Transcripts For BLOOMBERG Whatd You Miss 20240712

And a lot of those stocks on fire. For some folks, that is all you need to move this market. Caroline it really does blow your mind. Taylor i will leave you here with three comments, not to cut you off, caroline. Jeffrey gold main and end cam partners are three analysts raising their prices on amazon. Almost a 2 trillion company can rise more than 5 on the day. Jeffreys, 3800 price target from goldman. Looking at 3350. Talking about the structural shift underway from these companies that are not just benefiting from a work from home environment, that is a permanent change that they see not going away. Caroline i take you or three, i raise you three. Im looking at morgan stanley, rbc, and socgen worrying about the complacency in the market. Looking toward the election we have in the u. S. , the risks as we get into august, september, and the turn we see in the market. Lets get the take from chief Investment Officer who is still with us. Is there complacency in this market . Brent maybe in some names, but not overall. You keep talking about the bifurcation of the market. I think it is. You have the names doing well. Perhaps that continues. How much do you pay for that . Versus the other names that are down, and quite frankly, hurting. I guess when i think about complacency, i dont think didnt think i would see that much cash in the sidelines. I would not see the bullish fromy sentiments coming the 20s. I think we had one in the 30s last week. I saw Fund Managers who respond to surveys that they are underweight for the most part. Im not for sure that there is the complacency some people believe. It has attracted people who believe the world will have forever changed. I dont think overall there is complacency. Romaine interesting. I want to give another thing. We were talking about the outperformance of tech stocks. How the gap between that best performing, and the worstperforming, that a gap, on the year to date, 60 percentage point difference. The widest gap we have seen going back to 1990. Brent, when you talk about the current environment we are in, the pandemic, the recession, we have a big Election Year this year, there are a lot of bets out there that we will see some sort of transformational change in our economy in some of our sectors. Do you think that type of transformation is in the cards here . Or should we maybe be to paying attention to some of the triedandtrue names that we would gravitate in these times . Brent i think the market has priced in the transformational change that is occurring. The economy is always adapting changing, without a doubt. It is different than a was 10, 15, 20 years ago. But you have to ask yourself, is that priced in or not . . I think that is priced in the opportunity said, if you believe the economy will continue to recover and at some point, we will get a vaccine or treatment, or just at some point, the virus will loosen its grip on the economy, i think the opportunity is in some of the sectors and industries that have been left behind. Typically coming out of recessions, those are the areas that do fairly well. I would expect this time would be no different. At some point, those cyclical Asset Classes and factors will begin to perform. I guess to me, it comes down to your time horizons. Is at the next two months or the next year . If it is toward the latter, you want to push toward those places in the market. Caroline always great to get your voice. Thank you for joining us. Northwestern mutual chief investment strategist, brent schutte. That does it for the closing bell. Whatd you miss . That will be joined that will be up next. This is bloomberg. Caroline from bloomberg world headquarters, im caroline hyde. Romaine this is whatd you miss . Caroline one big finish for the nasdaq. Another record high. Up 2. 5 . Technology once again outperformed after being the laggard of the previous week. There is a meeting marathon. The eu moves close to an economic stimulus package after orbiting holdout said they would yield. Leadership lies. Carlisle for about carlisle cofounder joining us with mike evans on how he sees the chinese ecommerce giant handling covid19 and the simmering tensions between the u. S. And china. All of that and more coming up. Romaine lets start off with more ibm earnings out. Shares moving higher in after hours. Two key revenue coming above estimates at 18. 1 2 billion. Operating eps coming in above. At 2. 18. That is above the estimate of 2. 12. All of this down from a year ago. I want to point out, the total cloud revenue increased 30 . 6. 3 billion in the quarter. The red hat acquisition contributed 1. 1 billion of that. Caroline all about hybrid cloud. Romaine yes. Taylor . Taylor lets do a hard pivot. Euro. Take a look at the we have been awaiting that news and details coming out of that eu stimulus package. We had the euro showing strength relative to a weaker dollar. Up to the highs that we have not seen since january of 2019. The euro trying to hold on to some of those gains. Paring back some of the earlier bigger gains we had seen. This is after we know the eu leaders twice pushed back resuming talks to seal the package. Youre getting more headlines trickling out that it could be looking like 750 billion in a euro stimulus package, half of which would be there in terms of grants. For more insight, we are joined foreather conley, Center Strategic and International Studies Senior Vice President , for europe, eurasia, and the arctic. Great to have you. Walk us through the early reaction you have seen to what could be a good a big stimulus package, half of which looks like it will be grants relative to some low interest loans. Heather yeah, this has been an incredible four days of a lot of drama amongst 27 eu leaders. I think for me, they will get there. It has just been incredibly painful. And it is going to be howting to see if the it will implant impact the momentum asian of the recovery fund. Clearly for me, the take away is germany and france, the two largest eu economies, can no longer when they agree move the organization. Smallerly see the countries, when they are in coalition, countries that are frugal, they can bend the will of france and germany. This is why president macron was so angry throughout this entire conversation. They no longer can do this simply by themselves. What we are going to see is a smaller package, more heavily tilting to loans than previously. It bends to the frugal. I think we are seeing now where rebates, they will be paid off a little bit and higher rebates. The ultimate package looks like it will take away from the future of europe, reducing the digitalization, perhaps reducing some of the green agenda funds. At the end of the day, they will come out on this. The scars are deep. I dont think we are done with conditionality. Meaning that they are going to try to put markers on how the funds are implemented, and there is going to be a resistance from hungry hungary and from the italians in particular. Caroline what does that mean for the strength of the eu, and indeed, its binding together . Many have wrongly tried to predict the eu will not make it through whatever turbulent time. Now we move on to covid19 crisis. Well we still remain intact with italy and spain, greece, on board with countries such as the frugals, as you mentioned, the likes of the netherlands, austria, denmark, sweden . Heather what worries me, i dont bet against this project because it definitely showed us that it can sustain itself. What im worried about is the divergences. Economically, between the north and the south. You can see that in the German Response to the pandemic and the italian response. The germans are able to use their generous Budget Surplus into really spray down companies with state aid. Italy, spain, even france, they dont have the means to do that. If the south continues to struggle economically and the north can manage through this, they are not going to be able to bridge those economic caps. Then i just worry about the west versus the east. In this is all of hungary really becoming more liberal by the day. Poland, they will gladly take eu funds, but they are going to work against the eu in a variety of agendas. It is not going to fall apart but it is going to get more and more unwieldy. That is what we have seen over the past four days. They are having a difficult time papering over the divergences. Romaine so heather, that raises the question, where is this optimism coming from that somehow you would actually see a more unified European Union . For at least one that was a little bit more united by some sort of singular budget authority, that was sort of, i dont know, create a fiscal thread that ties these nations together . I guess you can draw that conclusion from this one deal, but once you get past this a deal, im not sure where that thread leads. Heather yeah, it has always been in the European Union 60 plus history that they have to sort of forge their institutions, their unity, only through crisis. The problem is over the last decade, they have had a crisis on top of crisis. It is really starting to strain the union. They will do what is necessary, they will reach the very minimum, and they will continue on. But as i said, what concerns me the most, what the United States , buying a strong europe u. S. Goods and services. And i just worry the european managing the recovery better than we are of cases, but the economics here this from not going to quite keep europe as strong as we would like. Wait until the next crisis, and there will be another one around corner, and they are having a harder and harder time meeting the minimum to get past this. Caroline what is so astounding about this potentially 750 billion euro package is the fact that for once, they are binding themselves more deeply when it comes to fiscal measures as well as just Monetary Policy measures. Is there any hope from that, and the fact that they might be able to start writing off each others debt . We might see some deeper integration coming out of this, even though it will be hardfought and scars yet to heal. Heather i did not see this moment as the socalled hamilton moment for europe. What i did see is europe using its ability to borrow, using the instruments it has at its disposal. Obviously using them in a much bigger, more powerful way. But i dont see, even though the germans have agreed it to this, i dont see this as a wholesale acceptance of debt mutual is asian. The true test of this, and i certainly do not wish this, will be if italy really starts to struggle financially and economically, or you have a government collapse and a new government comes in which will profoundly challenge italys use of the euro or how it is perceived as a member of the European Union. That is really the great test for this a debt mutual is asian challenge. Until they have that test, they will continue to find ways and patched together it is important to know they the european stabilization mechanism, the Italian Government will not use it because of conditionality. They have instruments, you cant lead a horse to water. The governments have to politically decide that they are able to accept the programs and instruments the European Union has provided them. I hope this is a better moment. Continuenk the battles and they will lurch from crisis to crisis. Caroline it certainly feels that way. Heather conley, spelling it out so eloquently of all the debts and disagreements that we continue to watch over the pond. We thank you. The vaccine shows promising signs. More breakdown and the results up next. This is bloomberg. Shows is thattudy the vaccine is safe and well tolerated. That was a very important goal of this study and that has been achieved. The second part is to make sure that there is a strong immune reaction and indeed, there is a strong immune reaction. And both parts of the immune system that need to be provoked, need to be kicked into action, have indeed been kicked into action. They are producing antibodies. And the other part is this t cell response, and that is also a very strongly provoked by this vaccine. So we are in a great position now to go forward into phase three. What happens in phase three . Studies,in phase three we need to make sure this vaccine can actually protect against infection. So we need to be doing the studies in places where there is a lot a virus around, so these phase three trials have been conducted in brazil, and south africa, as well as in the united kingdom. And the idea is that you take two groups of people, one group of people gets the vaccine, the other group gets the control, and then you see whether the vaccine has indeed protected people from the infection. There is a level of disappointment in the markets that it was up 10 as soon as the study was out. Now it is up 10 , now up 1. 2 . Were people expecting the trial to go better than it has . Richard well, to be really fair to astrazeneca, i do not think this study which was a phase one study, i dont think this study could have gone any better than it has grown. It showed exactly what we were hoping it would show. It stimulated the immune response. It couldnt do more than that. To have expected it to have done more than that would have been totally unreasonable. And now what we need are these phase three studies, and testing the vaccine and those people who are at greatest risk of covid19. People who are older, people who have chronic disease and so on. Lets just say phase three goes according to plan. What is the trajectory then . How soon could i get this in my arm . Richard ok. Disagreei can slightly with one of your previous commentators, the fastest vaccine that has been produced in recent times was actually for the zika virus. That vaccine was produced over the course of 18 months. We know we can do vaccines very, very quickly. Now, in this particular case, if we can get the phase three trials completed toward the end of this year, and if everything goes well, and then we can press the button forgetting production ramped up around the world, then we could have a vaccine, i would say, in the First Six Months of 2021. Richard, is is going to be the vaccine like the flu . Even if you have a vaccination against the flu, you can still catch it because there are various strains . Or could it be Something Like chickenpox where you get vaccinated and thats it, you are done, you never catch it again . Richard you are asking the 100 million question there. Right now, were six months into this pandemic. We didnt even know this virus existed six months ago. Right now, we dont actually know what are the determinants of protection. What are the determinants of immune protection . We dont know that. So we are still very much in the dark about what protects us. We dont know how long we are protected, we dont know to what extent we are protected. Wedont know how quickly might get reinfected with this virus. So there is a lot we still have to find out. I think we should be helpful, we should be optimistic, but we need to be a little cautious and we have to manage expectations of the public. Because there is still a long way to go. Romaine Richard Horton there, that is the medical journal laying out the details therefrom that Oxford Astrazeneca story. For more on that, we want to bring in Bloomberg Health care editor tim joining us to help us make a little bit of sense here of some of the timeline that we can expect. We heard horton say towards the end that we could potentially see a vaccine at the beginning of the First Six Months of 2021. I guess the question is when you look at what we have gotten out of this trial, the data we know so far out of this trial, are we putting a little too much optimism into the ability of getting this to market so soon . Tim that is a great question. And its a big question. I dont think there is an easy answer to it. Obviously, there is a number of candidates that are sort of in roughly the same phase of development now where you have drugs entering phase three, these largescale trials that are the most important hurdle to get over before getting to market. And you know, there are plenty of questions about the logistics of distributing these, who gets them first, how does it all work . There are worries obviously about vaccine skeptics and things like that. Think, with any reasonable timeline, i think early 2021, based on what we know now, sounds right. But there is always the possibility of something this complex that one small thing could come into play and change that timeline. Taylor how much of this is a zerosum game . Is it whoever gets the vaccine to market and gets it approve first, does everyone else and then stop working . Or can they too continue to work on their vaccine that could go out and be produced later on . How does it work when multiple players entering the space, and it seems to be relatively close horse race between moderna, pfizer, astrazeneca you name it . Tim i think there is probably room in the marketplace for whatever vaccine comes to market. This is obviously a thing where we are having to think about basically, you know, the global population needing a shot. Likely thats quite you could see a number of different vaccines come to market and different people, depending on where they are and where they are situated. They might get a fix a different vaccine then somebody else. Caroline tim annett, breaking it down for a spear thank you very much indeed. Lets get you up to speed with other headlines. Called their ubs office plans on hong kong. They reported a daily record of more than 100 new coronavirus cases. Theyve asked 70 of their stuff to work from home. Revived talks on a potential sale of its grocery unit. The potential multibilliondollar deal has been put on hold amid the coronavirus pandemic. Private equity firms in Lone Star Funds [indiscernible] mas will seekk evaluation when it goes public. The parent of chinas largest mobile payment come and he will pursue a jewel listing. One of the largest in years. This is one worth chatting. It is quite amazing. The fierce presence of that in not the u. S. , not only will they not list in the u. S. , but not push the product to the u. S. Doubling down in asia in particular. India and highland. Romaine you wonder if they dont really need the rest of the world, we are starting to see this bifurcation in a lot of these payment apps. We saw amex pull out of china. Maybe not pull out, but lessened its presence. This may just be the new world order we are in for. Taylor huge dual things between shanghai and hong kong. Caroline one to watch. 12 also watches what is coming up next. David rubenstein and none other than mike evans up next. This is bloomberg. Caroline leadership live starts with the david rubenstein, and this time it is mike evans him. Ng how the Chinese Ecommerce Company is navigating covid19 and the rising u. S. China tension. Take a listen. David michael evans, the president of alibaba. Welcome, michael. Michael thank you, david, nice to be with you. David where are you coming from . Michael you are getting me in canada where my where i have spent a couple of time spent a lot of time. David i should disclose that people who dont know michael well that michael is a canadian, but he also is beyond being a business executive, he was an olympic athlete who won a gold medal in the 1984 olympics. What was that like to win a gold medal . Michael well, the thrill of victory, for sure. It also, very emotional experience. And full disclosure, i did it with my twin brother in the boat well. That was a particularly unusual and unique moment in our relationship and for our family. David so you are still a rower, do you still row for fun . Michael casually only. David ok. Lets talk about the company you are the president of. Some people might be surprised that a canadian is the president of alibaba, which is well known to be a chinese based company. Just give us a little bit about how you became to be the president of alibaba which is based in china. Michael it is a bit of a circuitous story. I will give you the highlights. I first met jack ma in 1999. He was just starting alibaba. I was working for Goldman Sachs at the time. We were making an investment in the company. What attracted me, or what, my the investment, but the mission that jack had for the company. Was to look out for the little guy. I thought that was quite unique in the big corporate world of banking. So i stayed in touch with them. And his team over the next 15 years. Actually ended up spending almost nine years living in asia. Got quite close to jack. When i left Goldman Sachs in 2013, the first people to call were jack endocyte. They said hey, we are going to take this company public. We want you to come on the board. Which i did. Helped them get public. Immediately after they went public, and it should have seen this coming, they said why dont you join our team and help us globalize . Because you know us, you know alibaba, you know china. You can be very helpful in the globalization effort. So i did. Looking back on it, i have to say, that was a huge opportunity. And hard to believe. A dream come true. To be able to work with those three guys, jack, joe, daniel, to work for arguably the third, second most Important Technology company in the world. And to share jacks vision but also my passion for china, that was a dream come true. David in the lore of Goldman Sachs, theres a story that goldman made an investment that you alluded to, but that somebody came along and said, we dont need this investment. So they sold it at a modest profit. Is that true . Ofhael in the continuation hypocrisy stories, it is the case that two years after they made the investment, they may have sold at the same time that nasdaq and in Technology Companies went bust. That could have happened. David so, for those people that live in the United States or somewhere outside of china, and they dont know as much about alibaba as lets say, people in china, what does alibaba do . I know it as a company that does what amazon does. But i know it is much different. Tell me what alibaba really does. Michael alibaba, in some ecommerces a huge company, like amazon. But in almost every other respect completely different. Its core operations are in china. There is a very large cloud business, very large ecommerce business, very significant Logistics Business and Digital Media and entertainment business. And it has become the leader in china with almost more than one trillion u. S. Dollars of dmv. Over 700 Million Consumers on our platform. What it does internationally though, and in particular, what it does in the u. S. , is still a mystery to most people because we dont have a platform in the u. S. So we are not here selling products in the same way that an amazon or ebay or other ecommerce operators would. What we do, which is very significant, is we sell tens of billions of u. S. Dollars of Great American products from brands, retailers, even from farmers. To the Chinese Consumer directly. We have been doing this for almost 15 years. It is a business that continues to grow. Particularly, in the covid environment, china has become the china consumer has become so important to many u. S. Brands and Small Businesses. Because that is where they see growth. And the ability to benefit in the post covid environment. David a lot of American Companies say there are plenty consumers, i would like to sell to them. The easiest way without setting up shop in china is to do it through alibaba. Is that correct . Michael yes, it is. We have multiple platforms. Some for crossborder, some for the big brands like starbucks and png and others that are physically resident in the country. Weoss those many platforms, provide the access point, with tens and thousands of smes to sell their products to the Chinese Consumer. David today, the market value of alibaba is roughly 700 billion, Something Like that . And your number of employees is over 100,000, is that right . Michael about 120,000. David today, there is something that, has happened post covid as i understand it. Many people in the u. S. Want to get products like ppe products for Health Care Related benefits. And the only source was china. So you sold a lot of products through alibaba to americans, to help them through the covid crisis, is that right . Michael not quite. There were other sources of ppe. Korea and certain other markets. But our principal focus in terms of thinking about how to help with ppe and other medical products was to help source and vet countries as opposed to sell all of those products through our platform. So the work i did with Governor Cuomo for new york state was really not to sell new york state products through our platform, but to help source from reliable providers and also vet the quality of the product moving through. David so Governor Cuomo contacted you and said, we are having trouble getting ppe, can you help us . Is that what happened and you helped facilitate that . Michael no, a little bit the other way around. I called Governor Cuomo and said, im a canadian but live in new york city, and care about my state and the city. It is becoming clear to me that new york is becoming the epicenter of coronavirus in the u. S. What can we do . What can i do to help . And he said wow, he said this is great, please, lets talk, lets figure it out. Together with his team, we did a huge amount of vetting and sourcing of ppe for new york state and for the hospitals. David so in china, has there been a shutdown of the whole country the way the u. S. Shut down and everybody has been working from home . Or has it been in the wuhan area that people were shut down . David michael there was a time when wuhan was a major problem and the infection was starting to spread beyond the province. They shut the whole country down. We have employees all over china, many concentrated in hong joe and beijing and shanghai, places like that, but many other places, particulate for our b2b business. We sent all of them home, to work from home for several months. David in that case, how did you employees . R through technology, you can communicate. But if people want to buy an alibaba product, you had to have people at the warehouses putting it in and shipping it, is that right . Michael you are correct. There were a small number of employees that were required to have a physical presence in key parts of our business. None lease of which is the Technology Platform to make sure it would continue to run properly. The vast majority of our employees were working from home virtually. In the Logistics Business, and you focused on an important area, we are delivering more than 80 million packages a day. To satisfy continue the demand of consumers who were ordering more things online, the very it was important to get that business running properly and figure out how to do it safely for the employees, but also the customers receiving the packages. David the employees working from home, is it now that they are back in their offices . Or are they still working at home . Michael substantially everybody in china is back in our many offices. But almost all of our International Employees are still working from home. David so in your case, you are working from the United States, and obviously from one of your homes, lets say. How difficult has it been to do that . Michael it has not been very difficult. It just has been such a huge change. On average, i was going to china once or twice a month. Year. 20 times a i have not taken a trip to china since after you and i saw each other in davos. And the quarantine restrictions make it almost impossible to go there and be able to work. Ofi expect that for the rest this year, we will have to continue to conduct things virtually. So that has been a little bit of a it is a big shift. A huge shift. It hase Silver Lining is allowed me to spend more time with my family so thats great. David alibaba is not trying, i guess, to compete with amazon in the u. S. Setting up a whole infrastructure of the type that amazon has. That is not in your immediate plans because you have a big market in china and other countries. Is that fair . Michael our immediate plans in the u. S. Is to keep doing what we are doing. It is such a big crossborder business, sending all those products to china. It is so beneficial to those brands and those smes and farmers. We are going to keep doing that. That is going to be our major focus for quite some time. David i knew jeff bezos when he first started the company pretty much. At that time, he told me he had better software, and i rolled my eyes. There were other people selling books over the internet. Barnes noble was selling books over the internet. What is it that alibaba did that made it transcend all the other companies doing similar things does . T alibaba was there a secret sauce that alibaba had that made it rise up to the top company in this area . Michael if you go back to the early days, david, and you think about the internet in china. In 1999 when jack started this company, the internet was wellknown to all of us in the west. But people were just reading about the internet in china. Nobody really knew how to use it, much less commercialize it. What jack did, he figured out how to do that. Wasin doing that, he also able to develop a Sustainable Business model that could grow. That was the beginning of the b2b business which became the b2c business. He did two other things that were important and allowed him to very much distinguish himself from the rest of the competition. His mission was to help the little guy. The Small Business. Seemed like a peculiar mission to many people. Because why not run after the big corporations . And then he developed the culture which was one of customer first, employee second, and shareholders third. Strange,und that very including us when i was at Goldman Sachs when we made the investment in 1999. That, coupled with the innovation, looking after the customer, thinking about how to grow their businesses, that became the secret sauce. Because none of those customers ever wanted to leave. David did jack ma have a background as a Technology Person . Was he an engineer, an investment banker, what was his background that enabled him to have these insights . Michael none of the things you just adjusted. In fact, jack regularly jokes that he doesnt know how to use a computer. Jack was an english teacher. That teacher in the teaching skills he has work usually important in developing the company, instilling the culture and values in the Leadership Team and employees, and growing the business. And he is still a teacher today. David he is largely retired from the company. I think he is going to get off the board at some point in the near future. Is that right . Michael he is retired from the company, thats correct. David another of the founders is involved, known as the owner of the Basketball Team avenue the nets. Michael thats correct. David so he is still pretty actively involved. Michael joe is our executive vice chairman. Very actively involved in the day to day businesses. I speak to him two or three times a week. He is a core member of our senior Leadership Team. David given the u. S. China relationship, post covid, which is more tense than it was precovid, what is it like to be the president of a chinese based Company Operating in the United States . Is it more difficult to get things done . Do you have Government People coming after you, telling you how to do this or that . What is it like . Michael it is not difficult at all. Because people are always surprised when i sit down with them, u. S. Government officials, and i talk to them about what we are doing in the United States. And they become very supportive when they start to understand the impact and the scale of what is being sold by American Companies to the Chinese Consumer. They may have had misperceptions about what we were doing based on what other Chinese Companies do, once they hear the story and it, they are very supportive. They understand that is going to be our core mission in the u. S. Going forward. David many of the ceos with whom ive talked with on the show say their employees are working remotely. But some of them dont want to come back to work until there is a vaccine, or some of them say i can work from home efficiently. Are your employees in the u. S. And china actually interested in working from home more than they did before . Michael the bulk of our employees, outside of china and even in china, want to make sure that when they return to work, they can do so safely. That is the real prerequisite. But all of us would like to be back in the office. The thing we missed the most is not the ability to run the business properly and continue to grow, but the interaction which is a huge part of our culture. 121 and within groups. You cant really replicate that virtually. David so the tension between the u. S. And china, other than covid, is often over technology things. The United States government has said we dont want huawei to be used for 5g technology. I dont know whether your technology. Huawei i assume in china it does. How would you try to explain that issue to an american audience about huawei or technology or the tensions between the u. S. And china over technology . Michael i think it is very hard to actively engage on that issue with our clients. What our clients want to know, what our customers want to know, is how can you help us . Particularly during covid, but before covid and long after covid. How can you help us grow our business . The conversations im having with ceos of hundreds of brands, all the time, is how is your business doing in china . The response back, particularly in the last several months, it is growing much faster than they expected. Part of that is a very rapid recovery which you have seen recently in the gdp results in the National Bureau of statistics and Data Information on retail in china. But the other part of it is the repatriation effect of no Chinese People traveling abroad and spending money means those same Chinese People are actually now buying those products. Those u. S. Products in china. Many of the ceos see their China Business growing very, very rapidly. And they are pleased. It is not doing as well in other parts of the world. David amazon has done so well in the u. S. , it almost doesnt have a number two competing with it. Two,alibaba have a number ors or somebody close to alibaba . Or are you so dominant just as amazon is in the u. S. . Michael we have a number two, number three, number four. One of our Biggest Challenges is the need to aggressively and continuously innovate, in order to stay ahead of our competitors. We like our competitors because we learn a lot from them about things we should also be doing, or think of ways to change our business model. But we have huge competition in china. It is a big part of keeping us sharp and allowing us to provide the Digital Tools to our merchants and, you know, the ease of doing business on our platform for consumers. David if i sit in the u. S. And i want to buy something that alibaba has on its platform, lets suppose amazon doesnt have it, or want the thrill of buying something from china, can i go on your website, is it in english and buy something from alibaba . Will it be shipped to me in the United States . Michael yes and yes. You can go on a platform called aliexpress. Aliexpress. Com, you will find it. You will find millions of products there which you can buy directly from china, and they will be shipped and delivered to you in the United States. That is not a huge business for us. In it is not our core strategic focus. But it is a platform that exists, has been around for many years, and it is basically selling chinese products, Small Business products, to 130 countries around the u. S. David lets forget the u. S. , do you have a Large Business outside of china in asia or europe . Latin america, are there other parts of the world where you are very big compared to where you are in the United States where you are not as big, in terms of selling products . Michael yes. We have it has been my responsibility as part of leading the globalization effort, but we have a Large Business in southeast asia. We have a business in south asia. We have a smaller business in india. We have a big joint venture in russia. We own a business called trendy all in turkey. And the Common Thread for all of these businesses is that they are local platforms. We are dealing with local markets and local consumers and local products. We overlay products from china, in terms of crossborder sales on top of that. But yes, we have more than 10,000 people working outside of china who are actively engaged in these local platforms. David still, i assume 75 or 80 of your business is in china. Is that fair . Michael probably a little more than that. I think particularly as it relates to the crossborder business, where we book our revenues and sales is very different plan the huge impact we have on companies in countries like the United States. But all over europe, japan, australia, new zealand, where we source these products in order to get them to the Chinese Consumer. David i should have asked you, where did the name alibaba come from . I know what it is in a myth, but why was alibaba chosen as the name . Michael jack chose alibaba because it is open sesame. For Small Businesses, this was the opportunity to come on the platform and open the cave of riches. That is exactly what has happened. We started with 20 Small Businesses on the platform initially. We have over 11 million today. There has been a huge opportunity for Small Businesses to grow, take advantage of Digital Tools, and become profitable, hire more people, and prosper. David many years ago, when alibaba started in its early years, it developed its own equivalent of paypal which is its own way to pay for products that you buy on alibaba. It later became known as and financial. I should disclose my company, carlisle, has an investment in that. What is the status of that company . Is that a separate company, are you involved in any way . Michael im not involved, as the president of alibaba. And financial and alipay in particular works closely with alibaba. Because it is the payment basis for all the customers, consumers, on our platform. An financial in which alibaba owns 33 stake is an independent company and continues to grow both in china and outside of china. Some people will have seen just yesterday or last night that there was an announcement that they are planning to go public. Which is terrific for them. David public in hong kong. Michael public in hong kong and in shanghai. David and for a company like alibaba, the controversy going on in hong kong is not that relevant because your core business is sharing is china. Has that produced tensions within the company . Michael we are a corporation. We are not part of the government. The geopolitical tensions and the tensions between china and hong kong or china and the u. S. And hong kong, these are not areas that we will be able to resolve, where that will have a material impact. By us moving one way or the other. We are sticking to our core strategy and business, and trying to do that as well as possible. David for those people who are watching who are not living in china, when the average person is walking down the street in beijing or shanghai, are they wearing a mask . Our masks, now . Michael masks are very common. Even before covid, it was not unusual to see people Wearing Masks. Less outside. But i attended many meetings over the last several years where somebody or a small group of people within the meeting may be wearing face masks. The reason would usually be because they had a cold and they were being considerate and not sharing or spreading that cold to others in the room. In covid, everybody wore a mask. Jack, many of our business leaders, including daniel, absolutely adamant that this was critical to stopping the spread. And today, you see selectively people Wearing Masks in the office. David so you have a large family, nine children. Older than 25 or 35 yourself, you are not as old as i am, but you are, you know, a little bit older than you were a few years ago, lets say. You must worry about your health. How have you worried about making certain you dont get this virus, and your children . You have a nine children living together, how do you deal with all of that . Michael the standard we have adopted is of course the social distancing, washing your hands, wearing a mask. The most important thing we have done is to wear masks. Not when we are all together in the house, because we are not socializing with other people. But if we go to a store or if we go outside and see other people, we wear the mask. A lot of this i understood because covid happened to us in china first. I looked at the precautions that are leadership crew developed for our employees. Who safety was their number one priority. We took those precautions and applied them to our family. David Going Forward, eventually we will have a vaccine, i suppose. Eventually the world will come back. Sometime soon hopefully. Will there be anything you learned in the covid period that youll use Going Forward . Will you manage the company differently . Will you interact with your colleagues differently . What would be different Going Forward in your view . At alibaba . Michael the big theme, david, that characterizes the postcovid environment, and it is already taking place in china and outside of china, is this notion of digitizing, or having a real Digital Strategy for businesses that have offline operations. We talk about in the context of new retail, which is the integration of online and offline. But the digitization of the entire retail value chain. That is everything from manufacturing, to your supply chain, to your warehousing, to your Offline Stores and your online virtual store, the integration of all of that. The benefits for consumers are enormous. They can buy anything, anytime, anywhere, do whatever they want. But for merchants, and makes the difference quite apart from the Cost Reduction that they can recognize, they will be able to operate their offline assets if we go back into, at any time, a lockdown situation. Where consumers are not going to go to those stores. And in many cases, those Offline Stores can become Fulfillment Centers for online orders. This is a theme that used to be, well, thats really cool and that would be nice to have. It has gone from being a nice to have to a structural imperative. You have been listening to leadership live with david rubenstein, michael evans. You can check out more by heading to life go. For now, that is all for whatd you miss . Romaine a Bloomberg Technology is coming up next. They will keep an the launch from Cape Canaveral air force station in florida. Dont miss that. Taylor have a good evening. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Emily welcome to Bloomberg Technology. We are standing by to support spacex to launch just another rocket. They will be launching another satellite into space. If it happens it would be the fastest turnaround time ever for a rocket between two launches. This is the second the same one that took the astronauts into space