think it is an attractive policy tool for the u. S. The number two person at the European Central bank also telling bloomberg that the ecb can keep buying bonds without hitting any limits. What is the message here . Kathleen the message is inflation slows, the economy in europe is still weak, they are going to keep going. I think it is not going to reach the limits. Kathleen Asset Purchase Program is what he is referring to. Interesting because this came out after the financial review warned of excessive risktaking by some Investment Funds and insurers in some real estate markets. He said what they need now is that macro potential toolkit for the Asset Management industry similar to what they already have to banks. Shery thank you. The for the democratic debate happens later in atlanta where chief washington correspondent Kevin Cirilli joins us from capitol hill. We know 10 candidates are taking the stage. Who are we watching . Not at capitol hill, im here in atlanta, the site of the fifth democratic president ial debate. This will be a key battleground state democrats are hoping to win. Pete buttigieg, the south bend mayor, his time in the spotlight has booted him to frontrunner status in early caucus states of iowa and New Hampshire. We will see how he draws a contrast not just to aggressive candidates like Elizabeth Warren and Bernie Sanders but also former Vice President joe biden. Up until now, joe biden has largely occupied the Central Place to himself. Would buttigieg with buttigiegs assent comes the opportunity to make inroads with the africanamerican population, something he has struggled to do thus far. What are we expecting in the days and weeks to come . Kevin with regards to the impeachment inquiry, there was testimony on capitol hill earlier today by the European Union ambassador for the United States, in which he says there was a quid pro quo arrangement between the Trump Administration as well as ukraines president. That has drawn significant criticism from democrats on capitol hill, but the president as of now not facing significant pushback from republicans in his own party. Haidi thank you so much for joining us. Coming up next, we are here in beijing at the new economy for for them. We discussed the trade war and other global threats. This is bloomberg. Shery im shery ahn from the new economy form in beijing. Haidi our next guest says as he on is the big winner from the trade war. He is concerned about the new normal when it comes to trade balance between the u. S. And china even if a deal is made. Welcome to the author of the future is asian. We spoke a year ago about the trade war. Could have been talking about it for a long time prior had we understood that we have always been in a trade war with the world. Its not a trade war, it is a tugofwar. Everyone is perpetually engaged in a tugofwar to pull supply chains and value chains onshore as much as possible, to capture the maximum value of production from the services, to bring in the most advanced technology. It has been this way for hundreds of years. This is how empires and superpowers rise, by sort of activating industrial policy and import substitution policy the way china has been doing. The u. S. And china and everyone else have always been in a tugofwar over trade. But that is not with the zerosum world order dictates, right . Its a very good question, but now that we are revisiting everything that has happened since china entered the wto, there is a realization that meant fromry was not its part to sort of adapt itself to norms and regulations such as they were but to bend them to its benefit as much as possible while obviously claiming certain exemptions that have lasted almost up until the present. I think we are revisiting the notion that there really is one global standard shery we are seeing the u. S. Tried to choke the life out of the wto. With the wto still stand in another year . This is something we could have talked about before the trade war workout. There has not been a new doha round that covers everything from services to agriculture and global agreement on Critical Issues like ip for many years. We could be talking about these institutions that are i dont want to say no longer fit for purpose. Any global Multilateral Institution is still vital, it is the wto. The only one that has that binding dispute recognition. Look at how boeing and airbus are still going at it and china is involved in highlevel wto disputes. There is still credibility. It is unfortunate the u. S. Now is taking certain rules to undermine it, but that is an area where you see advisors have gotten him to back down a little bit. I think the wto is still important, but its not central in the bilateral resolution of this trade war. You cannot turn back globalization, right . Becomes selfdestructive, as we are seeing pretty much locally, who benefits from that . As we are seeing pretty much globally. I think its very important what you said, you cannot turn back globalization. A lot of commentators say we are in this phase, a deep, permanent retrenchment of globalization leading to a deceleration of the rate of global trade growth versus gdp growth. Those are very narrow metrics. If you want to talk about the full picture of globalization, you have to take into account Global Capital markets and finance. Whatstake into account going on, you talk about the chinese asset industry growing to maybe 15 trillion over the next decade. A lot of foreign capital wants to come into china. When we talk about trade, i think it is when we talk about trade as synonymous with globalization, that is a huge mistake. There is still a huge upside to financial globalization. Japan and korea and other mature economies have long since done, and after china, more developing markets are going to want to do the same india and indonesia and others. Shery we are already seeing one avenue is very trend focused. Will it still be a Strong Institution . No question. The alreadyinforce tense environment. More withcreates ozzie on then with the United States. We are talking about this u. S. China bilateral trade volume as if it is the central axis of the world trade economy. I think even if you have some kind of recovery or rollback of tariffs on both sides, the degree of suspicion is still very high. The culmination of tpp, which Southeast Asian countries also join, means again Southeast Asia becomes a very multidirectional trade player, to its benefit. Technology is the new battleground. What does that look like in the next 10, 20 years . Great question. , it would tugofwar be nice if we could focus the trade war conversation on what what it has really become about. We do not talk enough about that factor, but technology is a broad category. Again, solar panels are technology, Industrial Robotics our technology, clean energy, all these things where china has been investing hundreds of itlions of dollars, so, yes, will remain very central. The thing is we can already know today what Critical Technologies are, where the highest value added is, where r d money is going, and as we know, it is in ai and semiconductors and we know for sure that one of the consequences of this bilateral trade war is to accelerate chinas efforts to become more selfsufficient in these areas. Lets remember that china can substitute even critical u. S. Technologies, with few exceptions, from japan, south korea, taiwan, right . Three very hightech economies, producers of these components and goods, and that will further accelerate this sort of asianization in the years ahead. Shery you have the Chinese Government pursuing all these visions in technology, trade, the economy. Who will win the tech war when it comes to these different dynamics of two very different civilizations . We have, i think unfortunately, arrived at the portion of the conversation where people think this is a new iron curtain or tech cold war and you have to pick one side or the other. Unfortunatet is an situation. That is simply not the Way Technology works. One controls. There is not bipolar control over Nuclear Weapons anymore. There is not bipolar control over ai. Google and other companies are investing billions of dollars in indian ai startups, which could rival china and america without concerns over data privacy and theft, so we have to really get to where the puck is going, as the saying goes. Yes, there are countries that have more data indigenously like china, but it does not mean the capacity in terms of Software Development programming and so forth is not itself spreading quickly because we see this in the data about how this links to human brains. You can see that if its chinese brains or indian brands or american brands, they are actually globalizing to be firm level of integration, so these technologies are spreading and planting themselves just about everywhere. India Just Announced the fact that its going to have universal facial recognition built into its id system faster than china. Lets not paint this binary picture. Right. Is not a zerosum game. Thank you for joining us. New economy for them being organized by Bloomberg Media group, a division of bloomberg lp, the Parent Company of Bloomberg News. More to come on daybreak asia. This is bloomberg. Shery we have breaking numbers out of south korea. We are getting export numbers for the first 20 days, falling 9. 6 percent year on year. We are seeing to exports declining 23. 6 . When it comes to those imports, also down 11. 2 . We have seen 11 consecutive months of declines and south , and export intensive economy really under pressure. We are seeing exports dropping doubledigitot a drop. Haidi lets get you a quick check of business flash headlines. Aypal set to acquire Technology Hub for shopping and rewards. Its best known as a popular discovery hub that helps consumers find orders as they shop online. The sevenyearold start up a keep its base in l. A. Shery mitsubishi updating the release schedule of its jet, indicating yet another delay. They are still unable to provide a specific timeline for the plane. The mr j has already been pushed back five times from its originally planned debut back in 2013. And seoul at the top of the next hour. Sophie we are headed for a cautious start in tokyo as well and sydney stocks extending wednesdays drop. The latest korean export data not looking to spark enthusiasm. We had the yen stronger against ozzie shares this morning and gold falling over conflicting reports over progress of a trade deal, which pushed the offshore yuan pestis 100day moving average. After u. S. Stocks suffered the worst day in a month, futures are falling across the board. M a is down. 2 while treasury futures are nudging higher on the risk aversion is the 10euro closed at a twoweek low overnight. Thank you. We are here in beijing. Of our bloomberg colleagues are here. Is it fun yet . Its cold. We are still making it. Welcome. The focus on what he will tell us is if he is seeing fallout in the chinese economy. We will talk about hong kong and the impact it has on his client base and try to figure out exactly what the Business Models mean. If we will see some kind of consolidation statement, this is one of the concerns of europe, but if you also look at their client base compared to competitors in asia, it would maybe make sense if emerging regulators are behind it. Haidi looking forward to that interview. She will be speaking with bill winters in the next hour. We are here at the Bloomberg New World Economy for them. Do stay with us. Much more ahead. This is bloomberg. Good morning everyone. We are at the new Economy Forum in beijing. Global leaders are looking at the challenges facing the International Economy. Welcome to daybreak asia. We will have interviews on the World Economy and also china. The winters is here. Bill winters is here. Or areng or you you short on the chinese . Extremely long. There is 6 growth. The pressures are manageable. The economy is very strong. What does the chart play a role in . And roadsid belts projects. We did Renewable Energy contract. We did some very exciting, new age solar farm systems. There is new technology that allows power to be stored overnight. That allows the solar power to be continually delivered. We are creating a Sustainable Energy future. That is the belt and road project. If you look at the role economy, it seems we are on a better footing. Bill it is fragile. There is lots of things going on in the geopolitical road that could derail it. I think it is a reasonably robust economy. We had a few dips. As we get into 2020 and beyond, i think it is pretty good. It feels like we made some of the adjustments to the initial phase of the trade war. Worse on theets things we watch closely, we are optimistic we can avoid a detour back into the bed zone. We are continuing to invest as if the economy will steadily improve over the next 1. 5 years. Youre talking about u. S. And china trade getting worse. Bill the unstable situation in the middle east, the u. S. And china trade getting worse, demand, investments. All of these things seem to be bottoming out right now. What happened in hong kong . Bill you saw the overall level of Economic Activity drop. Retail has been very badly affected. Are feelingclients that. Reported our earnings were actually up in hong kong relative to the Third Quarter of last year. Is the downward pressure on Economic Activity. We could see some more impact from here. Are you monitoring the behavior of the offshore accounts . Monitoring the behavior of the offshore accounts . Bill we have seen very little money flow. ,f you look at the aggregate the performance has not moved. The money is staying in hong kong. People are making arrangements to contemplate some scenario like that. If the protests get worse or stay the way they are, bill it is not the level of protests. I think there is a remote possibility that a structure changes in some way. Talking about u. S. China. If we stay in his trade were without getting into a phase one deal or getting worse, how will that affect the economy . Bill we are steadily adjusting to this reality that some goods will become more expensive. Last night, some of the Companies Said they are really feeling the pain. Was affected. It is hard for them to run their business. Ability and ax reality on both sides that should allow us to get to an agreement. We are going to the holiday season. Is it more likely to get a phase one deal because of how it might affect consumers and christmas . Much right now, it is as sentiment as anything. And theness community thatst community believes investments will kick in. People will start taking actions , increases are pending. It is a behavior thing. The u. S. Trade war changed the World Economy forever because of supply chains and how they have changed . Will they go back to what they were . That changes happening in any case. The confidence of supply from a Single Source from anywhere in the world has produced. People will be spreading their bets and hedging themselves. They will be building more and more at home. Theory thatthe old if we can do it, it will be done best. As always, there is risk and opportunities and costs and benefits. Some of our clients have scribbled to arrange alternative supplies to offset the higher cost of goods. Some are benefiting because they are finding themselves as relevant as they were as a supply chain. Countries like a laser, thailand and india are benefiting substantially malaysia, thailand and india are benefiting substantially. Clients in china and the u. S. Are being affected by the ability to sell their goods at a higher cost. Will the stakes were assets that you want to sell be more present in the other countries . No, our strategy has been clear for a long time. We want to promote the opening in china. The movement of money, the movement of investments, helping chinese investors go out. Helping International Investors go in. That is chinas fear as it is. As much as u. S. And china trade is being disrupted by the between china and the middle east and africa will continue to grow. We are trying to reach the right deal with the right people. We have a 45 stake in this bank. We are going to approach this now. We hope we can do it sooner rather than later. There is a rumor of a bank consolidating with another. Are you going to cede more . Bill the biggest impediment if problem is the capital rules. They discourage banks from getting bigger because of the surcharges of mental capital requirements. Biggest competitive problem is the profitability challenge. The challenge has been getting the regulators to find a way to work it out. We probably need a little more exposure to some of the challenges. The local banks in china are doing quite well. They dont see a compelling need to merge. I think eventually we will get a merger. The common sense is so overwhelming. I think europe had to go through a process of getting the banks cleaned up before the stronger countries were able willing to take on the liabilities. That has substantially happened. The banks in portugal and spain substantially improved. Meeting meaningful corporate business in europe. Our angle is serving european corporations. In the context of brexit, we set of a substantial bank in germany. Is ways russ to participate in that. Brexit, whatf would you offer the next government in terms of the equivalency . What would you need from them . Bill to get the free trade deal agreed quickly. It is great that we can get the deal through the eu. If he gets that field to completion in parliament, there is another year of trade negotiations. That is killing the u. K. As you are agreeing the free trade agreement, dont forget this industry. 84 of the british economy is covered by the goods agreement. As you mentioned, the equivalency is critical. Have you had assurances that this is a priority for renegotiating . Bill i have not heard the refrain that there will be a great focus on that. Theyre going to focus on the trade of goods. I think that is a problem. When you look at your plans in asia across the world, is the big concern that shes executives are not spending . Will the lack of investment lead to the next recession . We have only increase our investments. We have a lot to do. People are holding back. Do you worry about liquidity in the markets russian marc do you worry about the market function as we get to the end of the year . Kerfuffle ine repo the u. S. Is a problem. Some of the fabric of the market is still fragile. We really have not tested the market. We have not had the credit crunch to really test this. I am concerned there is a little more fragility. It is not where it is supposed to be. Banks have severed their childs ties with charities. Do they need to embrace the causes better . Bill the charity that we have been involved with her several years is a phenomenal institution. It has helped literally thousands of entre nous is. Entrepreneurs. It is a great way to promote lookingsing for people to do that. We will continue to focus on that. Thank you for joining us. Is the chief executive of standard chartered. Make s extended that extending that midweek decline. Thenikkei is moving toward 23,000 level with tech players among the biggest players. Drags. The 10 year yield is moving back toward the line, 12 basis points. The lowest since november 5. We are looking to check in on the extending lawsuits for a fourth session and the korean yuan. Exports are set for a 12 monthly drop in south korea. Semiconductor shipments fell more than 20 . For a look at trade figures, those are due later. Singapore is gdp report was out this morning. It was higher for the Third Quarter. Half a percent. Aussie shares are headed lower for a second session. Checking quickly on u. S. Futures. Checking in here. Under pressure. This benchmark suffered the worst day in a month. Treasuries opening higher as the bull flattening continues. This was a twoweek low as growth concerns also weigh. The immediate focus turns to countermeasures in china. Sident trump reporting reporting week set reportin reportedly set to sign a bill sent from congress to support the hong kong protesters. ToPresident Trump is set sign legislation passed by Congress Supporting the protesters in hong kong. Congress overwhelmingly voted to support the bill which may go to the president as soon as thursday. That could escalate tension and competition with china that threatens the longawaited trade deal. The impeachment hearings have been told that Rudy Giuliani demanded a quid pro quo from ukraine by delaying a white house meeting onto unless ukraine carried out an investigation into joe biden. Giuliani was working at the president s direction. Sondland denied any Rogue Movement in ukraine. He said everyone was in the loop. Tax cutpeatedly got policy details wrong. A separate at separate campaign events, he confused the levels of taxes being placed by the government. They clarify johnsons comment and corrected his figures. Google says it will no longer permit election ads to target those based on political affiliation. Campaign notices will only be able to target users based on age, gender and location by postal code. Google is trying to prohibit misleading and false claims. Criticisms for running messages with misinformation and twitter has banned political as in response. Global news whatever hours a day on tictoc and on twitter, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Coming up from the new economy form in beijing, a talk with someone who was one of the biggest conglomerates in the philippines. Coming up next, we will be discussing the challenges facing big tech right now. It will be with venture partner garry marshall. This is bloomberg. Haidi i am at the new economy brm at forum in eijing. This is the challenges facing tech at the moment. You have often questioned whether we have seen this bifurcation for the world of big tech. To internets, even three internet. Joining us to discuss this is gary. Tell us about all this trade uncertainty and unrest in hong kong, is that affecting venture capitalism . Gary i think the investment in chinese Tech Startups have been affected. It is largely due to sentiment. A reality is you are at the end of a very big cycle in china. The Consumer Internet companies, that cycle is starting to end. You are wrapping up more of an Enterprise Technology focused sector. I think where you see some of the impact of the uncertainty is on fundraising. Fundraising for dollarbased funds in china is down 75 yearoveryear. That is probably sentiment. That is sensitive to the Technology Cycles we are in. The u. S. Block of these Tech Companies not only far away but also these ai companies. What is the sentiment like . Do people want to touch these companies when they know the risk is there . They know that the u. S. Will block them from the world. Gary youre talking about companies on the entities list. Large. Is probably i dont think entrepreneurs overseas are concerned about that when making those initial investments at this time. Towhat about the ability scale internationally . Is china a big enough market . Is it still enticing enough . Gary when you look at alibaba, 90 of its revenue is in china. It is a half trillion dollar company. Clearly in china, you can build companies at significant scale. I dont think it is a question of whether you can build the companies. I think it will be that you will start to see Companies Like tikt ok expand overseas. That is a new phase of the Chinese Companies moving outside of china. They are pretty large in china. The Chinese Market allows them to get to critical mass. The u. S. Market used to be the only market where you could get critical mass. If you were the largest in the u. S. , you were the largest in the world. What about Southeast Asia . Gary vietnam is half the size of the other province. You have to put Southeast Asia together. You have a market that is maybe 20 of china in total capacity. It is coming from such a low base. They have two roadmaps. The u. S. Development roadmap and the chinese. Both of them are nice primers. What is more enticing for these emerging markets . You see the u. S. Trying to blacklist all of the chinese tech, the chinese tech expansion. At the same time, there are reasons these consumers abroad by chinese tech. T is buy chinese tech it is more competitive. You have a political system in the u. S. The u. S. Has never had this before. You have a low trust administration and the u. S. That are acting with a low trust system with china. When that happens historically, that does not end well. You have to separate that from the u. S. When you try to block all chinese technology. That is not the case at all. I think the capital flows from those institutions. The ones in china are still very substantial. Over 80 of the risk has come from the United States over the last 10 years. Should the massive amount of investment to that china is putting into things like ai be seen as a threat . Gary no. This is my greatest frustration. When you have a system that has people that dont trust each other, you have to establish places you can rebuild that trust. Lets combine resources on Cancer Research and what are the rules for ai and jean that. There is gnet. 82 of the World Venture capitalist invest in china. Companies,private they have to come together to establish the rules of the game. Companies are established in the u. S. And china, these two countries have to come together to establish the rules of the game. The entrepreneurs and senior players want to do that. Right now we have a political system that is making that more difficult. About thetalking Global Cryptocurrencies on the panel. Mark zuckerberg is making the point that if a company like china,k does not go to china will do it. Make a not cryptocurrency, china will do it. Gary on the cryptocurrencies, china will not allow a cryptocurrency to suddenly to open its capital account. China will have its own rules on cryptocurrency. I think we have to distinguish whether or not we should have a bal policy or a global. Global cryptocurrency exchange. Steps thatre are two will have to occur in this. Youll never get agreements at this point in time. That is inconsistent with chinas capital account policy. Labor has so much opposition right now. It spurring every other government out there to make their own cryptocurrency . Gary it is causing people to think about this. Trailingts have been when it comes to technology. It is like a Nasa Space Program and things like that. Policy follows technology as it goes into the marketplace. This is one that i think is important enough. The policy is keeping pace with the technology. I think it was a wakeup call. The fact that we could have more private exchanges, that could be the best path. Thank you so much for joining us in beijing. Is new Economy Forum organized by bloomberg. We do have breaking news. We are hearing that softbank is seeking 2. 3 billion in financing from banks. Loans are said to be part of the companys regular financing. The nikkei also reporting earlier that softbank is raising money to pay for a 3 billion tender offer. They will pay for that share with that. We are live in beijing, this is bloomberg. This is daybreak asia. The new Economy Forum in beijing. Lets go to the first word news. Policymakers are elevated risks to the economy even as they agreed to keep Interest Rates on hold after a third cut this year. Weakening global trade was a concern and slowdown was weighing on the the rest economy. Until theree a halt is any Material Change in the other. Signs of a recovery in singapore where the economy expanded at a faster pace in the Third Quarter than earlier estimated. The final gdp reading showed growth of 1. 2 from the previous three months. Much better than an earlier projection of 0. 6 . The Central Bank Says the policy is appropriate to the moment but it may change as the economy evolves. Shownkorean exports have a monthly decline. Shipments during the first 20 10 of november fell almost from a year earlier. Deliveries to china, south koreas biggest trading partner dropped more than they percent. They account for the largest share of exports and they sell felt like almost a quarter. General motors has a racketeering cost gmand racketeering billions of dollars. They said they would vigorously defend themselves. That rattled investors. Both carmakers are slumping in u. S. Train. Boeing is facing more pressure to decide the future of the jumbo jet. Also, the factory that has produced fuselages were every 737 so far. They were the biggest supplier from the 747 program. Boeing is considering scrapping its most iconic plane. 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. This is bloomberg. A mixed picture across markets in asia. Lets turn to sophie for a check on the markets. Sophie lets check on the terminal here. Asian stocks extending. Latest exports david. Data. The yen is headed for a second weekly gain and off share yuan trading weakening. Shery thank you so much. President is expected to sign ino law a bill that is support of hong kong protesters after it was overwhelmingly passed by both chambers of congress. Potential problems as this could affect the trade deal. The trade you could be coming to a conclusion soon. We are going to hong kong with the latest. The legislation basically would require the date of Apartment Department data rtment to say that hong kong remains autonomous. It would justify that special trading relationship that hong kong has with the u. S. It is treated differently than the rest of china. Symbolically, it is a warning from the u. S. Congress to china that they are taking this situation in hong kong seriously. They dont want to see a crackdown from china. A bit of a warning that they are paying attention to what is going on. President trump is expected to sign this. There could be possible retaliation from china if this were to pass and be signed into law. This will certainly heighten tensions between the u. S. And china. Another area where there will be escalating tension. Thank you so much for that. That was Jodi Schneider in hong kong. That is setting up a confrontation with china that could slow down a trade deal. What is the latest on the trade negotiations with this phase one deal we have been hearing about for so long . You might think this is funny, you might think this is depressing. That deal was supposed to be side last week at the aipac meeting in july that never happened. Chile that never happened. It is in a sensitive state right now. The hong kong bill passed with exactly on eno one no vote. President trump is going to sign that in some fashion. The talks are in a very sensitive stage. It does bring in place the idea of this december 15 deadline. That is when tariffs are supposed to ratchet up. President trump was in texas at an apple factory and he said he is looking at exempting apple. Rom tariffs the december 15 stuff is going to hit some apple products. He said if you want to treat apple and samsung on a roughly he said that you want to treat apple and samsung on a roughly even plane. The president could exempt apple from all of the things coming up next month. The forum is key should we see a meeting between trump and xi anytime soon . We have been waiting for details on when that would get rescheduled. It has been a few weeks. It is interesting to me that we have not gotten anything firm on this. Both the u. S. And china have been looking for that meeting to be set to sign something rather than that being set to finish that discussion and then sign it. The very announcement of the meeting would be a signal that the trade deal was basically bait. Baked. We have not seen that. The more that you dont see that, the more and more that december 15 date seems to be in play. We appreciate your time. That was derek. , one of thext philippines biggest conglomerates joins us. We are live in beijing, this is bloomberg. This is daybreak asia. Economyry at the new forum in beijing. Haidi i am haidi. Isning us here in beijing teresita. She is the vice chair of sm investments corporation. Seen the trade deal . Mpact your business [inaudible] what about sentiment . Teresita sentiment . Ofhas affected the sentiment investing in the philippines. This. Ors want to see we hope the trade war will not be too long. What about the investment or business in china . You do have shopping malls in the cities. Do you see any impact . Teresita a little. Not much. The business is still doing ok. Does that mean youre not really feeling that chinese consumers are spending . Not much. The threat would be into investment disruption. Not so much from the trade war. I think we are ok. Why do you think it is the digital disruption . Us, weas been affecting are also going that direction. We are hoping to be an only child. The last time i was here in china, it was not affected by a lot of competitions. We are still doing ok. Do you think that china is getting affected from the trade war . The crucial elements . It is more of a sentiment at this point. We have not fallen that much. If it is long, maybe we will kill it. What do you think the challenge is going into next year . Teresita the prolonging of the trade war problem and sentiment. The sentiment is the most important. People buy with emotions. His sentiment being affected by the hong kong unrest is sentiment being affected by the hong kong unrest question marks teresita not as much. I am not going to go into that. It is more china centric that hong kong. You are such a large conglomerate. You have businesses everywhere. Whether it is shopping malls or retail. Where are you seeing changes that are any pockets of concern as you had to 2020 head to 2020 . Teresita it is digital disruption. It is slow but it is coming. We are also catching up. Who is the biggest disruptor at the moment . Have a bigt influence yet. Maybe as the years go by. What is your goal for Internet Sales over the next five or 10 years . Teresita we hope to have about 20 . 10 or 20 . Shopping centers, it is the social interaction, the bond of getting together. Digital, what would be the structure . There is the rise of the affluent markets. The ones with more purchasing power. We have the chinese there. What sectors of retail are you being trained in . They are ok. Isthe philippine economy getting estimates, it is accelerating. We are above that. We have nothing to compare about complain about. Is government policy supportive. I think our government knows what they are doing. We are enjoying it. Where are you seeing the opportunities . If you see strength in all different sectors of retail, does that mean that you also want to expand your business . Teresita we are looking at for an investment. That is affected by the trade war sentiment. We will wait. Where would you invest . This is growing. The middle part also follows. Growingou thinking of organically or inorganic late inorganicly . Both. The competition commission. Not many of us are growing that fast. Let me ask you about your construction business. Our residences are doing quite well. Bank arets of the doing well. Life from the new economy live from the new Economy Forum in beijing. Coming up next, one year out election, the democrats are holding their fifth tv debate. What to expect from the candidates. This is bloomberg. This is daybreak asia. Inm at the new Economy Forum beijing. This debate begins in atlanta. Kevin cirilli is on the ground. Whowe be watching should we be watching . This will be the first time that thatthis is the first time the democratic debate will be drawing a contrast with not just Elizabeth Warren and Bernie Sanders but the other centrists in this race. The people to Just Campaign has gone all in Pete Buttigieg campaign has gone all in on iowa. He has surged to the top of the polls in New Hampshire and iowa. Has risen Campaign Questions about his level of experience. A have been forced to draw a contrast at how it will engage with the African American community. In georgia, the africanamerican electorate is something they the democrats hope will coalesce behind them. I just spoke with tom perez, he told me as much. Beyond that, senator Elizabeth Warren, how will she as are questions about her medicare for all plan . There have been several top have this democrats who come out against that. She has been tried to moderate some of her messaging, not necessarily her policies. Trying to moderate some of her messaging, not necessarily her policies. We are almost a year out from the election. Who are some of the favorites and the big topics . The trade deal, the situation in hong kong. Mind fort the top of the dented its candidates . As we speak, that impeachment inquiry is going on on capitol hill back in washington dc. Is veryeachment hearing much driving the political discussion all throughout the United States. These toptier candidates, Elizabeth Warren, Bernie Sanders, amy klobuchar, Pete Buttigieg, they will have to for timeith compete as the impeachment inquiry intensifies. Aston martin will make its next first suv. Luxurydel competes with rivals like bentley, rollsroyce and lamborghini. Speaking to Tom Mackenzie about launching this in china. Nothing like this has come out in europe in 106 years. It is very meaningful. It is a clear indication of the importance of the Chinese Market not only to us but the whole luxury business. The suv is the predominant body type in china. Asthe suv part of it is crucial as you say, who are you looking at . I admire what the team has done. Many of their customers are female and many are male. Well see that mix we dont see that mix in the world. They were able to bring women into the fold here. This doubles their markets. If they can replicate that elsewhere in the world, it is a very powerful message. The ipo in 2018, the shares are down about 70 . How crucial is this to reviving astons fortunes . It was launched on growth. 2019, they are 13 up. We talkedwing but about the ipo. We talked about this fourthquarter growth, that started with the suv. Launching this car will be an important demonstration of the promise to grow. You got a sense of the sales target of the dbx over the first few months . The Maximum Capacity in the factory is 5000 units per year. Average aroundn 4000 units per year. It is a big leap up in total volume. Closestok at our competitors and how they are performing, though sales targets look relatively modest. You talked about the contest competitors. Whatever margins can they offer the company . What kindlar in of margins can they offer the company . It is similar in pricing. What dbx does is it expands volume. Car is the midengined car. That was the aston martin ceo speaking with Tom Mackenzie in beijing. Lets get a market check with sophie in hong kong. Sophie asia stocks are underwater. The nikkei is headed lower for a Third Straight session. Year treasury yields are off three basis points. Has a 100 peruan day moving average. Hong kong is being used as a chip in the trade war. On specificng details from china on countermeasures as the u. S. Is closer to enacting legislation that will support the protesters in the city. Coming up here in beijing at the new Economy Forum, the president of the Asian Infrastructure bank is joining us as well. Thee will be live here with ceo and the senior fellow of uber. That is it from daybreak asia. The market coverage continues. This is bloomberg. 9 00 a. M. In shanghai, singapore and beijing where the new Economy Forum is underway. I am Tom Mackenzie. I am david. Trade in hong kong is up. Lets get to your top stories today. Congress defined china and enacting the protest movement in hong kong. President trump is expected to sign the bill into law. The outcome looms over trade talks. There are warnings that they could easily collapse at any point. The latest testimony at the impeachment