Opecs cuts may be draining the glut. The bank of japan prepares for unscheduled talks as the coronavirus keeps extra pressure on the economy. Help for Small Business tops the agenda. Downside are seeing a start to trading on this final friday session of the week. Overwhelmingly, the concern over these escalating tensions between washington and beijing, and now also, beijings expected move to impose the National Security law on hong kong and we are watching, in particular, the start of mainland trading as well as hong kong trading and trading in the hong kong dollar but in the meantime, we are seeing a downside view when it comes to nikkei futures as well as kospi. Sydney futures looking to extend losses of. 4 in the previous session although we could expect to see some modest gains when it comes to the Energy Sector given the gains and that story when it comes to the continued rally in oil prices. We are also watching trading in new zealand. We had retail Sales Numbers out in the last hour or so showing a contracting but not as much of the deep contraction as was expected in the First Quarter given the scale and restrictions we saw with the pandemic lockdown in new zealand. Share a. Ry. Cher e she shery the opening of the pboc could add geopolitical tension over proposed National Security law which would curb dissent in hong kong and the u. S. Is already responding. Lets bring in our chief washington correspondent, Kevin Cirilli, who is with the under secretary of state for Economic Growth. Kevin thank you. We are joined by our guests, who joins us. I want to get to that first and foremost, mr. Undersecretary. Bipartisan legislation was introduced in the senate in response to china carrying and proposing for some controversial new measures as it relates to hong kong. President trump this afternoon declined to comment publicly so far on these measures, but this proposal in congress would issue sanctions to businesses and individuals in china should they cooperate with it. Can you give us an update or any comment at all in response to what we are seeing with regards coming beijing to hong kong . Kevin, thank you so much for having me back on your program. It is deeply concerning to the United States. Hong kong is a great friend to us, and we are monitoring this situation closely. We are going to see it as it develops. Meanwhile, your team has Just Announced within the last couple of days that 12 billion coming fromestment the Taiwan Semiconductor manufacturing corporation, a 12 billion investment in the state of arizona. What does this do for Silicon Valley. What does this do for the Semiconductor Industry . This was part of our 5g trifecta and then that we made on friday. It is an absolute game changer. Not only is it the biggest on shoring in u. S. History, but it is critical to National Security. It plays a very Critical Role in terms of the Semiconductor Business and they are going to be bringing their entire supply chain with them. It bolsters american National Security, and our Economic Prosperity, so with that said, it will create thousands of american jobs, and tsmc, high tech chips. It is a five nanometer plan, stateoftheart. It will impact daily lives for people around the world, and it will make made in america once valleyyou know, Silicon Semiconductor was invented in the united dates, and it brings it back. The deal also strengthens our relationship with taiwan. A vibrant democracy, a force for good in the world, and a real good friend of the United States, just like hong kong. Kevin you and i have talked about this before, mr. Undersecretary, about how the state department is working in the longer term to try to develop International Standards on a host of different standards as it relates to energy and 5g. This is just the latest illustration of that. Can you talk more broadly about the u. S. Foreign policy goals in the long term in developing those internationals to enter with europe International Standards with europe, hong kong . Keith this is part of our Economic Prosperity network initiative. And what that is, it is comprised of countries, like mining countries, companies, civil society, that operate under a set of principles. Those principles in the United States, we would call them american values. In europe, democratic values. But more translated globally, trust principles and those are basic things like integrity, accountability, respect for rule of law, respect for sovereignty of nations, respect for property of all kinds, respect for the planet, respect for human rights, respect for the planet, transparency. All of those things, and the Economic Prosperity network encompasses all areas of economic collaboration. Commerce, trade, investment, energy, digital, infrastructure, supply chain, research. Kevin i want to talk about the supply chains because as you look at the 12 billion investment in arizona as part of you talkn agreement, also about diversifying and disentangling some of the u. S. Interest from china. How important is that . Literally,her day there was more Bipartisan Legislation coming from congress that would require those Chinese Companies that are traded publicly on u. S. Exchanges to be able to be subjected to the same type of regulations on the exchanges as other countries, firms, and u. S. Firms. Youh yes, and i think what see in congress is a reflection of what citizens here in the u. S. Are seeing, and actually, citizens around the world, and i think people are waking up to the fact of the communist party threepronged strategy of concealment, cooption, and coercion. So the pandemic is a result of concealment of the virus, cooption is the entanglement of the supply chains, and then you see with chinas socalled face diplomacy isa c really seduction and coercion in terms of we want you to do these things. We will aid you. Countries are seeing that, citizens are seeing that, and they do not like it. That is giving the political will to government officials all over the world. Kevin two more questions for you. When you talk to leaders in Silicon Valley about these issues, what do you from them hear from them . Pompeoi hosted secretary out in Silicon Valley for four days. We met with many of the top leaders out there. You know, one of the things i said to him after spending 30 years in Silicon Valley and knowing all these guys is, guys, we always say Corporate Responsibility is social responsibility. Well, it is also level Economic Security because just as the threat to democracy is real and urgent, so is the threat to your businesses, because it seems like the battleground between democracy and regime is the technological battlefield. And they know it because they have had their intellectual property stolen. They have been coerced in terms of handing over proprietary technology. So they feel that. They are right along, i think, with businesses all over the u. S. , and actually, all over the world. Kevin and this is really a nonpartisan issue, it sounds like. Keith by the way, it is a totally nonpartisan issue. I think it is the most unifying issue, whether it is in congress, democrats, republicans, you can see it. You know, and i think everybody has woken up and said, look, we cannot look through rose colored glasses, as secretary pompeo would say. We have to treat them not how we hoped they would be, but how they are. Kevin just one final question. A lot of reports about the Inspector General, has that impacted in any way your ability to conduct your ability to do your job . Keith none whatsoever. Kevin alright. We will leave it there. Mr. Undersecretary, thank you for talking to Bloomberg Television and for bloomberg radio. I am Kevin Cirilli. Haidi, i will toss it back to you. Haidi great conversation with the under secretary of state for Economic Growth and our chief washington correspondent, Kevin Cirilli there. Coming up next, more on these tensions throughout the course of the day. We will be joined by the u. S. China Business Council, eurasia group, and peking university of china. They will all join us later. We are just getting some breaking news crossing the bloomberg when it comes to Fitch Ratings outlook on australia, cut to negative from stable by fitch. Fitch seeing australia gdp growth of 4. 8 in 2021 and seeing a contraction for australian gdp growth of 5 in 2020. The negative outlook, fitch says, affecting the outlook of the coronavirus endemic on australias economy and its public finances. They see a sharp fall in growth and Government Spending in response to the economic crisis will cause large fiscal deficits and a sharp increase in that to gdp, hence that revision downwards. The treasury in the meantime do expect that australia will retain 60 . The measures are being used in stages across parts of the country. Shery the pandemic having an impact on individual firms. We are getting and other it on the bloomberg. Ibm is cutting jobs in a farreaching workforce reduction. Ibm confirmed the move. They have declined to comment on the size of the cut but of course we know that the virus is putting pressure on their sales growth as they really have tried to reach their goal of becoming one of the leading hybrid cloud providers. This coming on top of data here in the u. S. Of more than 2. 4 million new jobless claims by last week. Almost 4 million americans have lost their jobs in the last nine weeks. Japans core inflation gauge likely turned negative in april, the first year on year drop since summer 2016. We will analyze with the former boj board member, plus another guest from Robertson StephensWealth Management has been advising businesses for 30 years. Jeanette explains why the virus could be this centurys moonshot, next. This is bloomberg. Karina you are watching daybreak asia. I am Karina Mitchell with the first word headlines. Nancy pelosi says the house will review the senate bill that will chineseestrictions on companies posting listings in new york. She admitted that legislation had broad twoParty Support in the senate said the house would give it consideration. The bill puts further pressure on u. S. China ties amid coronavirus blame and tech restrictions on huawei. Japan may lift the state of emergency in tokyo as soon as monday if the downward trend in Coronavirus Infections continues there. Restrictions have been used in osaka and surrounding regions but the capital and nearby areas and hokkaido must wait a little bit longer. Shinzo abe says the government will always put peoples safety first amid fears of a second wave of infections. Vietnam has been one of the Success Stories of the pandemic, reporting just 324 cases of the virus and no deaths. It was also one of the earliest to reopen business and the Prime Minister tells bloomberg he is targeting gdp growth between 5 and 7 for the year. He says that would make vietnam the best performer in all of asia. Given these circumstances, it is not possible for us to ensure that gdp growth that we expected in the beginning of 2020 will be met. We have to adjust the projected gdp growth and certain macroeconomic indices such as overspending as well as the gains of the national budget. Therefore, we have set the gdp growth for 2020 to be 5 year on. I believe that this is the highest gdp Growth Expectation in asia at the moment. Karina indias biggest store for two decades has cut power to millions in the northeastern city of kolkata. The cyclone is weakening into a tropical depression as it moves towards bangladesh. Millions of people have been moved amid concern that virus cases may surge in storm shelters. India was already facing the full year contraction while fitch has cut growth forecasts for bangladesh. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Shery theres a lot on investors minds ahead of trading on friday. The chinas National Peoples congress, increasingly frosty relations with the u. S. And congress. Lets discuss all this with jeanette garrity. Great to have you with us. Tolly a lot for investors digest, whether it is monetary or fiscal policy, not to mention geopolitical tensions. What will be most important for investors Going Forward into the rest of the year . Jeanette you would like to see earnings, but in saying things that encompasses all of this that is going on, and i must say mood here inthe the United States is one of lets just let everything be a little bit stable so that we can focus on opening up and moving forward, but of course, nothing is stable these days. Is onhink that the focus opening up and what that is going to mean for earnings and certainly what that is going to and for employment demand increasingly, it is a focus for many investors on those issues, those same issues, worldwide. Because it is still a globalized economy. Shery when it comes to earnings, how much are investors really considering potential additional costs post pandemic that could actually weigh on margin . Jeanette i do not think they are focused on that much at all right now. But it is going to get their attention pretty quickly. I think the focus has been so much on can you open up, what are the ways to open up, that lost in this a bit has been the costs,he Employee Health running multiple shifts, you name it, it is there. But now, we are starting to hear from companies saying, well, the good news is i am opening up. The bad news is it is a little bit expensive to open up. Haidi right, so do we see this period then as the money that has to be spent, the investment that has to be made, for future benefits . Jeanette well right now, it is money that has to be made excuse me, money that has to be spent to just open up and find out if you have got a market there and how are you going to be able to address it . I do think theres a lot of creative thinking that is coming out around this, and some of that is going to be a longterm benefit. I do think that, as we move farther through this, we will be giving more and more weight to the innovation that we are going to start to see, anything from robotics to materials, technology, to obviously, in health care. What sort of advice are you giving to your clients as to how to navigate the next steps forward given that we do not have a clear idea of what the post pandemic level of growth and Economic Activity is going to look like . Jeanette be careful out there. We need to be careful out there. General hasice in been, if you can see a Business Model that was doing very well going into this, most likely, that will be a Business Model that will be able to come back, and if there is a Management Team that is sitting on top of that Business Model that has a track record for innovation and flexibility and creative thinking, then that is good. At is ayou are looking Business Model that was a little bit broken going into this pandemic, chances are, it is going to be seriously pressured by the challenges of the virus, and on those, we want to be very, very careful. Price earnings ratios are wonderful to look at if you understand what the earnings are going to be. That is the biggest trick. Shery when it comes to the size of these companies, what are you looking at . We continue to see the resilience with these large caps, especially when it comes to tech stocks that have really lots of capital at their disposition but at the same time, we have seen a bounceback when it comes to the russell 2000 and those domestically focused stocks. Do think that these solutions, a lot of these solutions, the apparent solutions right now to opening up in this pandemic are expensive solutions. Larger companies have a greater ability to poll on resources and address this, but as we go forward, we are going to see more and more as we get better insight into individual company behaviors. We will see more that is interesting in the rest of the space. That was Robertson Stephens principal jeanette garrety joining us. You can get around up of the stories you need to know in todays edition of daybreak. Bloomberg subscribers can go to dayb on their terminals and its also available on mobile in the bloomberg anywhere app. This is bloomberg. Haidi quick check of the latest business flash headlines this hour. Morgan s