Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

Unchanged policy. Coming back from the typhoon slower by 116 points. We are talking about hsbc, one of the laggards here, missing out. The largecaps under pressure, 4819 right now. We are looking. When it comes to dollar dynamics, we did see a stronger dollar, which led to a hit. 379 right. 7 now. The china 10 year yield, we just got the pricing on the dollar bonds. Gold taking a retreat. Brent crude Holding Around 42. Tom lets bring you back to the top story in this region. Xi jinping will bring a major policy address later, in the next 20 to 30 minutes or so. Across the border in shenzhen, to talk about an integrated tech corridor to rival silicon valley. Stephen engle is following the story and joins us from hong kong. Steve, what are you looking for in this speech . Stephen i am looking for a better tagline. They are calling this a chinese socialist pilot zone with chinese characteristics. I think the greater bay is the grander scheme. And xily china wants to jinping with a trip south within thehalfhour, to emphasize need for selfreliance. In particular in the next generation of technology. Shenzhen in particular is home to some of the Biggest Tech Companies in china, be it tencent or huawei. There is also the ev manufacturer and others. He is trying to integrate at least nine Major Chinese cities with the more open internationally minded cities like hong kong for capitalraising as well as macau. It is a big endeavor and when they have been pushing for quite some time, to stimulate domestic growth as well as bringing hong kong more into lockstep with the mainland. Saidis what xi jinping yesterday on the theme of selfreliance. War ifs this tech cold you want to call it that, with the United States. Lots of headwinds in the global economy. Selfreliance is important, he says. Wethis time of uncertainty, are seeing changes not seen in a century and we need to set ourselves on a path to Higher Quality selfreliance. This harkens back to what was , where he chopped of the hawks in beijing in the face by pushing reform. Then we did see the opening up of shenzhen and regions to a tsunami of investment and reform. Perhaps he is taking a page from them. Instead of countering the four asian tigers in 1992, he is countering headwinds from the west, in particular, the u. S. As a complementary cog of the greater bay, pearl river delta region. Yvonne we heard from carrie lam. She is in shenzhen this morning at of the speech, saying hong kong does not need to worry about direct competition with shenzhen. How does this fit into the picture now . Hong kong has separate trade and Economic Systems, Legal Systems are different as well. They have an open capital account. Withare more in line Institutional Investors to the ipo pipeline. This would be a Capital Raising center for this greater bay initiative. Hong kong has lost manufacturing long ago when textiles left. Are ports and logistics losing a lot of ground to mainland ports. What do they have . They have finance and banking and an open capital account. They see that as an integral part of the Greater Initiative going forward. There will be challenges. We have seen social and economic challenges the last couple years with the protest movement and now the National Security law. For xi this is a chance jinping to sell that this is the way forward for hong kong people. Be momentsshould away from that speech. Could turn to your bloomberg for more on this. Just setting up to get more commentary and analysis from expert editors at bloomberg. Make sure to check it out lets get the first word news. We have Karina Mitchell in new york. Keptngapores Central Bank Policy unchanged, as expected, with the economy recovering gradually from the worst recession in years. They indicated little change in the foreseeable future. New data shows singapores economy shrank 7 in the Third Quarter from a year earlier, improving from a 13 decline in the june period. Prospects of a new stimulus package in washington dimming with nancy pelosi demanding they changed the most recent offer and Mitch Mcconnell pushing a strategy President Trump already rejected. The speaker says mcconnells proposal is a nonstarter. Adding in the wake of the president s tweet, democrats have more leverage than ever. Faces a slow post virus recovery, though it is offering a less dire view of the recession. They see global gdp shrinking 4. 2 this year, down from 5 in june. It would be the deepest contraction since the Great Depression, with covid19 having killed millions and shut down vast parts of the economy. We have seen advanced economies doing better than emerging and developing economies, excluding china. You are seeing low skilled doing worse in labor markets. We see growing inequality. It will be highly uncertain. Sentiment in australia soared in october a second straight month above 10 gains as progress containing covid19 combined with government stimulus and potential new rba easing. The Consumer Confidence index was almost 12 after an 18 jump in september. That is the highest level since the middle of 2018. Optimist now outnumber pessimists. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. I am Karina Mitchell. This is bloomberg. Tom . Tom getting our viewers up to speed with breaking lines on the australian bank. Itspac consolidating International Operations into three branches. Those are singapore, london and new york. Westpac will exit operations in beijing, shanghai, hong kong, mumbai and jakarta. Westpac yeartodate shares are down 23 . We will bring more if and when we get it. Still no sign of a quick end to the stimulus stalemate in the u. S. We will have the latest on that. Talks plus, investco about equities over bonds despite uncertainty. This is bloomberg. This is bloomberg. Tom welcome back. Lets look at the wide range of issues weighing on markets. Prospects for u. S. Stimulus before next months election are failing, while the dollar had its best day in almost three weeks. Likely to spur haven demand. In asia, investors are keeping an eye on president xis speech from shenzhen, which could be happening any moment now. We expect him to lay out his vision for the greater bay area. Lets bring in david chow, a strategist for that asianpacific. David, a lot to unpack. What are you most squarely focused on as you get a grip on these markets . David i think investors are concerned about the stimulus package in washington. We continue to see the pingpong back in force back and forth between republicans and democrats. What is at stake is the size of the stimulus and what it goes toward. Each side is pandering to its base ahead of the election. The stimulus has become more about politics than economics. That said, i think there will be a stimulus package between now and the end of the year which is what the market is partially discounting. Stimulusare expecting sometime before the end of the year. The election firmly on the horizon as well. The stimulus debate ties into that. There was a sense among investors you might get a blue wave. Seems they are paring back expectations now. What is the market response if you get a senate in the hands of republicans, but a presidency with democrats . David there is definitely a case for that. The risk of a hotly contested election has greatly been diminished and i think the stock markets recent upward trend reflects a likely win for the for biden. Theyis not priced in is could rethink investors of the investment environment, such as higher corporate taxes and more regulation to certain industries. David, the imf talked about china and giving it an endorsement, saying it will be the only economy that is going to see levels higher this year than 2019. I wanted to take a listen to the chief economist about that point. Take a listen first. China is a country this year and next cumulatively will be 10 higher than precovid levels. While everywhere else in the world, they will be lower than precovid levels. You see a stark difference over here. China also has a lot of underlying growth coming into this crisis. They were slowing down, but still a growth rate of over 5 . Forward, they will continue to accumulate higher levels of income. Have them about 1 below their precovid projected path. Based on the growth prospects, do you think china is still a good case to keep a bias in your strategy . How are you seeing it . David sure. We continue to remain positive on both chinas economic rebound from the pandemic as well as a positive bias on chinas equities. I think a few Different Things are going on here. If we look at the september trade data, which came in stronger than expected on both the export and import side, it suggests two things. On the export side, Global Demand continues to be a key driver behind the resilience from covidrelated issues. Most importantly, chinese rebound imports rebounded to a positive 13. 2 last month. Stronger both domestic demand and greater growth. The case in point is the most recent golden week holiday which saw chinese households hit the road and we saw increased spending at retail shops and restaurants. This is important because half of chinese gdp is made up of domestic consumption. So far this year consumption has been negative. Monthlynged as retail numbers in august finally became positive. This will indicate one of the most important cylinders for Chinese Growth Engine is finally started to fire up. This will give the chinese economic engine the boost it needs. The chinese growth cycle should last another two to three quarters. Yvonne we are counting down to president xis speech in shenzhen. We are likely to hear more on the speech on the theme of circulation. Doesnt boost relative attractiveness of chinese tech stocks compared to the u. S. . In the eyes of beijing, they are national champions. In the u. S. , if we see a biden blue wave, we could see these Tech Companies get split and more regulatory risks. We continue to be positive on tech stocks for both china and the u. S. It is possible there could be volatility because of the issues on covid and potential lockdowns. That could benefit tech stocks. That said, we continue to be positive on china because what we are seeing in shenzhen and policy measures announced there, it is an important signal that china continues to celebrate. This will remove some of the bottlenecks that have been hindering chinas reforms, are now being renewed. Chao, thank you for joining us. Coming up, we hear from the imf chief economist, Gita Gopinath. The global recession will not be as bad as first thought. This is bloomberg. This is bloomberg. Yvonne the International Monetary Economist Says the path to Global Economic economy is long and uncertain. Chief economist Gita Gopinath is also concerned about global debt and told bloomberg low rates and a possible growth rebound could offer help for nations to ensure their debt load is sustainable. It is uneven across countries. You see advanced economies doing better than emerging and developing economies. [no audio] tom you talk about the effects of this virus being longer. Does that mean the damage is going to be ultimately greater, despite the more shallow trajectory . Gita overall again, this is the worst crisis since the Great Depression and we have a very prolonged recovery. For most countries with the exception of china, they do not recover to 2019 even by the end of 2021. There are regions like latin america where that takes until 2023. This is a permanent loss to input. We have about 28 trillion loss because of this crisis, relative to the prepandemic levels. Long, uneven and highly uncertain a sense. What could stop it . I know the imf is saying, dont worry about debt, governments, just spend to support your economies. That seems to be coming to a halt. Stalled stimulus in the u. S. , and the u. K. , a more targeted furlough. They cannot get the Recovery Fund passed in europe. How do you look at it . Gita the number one thing countries need to do closely together is and the health crisis. The problem is not science. We are getting the first weeks of vaccines and testing, there is just not enough production on the scale required to reach anybody everybody in the world. If that does not happen, we will be living with this crisis for a prolonged recovery. We are asking countries not to prematurely withdraw support. You could be targeted because countries are at different stages of lockdown. You could be much more targeted in terms of how you are providing support. For countries that do not have the finances, they will need international assistance, aid. That is needed to ensure we are not going to knock this economy off of its path for the foreseeable future. The crisis is going to go on for a long time, you made that clear. That levels would be significant as a result of this. How big of a drag will the enormous debt most countries are now going to be carrying be in terms of Economic Growth far into the future . Gita we have debt now projected to be a record high of 100 of global gdp, but this is also at a time when private savings are high and private investment is very weak, which is part of the reason why Interest Rates are low. We expect them to stay that way for the foreseeable future. To the extent Interest Rates stay low and we get a growth rebound in 2 there are many countries021, for whom the debt level will stabilize. This means the window of opportunity to build a fiscal framework to make sure that will be sustainable over the next several years. In some cases that will require cutting back certain expenditures. Also, through greater revenue generation. Cases, making sure corporations pay their fair share of taxes, greater transparency, all of this will be important. We have the breathing space now because of the world we are in, with low Interest Rates. Imf chief economist Gita Gopinath speaking to our colleague, guy johnson. Apple launched of the latest iphone, a device line wall street expects to spur a new cycle of sales growth at a Virtual Event growth. At a Virtual Event, apple shown the new iphone 12. It has a smaller version, called less. Ny, 100 pro and promax versions go as high as 1100. All the new devices support 5g technology. Tencent to double its stake in music before it expires in january. They let a consortium for 10 of musicrlds Biggest Company and a deal that valued universal at more than 25 billion dollars. Tencent and its partners can raise holdings to 20 at the same valuation before january 15. Inroup making progress winning the approvals needed for its ipo in shanghai and hong kong, though it has no definitive timeline for agreement. Sources tell us, boc international, joint book runners for the major listing. Jp morgan and Morgan Stanley are acting as sponsors for the share sale in hong kong. Recordl ipo may raise a 35 billion. Yvonne big numbers in the markets. We take a look at evergrande. We continue to watch disappointment from the market on this share placement. Byy had to cut their sales about half what they were expecting, down from 15 . Hsbc, one of the biggest losers in the hang seng today. And tencent reaching the record of theid the launch iphones league of legends game. For tencent. Alibaba still on progress for their pio. We are watching securities. Scrapping merger plans. Lower for westpac as well, consolidating its International Operations. This is bloomberg. S. This is bloomberg. Is 10 29 p. M. In new york and d. C. And here are your first part headlines. The imf is slashing its outlook for india even further, saying it faces the biggest contraction among imaging major emerging markets. Far worse than the 4. 5 decline the imf saw in june. India imposed the worlds Biggest National lockdown in march. Bank of indonesia held rates as expected as it focuses on debt purchases to help support the weakening economy. The seven a reverse rate at 4 , the bank has opted for unconventional measures to revive the indonesian economy which is set for its first annual contraction since the Asian Financial crisis of the late 1990s. Malaysian Opposition Leader seems to have missed out in his latest bid for power, failing to convince the king that he has the support he claims to form a government. He says he offered proof of a majority among lawmakers and fore repeated his call the Prime Minister to step down payment however, the palace said he failed to supply names and advises him to advise abide by the constitution. The u. K. And European Union are dolling up the rhetoric ahead of Boris Johnson selfimposed deadline. Top e. U. Negotiators say negotiate and have not move forward enough to enter the socalled tunnel phase, while a johnson spokesman said the u. K. Is ready and willing to leave the Single Market without a deal. Starting fell on the news. Those are your first word headlines. This, theention biggest story of the day. President xi jinping in his speech in shenzhen. We expected some announcements, and you can see the pictures now live. You can see the president walking in and the delegates there and members of the audience all stood up. Thats president xi jinping. You can see theyre expecting a speech to mark the 40th anniversary of the special Economic Zone that was founded 40 years ago and shenzhen, as steve is been telling us, we could get some policy announcements and the push is to strengthen the area to include greater cooperation and enhance nineration between those major cities including hong kong and macau and other mainland cities in a region that generates about as much economic output as the country of indonesia. So there is president xi jinping and other senior members of the Commons Party government here and we are expecting the speech any minute. He has been making this trip and also pitching for the socalled selfreliance for the economy, the shift into this dual circulation, some topper framework here, and a lot of questions for what it means for hong kong as well. The chief executive, carrie lam is there in the audience set to meet with leaders and the president as well. She did mention that hong kong doesnt have to worry about direct competition with shenzhen. How does this all play out for the city and its further integration into the mainland . That could be a key question for this part of the world. As china seeks to reduce its reliance on high in manufactured goods like chips, we have seen that major push underway. We will see if we get any policies or rhetoric, but we could see some type of reforms underway as well. And i believe the president is about to speak here. We are not sure how long he will be speaking while he is in shenzhen, but it will be interesting to see if he has any specific policy subsidies that come out of this. Or even in subsidies. Tom that dual circulation policy that have been pushing in ae last few weeks is quite vague policy. There certainly a desire from investors and businesses to get more nuance in more detail as to what that means, and that is all within context of what is happening globally. Weve heard from officials in the last few days talking about the very difficult trade environment for china. You touched on the fact that the pressure remains on the country, particularly from the u. S. When it comes to technology and the desire that has been built up as a consequence of President Trumps actions to ensure that they can build out some indigenous technologies. Wireless,s five gr these areas are central to what is happening in the area and where the emphasis will be. President xi there in the center and we are expecting him to speak any moment. Theres a lot of hope leading up to this speech from president xi. Decided to come at this point in time, weeks before the u. S. Election, and he does want to continue as america has reiterated the whole america first, hes trying to mirror that with this kind of dual circulation economy as well. A lot of questions on what this means with the decoupling of the u. S. And china as well, if china becomes more selfsufficient and speeds up its technological progress, and what cost does this come . Will that make china less competitive in Global Markets if they are more internalized . I have a lot of questions about that as well. But its counting down to that fiveyear plan that were expecting in the coming weeks as well. Tom the plan is expected to be signed off early 2020 one, which will direct major policies here for the following five years. It is central to what investors are looking at us well. Lets bring in Kathleen Hays for her perspective. We have the imf upgrading and this is a positive outlook for china as president xi gets ready for his speech. Just over 8 for 2021. Kathleen, what is the Global Economic perspective on what china is doing and what president xi is expected to outline in the next few minutes . Kathleen if i may paraphrase an old blues song, if it more for china growth, we wouldnt have no growth at all. Of 4. 4 al forecast would be even more negative for was notd if china posting positive growth. Its the only major nation to post positive growth this year, and as you said, up to 8 next year. The imf also noted that china would into the virus first and came out and reopen first, so it is no surprise it is also recovering first. However, while chinas gdp expansion, if you are growing, your level of gdp will be higher than the year before, the only country like that right now, and where the virus has hit especially hard in europe and latin america, they can expect where back to the point every year theyre having a bigger gdp until 2023. Thats just how dark the outlook is. If i were president xi, i think i would be quibbling about this, underscoring that all my policies, all the things i led the country to do and my team are working very well. In fact, were showing the world that the chinese ways the way to go. We shall see what he says, but certainly when you look at what came out today from the imf, again, if you are mr. She, you wantto have mr. Xi, you to have something to convince people that youre doing a lot that is right. Certainly he can quote them and repeat what he said, we are there leaders the leaders when it comes to getting the country back on check. Yvonne you see in the audience, most of the members are still wearing mass. You have to talk about how they have come out of so much stronger than most economies out there, that they are applying the success of how they managed this covid crisis. When it comes to the economy, we saw that in the trade numbers yesterday as well, exports and imports seem to be improving, and is not just the manufacturing recovery but the domestic side is also getting traction, too. You pointed out how the chinese want to make sure that they have more of a two track economy, putting more emphasis on services. Building up the domestic demand, the way the u. S. And other Major Economies have depended for years on the consumption side of it, less on the exports. And china is still a very strong exporter, and the fact that the rest of the world is still in the doldrums, barely coming out of it, we just saw koreas exports turn positive after at least seven months of declines. This is something that is also a factor for china. Its one thing that maybe will keep not getting anywhere near the kind of growth rate they used to have, but it seems that this is another thing that they are definitely focused on now and as they come out of the virus, and in fact, if you are convinced in your country the virus has tamped down, if it starts coming up the regional governments, the National Government has the playbook in hand to know what to do to stop that from spreading, you probably feel better about going out, going to the movies, going out to eat, or taking your kid shopping. So this is a very important driver of their economy that everybody else is hoping to get to, but you can contrast them to the philippines. I spoke to the finance minister early earlier and cases have not gotten under control, so their economy is still suffering commensurately. Its a crucial point, and i can confirm speaking on experience, theres a sense of confidence that if there are outbreaks and were seen one on the northeast coast of china right now, that they do have a system in place to clampdown on that so it does give people that confidence to go out and spend, as you said. The vice premier was in charge of negotiating the trade one deal with the United States. In terms of the export and import numbers, what we have through the trade deal and the import of soybeans or other act. Its been some surprise somewhere on the phase i deal and saying it would probably fall apart by the end of the year, but they managed to maintain it. Otherwise eroding across multiple fronts. Kathleen its only three weeks until the election and it remains to be seen a President Trump, as the polls suggest, does not get reelected and joe biden and his team take over, what will they take up with regard to the relationship with china . Of course china did fall short for a long time on meeting those real quotas, but it was understandable even to the white house that when you are in the midst of a pandemic when there is so much pullback in the economy, maybe you cannot expect to get that number right on the nose, and if you fall short and youre still trying to get there, that you will. Just a big question. President trump is so consumed mainly with getting reelected and getting over the coronavirus, it seems that anything having to do with trade. As been way back on the burner the big question is joe biden and to what extent he is going to continue the insistence that china open up in certain ways, that china levels the playing field, all the things that not just the u. S. But other countries have been insisting on , and reached out to other allies to have more of a united front. A lot of people are saying thats what President Trump should have done and thats perhaps what joe biden will do. Kathleen hays, thank you. Byphen engle is standing ahead of the speech. So far, we havent heard from the president just yet, but when it comes to this hold concept of dual circulation, what sort of clarity are we looking for in this speech in particular . Anticipating there will probably be a lot of rhetoric that we have heard in the past. There will be specifics on policy directives and thats what the markets are looking for as well. He talked about the upcoming fiveyear plan that they will be developing with the Central Committee. Doubly meeting in beijing from august 26 onward. This will give you a lot of tea leaves to read as to how much promise the greater bay initiatives and the push for Innovative Technologies will be in that fiveyear plan. I can bet my Bottom Dollar that it will be high up on the agenda, as xi jinping has been obviously promoting selfreliance, given the conditions globally between china and the United States. Be looking going to at any kind of comments he has for hong kong, whether its an olive branch to those that perhaps took to the streets over the last couple of years, that there is a path forward for the people of hong kong in those innovative core doors, whereas hong kong is a Capital Raising center, it has an open capital account and canal finance a lot of these endeavors that china will be pushing in the new economy, but the young people here dont necessarily see a path forward if they are not in banking and finance. So what are the options for them across the border . Tom and carrie lam will be listening in as the president prepares for this speech. What do you think a role is in terms of partnering with the powers in beijing . Some will say they are the puppeteers and she is the puppet. Maybe that is overly cynical. What role can she bring to address those concerns about that citys role in the great debate area . Stephen out of want to be cynical, but i have to look at how its played out in the last year especially. Is she taking orders from the officeng Foreign Affairs and higher above . Her role will be to take the marching orders back to the people of hong kong and heal the wounds and say this is how we have to go forward or hong kong. Thats how it will seem to play out. Will she be negotiating with xi jinping and the powers that be in beijing . Not really, but she will be laying her case for hong kong paying a critical role, obviously. To have herosed policy address to lay out her plans and priorities for the next year. She was criticized and denied that she is just waiting to deliver that policy address based on orders coming from beijing. She says that is not the case. Not to hear from carrie lam and her policies until maybe as late as the end of november. In what isg to fold going to be relayed today into her policy address as hong kong gets further intertwined with the mainland, obviously. Mentioned about young people here in hong kong that are still a bit hesitant about going to shenzhen and the greater bay area to work. What sort of incentives are still needed to entice people to go across the border and go for the opportunities that china has been pitching for. Its really tough question. A documentary came out in the last month or two and that was, really is this the best path forward for the young, educated people . And the rankandfile here in hong kong who are not necessarily in banking and finance. And the high cost of living here is prohibitive. But there is a unique way of life here in hong kong that a lot of people want to preserve. They dont necessarily want to go work in mainland china, but is that where the best jobs in the new economy are going to be . I brought this up a number of times. Hong kong has not had these billiondollar tech unicorns at the rest of the world has had. Mainland and Southern China have. I guess we are about to hear from president xi jinping. Steve, just remind our viewers why the great debate area is central to chinas future policy plans. What is the importance of this area to beijing in the long term . Obviously Deng Xiaoping saw the incredible importance back in 1992 in his much ballyhooed southern tour when he kind of countered a lot of the hardliners in beijing and said the reform process is going to happen, and its going to happen through the Southern Province of guangdong. Ande was a cascade, avalanche, a tsunami of investment and there were priorities put on that. This being the 40th anniversary of the establishment of the special Economic Zone. I was here 30 years ago. You go across the border, it really was nothing. Its a miraculous transformation that happened. There needs to be that next step is china is obviously on that from not just being manufacturing capital, in fact wages have gone up so much it maybe be is not necessarily in the cards, but look at what is happening with tencent, huawei wants to be a leader in 5g. Again they are facing those headwinds in pushback from the likes of the United States. The south has the workforce and the people in the innovative companies. It is critical. Standby for more once we do hear from the president. Stephen engle join us here and you can turn to your bloomberg for more commentary on this. Once we hear from the president , we will bring you those pictures. Tom lets check in on the mainland markets as the buildup to the speech in shenzhen continues. Its red on the board for the mainland, fairly modest losses after couple of days of strong run ups. It was a moderately good day yesterday, closed in the green on tuesday. A strong base on friday and monday for mainland stocks. Currently youre looking at losses of on the csi 200. Youve got losses from hsbc and we can talk about that shortly. The futures in india are also down about. 4 . The imf, were talking to a chief economist for the imf. We talked about the upgrades buffer india they say contraction of more than 10 this year. The share sale disappointed in terms of pricing, currently down 16 . Again, this company the most heavily indebted developer in the world. It has a total debt pile of about 120 billion. It remains under significant pressure. Share sale yesterday was a disappointment. Tencent has gone up 2 private looks like they will buy another 10 in universal music. That will be linked to the new iphone 12. Hsbc is down close to 3 , on the back of the fact that they are not involved in the phone cell for the First Time Since 2017. 26 on the deal they were hoping to do with sino link that has fallen apart. Investigator investors clearly disappointed. Lets turn our focus to seamless measures in the u. S. Over a new battle package seems to be no closer to resolution. Mitch mcconnell is pushing a smaller scale strategy, one that President Trump rejects. Lets go to Kathleen Hays again, here with the latest. Stand,n, where do we President Trump saying go big or go home. Can we actually get to some type of compromise . Kathleen this is just such a process, isnt it . Republicans, the white house, the democrats led by nancy pelosi been going back and forth, not getting close enough to think up a new deal. Today Mitch Mcconnell started off talking about the need to do a targeted package. So Small Businesses dont have to lay people off. Let show the tweet, it is short, sweet, and powerful. Stimulus, go big or go home. Say i am saying this to Mitch Mcconnell, but i think thats what people conclude. Certainly nancy pelosi did. She said democrats have more leverage than ever. She called mcconnell steel a nonstarter, bad for democrats because we got priorities we cannot meet. She says trumps proposal falls short of what the recession needs. Changes have to be made. Wevetch mcconnell said got to replenish the ppp for starters. Saying some kind of deal is better than none. The democrats want all these measures that dont even relate to the virus. Hello sees rejection of the white house proposal comes after President Trump over the weekend raised the deal to 1. 8 trillion dollars. The republicans have been at 1 trillion and the democrats are down to 2. 2. Ow saying lets go big of course he is in a tough reelection spot and it seems that is what he is aiming for, but maybe with trump in a not quite a Strong Political , it may be at a point where Mitch Mcconnell is not anymore willing to move on this than he was before. Were getting live shots of the Conference Hall in shenzhen where we are still awaiting president xi jinping to give his speech arcing the 40th anniversary for that special Economic Zone in shenzhen and outlining his plans for the area. Shipping in the spotlight to asia. Korea kept its policy unchanged. What do you think the prk is signaling about the future . Kathleen it is signaling an economy that is somewhat better but uncertainty continues to hang over the economy. No sense of the possibility of a rate cut being squashed. However, look where the be ok has come in the past several months in terms of the key rate, where the three year bond yield is trading right now. You can see that after three rate cuts this year, the key rate is down to 0. 5. Three year bond yield is retreating around just under 1 and back in march the be ok launched a program where they are buying some bonds in order to keep those yields low. Thatll quite call it quantitative easing, but its clearly a noninterest rate policy measure. Noted ok governor following the decision the slump in exports is easing, but spending numbers, consumers, still not too aggressive. Fairly tepid because the virus is still in place. Korea saw a resurgence of some of the virus cases. They expected a slow recovery in line and with their august forecast of minus one. 3 for the year of 2020. The imf slightly upgraded their 1. 9,orecast for korea to so its still pretty dismal. That is also in the mix. Yvonne Kathleen Hays there. Monetary policy in this part of the world. Lets bring back stephen engle, hes been following the story and joins us from hong kong. We still havent heard from president xi just yet, but what if we heard so far . Mind,n lets keep in china is still a planned economy. Thats why we look at these fiveyear plans are closely and why the markets look at them so closely. Then you follow the trends and where the money is going and into what sectors. What has happened as well, while china has maintained its command economy, it has also developed an Innovative Private sector. Companies like tencent, which is just across the border, and other companies in the innovative south, theres always some sort of links to the government. Dynamics,ve those two rising private enterprise and innovative sectors, then you have the old stodgy, state owned enterprises which go in lockstep with the command economy and the plan policies. Thats what is interesting going forward. Not only a new fiveyear plan but theres talks the Central Committee of the common his party will also be talking about an even longer forward plan through 2035 in the upcoming gathering. And that is very interesting as well. But what are going to be the strategic, important policies and where is the money going to go . China is evolving, but it is still a planned economy, but with a very lucrative private sector that is also very much under attack in this are for gated tech world that we are seeing right bifurcated tech world that we are seeing right now. Yvonne we will hear more about the future, and the whole concept of selfreliance, of making your own highend manufactured goods like chips, for example. How much more can they catch up, given how large the domestic economy is . Can they keep largescale businesses going . Sanctionsook at the Trump Administration has been targeting, theyve been targeting against huawei, and u. S. Chip equipment makers have to seek export licenses to do business with the likes of Semiconductor Manufacturing international and other chinese chip companies. So you are cutting off that source. Upwards of 50 of that chipmaking equipment is bought from u. S. Companies, whether it supplied or others. That goes all the way down to the big foundries in taiwan. They have to comply as well. So it behooves china to make their own industry with their own technology, and maybe its a best thing that could ever happen to the tech sector in china, rather than be continually reliant on the United States, become selfreliant and you will accelerate that innovation, perhaps. Hoe, but somew to say maybe the Trump Administration is doing china a favor on this front. Just got some breaking lines crossing the terminal. The bank of korea saying now is not the time to adopt actual quantitative easing. So bit of strength for the korean won on the back of it, about. 2 versus the u. S. Dollar. They kept rates on hold, the bank of korea kept rates on hold. We are getting commentary from the bank of korea, officials saying the size and timing will be dependent on the market situation. They will buy government bonds in case of bond market imbalance. But the top line on the terminal is that now is not the time to adopt actual quantitative easing from the bank of korea. We will bring you more as we get it. We continue to wait for the president speech. You have outlined some of the policy priorities we may expect from the longer picture here for china. Some of the headwinds at president xi and his team face. The broader picture from the last few weeks has been one of strengthening economic data. Chinaowth forecast for 8. 2 for 2021. To does that give to president xi and his team as they look to navigate these headwinds . Them thatt gives floor that theyre not necessarily afraid to crash through it. He gives them a springboard while the rest of the world is coping with the rising number of infections and deaths and stalled Economic Growth. So absolutely it gives the leaders in beijing a confidence boost that they can go and embark on these kind of things on these initiatives. Again, were not sure what is going to say, but xi jinping is beginning his speech now. Development of special Economic Zones at a higher level, mobilize the whole country and whole society to unite and work hard for the construction of a modern socialistic country, and the of the secondary goal. Of specialshment Economic Zones is a great move made by our party and our reform andpromote socialist modernization. 1978, the third Plenary Session of the 11th Central Committee made the historical decision to shift the of our partiesrk country to Economic Development and start an opening up. And to mobilize the whole party and people of all ethnic troops throughout the country to start a new march 4 socialist modernization drives. April 1979, the then head of the Committee Proposed two leaders of the committee the establishment of Export Processing zones and the promotion of reform and opening up. Comrade Deng Xiaoping indicated clearly that special zones would be the better name. The cbc Central Committee could offer some policies, and people from these areas would be free to choose what to do to blaze a new trail. 1979, the Central Committee and the state council provinces to be forerunners by adopting special measuresand flexible and piloting special export zones. In 1980, our party and country approved the establishment of zones. Thepril 19 80s 1988, party and country approved establishment of a special Economic Zone. Pointing out that special Economic Zones should serve as important windows and examples of chinas reform opening up and socialist modernization plans. For a long time, under the strong leadership of the Central Committee, with support from throughout the country, the special Economic Zone has reformated the mind for and innovation, fulfilled the haveon, and these pioneers written a splendid chapter in the construction of socialism with chinese characteristics. Made important ,ontributions to other reforms opening up, and socialist modernization drive. , quan donggentlemen is the vanguard pioneer and experimental zone of chinas reform and opening up. It was the earliest established and the largest member of the special Economic Zone. Shin jen, as a brandnew city created by our party and people sees reform in opening up. Of socialism with chinese characteristics on a piece of blank paper. Working through difficulties, officials and people in shin jen have completed a journey for these 40 years that would have taken around 100 years to finish by metropolis is from other countries. Miracle created by Chinese People through the history of world development. In the past four decades, shin to worked relentlessly emancipate and develop social productivity and promote it vigorously scientific and technological innovation. Gdp rose from ¥270 trillionn 1980 to 2. 7 in 2019, annual growth of 20. 7 . Aggregate now ranks fifth among asian cities. Revenue increased tom less than ¥100 million yen. 2. 4 billion the city has achieved a from a backward, remote town to a metropolis with global influence. Decades, it was adhering to taking the lead in carrying out market oriented Economic System reform and pioneered in adopting over 1000 measures of reform. An epic with concrete actions and hard work. You have a historical leap from Economic System reform two different performs in all aspects. , shin jent decades utilizedlly international and domestic markets and resources and has actively attracted global investment. Volumeort and export million in 1980 to 431 point 5 billion in 2019. 26. 1 . Al increase of it has realized a historical leap from importexport trade from a high level at all aspects. Years, with the development of socialist democratic politics, shenzhen has strengthened the Development Core values and as aresult the city has realized historical lift from Economic Development to coordinated. Evelopment all civilizations. Decades, withur its adherence to the people oriented philosophy, shenzhen has made remarkable achievements and has realized transformation in education, health care, policy, and other sectors. 2019, shenzhens per capita disposable income reached ¥62,000, increasing by 31. 6 times on the 1985 level. Achieving a target of building a moderately prosperous society, shenzhen has made a historical leap to achieving high quality reach across society. 40 years in the past, ive witnessed the flowers in spring grow to the fruits of autumn. Theill remember groundbreaking sound in the early days. , special Economic Zone with great vitality, is showing to the world the power of chinas reform and opening up and the Bright Future of socialism with chinese characteristics. What appears to be usual may turn out to be just the opposite. Success and achievement never come easy. Step made byy shenzhen and other special Economic Zones in their , it is the results of their hard work. Their achievements are the result of this long leadership, ande Central Committee the result of the pioneering work of officials and the result public, and the of extensive support from people throughout the nation and from all sectors. Of the Central Committee and the Central Military commission, i would like to extend my sincere builders of the special Economic Zones, to all comrades that have contributed to the Economic Zone. [applause] i would also like to extend alleartfelt gratitude to those special men and women. Ladies and gentlemen, comrades. The successful practice shall thate and has only proven there were Strategic Decisions made by the Central Committee. These special Economic Zones should not only continue to be run but to be better run and run to a high alert higher level. The past 40 years of practice of reform and opening up have andeved great miracles accumulated that bold experience, and deepen our understanding of rules, and building a special Economic Zone of socialism with chinese characteristics. First, we must adhere to the parties leadership and maintain the right direction of development of the special Economic Zones. To and we must adhere with chineselism characteristics. Mature and even more to reform. Blished third, we must carry out development with the courage to break the ground and to be first. We could continue to lead the reform with breakthroughs, with innovative thinking. First we must adhere to the opening up in an allaround way, and it helps the attractiveness global. Assions of going innovation ast in and tomary driving force gain the lead in global scientific reform and industrial reform. To the adhere so thating development the achievement of reform and development could benefit more people in a fairer and more equitable way. We must adhere to scientific legislation, law enforcement, justice, and universal law make this the guarantee of special Economic Zones. Philosophy to the ,ealize comprehensive coordinated, and sustainable society,nt in economy, and the ecological divider ecological environment. Promote inclusive and mutually reinforcing development among the countries. 10, we must play a leading role with special Economic Zones in the nationwide blueprint and work for national development. Issues, the experience accumulated by special Economic Zones during the last 40 years of reforming and opening up. These are significant guidance to the development of special Economic Zones in the new era. Cherish it, continue to adhere to it, and constantly enrich and develop it in practice. Gentlemen. World is undergoing profound changes never seen in a century. Is covid19 pandemic accelerating this whole process. Globalization is facing reversing trends with rising protectionism and unilateralism. Is decreasingomy International Trade and science and the technology, cultures, security and politics, are all undergoing profound adjustments. The world has entered a transformation period with turbulence. Stage ofnow at the key the great rejuvenation of the chinese nation. Our economy has transformed from a face featured a highspeed featured bye highquality growth. Undergoing is profound changes. With people think and need for better life, fast market resilient and development drive. We are forming a new Development Capacity with the Economic Cycle playing a leading role want international and domestic cycles mutually benefit each other. Isthe same time, our economy in a development of transportation mode. Ships as driving forces. To achieve highquality development, we still need to improve a lot. Of specialelopment Economic Zones is faced with difficulties and challenges. The new era calls for new responsibilities and new endeavors. Thehe development of special Economic Zones in a new , with chinas characteristics, comprehensively plans ande integrated the comprehensive strategy. To keep in mind the overall initiative of our country in a new Development Stage and implement the Development Concept. We should promote highquality shape the new development landscape, and in the spirit of arm serving efforts with readiness to break difficulties, we will continue to reform and opening up. We will promote reform and opening up at the higher starting point, and to open up new prospects for the work of special economic soldiers. To make new and greater contributions in the building of a modernized socialist country and the realization of the. Econd itinerary committee has High Expectations to washingtons reform and open arms, innovation and development. In august last year, the cbc Central Committee issued guidelines on the vote with chinese characteristics. It is with comprehensive instructions. To build itself into a pilot demonstration area of become a modelto of a great, modern, socialist country. Implement new Development Concepts and persist in limiting reform comprehensively and extend opening up unswervingly. The situation also promotes the andlopment in the bay area enriches the new practice of the one country, two systems. Will take the lead to realize socialist modernization. This is the Historical Mission of shenzhen given by the Central Committee in a new era. First, i will unswervingly develop the new concept. Economy and shenzhens is comparatively developed. Ofce it places more pressure global competition in technology and others. The implementation of the new Development Concept for highquality development is a fundamental way out. Development is our primary task. Talents are our number one resources. An innovation is the top driving force. To take the lead in promoting transformation and quality, efficiency, and driving to achieve Higher Quality developments that are more efficient, fair, and sustainable , and secure. We need to speak to the supplyside structure reform as the major component and to leverage resources of protection, distribution and consumption in domestic markets. Supply to improve compatibility for domestic demand. So that we could meet the growing needs of domestic markets with high quality. We need innovation driven implementation strategy. New trend, i reviewed the high ground with global influence. We should deploy any major underlining industrial chain was innovation chain. ,e should plan in advance cultivate future Interest Rates and develop a digital economy. We should increase the input in basic research and apply basic play to and give full , to takes advantage initiatives in integrating ones Global Innovation network. Benchmark with global firstclass business, develop finance, r d, design, accounting, lulls, and other golden touch within the industry. Also we need to strengthen our competence or capacity level. We will implement more open tennis policy to attract strategic signs, leading science and Technology Using science and technology highlevel transparency to utilize global brainpower. Second, comprehensively deepen reform in time in line with the times. The goal of reform is never ending. The goal of reform is never through. Reform is at a New Historical juncture. With many unprecedented challenges approaching. The sensitivity and difficulty of pushing forward reformers are no smaller than four decades ago. Therefore, we must with greater political courage and wisdom think through the culmination of crossing the river while throwing stones and transmitting toplevel design. We will deepen the reforms in in key links with the right timing. We will pay more attention to the systematic, holistic, and gordon edit effects of the reform. To enhance a comprehensive effect of the reforms. Through indepth research, the committee has decided to take the 40th anniversary of the establishment of the special Economic Zone as an opportunity to support the comprehensive reform pilot in shenzhen. Links areas and critical and to launch 27 reform measures. The first batch of 40 authorization items. Zonehen special economic should shoulder its responsibility, firmly followed the right direction, immense peoples emancipate minds and carry the essence of socialism. The city should introduce major reform measures in key areas and majore a group of replicable results in institutional innovation. We should focus on solving real problems facing highquality address the need for developing a higher level foromic system, plan strategic and defining role for creative and pioneering reforms. So we can pilot and pioneer in making improvements in key areas such as a distribution hanism, and integrate the a market oriented law base and internationalized business openonment, a high level Economic System, supply system for goods and services, for urban mechanism spaces, etc. The city should optimize , implementservices the mechanisms of power lift, responsibility live, negative , and step up the formation of a close yet cleaned relationship between the governments and businesses. Promote theso entrepreneurship spirit, protect the legitimate rights and interests, Property Rights as well as intellectual Property Rights in accordance with the motivate them to follow their businesses. Third, we should strive to further open up in a comprehensive manner. Economy ishe world confronted with complicated gestures previewed by no means should we be stopped by the reversing trends and tide. We should choose the right side of history to further open up in a comprehensive manner. Push for the building of the community of a shared future for mankind. The new development packages not the closed domestic cycle, but an open domestic and international cycle. We should optimize and upgrade our production, distribution, circulation, and function systems, strengthen domestic, andmic connections enhance the economic intensity, improved capabilities of the domestic cycle in connecting , ramp uponal cycles the institutional opening up of spenders and take the lead to build another Economic System at a higher level. Flexible explore more policy systems and Scientific Management routines in domestic and International Trade, investment and financing, fiscal and taxation policy, financial innovation, entry and exit policy, etc. , so as to enhance multilayered and a pragmatic obligation. The more we open up, the more we should Pay Attention to security. We should strike a balance between the two important issues of development and security by improving our ability to risk control. We should push toward the modernization of Government Systems and capability with innovative mentality. Over the past 40 years of high speed development, shenzhens special Economic Zone has witnessed profound in ways ofion production, organizational models and operational mechanisms. Presenting the city with numerous challenges such as tremendous pressure on other governments and lack of development. Cycleuld foster and all management philosophy, speed up the modernization of our confidence system and newbilities, or blaze a trail of governance that matches the patterns. We should place emphasis on learning to address challenges in urban management with a lower an approach is making the rule of law a consensus and basic rule of society. Attached byhould be adopting a scientific, meticulous, and intelligent approach. The city should approach the advantages in the development to promote innovation in urban management methods, so as to make the city afraid in this matter and in an intelligent way. We should put into practice the People Oriented Development philosophy with concrete action. The root and foundation of the communist party of china lie in the people whose aspirations for a better life have set the goal for each of us. Focus ofing point and the reform and development of the special Economic Zones should be based on this as well. Our people know best whether they are living a good life or not. Currentd start with the problems that our people are most concerned about and feel most strongly about. Reforms andre innovation measures to tackle problems in employment, education, health care, social ,ecurity, housing, elderly care ecological environment, among others, one by one. Fenceid to offer a higher higher sense of more and durable happiness and better guaranteed security to the people. Innovationespect the initiative of the people and theiruously grow on innovation and creativity in the development of the special Economic Zone. We should prioritize development, endeavor to provide the Community Level with more , draftto Public Services a Public Service system and build a universal and sustainable Social Security system. Conduct normalized Epidemic Prevention and draw on past experience to prove our worthiness and public health. We should vigorously deepen the development of the Hong Kongmacao greater bay area. Its a Major Development strategy of the country, where shenzhen being an important engine in its development, we should see the major historical opportunities in the development of that area and promote the laws,ent of economic institutions of quando, hong kong, and macau. Efficient andthe and other flow factors and enhance the integration of the market, we should deepen reform into plan and execute well the construction of kong Technology Innovations zone and speed up the construction of housing in zones. Ng, macau thehould leverage construction of the pilot launching area of comprehensive National Science center in the greater bay area to enhance synergy and coordination with resources of innovation in hong kong and macau. We should also continue to encourage and guide our overseeots as well as chinese to play their important roles in investment and twoway openness. So that they can make new contributions to the development of the special Economic Zones, which also fully utilize the cooperation to attract more young people from hong kong and macau to study, work, and live in the mainland. Exchanges,elp those comprehensive communication and increase their sense of belonging to the motherland. Departments of the cpc Central Committee and central should Work Together to comprehend the strategic input and give full support to the reform and development of shenzhen and other Economic Zones, following the requirement theromoting the plans and four prong strategy, this department should support special Economic Zones in deepening reform and opening up, engaging in cutting edge scientific and technological innovation, developing strategic industries, enhancing the beauty of equal civilization, strengthening spiritual vibration, increasing the report, reforming and innovating social governance, improving the beauty of ecological civilizations and other work so we can provide scientific guidance and strong support to the reform and development of the special Economic Zones in a new era. The blossom of a single flower cannot represent green. Only the blossom of 100 flowers can be a rival of spring. Opposed the opening up principal featuring mutual means we cannot only gather momentum from the. Orld make sure that chinas development benefits the world. Is cannotof have been completed without assuring patients from countries around the world. It has created room for development and share dividends with different countries, so china welcomes countries of the world to take more part in the reform in opening up and development of our special Economic Zones and build a new new landscape based on joint participation, which of we will bringd this out. Ladies and gentlemen, comrades. Are at Economic Zones the forefront of the reform in highng up, and there are requirements on strengthening the overall leadership of the cdc. We should fully implement the new requirements on Party Building in a new era privet with the spirit of reform and , shenzhen serves as a pilot demonstration in strengthening the overall leadership and extends to the coverage of primary party observations. All Party Members should reaffirm their ideas and commissions, replenish their knowledge and concept, and voluntarily plan and execute their work with the picture of the whole country and mine. We need to establish and improve an incentive mechanism, channeling it toward the direction of promoting the capable and demoting the incapable, and eliminating the underperforming. I support the passion and momentum of Party Members and encourage their work. Cure theo relentlessly party was strong discipline and crackdown on corruption. Bureaucracy and the social and political echo system. Socialism with chinese , goingeristics handinhand with material civilization and spiritual civilization. So we should give equal importance to material and spiritual civilization right now. We should strengthen the education on ideals and convictions, cultivate and exercise the socialist core , deepen the published city and education on the socialism with chinese characteristics and chinese trade. Educate officials and the general public, in particularly the youth, to consolidate their confidence in party. The theory that institutions and the culture of socialism with chinese characteristics. We need to promote the national of patriotism centered on reform and innovation, continue to pass on the spirit of special Economic Zones featuring andrprising, pioneering, industriousness. Publicourage the general to be the trail blazers of the new era. We need to extensively carry out spiritual civilization Building Activities among the general public. Education on social morality, work ethics, family virtue, and individual integrity. Constantly increase the cultural attainment and social socialization. More cultureild ,nfrastructure for public use and the highquality development of culture industry to better meet peoples new expectations on cultural life. Ladies and gentlemen and comrade. With the past four decades behind us, the new road ahead is more inspiring. Placeeat changes taking in the special Economic Zones are derived from the great endeavors and hard efforts of generations of special Economic Zone builders, and the new starting point. The people of the special Economic Zones should theervingly implement position and deployment of the cpc Central Committee, maintain the spirit of pioneering, the momentum of innovating, the approach of hardworking, and strive to write more stories and new and greater miracles that amaze the world. [applause] tom chinese president xi jinping wrapping up his speech on the 48th anniversary of the special Economic Zone there in shenzhen. You can also turn to bloomberg for more on this. You can find analysis from bloombergs expert editors. Stephen engle has been following the story throughout the morning and joins us from hong kong. Steve, what were some of the Key Takeaways for you . I didnt hear anything specific in terms of new policies. Am i wrong . Steven thats what i was listing for, any specifics. I predicted it would be high on rhetoric and repeating similar themes. We are repeatedly the concept of socialism, or socialist modernization. I dont have that rolling off my tongue quite yet, but he mustve mentioned that at least 1015 times, socialist modernization drive, and they used the term unswervingly repeatedly. So they will be unswerving in their determination to continue the reform process, and shenzhen will be the center of the innovative push in the greater bay area. Taiwan,oned hong kong, and macau a number of times, and a little bit more veiled in terms of trying to get the people in particular here in hong kong on board with this vision that he has for the southern wan dong province to be an innovative hub, and is encouraging the young people to come and work, live, and study in mainland china, to build your unity in your love for the mainland, if you will, by living there. That is a direct overture to the people who have gone through a year and a half or two years of unrest and dissatisfaction with chinas growing influence here in hong kong. Not everyone here in hong kong is to, i might add. However, development is the number one priority. He said talent is the number one resource, and innovation is the guiding course. But you are right, tom. He wasnt specific, just speaking on grand, overarching terms, that shenzhen is going to be the leading innovating center while facing global headwinds, obviously. Great challenges not seen in a hundred years, he said. About hong kong attracting more young people to work in the mainland to help boost their sense of belonging to the mainland, that was a direct quote from the president. It will be interesting to see how this will be received in hong kong as well. We continue to watch these lines coming through out of shenzhen. The market still seeing some pressure when it comes to chinese equities here today, but. 6 lower for the csi 300, a mixed bag as we look at what is to come here. Still a lot of disappointment on fiscal stimulus in the u. S. , vaccine setbacks, and not a lot of policy reform updates out of shenzhen either. This is bloomberg. The following is a paid program. New kenyans and views expressed unexpressed those of bloomberg lp, its employees. The following is a paid presentation brought to you by rare collectibles tv. Announcer the Morgan Silver dollar is the most iconic coin in United States numismatics history. Designed by United States mint assistant engraver george t. Morgan, this Silver Dollar series was minted from 1878 to 1904. Then again for one year in 1921. The morgan dollar is nearly an ounce in weight and has a 90 silver