WEBVTT - China Walking a Tightrope With Russia’s War 0:00:01.840 --> 0:00:04.480 This is Bloomberg Business Week. I'm Charle Masser and I'm 0:00:04.480 --> 0:00:07.320 Bloomberg Quick Takes Tim Stanovk. We're here every day bringing 0:00:07.320 --> 0:00:09.840 you the latest news from the world of business and finance, 0:00:09.880 --> 0:00:13.680 plus technology, politics, economics, all partnising the power of Business 0:00:13.680 --> 0:00:17.160 Week reporters and editors, not to mention our journalists and 0:00:17.200 --> 0:00:20.040 analyst in more than one twenty countries. You can download 0:00:20.040 --> 0:00:23.279 Bloomberg Business Week on iTunes, SoundCloud, or Bloomberg dot Com. 0:00:23.440 --> 0:00:25.200 You can also listen to our radio show at two 0:00:25.200 --> 0:00:27.880 pm Eastern Time on Bloomberg Radio or watch us on 0:00:27.920 --> 0:00:33.080 YouTube search Bloomberg Global News. So I mentioned the rally 0:00:33.159 --> 0:00:34.879 in Chinese stocks. The a d R s here in 0:00:34.880 --> 0:00:37.559 the US as measured by the Golden Dragon China Index up. 0:00:38.400 --> 0:00:43.400 We saw stocks in China Hong Kong rally overnight this 0:00:43.600 --> 0:00:46.320 as China made a strong vow to short battered financial market. 0:00:46.400 --> 0:00:50.240 So that's going on. Quite a turnaround in Chinese stocks. 0:00:50.240 --> 0:00:52.920 They've been under pressure because of greater regulatory oversight, and 0:00:52.960 --> 0:00:56.560 then there's concerns about China's relationship with Russia, how that 0:00:56.640 --> 0:01:00.720 might impact growth, the possibility of sanctions against and these companies. 0:01:00.760 --> 0:01:03.800 Just a lot going on, let's put pressure on China. Yeah, 0:01:03.920 --> 0:01:06.400 that's why we're so grateful to have Dexter Tiff Roberts 0:01:06.480 --> 0:01:08.600 join us. He's a Senior Fellow for the Mansfield Center 0:01:08.600 --> 0:01:10.840 at the University of Montana, also senior Fellow at the 0:01:10.880 --> 0:01:15.040 Atlantic Council's Asia Society Initiative. Also a former Bloomberg Business 0:01:15.040 --> 0:01:17.520 Week China Bureau chief, and the author of the Myth 0:01:17.520 --> 0:01:20.240 of Chinese Capitalism, The Worker of the Factory and the 0:01:20.280 --> 0:01:24.600 Future of the World. Tiff, how are you. I'm doing well. 0:01:24.680 --> 0:01:27.399 Great to be back on the show with you and Carroll. Yeah, 0:01:27.480 --> 0:01:29.800 really great to have you apologize because I forgot you 0:01:29.880 --> 0:01:31.360 were here. I've been here for a long time. I 0:01:31.440 --> 0:01:33.399 just to think you were overseas a lot so I 0:01:33.400 --> 0:01:37.319 can remember, but I was I was engaging more often 0:01:37.360 --> 0:01:40.360 than New York Carol. Okay, fair enough, But I feel 0:01:40.360 --> 0:01:45.000 like you do know everybody, Carol, so yeah, you know, Hey, uh, Tiff, 0:01:45.080 --> 0:01:46.520 I I do want to start with what Carol said 0:01:46.520 --> 0:01:49.360 about Chinese stocks, Okay, because this is a story that 0:01:49.400 --> 0:01:51.880 we've been following for more than a year now very closely, 0:01:52.280 --> 0:01:54.560 as Chinese stocks have been absolutely getting beat up, and 0:01:54.600 --> 0:01:57.200 I'm wondering if you were surprised at all, UH, at 0:01:57.200 --> 0:01:59.400 the last minute that you saw the Chinese government step 0:01:59.440 --> 0:02:02.600 in and say they were gonna offer support. Well, I'm 0:02:02.640 --> 0:02:05.440 not really surprised because, as you said, it's been so 0:02:05.880 --> 0:02:08.840 it's been almost a blood bath for Chinese stocks in 0:02:08.960 --> 0:02:14.480 Hong Kong and Shanghai, and UH. I think they became concerned. 0:02:14.680 --> 0:02:20.360 So shi Jing King's right hand economic person, Leo Ja 0:02:20.840 --> 0:02:24.160 you know, he met with UH top finance officials and 0:02:24.200 --> 0:02:28.120 basically said, UH, it's time to market stability is what 0:02:28.160 --> 0:02:33.079 we need to focus on now, and promised to UH 0:02:33.280 --> 0:02:35.720 ease up on the regulatory pressure that's been on the 0:02:35.760 --> 0:02:39.239 tech stocks that's brought down UH brought down so many 0:02:39.280 --> 0:02:41.919 of them in terms of their value. UM, So I 0:02:42.440 --> 0:02:46.160 wasn't that surprised. I guess the question is how how 0:02:46.240 --> 0:02:49.560 long or how sustained will this rally D I think 0:02:49.639 --> 0:02:54.800 there are continuing issues, particularly on the regulatory side. I 0:02:54.800 --> 0:02:58.120 don't mean China's backing away from its desire to deal 0:02:58.160 --> 0:03:02.120 with what they perceive as national security concerns related to 0:03:03.000 --> 0:03:05.400 online data, which many of the companies that have been 0:03:05.480 --> 0:03:07.640 hit very hard have been in one way or another 0:03:07.880 --> 0:03:10.480 involved in that business. Tip is churn it all starting 0:03:10.480 --> 0:03:13.600 to back away from its relationship with Russia too, because 0:03:13.600 --> 0:03:17.040 that has also been something we all are watching very 0:03:17.160 --> 0:03:23.480 very closely. I think that China wants to signal to 0:03:23.560 --> 0:03:26.840 us that it's backing away from its relationship with Russia. 0:03:26.919 --> 0:03:31.079 I think they are disturbed by how long this war 0:03:31.120 --> 0:03:34.720 has been going on. They're definitely disturbed by the degree 0:03:34.720 --> 0:03:38.920 to which their international reputation has taken a beating for 0:03:39.040 --> 0:03:43.320 this perceived support and this real support for Russia during 0:03:43.360 --> 0:03:45.880 this during during the invasion, in the war. So I 0:03:45.920 --> 0:03:48.000 think that's the message that they're trying to put out, 0:03:48.240 --> 0:03:50.960 that they are actually stepping back. I'm not so sure 0:03:51.280 --> 0:03:53.160 for a whole variety of reasons that they're they're going 0:03:53.200 --> 0:03:57.040 to actually create real distance between them and Russia. What 0:03:57.040 --> 0:03:59.880 would real distance look like? And and I mean, could 0:04:00.120 --> 0:04:03.720 China actually actually afford to do it, especially if you know, 0:04:03.800 --> 0:04:05.440 Russia is so cut off from the rest of the 0:04:05.480 --> 0:04:08.120 world that China is really the only country that can 0:04:08.200 --> 0:04:12.760 supply it with high with with higher end technology. Yeah, 0:04:12.760 --> 0:04:15.680 I mean I think for China, I mean the trade relationship. 0:04:15.800 --> 0:04:18.120 You look at the Russian trade relationship, I think it's 0:04:18.120 --> 0:04:21.960 about hundred forty seven billion dollars last year. For Russia, 0:04:22.040 --> 0:04:24.480 it matters a whole lot. China is their number one 0:04:24.480 --> 0:04:27.960 trading partner for For China, not so much. I think 0:04:27.960 --> 0:04:31.240 it's about two percent of China's trade. That compares to 0:04:31.400 --> 0:04:35.680 roughly twelve percent each for the US and the EU. 0:04:35.800 --> 0:04:39.400 So the relationship, the economic relationship is far less important 0:04:39.400 --> 0:04:42.800 to China. Uh. I think there are I think what 0:04:42.839 --> 0:04:46.719 we're dealing really with here are political issues, and that's 0:04:46.800 --> 0:04:51.760 where the alignment between the two countries becomes very, very important. Well, 0:04:52.000 --> 0:04:54.200 it's very clear, right, and I know we've talked about 0:04:54.240 --> 0:04:56.880 this with you. We've just got about thirty seconds or 0:04:56.920 --> 0:04:58.680 so and then we'll come back and talk some more. 0:04:58.760 --> 0:05:02.440 But I mean China's increasingly drawing that line in the 0:05:02.440 --> 0:05:05.719 sand about how it feels about democracy and and US dominance, 0:05:05.720 --> 0:05:09.680 whether it's through the dollar or something else, just quickly. Absolutely, 0:05:09.760 --> 0:05:12.040 I know. I think the big issue here is China 0:05:12.120 --> 0:05:15.960 feels like it's the political values are roughly aligned with Russia, 0:05:16.160 --> 0:05:20.640 and much of that is defined by opposing the values 0:05:20.680 --> 0:05:23.599 of the US and Western liberal democracy. They see that 0:05:23.680 --> 0:05:29.480 as as really um to what they're trying to achieve. Hey, Ti, 0:05:30.560 --> 0:05:35.200 so who needs China more more. I mean you talked 0:05:35.240 --> 0:05:38.960 about the importance for Russia, But does Russia or the 0:05:39.040 --> 0:05:43.520 US needs China more? And who needs the US more? 0:05:43.600 --> 0:05:48.880 Russia China? Uh sorry, that's a little complicated. I need 0:05:48.880 --> 0:05:52.120 a whiteboard. The second I'll go for the second part. 0:05:53.279 --> 0:05:56.479 China needs the US more than Russia. I think obviously 0:05:57.720 --> 0:06:01.360 the US is I guess it out just right, just 0:06:01.560 --> 0:06:05.599 barely smaller trade relationship with the US than with the EU, 0:06:05.880 --> 0:06:10.200 but extremely important the source of much of China's high technology. 0:06:10.320 --> 0:06:13.600 So there's no doubt that China needs the US more 0:06:13.640 --> 0:06:19.640 than than Russia. Dies Um, so I think, uh, yeah, 0:06:19.680 --> 0:06:21.800 so I I would just point that out. And then 0:06:21.839 --> 0:06:25.360 the first part of your question is, um, uh does 0:06:25.400 --> 0:06:33.080 the US maybe maybe tell me again, Russia or the USA? 0:06:35.680 --> 0:06:40.800 I think the US clearly. Again, Uh, doesn't you know 0:06:40.880 --> 0:06:43.799 the China, China and the US have a tremendously important 0:06:43.839 --> 0:06:47.680 economic and trade relationship. It's tremendously important to a lot 0:06:47.720 --> 0:06:52.560 of our biggest multinationals in the US. So even as 0:06:52.680 --> 0:06:55.760 the UH, you know, even as tensions grow on the 0:06:55.800 --> 0:06:58.920 political side between the two countries, I think, uh, the 0:06:59.000 --> 0:07:02.760 U s will continue to put rightly so a tremendous 0:07:02.800 --> 0:07:06.479 amount of importance on maintaining a strong economic and trade 0:07:06.480 --> 0:07:09.480 relationship with China without questions. So it sounds like both ways, 0:07:09.520 --> 0:07:11.760 whether it's coming from China or from the US, they 0:07:11.800 --> 0:07:14.080 both really need each other. Um, that's what it says. 0:07:14.120 --> 0:07:16.520 I think so. I think so. Now having said that, 0:07:16.520 --> 0:07:20.280 that doesn't preclude the fact that UH was a political 0:07:20.320 --> 0:07:23.360 relationship just keeps getting worse and worse, and I think 0:07:23.360 --> 0:07:26.720 that will continue unfortunately. So it's a real it's a 0:07:26.760 --> 0:07:31.200 tough position for both countries. UH. You know, increasing anger, 0:07:31.600 --> 0:07:34.440 outright anger and disagreement about how they look at the world, 0:07:34.960 --> 0:07:39.080 but at the same time very tightly economically linked. Dexter Tiff, 0:07:39.160 --> 0:07:42.360 we haven't been able to talk to you since Russia's 0:07:42.360 --> 0:07:45.200 invasion of Ukraine, and you know, it really seems like 0:07:45.240 --> 0:07:49.600 a big part of the conversation early on in this 0:07:49.600 --> 0:07:54.560 this war was where China would go and how this 0:07:54.680 --> 0:08:00.440 could embolden Xiji and Pang to take over Taiwan. And 0:08:00.800 --> 0:08:05.040 I'm wondering where you fall on that if if you 0:08:05.080 --> 0:08:08.040 think that what Vladimir Putin is doing and has done 0:08:08.040 --> 0:08:12.440 in Ukraine, how that leaves UH China and the situation 0:08:12.480 --> 0:08:16.000 in Taiwan. Yeah. Well, first of all, I think it 0:08:16.480 --> 0:08:20.240 explains to a large degree white China is being I 0:08:20.280 --> 0:08:23.080 would call it wishy washy on on which side they 0:08:23.160 --> 0:08:27.720 want to stand stand behind. UM. China knows that. I mean, 0:08:27.760 --> 0:08:31.280 first of all, China I think feels that they feel 0:08:31.320 --> 0:08:33.800 Putin's pain, if I can say that, they actually think 0:08:34.080 --> 0:08:36.960 that Putin is is is an a grieved party here 0:08:37.080 --> 0:08:40.040 and that NATO expansion is a threat to Russia, and 0:08:40.040 --> 0:08:43.480 they sympathize with that in large part because they see 0:08:43.600 --> 0:08:46.400 UH a rough parallel to the to the U S 0:08:46.440 --> 0:08:51.640 and Indo Pacific, and particularly Taiwan. They see also UM 0:08:51.920 --> 0:08:55.760 a threat obviously U there. And I'm just finished by 0:08:55.800 --> 0:08:59.400 saying they would like Russia's support going forward. When when 0:08:59.679 --> 0:09:03.520 and when they eventually do decide to move more forcefully 0:09:03.559 --> 0:09:08.440 against Taiwan, is that just a matter of time? I 0:09:08.440 --> 0:09:11.040 am afraid. So I'm one of those I think that 0:09:11.320 --> 0:09:13.840 I don't think that she Jimping is a status quo 0:09:13.960 --> 0:09:16.960 sort of a guy. He I think he made it 0:09:17.040 --> 0:09:19.960 fairly clear that he would like to see UH Taiwan 0:09:20.040 --> 0:09:23.920 much more under China's thumb during you know, during his watch. 0:09:23.960 --> 0:09:26.040 I mean, the good news is Chijing. Things gonna be 0:09:26.120 --> 0:09:28.079 around for a long time, so they don't have to 0:09:28.120 --> 0:09:30.840 do it tomorrow or anything. But yes, I think I 0:09:30.880 --> 0:09:34.319 think he uh, he doesn't want to see the relationship 0:09:34.400 --> 0:09:36.640 change dramatically. One thing that jumped out and I was 0:09:36.679 --> 0:09:38.680 actually off for a day, but I saw the ster 0:09:38.800 --> 0:09:40.240 and I'm like, I gotta send it to myself because 0:09:40.240 --> 0:09:43.800 I it's just sitting with me. Um the Dad Jones 0:09:43.840 --> 0:09:46.600 report about Saudi Arabia in active talks with Beijing to 0:09:46.600 --> 0:09:49.480 price some of its oil sales to China in the yuan. 0:09:50.840 --> 0:09:54.920 That it's something that they've been talking about for years. Uh. 0:09:54.920 --> 0:09:57.000 And this is a guys, according to people with the 0:09:57.000 --> 0:09:58.840 matter and so on and so forth. What's your read 0:09:58.880 --> 0:10:02.880 on that? That's pretty to mattic to me. I think so. 0:10:03.040 --> 0:10:06.840 I mean, this is obviously all about China's long term 0:10:06.880 --> 0:10:10.439 goals and maybe not so long term to internationalize the 0:10:10.520 --> 0:10:14.840 U N currency, and this would be a significant step. 0:10:15.200 --> 0:10:18.800 I'm having said that. I think we can. I think 0:10:18.800 --> 0:10:20.480 we can get ahead of ourselves. I mean if we 0:10:20.559 --> 0:10:24.520 look at you know, just looking at for example, Swift, 0:10:24.600 --> 0:10:29.440 the global provider of financial transactions, compared to the China's rival, 0:10:29.640 --> 0:10:33.280 the steps the I p s. I mean there's no 0:10:33.400 --> 0:10:36.520 competition whatsoever. We're you know, we're talking about I think 0:10:36.559 --> 0:10:41.439 something like eleven thousand institutions globally processing five or six 0:10:41.520 --> 0:10:45.560 tillion dollars a day by swift, and China's doing, you know, 0:10:45.640 --> 0:10:49.160 less than twelve trillion, I think for the entire last year. 0:10:49.480 --> 0:10:52.280 So I think, you know, I think to your question, Carrol, 0:10:52.320 --> 0:10:54.520 I think it's a step forward, but there's still a 0:10:54.559 --> 0:10:56.640 long way to go. And I don't think, by the way, 0:10:56.679 --> 0:10:59.960 I don't think China has is capable of bailing out 0:11:00.080 --> 0:11:04.480 Russia there um as sanctions tighten on on that country. Tiff. 0:11:04.720 --> 0:11:09.120 We've covered a lot. We've covered, uh this Chinese stocks, 0:11:09.160 --> 0:11:11.000 not just Chinese stocks listed in the US, but those 0:11:11.000 --> 0:11:14.280 in Shanghai and Hong Kong. We've covered the Russian invasion 0:11:14.280 --> 0:11:17.120 of Ukraine. Uh. I want to talk a little bit 0:11:17.160 --> 0:11:20.400 about trade between the U. S And China, because during 0:11:20.440 --> 0:11:23.040 the Trump administration, we'd call this a trade war, and 0:11:23.120 --> 0:11:25.560 that's something that I think has been really lost in 0:11:25.640 --> 0:11:29.640 recent years with the coronavirus pandemic. Here Um, give us 0:11:29.640 --> 0:11:31.240 an update on what you think we need to be 0:11:31.280 --> 0:11:33.440 watching for when it comes to trade between the U S. 0:11:33.440 --> 0:11:38.120 And China and how things actually get better from here. Well, 0:11:38.160 --> 0:11:40.880 I think the tensions are still there. You know, we 0:11:40.920 --> 0:11:43.960 can the trade war may go away. And by the way, 0:11:44.000 --> 0:11:46.960 you know, the Phase one deal signed by the previous 0:11:47.040 --> 0:11:50.719 Trump administration went nowhere, as you know, so China did 0:11:50.720 --> 0:11:54.679 not satisfy or meet its uh it's commitments on that 0:11:54.800 --> 0:11:57.120 on that trade on that Phase one trade deal. So 0:11:57.160 --> 0:12:02.000 we still have a lopsided trade relationship. We had news 0:12:02.080 --> 0:12:04.600 just about a week ago that the Biden administration was 0:12:04.640 --> 0:12:09.439 considering leving uh some kind of sanctions, perhaps car ups 0:12:09.640 --> 0:12:16.640 related to China's continuing mercantilist practices, it's industrial policy. Um. 0:12:16.800 --> 0:12:21.600 So I think the tensions are still there, um and uh, 0:12:21.880 --> 0:12:24.360 you know, they may sort of be pushed to the 0:12:24.440 --> 0:12:27.400 side momentarily when we're dealing with you know, a global 0:12:27.440 --> 0:12:31.280 international crisis as we are with the Russian war against Ukraine. 0:12:31.360 --> 0:12:33.240 But but but I think it's still there. I don't 0:12:33.280 --> 0:12:36.840 see that really getting much better. All right, we gotta run, Tiff, 0:12:36.920 --> 0:12:40.240 Thank you so much. I really appreciated Tiff. Robert Senior 0:12:40.280 --> 0:12:44.040 Fellow at the Atlanta Council's Asia Security Initiative, Man's faild 0:12:44.280 --> 0:12:47.360 fellow at University of Montana. Former Bloomber Business Week China 0:12:47.360 --> 0:12:49.240 be our chief, and of course check out his book. 0:12:49.280 --> 0:12:51.560 It's very relevant to all of these discussions the myths 0:12:51.679 --> 0:12:56.679 of Chinese capitalism. You're listening to Bloomberg Business Week with 0:12:56.800 --> 0:13:01.600 Carol Messer and Bloomberg Quick Takes Tim Stinovy on Bloomberg Radio. 0:13:02.320 --> 0:13:06.359 This is Bloomberg Business Week with Carol Messer and Bloomberg 0:13:06.440 --> 0:13:10.599 Quick Takes Tim Stinovic on Bloomberg Radio. Well, he's a 0:13:10.640 --> 0:13:13.520 former UK Deputy Prime Minister. He has now met as 0:13:13.880 --> 0:13:17.040 president of Global Affairs, new to that job, although he's 0:13:17.040 --> 0:13:19.200 been at the company for a few years. He is 0:13:19.240 --> 0:13:21.679 also the one dealing with the latest crisis at the company, 0:13:21.720 --> 0:13:24.640 and that is to solve Meta's Russia problem. The story 0:13:24.679 --> 0:13:26.760 the upcoming issue of Business Week, and we're talking about 0:13:26.800 --> 0:13:30.640 none other than Nick Clegg, not Mark Zuckerberg, not Cheryl Sandberg, 0:13:30.720 --> 0:13:35.760 but the man charged with navigating the global political crises. 0:13:35.960 --> 0:13:38.720 Kurt Wagner's technology reporter at Bloomberg News. He joins us 0:13:38.760 --> 0:13:41.080 on the phone from San Francisco. Kurt story is featured 0:13:41.240 --> 0:13:43.959 in the upcoming issue of Business Week magazine. Check it out, 0:13:43.960 --> 0:13:46.520 though now on the Bloomberg Terminal, also at Bloomberg dot 0:13:46.520 --> 0:13:49.560 com slash business Week. Okay, Kurt, for people who don't 0:13:49.559 --> 0:13:53.240 follow Facebook is closely meta platform z Inc. Excuse me, 0:13:53.440 --> 0:13:55.800 I keep doing that as closely as you have for 0:13:55.840 --> 0:13:59.800 so many years. Who is Nick Clegg? Yeah? Nick Clegg 0:14:00.240 --> 0:14:04.040 is basically the head of all policies at Facebook. So 0:14:04.080 --> 0:14:09.760 anytime you think about misinformation, you think about relationships with governments, 0:14:09.960 --> 0:14:13.360 uh speech, right, Like what's allowed on Facebook and Instagram 0:14:13.400 --> 0:14:16.640 what's not? These are policy decisions and now all of 0:14:16.679 --> 0:14:19.480 those roll up to Nick Klegg, and he is kind 0:14:19.480 --> 0:14:22.920 of the final word, um on what Facebook and and 0:14:23.040 --> 0:14:26.720 Meta do in those instances. And obviously that's a lot 0:14:26.760 --> 0:14:29.480 of different things, especially as we get ramping up here 0:14:29.480 --> 0:14:32.240 on another U S election, you can imagine that all 0:14:32.280 --> 0:14:35.400 of these decisions are pretty consequential, and um, he's now 0:14:35.440 --> 0:14:38.040 the guy in charge of all that. All right, what's 0:14:38.120 --> 0:14:41.960 up with Cheryl and Zack? Yeah? Well they're still there 0:14:42.440 --> 0:14:45.320 for those wondering, And and this has always been a 0:14:45.520 --> 0:14:47.920 kind of two headed monster at Facebook, right. It was 0:14:47.960 --> 0:14:52.760 it was Mark Zuckerberg handling the product and Cheryl Sandberg 0:14:52.880 --> 0:14:56.840 handling the business. But then after the election, all of 0:14:56.880 --> 0:14:59.560 these policy issues I was just talking about really um 0:14:59.720 --> 0:15:02.360 real their head for for kind of the first time, 0:15:02.520 --> 0:15:06.920 and so they took off, Like Cheryl kind of started 0:15:07.400 --> 0:15:10.280 addressing a lot of this. Mark obviously got much more involved. 0:15:10.320 --> 0:15:12.480 We started hearing from him on all these different issues 0:15:12.520 --> 0:15:16.080 around politics and policy. And over the last you know, 0:15:16.120 --> 0:15:18.640 a couple of years, what they've realized is one neither 0:15:18.720 --> 0:15:22.560 of them are necessarily uh something that they want to do. 0:15:22.600 --> 0:15:25.440 This is not a job that's very fun. And number two, 0:15:25.640 --> 0:15:28.200 they've become so unpopular in a lot of ways that 0:15:28.280 --> 0:15:32.280 their message Facebook's message is often getting lost simply because 0:15:32.280 --> 0:15:35.240 of who's delivering it. Right, So, anytime Mark Zuckerberg says something, 0:15:35.520 --> 0:15:38.400 people have a strong opinion about him, regardless of what 0:15:38.440 --> 0:15:41.000 he's saying. And I think part of that is is, 0:15:41.120 --> 0:15:43.360 you know why Nick Clegg is now the face of 0:15:43.400 --> 0:15:45.760 all this stuff? So how did this come into sharp relief? 0:15:45.840 --> 0:15:48.200 And look not just during the Trump administration, because I 0:15:48.200 --> 0:15:49.880 think that was the name that Nick Clegg was a 0:15:49.960 --> 0:15:51.680 name that people became familiar with that and even if 0:15:51.680 --> 0:15:54.920 they weren't following British politics before, but with Russia's invasion 0:15:54.960 --> 0:15:56.920 of Ukraine in late February how has it all come 0:15:56.960 --> 0:16:01.200 to a head. Yeah, so the timing is pretty incredible, really, 0:16:01.400 --> 0:16:05.200 Um Meta promoted Nick Clegg on I believe was February 0:16:05.280 --> 0:16:08.440 sixte um, so just a month ago to the day, 0:16:09.080 --> 0:16:12.200 and uh at that point Mark Zuckerberg said, Hey, he's 0:16:12.280 --> 0:16:14.760 the last word on all of these big things. You know, 0:16:14.800 --> 0:16:16.280 if you have an issue, to take it to Nick. 0:16:16.920 --> 0:16:20.920 About a week later, Russia invades Ukraine and suddenly, um, 0:16:20.960 --> 0:16:23.280 you know, here's Nick one week into his his new 0:16:23.360 --> 0:16:27.240 fancy job, and um you know, he's back channeling with 0:16:27.600 --> 0:16:31.760 the Ukrainian UH President Zelenski and his staff. He's talking 0:16:31.760 --> 0:16:34.920 with Russian regulators trying to kind of navigate this whole thing. 0:16:35.560 --> 0:16:38.360 Um in in the first big challenge that happens immediately 0:16:38.400 --> 0:16:42.080 after he gets this promotion, And so the story really 0:16:42.160 --> 0:16:44.400 kind of looks at how these first couple of weeks 0:16:44.440 --> 0:16:46.160 has gone for him. We actually got a chance to 0:16:46.160 --> 0:16:48.120 sit down and interview him for this. It was his 0:16:48.160 --> 0:16:52.200 first interview since getting that promotion, and UM, you know, 0:16:52.400 --> 0:16:54.480 I just think it's kind of a timely look at 0:16:55.200 --> 0:16:58.280 who this guy is and why he suddenly um has 0:16:58.360 --> 0:17:00.840 you know, one of the most important jobs and so help, 0:17:01.000 --> 0:17:03.480 so help me out here, Kurt, because in your story, 0:17:03.480 --> 0:17:06.200 you're right met His critics called the announcement when he 0:17:06.320 --> 0:17:08.720 was named little more than a public relations move. Yet 0:17:08.720 --> 0:17:11.480 at the same time you say that he's the one 0:17:11.480 --> 0:17:14.760 who's been Cleggett Nick clegg has been talking to Russian officials, 0:17:15.160 --> 0:17:18.080 He's the one who has talked with President Zelinsky. So 0:17:18.520 --> 0:17:22.080 I don't know, how do you see it? Well, I 0:17:22.080 --> 0:17:24.679 I don't think that it's just a pr thing. I 0:17:24.720 --> 0:17:27.080 think he truly is making a lot of these decisions. 0:17:27.200 --> 0:17:28.879 And it was actually a question that I got to 0:17:28.920 --> 0:17:32.440 ask him, Um, I brought up that criticism. I said, 0:17:32.440 --> 0:17:35.360 what would you say to people who you know? Are 0:17:35.440 --> 0:17:38.080 you you just got promoted to be um someone to 0:17:38.119 --> 0:17:40.199 take all the heat off of your bosses, you know? 0:17:40.320 --> 0:17:44.360 And he said, look, if I wasn't actually wielding any 0:17:44.400 --> 0:17:47.280 power internally, if I didn't actually have any control over 0:17:47.520 --> 0:17:49.560 the things that I had to go out and then defend, 0:17:49.920 --> 0:17:51.720 then yeah, this wouldn't be a very good job. And 0:17:51.760 --> 0:17:54.000 it's not one that I would have accepted. But he says, 0:17:54.359 --> 0:17:57.120 you know, he's willing to take that heat because he's 0:17:57.160 --> 0:17:59.679 the one making these decisions, and as a former politician, 0:18:00.119 --> 0:18:03.639 he's not you know, unfamiliar with people being angry at 0:18:03.720 --> 0:18:07.040 him no matter what he does. Yeah, it's it's I mean, look, 0:18:07.040 --> 0:18:10.520 it's not it's not a job for everyone obviously, you know, 0:18:10.560 --> 0:18:12.359 making but but it is if you think about it. 0:18:12.440 --> 0:18:13.960 And that's why you see so many people who have 0:18:14.000 --> 0:18:17.240 worked in politics take on these policy type positions help 0:18:17.320 --> 0:18:21.280 us think forward beyond Ukraine, beyond um, Russia's invasion of 0:18:21.359 --> 0:18:23.560 Ukraine and the challenges that that Clegg has in front 0:18:23.560 --> 0:18:25.200 of him when it comes to regulators in the United 0:18:25.240 --> 0:18:28.560 States and in Europe. Yeah, of course, well, I mean 0:18:28.600 --> 0:18:32.679 we there's some data transfer regulations happening in Europe right now, 0:18:32.760 --> 0:18:35.280 or discussions i should say, around data transfer. That's very 0:18:35.320 --> 0:18:38.960 important and that Facebook has been vocal about. I think 0:18:39.000 --> 0:18:42.119 the election here in the US, of course, mid terms 0:18:42.119 --> 0:18:44.199 are coming up, and they're going to be dealing with 0:18:44.240 --> 0:18:47.119 all of the same issues that they dealt with in right. 0:18:47.160 --> 0:18:49.600 How how do they want to handle back checking the 0:18:49.680 --> 0:18:54.439 political post, how do they want to handle advertisements from candidates? Right? Um, 0:18:54.480 --> 0:18:57.400 these are all the issues that haven't gone away um 0:18:57.440 --> 0:18:59.400 in the last couple of years, and so he'll be 0:18:59.600 --> 0:19:01.720 looking at those and then I think one of the 0:19:01.720 --> 0:19:07.280 biggest ones is that in January of next year, um, 0:19:07.359 --> 0:19:11.080 former President Donald Trump's to year ban will be listed, right, 0:19:11.119 --> 0:19:14.919 and suddenly you have um President Trump back on the platform. 0:19:15.119 --> 0:19:18.800 And that's gonna, I imagine, create you know, a lot 0:19:18.880 --> 0:19:22.080 more issues for Facebook. It certainly has in the past. Well, 0:19:22.080 --> 0:19:24.159 and as you said, he played cleg played a critical 0:19:24.280 --> 0:19:27.359 role in removing Donald Trump from that platform. All right, 0:19:27.400 --> 0:19:30.159 Kurt Wagner, great stuff, technology reporter at Bloomberg News. This 0:19:30.200 --> 0:19:33.639 story in the new issue of Bloomberg Business Week magazine 0:19:33.680 --> 0:19:36.359 online and on the Bloomberg terminal. Catch it all now 0:19:36.440 --> 0:19:39.359 online and catch the magazine. It'll be out tomorrow. This 0:19:39.480 --> 0:19:45.080 is Bloomberg mo. Yeah, but you let me drive. Oh no, 0:19:45.080 --> 0:19:51.199 no, no no, no, honey, please, I'll do the BLS. I 0:19:51.280 --> 0:20:00.600 want to drive. It's a good question, A pretty clue, 0:20:05.560 --> 0:20:09.919 our birds. You've just heard our simulcast on TV and radio. 0:20:10.040 --> 0:20:13.200 Tom Kim said, Ramoitz and Jonathan Pharaoh that FED meting 0:20:13.320 --> 0:20:15.960 second FED meeting of the year. We'd I've been looking 0:20:16.119 --> 0:20:18.560 forward to it, uh, and we got that marched rate 0:20:18.640 --> 0:20:22.320 increase has expected. I think what's interesting is what they 0:20:22.400 --> 0:20:24.439 have talked about in terms of growth here. J Powell 0:20:24.520 --> 0:20:28.879 talk about what he thought was a strong growth forecast, 0:20:29.000 --> 0:20:32.800 but also moving up their inflationary expectations. But longer term, 0:20:33.160 --> 0:20:35.879 the expectation is inflation comes down again. I've been tracking 0:20:35.920 --> 0:20:38.520 the markets here, Tim and you know turnally broke down 0:20:38.600 --> 0:20:41.600 the numbers. But it looks like the equity market, based 0:20:41.680 --> 0:20:44.960 on my you know, calculations, and just as the news 0:20:45.160 --> 0:20:46.919 of the Fed announcement was coming out at two fifteen 0:20:46.960 --> 0:20:49.800 Wall Street time, we are higher in terms of where 0:20:49.960 --> 0:20:53.080 stocks were prior to that announcement. So we've definitely seen 0:20:53.119 --> 0:20:55.640 a bounce back after initial sell up, and it looks 0:20:55.680 --> 0:20:57.520 like that tenure has settled down to where it was 0:20:58.240 --> 0:21:00.960 prior to the FED news. The two year the shorter 0:21:01.080 --> 0:21:03.720 end of the yield curve UH close to where it 0:21:03.800 --> 0:21:05.440 was a little bit higher. Well, let's go back to 0:21:05.440 --> 0:21:07.240 the equity market, because I think that this was a 0:21:07.280 --> 0:21:11.320 really important point for at least equity investors. When Powell said, 0:21:11.359 --> 0:21:13.920 quote the economy is very strong and well positioned to 0:21:14.000 --> 0:21:16.840 handle tighter monetary policy. It was at that point that 0:21:16.960 --> 0:21:21.400 equity started moving higher. Recording to our Bloomberg Live blog team, 0:21:21.400 --> 0:21:24.119 when it comes to the UH, well, what the f 0:21:24.200 --> 0:21:26.800 O m C chair was saying and what markets were doing, 0:21:26.960 --> 0:21:28.919 because it was pretty remarkable. As soon as his statement 0:21:28.960 --> 0:21:30.640 came out, we saw a real sell off and equities, 0:21:31.000 --> 0:21:33.160 yeah we did initially, but we've seen a bounce back. 0:21:33.480 --> 0:21:35.680 And if you look at the yield curve, UM, we 0:21:35.880 --> 0:21:38.880 saw the yield curve between five and ten years invert 0:21:39.080 --> 0:21:42.359 after the f o MC decision, right after it, UH, 0:21:42.480 --> 0:21:45.080 and the five to thirty year yield curve just a 0:21:45.280 --> 0:21:49.600 little bit about thirty minutes ago, the curve extends, it's 0:21:49.600 --> 0:21:52.119 flattening to under twenty five basis points. So this is 0:21:52.160 --> 0:21:54.520 what's key. We're watching that that inversion, especially when it 0:21:54.600 --> 0:21:57.320 comes to to intend UH and what it tells us 0:21:57.320 --> 0:22:00.480 about the potential for a recession. And so you know, 0:22:00.560 --> 0:22:04.760 we've talked about that in particular right now though, um, 0:22:05.240 --> 0:22:07.240 you know, yields, like we said, kind of staying where 0:22:07.280 --> 0:22:10.640 they were the bit up to it, but down from 0:22:10.720 --> 0:22:13.840 some of the spikes we saw right after that FED decision. Okay, 0:22:13.880 --> 0:22:16.440 so the Fed raising interest rates by a quarter percentage points, 0:22:16.840 --> 0:22:20.840 signaling hikes at all six remaining meetings this year, launching 0:22:20.880 --> 0:22:24.479 a campaign to tackle the fastest inflation in four decades. 0:22:24.560 --> 0:22:27.680