Transcripts For BLOOMBERG Bloomberg Best 20240713

Business, finance, and politics. Jin liqun in the presentday world, only cooperation is the answer. For the first time, this generation realized there is no planet b. This invasion portfolio, we have to have a lot of bets, knowing that some of them wont succeed. This innovation portfolio, we have to have a lot of bets, knowing that some of them wont succeed. Viviana it is all straight ahead on bloomberg best. Hello and welcome. I am viviana hurtado. On this edition of bloomberg best, highlights from the Bloomberg New Economy Forum. Global leaders gathered in beijing. They exchanged ideas, examined opportunities, and addressed challenges facing society, this at a critical moment of economic transition. On the agenda, issues including trade, technology, climate, urbanization, and much more. Chinas Vice President , wang qishan, set the tone in his keynote speech. He warned against protectionism. Vp wang qishan [speaking foreign language] translator we should pursue common, comprehensive, cooperative and sustainable security and reject zerosum games and cold war mentality. Viviana some of the worlds most influential people in banking and finance shared their thoughts on the Global Economy and capital markets. Lets start with Goldman Sachs ceo david solomon. David i think one of the big issues, when you think about Economic Growth in the medium and long term, is the u. S. And china finding a way to coexist more productively economically. I think there is a good chance that we will see progress from the trade discussions. Ive been fortunate to speak with policymakers on both sides, and i am encouraged. I think we can probably expect the progress to be in stages, but i am hopeful that we will see progress, and i think is important here in china, the chinese realize it is important for them. The u. S. Realizes it is important for the u. S. And, candidly, for Economic Growth around the world, given the size of both economies it is , important for everybody. Francine does the phase one deal lead to a phase two . Does it mean something concrete for the World Economy . Or is it just status quo . David i think we have to hope that, over time, in a world where both these economies are super important to global growth, that we can find a way to make progress on all these issues. And so, certainly, a step in a positive direction is a step in a positive direction. You know, i am a glass halffull guy. I am going to assume that it is in chinas interest, it is in the u. S. Interest, and the Global Economy at large, it is in its interest. We should see progress over time. Francine talking about hong kong, you were just in hong kong, and you postponed a party there. David we had been celebrating around the world this year the 150th anniversary of Goldman Sachs, and we have been having events in cities to celebrate or commemorate that with our clients. So we did postpone an event in hong kong. But i spent some time in hong kong, and it is a very complex, multilayered situation that we are watching very closely. I was glad to spend some time in hong kong with our team. We have over 2000 people on the ground, and i would say that, when the routine people experience in a city like that is disrupted, it is tense. So i would say it was tense. It was quiet. There were not as many people out on the streets. You could clearly see the impact on the economy. We are watching this closely and hoping for a resolution, because i think that is good for everyone. Francine when you look at your very wealthy clients in asia, are they impacted by the u. S. China trade war . Do they invest less . Is that the biggest problem for the economy in 2, 3 years . Tidjane i think it has a number of impacts. One, it has reduced visibility, so it is more difficult to make longterm investment decisions. On the positive side, it has led to a lot of restructuring of trade flows in asia. If you look at countries like vietnam or the philippines, a lot of clients have operations already in those countries, so they can shift production and manufacturing from one country to another, so you have seen a interest d of trachinana trade in trade from that but we hope for , resolution. Francine so do supply chains change . If we have more than a phase one, does the supply chain come back to china . Tidjane im not sure. Actually, i worry that some change will be irreversible. You know, because once you the reason why it is so important is it gets results. Francine every time i talk to you about consolidation, i talk to about negative rates. Is consolidation going to happen because of negative rates . If we have a Banking Union . Tidjane it can be a positive factor. But at the end of the day, what we need is growth. This is why the focus on emerging markets is very important. We are focusing on entrepreneurs in emerging markets to create wealth growing them ultimately is the answer. Consolidation and costcutting is necessary in europe, because we probably have too many banks, but longterm, the future of european banks is to win outside europe. Tom do you think there is a likelihood the two sides can come together on phase one by the end of 2019 . Jin liquin i think certainly phase one is to be congratulated. That is not enough. I think we need to move forward, to see how these two big economies of the world can work out their differences. And we, in the bank, promote a multilateral approach to development. We promote investment in infrastructure, which can include connectivity, which is essentially to promote cooperation on a regional basis. On an international basis. So i do hope these two countries will work out their differences and move forward. Tom you still very much have your ear to the ground. What do you think as a key Sticking Point at this stage in the talks . Jin liqun you see, my view is that, in the presentday world, only cooperation is the answer. By working together, sorting out their differences, looking at the Common Ground they share, i think all this is important. If people look just at the very narrow, shortterm interest, that would be very hard for things to work out. Tom it looks like we are very far from that. At this point. Jin liqun i would say initial phase is encouraging. And i think both sides understand how big a stake they have in maintaining the very good economic and trade relationship, and the rest of the world is watching. These negotiations, discussions. So we, as a development bank, we really like to work with all of the countries promoting economic cooperation, regardless of membership. Bill we have obviously had a dip. I think that dip will persist for a little while. But the outlook as we get into 2020 and beyond is pretty good. It feels like we have made some adjustments related to the trade war. Obviously, if things get worse on any of the fronts that we all watch quite closely, then it could be different, but we are optimistic that we can avoid the detour back into the bag zone bad zone. And i can tell you, at standard chartered, we are continuing to invest as if the economy will improve over the next year and a half. Francine talk to me about u. S. And china. If we stay in this trade war without getting a phase one deal but without if getting worse, what does that mean for the World Economy . Bill i think the world has adjusted. I think supply chains are steadily adjusting to this reality. That some goods will be more expensive. We are seeing, as recently as last night, some of the Companies One was identified that was identified as a result of a visit from President Trump was apple. It is very difficult for apple to run their business. That is not a good thing for u. S. Consumers. Flexibility on both sides should allow us to get to an agreement. Francine has the u. S. China trade war changed the economy forever because the supply chains have changed, and will the supply chains go back to how they used to be, if there is a resolution . Bill supply chains are evolving anyway. China is not the lowcost producer of a number of goods any longer. It is a much more prevalent highvalue added producer. That change is happening. The world is changed forever. I think the confidence of supply from a Single Source for anybody in the world has reduced. So people will be spreading their bets, they will hedging themselves, they will be arranging alternative supply chains, and they will be im afraid they will stay more and more at home. I say im afraid, because we all know the that old theory that things should be done where they are done best, and there will be less of that. Viviana still ahead, much more from the Bloomberg New Economy Forum. Business executives from around the world explore issues of impact in the new economy. We have had a lot of discussion do supply chains move . Consumers are doing well. They continue to trade up. Viviana up next, populism, protectionism, and the evolving relationship between the u. S. And china. Ray we are at a point, i think, that is very similar to 1944. Gary i think we are having a trade skirmish. Hank i believe we are now headed in precisely the wrong direction. Viviana this is bloomberg. Viviana this is bloomberg best. I am viviana hurtado. We are looking back at the Bloomberg New Economy Forum. One of the events most provocative Panel Discussions was called a new capitalism staving off class warfare. On stage, luminaries, including Bridgewater Associates ray dalio. Ray i think the period we are in is unique. We are 10 years into lets take technology. Technology is, Artificial Intelligence and so on, is replacing people, and it is great for the whole, but it changes the nature of the environment. And that is going to happen. A very important implication in the years ahead. As far as the shortterm debt cycle, or the business cycle, we are 10 years into this expansion. And many of those stimulants that happen will be dissipating. We wont have more Interest Rate cuts, better material, you wont have more tax cuts, and so on. And this is true around the world, as we have our obligations. So we are coming into this period that is sort of a big sag. Not a debt crisis in that way. But a lot of obligations that are coming at us, particularly in the mature reserve currency countries. They include pension obligations, healthcare obligations, and the like. Large deficits which will have to be monetized. They will print money to deal with that. There is a reserve currency issue. And then, of course, we have the external conflict, or the issues of the rising of a great power rising and of china the United States having its, that say, relevance decline. So we are at a point, i think, that is very similar to 1944. There is a war. After a period of war, there is a period of peace, because nobody wants to fight the country that has won the war, and there is a new world order. And there is a new Monetary System. 1944, we established the dollar reserve currencybased Monetary System and the like, and i think all of that is going to really change the world order in dramatic ways in the next 10 years. Viviana many guests at the new Economy Forum have occupied crucial roles in finance and government. Both hank paulson and gary cohn went from wall street to washington. Paulson went on to establish the paulson institute. It aims to foster a stable relationship between the u. S. And china. When he spoke about the current state of that relationship, the former treasury secretary had blunt words for both sides. Hank i believe we are now headed in precisely the wrong direction. We are headed for more decoupling, not less, despite professions of constructive intent from washington and beijing. Last year at this forum, i spoke of the barriers to the flows of goods, capital, people, and technology. Some predated the current trade disputes, others are a result of it. Flows of goods, for example, have been impeded by the failure of china to open big parts of its markets to foreign competition, and they have been further impeded by unilateral or retaliatory tariffs from both the u. S. And china. Beyond goods, i also warned about interruptions to the flows of people. And indeed, these have been impeded by new restrictions on visas, peopletopeople exchanges, and the interactions of students and scholars. But what concerns me most is what has happened to the flows of capital and technology over this past year. Both areas are vulnerable to significant negative headways in both areas are vulnerable to significant negative headwinds in the form of policy changes under consideration in the u. S. And china. Put simply, china must open further. It needs to resist the defensive temptation to protect domestic firms that would become stronger if they are subjected to best in class foreign competition. But washington needs to resist some temptations, too. Decoupling china from u. S. Markets by delisting chinese firms from u. S. Exchanges is a terrible idea. Viviana former Goldman Sachs president gary cohn served as chief Economic Advisor to president donald trump. In an exclusive conversation with francine lacqua, he shared his insight on trade. Gary i think we are having a trade skirmish. I think the two sides have some disagreements on trade, but if you look at what is going on, the two countries are functioning. There is a lot of trade still going back and forth. The United States is receiving the goods from china that we need to have a fullyfunctioning economy, and our economy is functioning well. I hope that we get a phase one deal done, and i think it is in everyones best interest to get a phase one deal done. Francine supply chains have moved, have they not . From china, they are going elsewhere. Gary that is a natural business cycle, and i think that makes sense. The supply chains have moved. Maybe Companies Got too concentrated in one market, and maybe we are seeing more global diversification of supply chain, which, in the end, probably is a good thing for companies to be more diversified about where they get their products and where they get their supply of goods. Francine ok, but if you have lasting for, say, 5 years to 10 years, that must hurt the World Economy. Gary im not saying its a good thing. Dont interpret this as a good thing. What im trying to say is everyone talks about how dramatic this whole trade confrontation is. It has an impact. But whenever you have impacts, when countries are disagreeing in some fashion, markets make up their own mind what they need to do. Markets have very quickly made up their mind. Companies have made up their mind. Look, we need to diversify our supply chain. We cannot be as dominant and dependent on one country or one supplier as we were in the past, and we got to create more diversity, which, netnet, is a good thing for the system. Yes, it is having economic consequences, but it is not the only thing going on in the economy. Francine ok, you have worked for President Trump. How does he view china . Is this a supremacy 10year trade confrontation, or is it he wants a deal, and he wants it fast, if the chinese play by the book . Gary i think he is more interested in getting it right in the long term. That said, he understands how important it is to get the farmers back to work in the United States. We have a big agricultural economy in the center of the United States. Our farmers need to be exporting farm products, and our farmers have gone through a very tough cycle here, losing export share to china. Our farmers need to get that back, and they need to get that back by next summer. So getting a phase one deal done would allow farmers to get back into the growing cycle, would allow farmers to export back to china. The chinese need to import food, so the question will become, who are they going to import from . I think importing it from the United States is very important. The president understands it is a shortterm phase one fix, getting our farmers back into the cycle and selling to china is important for the short term. Viviana you are watching bloomberg best, coverage of the Bloomberg New Economy Forum. I am viviana hurtado. Here is another Panel Discussion at the forum, caught in the middle. Bloombergs Haslinda Amin moderated this session. It focused on countries facing unprecedented challenges. This as they make the transition to a new economy in an increasingly divided world. Haslinda for a very long time, the smaller countries have desperately refrained from making a choice between the u. S. And china. Are they getting closer to the time when they have to make the choice . Piyush haslinda, the reality is they cannot afford to make a choice. They cannot do that, because, from both capital and trade, these small countries are tied to the bandwagons of both large economic entities, the west and china. And so the minute you make a choice, you give up 50 of your capital flows and 50 of your trade flows. And that is not a recipe for economic success. Haslinda we know africa has been impacted by the u. S. China trade war. Growth is down, Investor Sentiment is down. Commodities, currency also down. In such scenario, has the u. S. Reputation in africa been impacted . And has chinas standing been boosted . Zouera what we do know is, as a continent, africa is not based on ideology. People will pick who the better partner is and who is coming up with better deals, better and more deals. And china has been very active lately in africa. So has russia. Interest in africa in ways we had not experienced before, in different forms. So, really, like piyush just said, i dont know that there is a choice, like it is either or. It is really going to have to be a mix of both. That africa will have to deal with. Haslinda opportunities are increasingly in the east. What are European Companies doing, and what is dictating those choices . Is it more political values or is it more hard nose business calculation . Sergio well, actually, if you look at what happened in the last few years, the interlink in the euroasian dimension has grown dramatically, so i would say that relationships and trades, particularly when you look at infrastructure and investments, the balance between u. S. Europe versus east and europe is coming up almost at the same level. So i think that europe cannot afford, at this stage, to be cut. So we need to continue to develop sound and sustainable relationships with both sides. You know, we are way too dependent on both for growth. And ongoing business. I dont think it has to do with ideology. It has to do with business. This is very clear. Also, fundamentally, i dont also believe that we will ever be facing a situation in which any country has to pick a side. China and the u. S. Have no interest to create such a dramatic break of relationship. It is going to be extremely damaging for both, and, therefore, it is more tactical than strategy. Viviana there is much more to come on bloomberg best from the new Economy Forum in beijing. A conversation with the worlds richest person, bill gates, on solving the worlds most pressing challenges. Bill the free rider problem has never been worse than it is in climate. Viviana plus, how business will shape the new economy. Top executives speak frankly about the road ahead. Jaime i think everyone has seen that they need a china plus one market. Gary clearly, within china, you can build companies that are at significant scale. Viviana this is bloomberg. This is a special edition of bloomberg best. We are focusing on the Bloomberg New Economy Forum. I am viviana hurtado. The goal is to stimulate productive, fact driven dialogue among participants to develop Actionable Solutions on important global issues. Executives from a range of industries around the world coming to beijing. Here is some of what they had to say. In the china markets, we are viewing our customers, where are they going with their demand, where do they see their changes . And there has been a lot of discussions. Do supply chains move as trade and tariff negotiations go forward . Will you see supply chains move, customers move production . We have not seen that. We continue to serve customers in china with their plans here. 70 of our revenue is designed and or specified in our customers bill of materials or processes they use. That tends to be very long cycle demand from them. And that is staying here in china. One of the most difficult markets for you, though, was china. So what made it so difficult for you to gauge customer demand here . It was really, we saw a softness in two end markets in china. They happened to be very important and large. It was the automotive industry. The build rate of automobiles in china, and globally slowed down. ,it declined significantly in 2019. It has been staying soft all year. At the same time, electronics softened as well. Between china, electronics, and automotive globally, it is 30 of our revenue that we saw slowing. We had to make adjustments in our plans as we went through the middle and latter part of the air. What are you seeing Going Forward . Will you see that demand, especially the automotive part, come back, say, next year . Inflections first. We see downturns early. And we tend to lead out as well. Many economists ask us, what do you see and do you see anything changing . As we come to the second half of 2019, it has been pretty steady. As we came out of our Earnings Call out of q4, we told everybody we see q4 much like q3. We have not seen the inflection up yet. There is hope and optimism that things will get better, but we have not seen that yet in the marketplace. Continue hiking prices, if we are in a global trade war are you worried that , the consumer at some point will stop drinking less . We are not economists. We are brewers. As long as our economies are doing well, they continue to trade up. That is something we see all of the world. In less mature markets, and more mature markets, in all those markets, there a segment of consumers looking for the next opportunity. Francine talk to me about supply chains. Have you had to change or supply chains because of the u. S. China trade war . Not really. Is of what we produce sourced locally. We source locally and we brew locally. In contrast when there is a tax on aluminum, that impacts our business in the u. S. Where most , beers are sold in cans. That is a tax on the consumer. Worst of all, that is a big disadvantage for the mach 6 brewers. Francine i know youre doing a lot on sustainability. Tell me why this is not pr speak, this is for real. Overall, it impacts water security and beer making. Sure. No water, no beer. It is that simple. Sustainability is our business. No farming. Beer, we are a community business. The thing is that we talk about consumer changes one of the biggest changes are seen with this new generation is that, for the first time this generation , realizes there is no planet b. There is only planet a. And if they were worried about what they do that can impact the planet and what companies and they work how together to try to have Lasting Impact in the world we live in. Our brands are all connected to a business that is good for business but also good for the environment. Is all this sentiment being dampened around the world, is this having any impact on your business . I think it is making everyone far more conscious about areas of inclusivity. All our businesses have to understand that inclusivity, social tensions, these are issues that we have to take into account in our businesses. They are sensitive issues, and these explosions that are happening all around the world are happening for reason, and as businesses, we have to be sensitive to them. How are these countries being affected by the shifts in supply chains away from china as you continue to see these trade tensions with the u. S. . Definitely these shifts are taking place. Everyone has had a china plus one policy in manufacturing. Everyone has a china plus one policy and manufacturing. We have plants in china and the philippines. We have seen an influx of manufacturing people who are moving out of china. Just a balance out the equation. But we are not the only ones. Vietnam, i think, is a beneficiary, thailand is a beneficiary. Everyone has seen they need a china plus one model. And Southeast Asia is a perfect venue for some of these manufacturing groups to move into. Francine do the hong kong protests actually curb your appetite for china at all . No. Hong kong has had a variety of challenges over the years, politically and otherwise. And this is clearly a serious one. The largestf companies in hong kong, and i am sure everyone that sits here says theyre watching a very carefully, and we are. Im not going to try to predict the outcome. It is certainly changing in nature. But no i think there is an outcome on the horizon that we return to something resembling normalcy. We have been in hong kong since the early 1960s and in china 20 years, so it is not the first thing we have weathered. Francine when you look at the u. S. China trade war, does it actually have an impact on how many people want your products or not at all . Great question. We are seen as a u. K. Firm. We are still listed on the ftse we do not do u. K. Business anymore, but we are listed in the ftse stock, and it has our headquarters. That definitely is a respected structure in this part of the world. U. K. Governance is a well proven model. And the Risk Management for those sorts of tools we brought here and, i think, are seen as best practice, which is a great thing. Peace it slows down how long it takes the consumer to make a decision. It also increases the likelihood they stay with us. In the investor perspective, consistency, the likelihood of making that second or third a fourth payment, because people are riskaverse. So decisions take longer. That is true anywhere in the world, in the u. S. , the u. K. , Southeast Asia. We have seen that pattern emerge across my 25 years with the group. Viviana you are watching bloomberg best, a recap of the Bloomberg New Economy Forum. I am viviana hurtado. Here is another Panel Discussion from the forum. Carlyle group cofounder David Rubenstein moderated a session. It featured global tech leaders examining chinas significant strides in technology and innovation. David if i wanted to invest in young Artificial Intelligence companies, should i go to china to find them the United States, israel . Where would i find the best one . Yes, all those places. In fact, we released a study a couple weeks ago about where ai was in the global scene. There are number of countries that are leading. There is no question that the u. S. Is the farthest advanced. However, china has, as a national priority, made leadership, or at least collating in ai, a huge priority for their stem related fields. They are perusing many, many more articles, patents, and computer scientists, so there is every reason to believe china will be a leader as well. David and do you think women have as good a chance to rise into Technology Companies in china . Sure. David do you go out of your way to hire women or are they going to get hired anyway because they are equally talented, a crosssection anyway . We should create a more friendly and pharma for what for women. A lot of them, when they give birth, we create a work from home environment for them. One technology which i would really look forward to is to invest in ar or vr. Replicate this atmosphere at home. You can have the full experience at home. This is emotional, right . The bloomberg forum. If we could replicate this at home, it empowers all the women. And i think it solves all the problems we talk about at this forum. I think technologies can empower a lot of things, including women and womens careers. David the china dispute with the United States on trade you are probably familiar with it has it affected you in any way, or do you really care whether it is resolved in the near term, or will it not affect you one way or the other . Well, it has not affected us, per se, but it is actually kind of dangerous. The way it is going. And if there is really going to be additional sanctions or the two countries actually go farther apart. Because i think, if you look at technology advancement, i know all we are talking about is innovation. Innovation really happens when people collaborate. Even if you look at china, the tech industry, right . To the point a lot of grassroot entrepreneurs who know about the market. But, at the same time, there a lot of engineers and entrepreneurs who have had experience in the states and come back. And the capital. Like you are a company, and a lot of them are associated with the states, bringing in experience. Biodiversity is actually very, very important for innovation. As chinas economy becomes more open, the opportunities for local entrepreneurs and Foreign Investment multiply. The countrys tech sector has produced giants like tencent and alibaba. Smaller companies and new businesses are also on the hunt for capital. All this against a background of security and privacy concerns ratcheted up by global trade tensions. Bloomberg spoke with several guests at the new Economy Forum about established and emerging about the established and emerging technology and investment scene. All of this trade uncertainty this unrest in hong kong, how is affecting Venture Capital and chinese Tech Startups . Investments in chinese Tech Startups have been affected, but it is largely due to sentiment. The reality is also your art you are at the end of a very big cycle in china. So the Consumer Internet companies, that cycle is starting to end, the sharing economy cycle is starting to end and youre rounding up to an enterprise focused cycle. There is a natural slowdown that would be occurring anyway. Where you really see the impact of uncertainty is on the fundraising. Fundraising for dollar based funds in china is down 75 yearoveryear. I think that that is partly sentiment and, again partly , sensitive to the Technology Cycles we are in. Shery especially when you have the u. S. Coming in with some blocking of tech companies, not only huawei, but also these ai companies. What is the sentiment like . Do people want to touch these companies when they know the risk is there, that the u. S. May block them from the world . Youre talking about the companies on the entities list, and huawei and some are quite large. If you look at the startups affected, youre talking tenths of a percent. I do not think on entrepreneurs or vcs are particularly concerned about that when we are making the initial investment. How important, then, is the ability to scale internationally . Domestict is just a play, is it enticing of enticing enough . Gary if you look alibaba, 90 plus percent of its revenue is in china, and it is a half trillion dollar company. Tencent is a 400 billion company, so clearly you can build companies at significant scale in china. I do not think it is a question of whether you can build the companies. I think it is going to be you will start to see Companies Like ic. Ly tictoc music. Ly tiktok expand overseas and be more successful overseas. I think that is a new phase of the chinese Technology Companies moving outside china. They are pretty large inside 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 to critical mass. If you were the largest in the u. S. , you were the largest in the world that is no longer true. Lets talk about alibaba. Why list in hong kong now . It is a shot of confidence in hong kong as a financial center. It is basically bringing together the information zone and the trading zone. Trading has always been in new york for the stock, but the information zone is really china. Alibaba is fundamentally focused on the Chinese Market. It is really focused on china. People in china know it a lot that are that even Institutional Investors might have to learn in the u. S. How much does this help alibaba in the eyes of beijing . It is certainly not unhelpful. These days, as we are hearing the power of the states, the , power of the party, one has to follow the party line, or get ahead of the party line, to some extent. Jack ma has always interpreted pretty well where things are moving in business and government. So this is a helpful move, i think. But it also makes sense for them to have aroundtheclock trading of the stock. And also tapping into the chinese mainland consumers who want to buy in to the stock further. As we see this bifurcation of chinau. S. Trade, this bifurcation in tech, even, how is this affecting the dynamics of where we are headed in this Global Technology battle . It is almost a trifurcation. I am not sure if that is a word. What does the rest of the world do . They are looking at china. There are hard questions to be asked now. But in some cases, where the u. S. Is not actually offering an awei,native, like 5g for hu do the countries hold back or work in ways, like germany and the u. K. Are now wrestling with, for ways to work with Chinese Companies . We assume, by now, that mainline china would be going in a different direction, in terms of opening up, and that is now happening globally. This question of where is china headed . Is this the china that we were expecting to show up . That is the debate here. What is your view on the state of dealmaking in china now . Based on our numbers, activity has come down a big notch this year. Mostly in terms of the fund rates as well as the amount of investment. On our measure, it comes down anywhere between half to one third. Stillll climate is most of the deals got done. , unicorns are still able to raise a lot of capital. A it shows you there is flight to a quality. But there is still a lot of early stage innovation happening. A lot of stuff happening in 5g, internet of things, health care is still very hot. Has the Venture Capital industry reached a bottom, though, or can it continue to slow even further . [laughter] not so much in terms of the supply of the capital. The top funds still sits on a lot of dry powder. People tend to be more cautious because of what is going on at a macrolevel. People want to take more time and see whether they can negotiate a better deal. But still, there is a lot of dry powder out there. Viviana welcome back to bloomberg best. Im viviana hurtado. Lets wrap up our look back at the Bloomberg New Economy Forum in beijing. Bloomberg editorinchief John Micklethwait interviewed microsoft cofounder and bill and Melinda Gates foundation cochair bill gates. Bill spoke about the need to engage the Global Climate crisis by developing Renewable Energy sources. Bill there is no doubt that solar and wind, including offshore wind, will be a huge part of that. Because those are intermittent sources, the need either for 24 hour sources like nuclear or unbelievable miracle in terms of both transmission and storage, is very, very high. You can look at a country like japan. Tokyo, 60 gigawatts, you have seven days where you have no wind or sun power at all. So you have to say to yourself, if youre not want to have people freeze to death, what is the source of energy during that sevenday period . The u. S. Midwest, you have long periods where a cold front sits on it, and the wind does not blow. Ofit will be a lot renewables and either a storage miracle or quite a bit of nuclear. The electric source will be almost three times as big, because it will be taking over parts of transport and industrial and heating that historically went to direct hydrocarbon usage. Anyway, people Building Models of that future grid, different know,sities, you different people picking their choices, that will be the sign that, not only do we have a goal to be there by 2050, but we are debating the paths and very concrete plans. When you see things like a 15 diesel tax create unrest the , willingness to make the change in investment, you can question whether that is there. Because the free rider problem has never been worse than in the climate problem. Particularly for middle income countries, which argue that the historical omissions of the rich countries mean that they have to wait until, per person they get , up to that per person and they have emitted as much as we have. John that is the fairest way to do it. Bill it is a way to do it. If you look at the u. S. In particular, i do not think it is likely to happen. So we have had tax credits on renewables, we have had renewable portfolio standards you can get there in a way that is less neutral. There is a variety of and helping make some sectors. What has happened to solar and wind is very good. In terms of the industrial sector, in terms of how do we make steel and cement, people of gotten excited about the low hanging fruit. Electric cars that is the easy part. You still have to do the grid. But the various things, including industrial, are very, very difficult. Nuclear you know, you get a million times much energy per reaction as you do burning hydrocarbons. So it is very advantaged if you do the design right. I cannot say for sure it would succeed, but it would be good in this innovation portfolio. We have to have a lot of bets, knowing that some of them will not succeed. Terapowerin that you think youve come up with a new design that would be safer and more efficient. Bill yeah, in the computer our , design is amazing. And that is beautiful, because you can simulate earthquakes, volcanoes, planes crashing, all sorts of things that none of the existing nuclear plants, could you do any of that. And you can show your costs and inherent safety are strong. We need to build a demo plant. At one point, we planned to do that in china. The u. S. Government decided that we should not do that. And so now, the backup plan now is that we will try to build that demo plant in the United States. It is not an easy endeavor. But none of the paths to climate success are riskfree. John the big theme of this conference has been china and america. Henry kissinger said we were in the foothills of the cold war. As long as i have known you, you have been a passionate advocate of engagement with china. How do you view the Current Situation . Bill im even more passionate about the value of engagement than ever. And in the last few years, i have seen a lot of boisterous arguing against that, even arguing, in some extreme cases, for socalled decoupling. I think it is a benefit that there is interdependence. You know, the fact that we have tourists from japan. From china. We have students from china. We have companies that do research in china. Apple is the tech company that actually sells the only tech company that actually sells a lot of product here in china. That interdependence can lead to more dialogue, more mutual understanding. So to have people arguing against that is definitely a serious concern. Forana that is all bloomberg best this week. We hope you have enjoyed our review of the Bloomberg New Economy Forum. You can find many more stories on what is shaping the new Global Economy, as well as much more video from the forum, at bloomberg. Com, along with all the latest Business News and analysis, 24 hours a day. Thank you for watching. I am viviana hurtado. This is bloomberg. Y95ooo taylor i am taylor riggs in for emily chang, and this is the best of bloomberg technology. Where we bring you all of our top interviews from this week in tech. Coming up, cook facetime. President trump tours the austin, texas factory at a time when the white house considers whether to exempt apple goods from the tariffs. We will have the latest. Plus, clean. Senator josh hawley says a big big tech