Estimates of 6. 1 . In october, and the fixed Assets Investment can in line with investments, a. 3 for january 8. 3 in january through february. There has been some discussion amongst economists as how much curbs and house prices would have on peoples spending power. We have in inflation data showing a pickup in consumer inflation but likely that will see through the month ahead. 1. 8 is a positive in terms of what color policymakers are trying to do. It is marginally above estimates. When we are talking Industrial Production, we talking cement, glass, autos. Were going to get a breakdown of each of those components plan to that number. What comes to asset investment, were going to have to break it down and see how much the public state will have to step up its spending, because we have seen the state having to take the place of the drive it sector, which has pulled back on some of its fixed asset investments. We will get some of those details in the next hour. In terms of policy makers, this paints a picture of Economic Stabilization at the end of the year. Have a basic policymakers can use to reign in some risks. Expect to see it continue to when wek of credit, and get money supply data, we are expecting to get that sometime this week, that will give you an idea of the lows in credit, as well, which had eased back. There willhs thinks be a more hawkish line, because it has space now to act. The big unknowns Going Forward into toy 17 are donald trump into 2017 are donald trump and how he will handle chinese imports. That will be affected to watch, as is the rating raining steps toet to change the credit market. When they start to pull back and you throw crop into the mix, there is some uncertainty on china. Sophie thank you so much. The aussie dollar is often one of the first two reacts. We have seen a spike in the aussie dollar, it was trading weaker against the u. S. Dollar despite the fact that we have seen a bit of dollar weakness across the board. Youre now seeing that pullback. Fairly unchanged, the aussie dollar. A little bit of a spike initially when the numbers hit the wires. Better than expected, so far no real reaction in the cash market. Were seeing the shanghai markets down 4 10 of 1 . 2. 7 . Down around still seeing some weakness coming through. A lot of analysts are saying it is likely markets will remain listless head of the fed meeting, even though we have seen a positive upside in china. It is still flat and slightly in metals from some of the players in australia. And in hong kong, it continue to decline by 2 10 of 1 . Some weakness coming through from financials and some of those Real Estate Property trust, although you are seeing some upside from a lot of the energy players, and petrochina is the front runner on the hong kong exchange. Tropic the nk and trading at levels we have not seen since last year. The other action we are seeing today is in the bond market, and if you have a look at the australian 10 year, you are seeing bills being sold all day, a different picture than yesterday. Bonds are getting more traction on the tenure basis, down by three basis points. At this stage, no real positive upside in terms of currencies or cash markets from china. But it was a bit better than what the market was looking for. Rishaad thank you. Getting into assets now. The numbers are pretty much coming in line with estimates given what we saw in november. What is your assessment of the latest activity . Stabilization,ee stabilizing of Industrial Production and robust consumer sentiment. We also saw decent investment data, so i think overall the Data Confirms that into the fourth quarter, the economy remain quite solid in growth. The globalization story and just hanging on. Rishaad moving 6. 7 over the quarter, that has been stable all year. That could translate into something Even Stronger than that looking ahead well, looking at the present quarter. There could be some modest upsize risk, but i think the economy is seeing some headwinds down the road. Number one, we have uncertain trade policies coming from the trump presidency, and number two is the china has been tightening the market. Despite the near term stabilization, i think which also offers some room for the policy to stay neutral to tightening. Sophie what does this mean for policymakers, especially when it comes to the balancing act . We are seeing the shift of policy priorities of the pboc since august, when it resumed the 14 day loophole. Policy brokers have shifted from stabilizing growth, supporting group into continued financial risk, as well as managing the impossible trinity, the currency pressures. Underlining that, the whole cabinet outflow story, as well. It looks like capital control is being taken down. A conversation along way off for now. Think intensifying capital controls is only necessary, especially with very strong Dollar Movement after Donald Trumps victory, and going best case is three fed rate hikes by the end of 2017, and we continue to have a very strong dollar that will further add to the currency depreciation pressure. Alsothat the household, and has continued incentive to continue their assets. Sophie there are some assessments that the china picture is not as worrisome as some content. What is going on, Housing Market is relatively strong. Rishaad and manageable. Clearly a there is sense of complacency from the markets, which is also true. Cyclically within the old economy with a strong rebound since the beginning of the year with a very strong credit. But we know this is another round of debt fueled investment stabilization, which only brings more risks down the road in the medium term. In the near term, i think it is fair to say that china needs a stabilizing factor for the global economy. Rishaad that is just it. There is a bit of the capital outflow and housing. Where does that all leave you was looking at the yuan . 7. 2, 7. 3 said, oh maybe before the summer. Is the currency will continue to depreciate to 7. 35 in a years time. Theres also a risk if we see a recent fast depreciation of a currency added to the outflow pressures. There is some increasing probability that the government may shift toward more rapid shift of floating currency. Sophie are capital controls anticipated . They will be necessary to facilitate this shift to a more Flexible Exchange rate, where we see more volatility and reducing of intervention. Some of the timing, with President Trump continuing to highlight some of the potential targeting of china sophie . That chinase way ethics reserves have been driving down. What you make of the labeling by president from . President elect trump . There is constant intervention in the market. It is not really constitute a strong argument that we all know, the president s you may be has the power of making some technical adjustments, but our base case is that the key is not currencyly just the manipulator come up a kind of trade policies he would have imposed with trading partners, including china. Rishaad we just of no. That is a big problem. Said he would you some things on his first day that i dont think he will have time to do. Other than the political comments he has made in the region, he is not yet moved on the trade front on china. Barely there is a risk that we should not be underestimating. Rishaad thank you so much. Looking into all of this data. Broadly speaking, we were pretty. Uch exactly the the European Union will set up how to conduct brexit negotiations with u. K. Leaders will meet on thursday without prior minister theresa strategy. Cuss the the u. K. Will be excluded from all meetings were the 27 remaining eu members discuss brexit. Christine lagarde has told a paris court that an imaginary plot has led to her iran trial on negligent charges. Did judges rejected her request for a delay in the trial and she will return to court on tuesday. Donald trump is set to said to be postponing until next month the details of how he will handle his Business Operations in the white house. Transition Officials Say a News Conference scheduled for thursday will be delayed because the president elect is busy filling his administration post. That on top has about 3. 6 billion in assets and 630 million in debt and holds more than 500 companies. Donald trump has nominated another Goldman Sachs executive to his administration. He has picked 25 year veteran gary cohen to be his advisor. Advisor. Mic his role on the National Economic council will see him help coordinate comes economic program. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Trade andill ahead, treasury. China launches a wto complaint against the u. S. And eu. Rishaad the global bond rout. You are watching bloomberg. Sophie the fed is widely expected to announce a late hike bondsday and a bunch ers are waiting we can say to a certain extent it started with some surprises on the u. S. Economy. The u. S. Economy will get more stimulus, that really gave it some speed. With an the last few days, with opec and Oil Prices Surging to a 17 year high, it is putting more fuel on this bond Market Selling fire. Lets look at bloomberg. At end of day basis, it traded at 2. 5 , the highest in two circlethe little red benefit lower lefthand corner of your screen. Yields doubling in six months. Just the lefthand corner, before went into recession. You can get a sense of how much further this would have to go. The question now, where is the fed . Donald trump says he is going to boost the economy. This is what is really on traders mind now. Why are bond traders and investors finally be leaving the fed forecast for the economy and rate hikes . They are seeing more evidence that the fed is right and the economy is going to pick up. A year ago, the fed was forecasting for Interest Rate increases, the bond market did not selloff and a kept rallying. Things i just mention, if they build up, they are changing their view. To the terminal. Line isum green connecting those yellow clusters. 2017, 2 rate hikes, 2018 in the middle. That is the forecast, the medium forecast for three rate hikes. The red line at the bottom is what the traders were betting on in september. Hardly any rate hikes in the next few years. The purple line is what those traders are betting on now. Will the fed change those dots at the meeting . It has said publicly it cannot change his view on the economy and monetary policies, and that is what donald trump says hes going to do. Fedr fisher at the new york said maybe it is time for the fed to step away from those dots. The hardest thing for the fed is they dont know where they will be a year or two from now, they dont know how much of this recovery is going to come through, they dont know how on top of that the children ministration and congress will put. , doesm looking for is janet yellen know he has she has to pull back from pretending she knows an estimate on the fed funds rate for 12 months from now, what she doesnt really know. He basically says Forward Guidance is past its prime. Earlier this year, jim fuller, one of the guys out front on Monetary Policy in the last 45 years, he pulled away from the. Forecast and does not think they work for a well. It will be interesting to see if janet yellen would signal anything like that at the meeting on wednesday. Sophie we are nearing the end of a count on to that fed decision on wednesday. Rishaad a long time coming. Shares of Smc Corporation are tumbling after investment released a negative report on the company. Thee are questioning of accounting. Sellers have been targeting Japanese Firms this year. Smcs spokesman said he had no immediate comment. We will be talking to the wells investment security seo about this call. Prominent short seller has targeted a Japanese Firm for the first time for the negative report on motor maker night at. Idec. He says they consistently miss sales and profit targets and he uses and use aggressive accounting. Rishaad apple is said to be discussing investing in the 1 billion tech fund by softbank. In a invested a billion ridesharing company. For beats 3 billion in 2014. Sophie up next, we will look at why hong kong money markets are already feeling the strain from the fed meeting this week. This is bloomberg. We have a rate hike from the Federal Reserve this week. Pressure in hong kong on the citys currency. It is becoming more expensive to borrow in order to buy stocks. We are seeing the interbank rate, the threemonth interbank rate surging for the past 10 days. They are saying this credit crunch signals concerns of cash, capital outflows from hong kong. Higher u. S. Interest rates come with cash outflows from emerging markets and hong kong. The fact is that in isolation, higher rates would boost or support the hong kong dollar, given the come comparison to the u. S. Dollar. But you can see a previous bout of cash outflows has led to currency depreciation along with a jump in rates. That spike you see in january, the blue line, that would be the hong kong dollar plunging to an eight year low. We did see the yuan steadily we can, and this is the highball line, the white line. This is a tenths of 1 or 8 10 of 1 or thereabouts. Yes. What economists are saying right now, were seeing that the fed will hike rates twice next year, the rate in hong kong will not be so big so we were not see such you get outflows. Not to mention we have seen mainland investors pour money into hong kong equities and to hedge the devaluation of zero currency. The risk so there, but still the Exchange Rate pegged to the u. S. Dollar is trading at a stronger level of that bank against the greenback. Sophie thank you so much. Up next, donald trump has made a friend of taiwan. Sophie well see why some think his obsession could be misled. Rishaad plus, a full Market Update and the tokyo close after the lunch break. We have that 60 minute low, down at the moment by 28 points. Were back in of it. It is 10 29 in hong kong. Stabilizationic held in november, with industrial traction climbing from a year earlier. Slightly above estimates. Retail sales advanced template present last month 10. 8 last month. Policymakers have more room to switch focus from stimulus toward curbing Financial Risks third in boost to production in november and nigeria, libya and angola all pumped more oil, rating total output to 28 Million Barrels a day. Opec members and independent producers to increase output ahead of the cuts to ensure no loss of market shares. Pursuing aups Football Club has failed to meet the deadline for a down payment. They will they agree last week that the money would be transferred on monday, with march 3 the date for completing the sale. The agency said the money was not paid sign oh europe did not have it in place when the big milan. The mission will be a final sweep of deep ocean road means that my called the remains of mh 370 and the 200 on board. Local media say that if the plane is not found in one of the trenches, the search will be called off in january or february. Global news 24 hours a day powered by more than 2600 journalists in more than 120 countries, this is bloomberg. Lets have a look at what is going on market wise. What is the flavor of the day . Not a lot of conviction and markets today. We are seeing the regional index flat there. We thought was better than expected china, youd see some upside. This is mostly ahead of the fed meeting this week. Players. Strial health care very much the front runner today. That shows you how much a defensive play todays trade is. Down by close to 5 . This is as its Trading Volume also doubles. The biggest fall the scene in the steelmaker since june 24. Quite a lot of movement going through in that stock. This is a Health Care Stock in japan. Really showing you that line we are seeing an health care. Is one to watch. It is resuming trade for the First Time Since june. 1. 1 77 billion billion yuan. We know a lot of these property stocks have been coming under pressure. A look at how the overall Shanghai Hong Kong markets are going, still a lot of weakness. Yesterday having that biggest fall in six months, still think a lot of downside coming through. Also, Home Appliance companies. And in hong kong, your sing the hang seng up. That is limiting the losses somewhat on the hang seng. Petrochina looking good there. Finish yesterday as well despite the rally we saw in energy players. A little weakness coming through in some of those other commodity players. A look at the remedy renminbi. Pretty flat. Today came through a little stronger than what it has been. No real reaction there in currencies. Sophie thank you so much. Donald trump accusing china of ripping off the u. S. On trade and threatening to brand them as a currency manipulator. Sophie there are some economists who say that his new friend, taiwan, is more fitting of that label. That is imaged in question. Mullah economyse a far smaller economy, has a far smaller stake in global optics politics. China is the second largest economy in the world. I think what trump is trying to do is he is trying to use his relationship or the socalled beginning of this relationship with taiwan as a bargaining chip against china. China is extremely sensitive about the one china policy. Anyaad trying to brand country as a currency amid later, moving beyond that, if we look beyond the rhetoric, what about any real impact . Im not sure about real impact. Trump is walking a very dangerous line. At some point in time, you want a certainut beyond point, you dont want to take a certain chance. On the other hand, if you look at the evidence over the past hass, the taiwan dollar risen against the greenback, but the chinese currency has dropped almost 6 . That is a huge almost devaluation, depreciation in any. Of time. In any period of time. Im sure he has his reasons. The real impact is he good push things beyond a certain point where it could affect the entire asian economy. A good have a knock on effect and currency stocks and all of that. Sophie leading into perspective here, china is a behemoth. Taiwan, but we are seeing with the u. S. Relationship in this region, what else can we anticipate here . Take a look at the economics of taiwan. They have been planning. On the other hand, you see china is declining. You see the two opposite. They have been defending their currency as widespread speculation. They have left their currency drop. They have been trying to control it. There is a lot of meddling in the currency. However, taiwan, we have seen , we have seenars them of allowing the currency to appreciate, and toward the end of trading, they try to step in and weaken the currency. That is something that creates a problem in the currency market, that creates these artificial moves. I think that is a problem. If trump pushes, he has to know when to stop. Sophie thank you so much for that. Year to date, 3. 8 , to put that into context. Lets talk about these tensions between beijing and washington. A bit more heat here. Beijing filing a complaint to the world trade organization. We are joined for more. Are we already seeing retaliation for trumps comments on the one china policy . I just morphed from robin to myself. It is interesting what he had to say about trump and his administration needing to tread carefully. China needs to tread carefully as well. Listen, so much is at stake in this china u. S. Relationship. China does not like this kind of uncertainty. It does not necessarily know how to react to it. Do you push back strongly . Do you have a measured approach . So far they have been fairly from a fews i inflammatory comments coming from state media. This latest development is tohaps not related directly what trump has said about the one china policy. It coincides as well with one day after the 15th anniversary of chinas ascension to the world trade organization. This is something they have been pushing for. They want the u. S. And the eu and others to use fair in their estimation pricing for antidumping complacent complaints and tariffs. These use what is called surrogate country pricing, which takes third country pricing applied to domestic complaint. It is kind of wonky. Very complicated. Basically, china says it artificially raises the levels of tariffs against china in a case against chinese exports. We have a u. S. Trade official the United States has no plans to modify the way they calculate antidumping measures, and the quote from that open hillside china has not made the reforms necessary to open up on market principles. Rishaad the danger here we were talking about this earlier you get a series of titfortat moves. Before you know it, you get into a trade war. That is the big concern for a lot of people. We are in uncharted territory. Donald trump so far talking and acting or tweeting unlike any other president sitting in the white house. That is what is the concern. I mentioned the state media, they sort of gingerly criticizing trump. He is not president yes. He is not the president yet. He is acting like a child who is ignorant of foreign policy. The one china policy cannot be bought and sold. This is what the bank of america had to say about 2017. This is my single biggest worry. U. S. And china could be on a collision course. So we live in interesting times. Aumps horsetrading tactic big trade for china. Ive never said bigger tips and bigger tax on television before bigger tit and bigger tat on television before. Up, the activist who is fast becoming japans most influential bear. Rishaad well be joined live from tokyo. Sophie a quick check of the latest business flash headlines. Extended trade after boosted. Ividends of 30 also a 13 billion buyback plan to. There is your aircraft being built due to demand. Changes will not affect its 2016 financial. Stake in the pipe by division ii a 3. 3 billion. Seeking funds to the to expand. The division of state about the corporation will take their hanjin shipping is likely to be liquidated. Its as the Accounting Firm in charge of Due Diligence pricewaterhousecoopers, will recommend auction. Atuidation is recommended 1. 5 billion. At japaneseook pneumatic equipment maker. A Short Research and well investment issuing. Sophie this is a group of activist shortsellers that have been targeting Japanese Firms over the past year. Joining us from tokyo is the head of research. 11 . Seeing it fall at your psychic could follows much is 85 that you are saying it could fall as much as 85 . Thank you for having me today. Sophie what is driving your view . Our activity just started last year. Point is to provide prospective to the japanese market. [indiscernible] sophie there is a question about the accounting measures taken. Youre saying it is being audited. What other factors are sending of red flags up red flags . Eval and email that indicates their practices a dubious one. , and weat the company saw that the Auditing Firm is quite tidy tiny. It is very unreasonable for this size company. We actually doubt the credibility of their financial statement. Ithaad why are you touting doubting it . You are saying essentially that this company is broke here. Why is in the Stock Exchange investigating it . There are several points i want to make. First of all, the firms for the overseas subsidiaries has been changed frequently. Each different subsidiary uses a different Accounting Firm. Why they have to appoint all these firms. Also, when we look into ofial statements hal it is quite dubious when compared to their competitors. Those are the main points i made in the reports. Are eighte calls buys, seven holes. Clearly youre saying this is a strong sell. What other market are you looking for to indicate the type of weakness that you have observed . An accounting issue i found by thee Holding Company than 5 , which has more , pledged this company all of the shares to a bank, which is the main bank for fnc smc. , iht after the failure couldnt find where the financed money went to. Is a strong fact smoking gun. Rishaad thats just it, isnt it . You say you have all his despair Accounting Firms disparate Accounting Firms. They would have looked at that and they did not see any flags here. Why are you seeing them and not them . For example, in singapore subsidiary of smc has a very tiny firm, which has a track of accounting scandals in agent region asian region. This has a lot of cash among the group. Appearednt auditing they conducted it quite short. That is what we have a doubtful view on this company. Sophie taking into the bigger picture, this is the fourth stock you have made this report on. Looking what is going on the past year, are you saying there are overall concerns over public governance, other types of accounting measures . Will be see more of this type of activity . Yes, i hope so. , seelly as you mentioned pif and boj is now investing a lot of money in Capital Markets in japan. If this kind of Accounting Practice is allowed, that means that hurts our national assets. Take atheyre going to strong action against these kind of Accounting Practices. Rishaad do you have anybody else in your sites sights with accounting irregularities as you would say that are endemic when it comes to corporate japan . People area lot of now supporting my activities, especially since september, when [indiscernible] a lot of people are connecting me. I think there are a lot more coming in the coming months. Rishaad thank you for that. Ofis the chief executive sort chilling Research Short selling research. Sophie more to come. Well see how some of hong kongs wealthiest people have trimmed their tax bills. This is bloomberg. Sophie this is Bloomberg Markets asia. Rishaad some of hong kongs wealthiest individuals had to sidestep theys to real estate curves that have been instituted. In the protest, that in the process, saving a small fortune in taxes. Saved 70 million he 17 million in property taxes. He managed to qualify as a firsttime homebuyer. Who ownsomebody hundreds of properties through his company. Anyuse he never registered of them in his name, he qualify for a program that is meant to encourage people in the bottom of the income bracket to get their foot on the property ladder. Guess what, it wasnt just one property. He and his family bought three properties. Two of them, he plans to combine into more than 8000 square feet. That is not 10 times the average apartment here. Another Family Member got a third. Considered onell transaction, they are all considered firsttime purchases. Are 155ll three u. S. N u. S. How widespread is this practice . It is hard to say exactly. A lot of it happens sort of behind the scenes. They buy properties through companies. If those companies are registered offshore, guess what . He resell theif property, or if you buy a property through a registered company. This is. Popular among mainland chinese. It is only worthwhile if you are very wealthy. Legal expenses can be high. Rishaad what does it mean . Does it mean anymore in terms of these government attempts to curb these prices . What does it do to that . Government measures are meant to try and curtail the demand by investors and second time buyers. What this does is it basically undermines the governments efforts. A very wealthy person can say there is a new development, i think i will buy 15 units. I have never bought anything in my name, and i can qualify for the concessionary rate. It is a goes against, all in one transaction. Sophie thank you so much. The wealthyk at how and hong kong are sidestepping real estate taxes. Rishaad coming up ahead, we will be updated on the big stories of the day. What is in store . Economics stabilization continues, and it means that china is feeling less pressure on fiscal stimulus, and perhaps it can control its market little more with tightening. Is that what it is going to do . E will ask that but it is up to kyoto we go. Form g to a Japanese Firm for a very first time. What is that mean for corpus corporate government . The mystery saga continues. All that in the next hour of Bloomberg Markets asia. From our studios in new york city, this is charlie rose. Charlie we begin with Cyber Security and the obama administration. The president ordered a full review of russias election related hacking. The Homeland Security advisor told reporters about the investigation on friday morning. She said the order will be delivered before president Obama Leaves Office on january 20. Senator john mccain also announced today that Cyber Security issues would be a significant focus of the Senate Armed Services community that he would chair. Joining me is senator john mccain. Thank you joining us