1 00:00:02,920 --> 00:00:12,200 Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is Bloomberg day 2 00:00:12,200 --> 00:00:14,480 Speaker 1: Break Weekend, our global look at the top stories in 3 00:00:14,520 --> 00:00:16,759 Speaker 1: the coming week from our day Break anchors all around 4 00:00:16,800 --> 00:00:19,000 Speaker 1: the world, and straight ahead on the program, and look 5 00:00:19,000 --> 00:00:22,360 Speaker 1: at how some recent box office blockbusters may have impacted 6 00:00:22,440 --> 00:00:26,599 Speaker 1: quarterly results at the world's biggest entertainment company, Walt Disney. 7 00:00:26,840 --> 00:00:29,520 Speaker 2: I'm Stephen Carrol in London, where we're asking if Rachel 8 00:00:29,520 --> 00:00:32,080 Speaker 2: Reeves can sell the British Dream in America. 9 00:00:32,440 --> 00:00:35,360 Speaker 3: I Riyan Curtis in Hong Kong along with Doug Chrisner 10 00:00:35,400 --> 00:00:38,360 Speaker 3: in New York. We look ahead to Ali Baba's earnings, 11 00:00:38,440 --> 00:00:41,000 Speaker 3: and we preview China's upcoming trade data. 12 00:00:43,960 --> 00:00:47,960 Speaker 4: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg 13 00:00:47,960 --> 00:00:51,800 Speaker 4: Eleve Them three own New York, Bloomberg ninety nine to one, Washington, DC, 14 00:00:52,120 --> 00:00:56,200 Speaker 4: Bloomberg one O six one, Boston, Bloomberg nine sixty, San Francisco, 15 00:00:56,400 --> 00:01:00,680 Speaker 4: DAB Digital Radio London, Sirius XM one nineteen and around 16 00:01:00,680 --> 00:01:03,320 Speaker 4: the world on Bloomberg Radio dot Com and via the 17 00:01:03,360 --> 00:01:04,560 Speaker 4: Bloomberg Business App. 18 00:01:08,880 --> 00:01:11,640 Speaker 1: Good day to you. I'm Tom Busby. We begin today's program, 19 00:01:11,640 --> 00:01:14,560 Speaker 1: but the Walt Disney Company, set to report third quarter 20 00:01:14,600 --> 00:01:19,120 Speaker 1: earnings on Wednesday. The world's most popular parks, cruises, movies, 21 00:01:19,160 --> 00:01:22,160 Speaker 1: broadcast cable streaming properties. The list goes on. For more 22 00:01:22,319 --> 00:01:25,520 Speaker 1: on what to expect and what investors are looking to hear. 23 00:01:25,600 --> 00:01:30,120 Speaker 1: We're joined by Thomas Buckley, Bloomberg Entertainment reporter. Thomas. Thank 24 00:01:30,160 --> 00:01:32,679 Speaker 1: you for being here. Why don't we start with what 25 00:01:32,720 --> 00:01:35,000 Speaker 1: you're expecting to see in these results? 26 00:01:35,040 --> 00:01:36,400 Speaker 5: Great to be hit, Tom. You know, it's going to 27 00:01:36,440 --> 00:01:39,679 Speaker 5: be a really interesting set of results for Disney, especially, 28 00:01:39,680 --> 00:01:41,559 Speaker 5: as you said, you know, one of the world's most 29 00:01:42,240 --> 00:01:45,640 Speaker 5: popular parks companies. I think that what's going to be 30 00:01:45,760 --> 00:01:48,600 Speaker 5: very interesting for shallholders here is to gauge the performance 31 00:01:48,680 --> 00:01:51,600 Speaker 5: of the parks in the current period. I mean, basically, 32 00:01:51,640 --> 00:01:56,280 Speaker 5: we've seen Comcast reports earlier in July results that were 33 00:01:56,320 --> 00:01:59,920 Speaker 5: fairly tepid in its parks division, so that includes Universal Studio, 34 00:02:00,640 --> 00:02:03,080 Speaker 5: and Disney had been very clear early on that they 35 00:02:03,080 --> 00:02:06,920 Speaker 5: have seen demand start to moderate at the parks following 36 00:02:06,960 --> 00:02:10,640 Speaker 5: a peak as we came out of COVID, So that's 37 00:02:10,639 --> 00:02:12,680 Speaker 5: been well flagged. But we want to see exactly just 38 00:02:12,880 --> 00:02:16,680 Speaker 5: how much the slowdown has impacted the company. CFO Hugh 39 00:02:16,720 --> 00:02:19,320 Speaker 5: Johnston was very clear last quarter that the third quarter 40 00:02:19,360 --> 00:02:22,440 Speaker 5: would be impacted by costs related to its cruise division 41 00:02:22,480 --> 00:02:25,120 Speaker 5: as well as well as higher inflation. So that's it 42 00:02:25,160 --> 00:02:28,040 Speaker 5: on the experiences side. What's interesting as well on the 43 00:02:28,160 --> 00:02:30,520 Speaker 5: entertainment side is to see whether or not's Disney's going 44 00:02:30,520 --> 00:02:33,640 Speaker 5: to be able to achieve its first profit since April 45 00:02:33,720 --> 00:02:36,720 Speaker 5: twenty twenty two thanks to the blowout performance of the 46 00:02:36,760 --> 00:02:39,480 Speaker 5: blockbuster Inside Out Too, which is a Pixart film. 47 00:02:39,600 --> 00:02:42,440 Speaker 1: And they've got Deadpool and Wolverine which just came out, 48 00:02:42,480 --> 00:02:45,960 Speaker 1: won't affect these earnings and in the pipeline some huge 49 00:02:46,080 --> 00:02:50,040 Speaker 1: movies Moana two in November, Mufasa the Lion King at 50 00:02:50,120 --> 00:02:53,760 Speaker 1: Christmas time. I mean, parks always seems to be driving earnings, 51 00:02:53,800 --> 00:02:56,919 Speaker 1: but is entertainment Is this division really hitting it out 52 00:02:56,919 --> 00:02:57,760 Speaker 1: of the park right now? 53 00:02:57,960 --> 00:02:59,960 Speaker 5: You know, that's a really interesting question that certainly feel 54 00:03:00,120 --> 00:03:02,600 Speaker 5: as though this is the year that Disney's movie studio 55 00:03:02,720 --> 00:03:06,080 Speaker 5: has truly come back to past performance. There were a 56 00:03:06,120 --> 00:03:08,720 Speaker 5: few stumbles in recent years. If we think about last 57 00:03:08,800 --> 00:03:11,079 Speaker 5: year's and Man of the wosquantum mania that called into 58 00:03:11,120 --> 00:03:14,040 Speaker 5: question the appeal of the Marvel franchise that was then 59 00:03:14,160 --> 00:03:17,240 Speaker 5: followed by The Marvels in November, which also did not 60 00:03:17,320 --> 00:03:20,160 Speaker 5: perform well at all. If we think about the film 61 00:03:20,240 --> 00:03:22,480 Speaker 5: Light Year back in twenty twenty two, that called into 62 00:03:22,520 --> 00:03:25,600 Speaker 5: question the appeal of the Pixar franchise. Both of those 63 00:03:25,639 --> 00:03:28,800 Speaker 5: franchise seem to have really come back this year with 64 00:03:28,960 --> 00:03:31,840 Speaker 5: Inside Out Too in June the Pixar as I mentioned, 65 00:03:31,960 --> 00:03:35,080 Speaker 5: and then Deadpool and Wolverine. The numbers on this are 66 00:03:35,120 --> 00:03:39,360 Speaker 5: absolutely outstanding. Is the highest ever our rated debut in 67 00:03:39,440 --> 00:03:42,840 Speaker 5: terms of an opening weekend in history. It's already grossed 68 00:03:42,880 --> 00:03:46,320 Speaker 5: above five hundred million dollars and could easily compete with 69 00:03:46,480 --> 00:03:48,360 Speaker 5: the Disney's own Inside Out two to be one of 70 00:03:48,360 --> 00:03:49,440 Speaker 5: the biggest films. 71 00:03:49,120 --> 00:03:49,520 Speaker 4: Of the year. 72 00:03:50,120 --> 00:03:53,720 Speaker 1: Yeah, a little confusing to people though Mowana is a two. 73 00:03:53,920 --> 00:03:56,640 Speaker 1: Mufasa is I think the third in a series, Deadpool 74 00:03:56,680 --> 00:03:59,840 Speaker 1: and Wolverine the third and net series. I mean, na 75 00:04:00,040 --> 00:04:01,400 Speaker 1: a whole lot original coming out of. 76 00:04:01,360 --> 00:04:05,040 Speaker 5: That studio, though that is certainly true aspertains to this year. 77 00:04:05,160 --> 00:04:07,720 Speaker 5: I think there's been interesting ever since Barbaya came back 78 00:04:07,760 --> 00:04:10,880 Speaker 5: as CEO in November twenty twenty two. Is his ambition 79 00:04:11,000 --> 00:04:13,040 Speaker 5: to get the studio back to pass form and the 80 00:04:13,040 --> 00:04:15,720 Speaker 5: way that he's done that is these pulled back on 81 00:04:15,760 --> 00:04:19,480 Speaker 5: some titles to focus exclusively on their quality, to make 82 00:04:19,480 --> 00:04:21,280 Speaker 5: sure that as perfect as can be at the time 83 00:04:21,279 --> 00:04:24,880 Speaker 5: that they're released. And coincidentally, what's happened is that the 84 00:04:24,880 --> 00:04:28,799 Speaker 5: primary focus of films this year has been on sequels 85 00:04:28,839 --> 00:04:31,280 Speaker 5: or spin offs, and so far that's worked out very 86 00:04:31,279 --> 00:04:33,560 Speaker 5: well for the company. I think it serves to remind 87 00:04:33,600 --> 00:04:36,960 Speaker 5: audiences what they once loved about these franchises, and we 88 00:04:37,000 --> 00:04:39,560 Speaker 5: can certainly expect a lot of aretionality coming down the 89 00:04:39,600 --> 00:04:40,360 Speaker 5: pipe next year. 90 00:04:40,760 --> 00:04:43,560 Speaker 1: Now, another big part of Eiger's turnaround is a focus 91 00:04:43,600 --> 00:04:46,800 Speaker 1: on streaming, and it just locked down an eleven year 92 00:04:46,839 --> 00:04:49,760 Speaker 1: deal with the NBA along with some partners Comcast in Amazon. 93 00:04:50,440 --> 00:04:53,719 Speaker 1: But streaming, what do investors hope to hear about the 94 00:04:53,760 --> 00:04:56,400 Speaker 1: streaming numbers? And it has a lot of properties, I mean, 95 00:04:56,600 --> 00:04:59,760 Speaker 1: Hulu is part of that family, ESPN with a standalone 96 00:04:59,800 --> 00:05:03,200 Speaker 1: stream service of course, Disney plus what are we looking 97 00:05:03,240 --> 00:05:07,279 Speaker 1: to hear in subscribers and what's ahead for the streaming division? 98 00:05:07,720 --> 00:05:10,160 Speaker 5: Absolutely so. A you that's very well documented at this 99 00:05:10,200 --> 00:05:12,480 Speaker 5: point on Wall Street is that for the longest time, 100 00:05:12,520 --> 00:05:16,359 Speaker 5: shareholders were purely focused on subscriber growth, and especially at 101 00:05:16,400 --> 00:05:18,320 Speaker 5: the peaks of the pandemic when the market cap of 102 00:05:18,360 --> 00:05:20,720 Speaker 5: Netflix was what it was with people locked at home. 103 00:05:21,279 --> 00:05:24,599 Speaker 5: I think that that focus has now since shifted to 104 00:05:24,839 --> 00:05:29,000 Speaker 5: streaming profitability, and Disney has lost in excess of eleven 105 00:05:29,040 --> 00:05:32,440 Speaker 5: billion dollars ever since debuting the flagship Disney Plus streaming 106 00:05:32,480 --> 00:05:35,799 Speaker 5: service in twenty nineteen, and now I think the shareholders 107 00:05:35,800 --> 00:05:39,479 Speaker 5: are becoming increasingly impatient and want to see profitability in 108 00:05:39,480 --> 00:05:43,640 Speaker 5: the streaming division. Now, Disney has been clear that achieving 109 00:05:43,720 --> 00:05:47,000 Speaker 5: profitability would not be a linear exercise. There would be 110 00:05:47,040 --> 00:05:50,560 Speaker 5: ebs and flows quarter to quarter. Last quarter they came 111 00:05:50,920 --> 00:05:54,520 Speaker 5: very very close to achieving an overall profit in the 112 00:05:54,560 --> 00:05:58,599 Speaker 5: streaming division. So for the third quarter, CFO Hugh Johnson 113 00:05:58,640 --> 00:06:01,880 Speaker 5: had flag that he doesn't exp growth in coll Disney 114 00:06:01,880 --> 00:06:05,640 Speaker 5: Plus numbers of subscribers. As a result, we're probably going 115 00:06:05,680 --> 00:06:09,400 Speaker 5: to see the overall division come down slightly lower than 116 00:06:09,880 --> 00:06:13,880 Speaker 5: achieving a profit. We're thinking maybe one hundred million dollars 117 00:06:14,480 --> 00:06:18,719 Speaker 5: in losses in that division this quarter or thereabouts. Now, 118 00:06:19,000 --> 00:06:22,280 Speaker 5: Barbaiga has said that he's very confident in achieving streaming 119 00:06:22,279 --> 00:06:26,160 Speaker 5: profitability by the end of Disney's fiscal year, which would 120 00:06:26,200 --> 00:06:27,560 Speaker 5: be as early as next quarter. 121 00:06:27,880 --> 00:06:29,960 Speaker 1: Now investors are going to be a little restless to 122 00:06:30,040 --> 00:06:33,040 Speaker 1: hear those kind of figures, those kinds of losses and 123 00:06:33,480 --> 00:06:36,159 Speaker 1: maybe muted subscriber growth with all the competition. Do you 124 00:06:36,160 --> 00:06:37,960 Speaker 1: think people are not going to be happy? 125 00:06:38,240 --> 00:06:43,960 Speaker 5: I think fundamentally, Disney has flagged repeatedly that achieving a profit, 126 00:06:44,000 --> 00:06:46,640 Speaker 5: as I mentioned in streaming would not be a linear exercise. 127 00:06:46,720 --> 00:06:49,719 Speaker 5: And also I think that they have guided towards achieving 128 00:06:49,760 --> 00:06:52,640 Speaker 5: break even by the end of their fiscal year. So 129 00:06:52,760 --> 00:06:54,840 Speaker 5: on that basis, I think that you know, if they 130 00:06:55,720 --> 00:07:01,080 Speaker 5: hold to that timeline, then the performance will be unsurprising 131 00:07:01,360 --> 00:07:04,640 Speaker 5: and a relief for many shareholders, as in when that 132 00:07:04,760 --> 00:07:05,880 Speaker 5: streaming profit comes in. 133 00:07:06,200 --> 00:07:09,200 Speaker 1: Disney earnings out this Wednesday, that's ahead of Wall Street's 134 00:07:09,200 --> 00:07:13,560 Speaker 1: opening Bell and our thanks to Thomas Buckley, Bloomberg Entertainment Reporter. Well, 135 00:07:13,640 --> 00:07:16,920 Speaker 1: we move next to the ride sharing companies Uber and Lift. 136 00:07:17,040 --> 00:07:21,040 Speaker 1: Uber reporting its latest quarterly results on Tuesday, Lift on Wednesday, 137 00:07:21,040 --> 00:07:23,480 Speaker 1: and for more on what to expect, We're joined by 138 00:07:23,520 --> 00:07:28,240 Speaker 1: Mandeep Singh, Bloomberg Intelligence Senior tech industry analyst. Man Deep 139 00:07:28,280 --> 00:07:31,720 Speaker 1: The COVID nineteen lockdowns are over people hailing rides again, 140 00:07:32,040 --> 00:07:35,400 Speaker 1: ordering food deliveries and big numbers. What are you expecting 141 00:07:35,400 --> 00:07:36,360 Speaker 1: to see. 142 00:07:36,600 --> 00:07:39,800 Speaker 6: Well, So I think what we have seen with Uber 143 00:07:39,920 --> 00:07:43,920 Speaker 6: specifically is the ride sharing segment has come back very 144 00:07:44,040 --> 00:07:48,720 Speaker 6: strongly since the reopenings, and travel continues to be strong. 145 00:07:48,840 --> 00:07:53,320 Speaker 6: So mobility segment, which is their big driver of profitability, 146 00:07:53,720 --> 00:07:57,680 Speaker 6: should have another quarter of twenty percent plus booking's growth. 147 00:07:58,240 --> 00:08:01,640 Speaker 6: And I think in terms of scale, I find Uber 148 00:08:01,680 --> 00:08:03,920 Speaker 6: to be the best position when it comes to the 149 00:08:04,040 --> 00:08:08,560 Speaker 6: right sharing side. The delivery side is still not profitable. 150 00:08:08,680 --> 00:08:12,200 Speaker 6: They've been layering ads, they've been pulling back from markets 151 00:08:12,280 --> 00:08:15,160 Speaker 6: that are not profitable. But in the end, we haven't 152 00:08:15,200 --> 00:08:19,240 Speaker 6: seen the type of synergy that everyone feels should come 153 00:08:19,360 --> 00:08:22,720 Speaker 6: with a company like Uber given its own right sharing 154 00:08:22,800 --> 00:08:27,200 Speaker 6: and food delivery and freight, which is a completely different segment, 155 00:08:27,280 --> 00:08:30,400 Speaker 6: so money losing segment. So in the case of Uber, 156 00:08:30,600 --> 00:08:34,440 Speaker 6: everyone wants to see mobility do well because that's when 157 00:08:34,440 --> 00:08:37,640 Speaker 6: they beat on their profitability metrics. And look, there has 158 00:08:37,679 --> 00:08:42,920 Speaker 6: been news about Tesla launching robotaxis, Wemo actually scaling up 159 00:08:42,960 --> 00:08:46,480 Speaker 6: their robotaxis that they currently have in three cities in 160 00:08:46,520 --> 00:08:49,160 Speaker 6: the US, and that's a big risk when it comes 161 00:08:49,240 --> 00:08:52,240 Speaker 6: to long term what happens to the business model of 162 00:08:52,320 --> 00:08:53,400 Speaker 6: right sharing companies? 163 00:08:53,760 --> 00:08:56,520 Speaker 1: How about Lyft, which does not have the food delivery. 164 00:08:57,000 --> 00:08:59,640 Speaker 6: Yeah, I mean, look, this is a scale business, and 165 00:08:59,679 --> 00:09:03,000 Speaker 6: if you don't have scale, then you know, there is 166 00:09:03,040 --> 00:09:06,360 Speaker 6: a very little chance of sustaining profitability. And that's been 167 00:09:06,480 --> 00:09:10,959 Speaker 6: Lift's biggest problem because look, Uber with a revenue run 168 00:09:11,040 --> 00:09:14,680 Speaker 6: rate of over forty billion dollars a year can barely 169 00:09:15,000 --> 00:09:18,600 Speaker 6: be profitable because of its mobility segment. Lyft is like 170 00:09:18,880 --> 00:09:23,560 Speaker 6: five times smaller and that's where and just like you 171 00:09:23,559 --> 00:09:27,360 Speaker 6: SAIDT doesn't have delivery, so that's where it gets challenging 172 00:09:27,440 --> 00:09:32,040 Speaker 6: to get supply to really do this in a profitable fashion. 173 00:09:32,240 --> 00:09:34,880 Speaker 6: There are insurance costs, and look, this is not a 174 00:09:34,920 --> 00:09:39,840 Speaker 6: software type eighty percent gross margin business right sharing delivery. 175 00:09:39,960 --> 00:09:42,600 Speaker 6: This is more of a fifty percent gross margin business. 176 00:09:42,600 --> 00:09:45,160 Speaker 6: And you've got a lot of variable costs. And on 177 00:09:45,240 --> 00:09:48,040 Speaker 6: top of that, you have a technology threat. You know, 178 00:09:48,080 --> 00:09:50,320 Speaker 6: if there are robot taxis, then you don't need a 179 00:09:50,400 --> 00:09:53,640 Speaker 6: human driver or a human career to deliver. So that's 180 00:09:53,720 --> 00:09:57,560 Speaker 6: the big overhang when it comes to these two companies. 181 00:09:57,600 --> 00:10:00,600 Speaker 6: The good thing is the market has rationalized. It's just 182 00:10:00,640 --> 00:10:03,120 Speaker 6: two players in the US. A lot of the other 183 00:10:03,160 --> 00:10:07,000 Speaker 6: players outside the US are retrenching. They're pulling back, you know, 184 00:10:07,120 --> 00:10:11,960 Speaker 6: from unprofitable markets. So that rationalization is all good. But 185 00:10:12,040 --> 00:10:15,360 Speaker 6: if Weimo comes up with a driver less car that 186 00:10:15,360 --> 00:10:18,760 Speaker 6: can operate in certain zip codes, that really puts a 187 00:10:18,800 --> 00:10:21,440 Speaker 6: lot of pressure on the take rates for these companies. 188 00:10:21,480 --> 00:10:25,400 Speaker 6: And that's why you see an Uber stock reacting every 189 00:10:25,440 --> 00:10:28,760 Speaker 6: time there is news of Tessa talking about robotaxis, even 190 00:10:28,800 --> 00:10:30,760 Speaker 6: though it was a delay this time around, which is 191 00:10:30,800 --> 00:10:31,199 Speaker 6: a good thing. 192 00:10:31,559 --> 00:10:34,439 Speaker 1: And that's all that Cruz and Weimo are doing right 193 00:10:34,480 --> 00:10:35,360 Speaker 1: now is yeah. 194 00:10:35,400 --> 00:10:37,840 Speaker 6: I mean Cruse, I think has pulled back. So it's 195 00:10:38,000 --> 00:10:42,840 Speaker 6: really Tesla and Weimo right now who are really pulling ahead. 196 00:10:42,840 --> 00:10:46,240 Speaker 6: When it comes to scaling this technology, there are challenges. 197 00:10:46,280 --> 00:10:50,760 Speaker 6: I don't think they feel comfortable these autonomous driving kind 198 00:10:50,760 --> 00:10:53,600 Speaker 6: of can take care of all the edgy use cases. 199 00:10:54,000 --> 00:10:56,600 Speaker 6: So there is that risk that you know, you can 200 00:10:56,720 --> 00:11:00,280 Speaker 6: only operate with certain guardrails and you know, making sure 201 00:11:00,080 --> 00:11:03,600 Speaker 6: or you don't run into the ed scenarios. But still, 202 00:11:03,800 --> 00:11:06,839 Speaker 6: as I said, for Uber and Lyft, it's all about 203 00:11:06,880 --> 00:11:10,680 Speaker 6: the take rates. If your take rates compress, then it's 204 00:11:10,679 --> 00:11:12,800 Speaker 6: going to put a lot of pressure on your business model. 205 00:11:12,840 --> 00:11:15,120 Speaker 6: And that's why you know, every time you hear about 206 00:11:15,120 --> 00:11:19,680 Speaker 6: Prop twenty two New York cab drivers asking for more, 207 00:11:20,480 --> 00:11:24,679 Speaker 6: that is all putting pressure on Uber that you know, 208 00:11:24,800 --> 00:11:27,880 Speaker 6: they cannot even talk about raising their take rates. They 209 00:11:27,960 --> 00:11:30,640 Speaker 6: just have to find a way to be profitable by 210 00:11:30,720 --> 00:11:31,960 Speaker 6: keeping their take rates slow. 211 00:11:32,120 --> 00:11:34,240 Speaker 1: Well, let's dive a little deeper into that. The Prop 212 00:11:34,280 --> 00:11:38,320 Speaker 1: twenty two a victory of sorts in California, officials there 213 00:11:38,400 --> 00:11:41,400 Speaker 1: leaving intact, at least for now, the classic classification that 214 00:11:41,480 --> 00:11:45,679 Speaker 1: drivers are independent contractors, not employees. And in New York 215 00:11:45,720 --> 00:11:48,560 Speaker 1: City officials backing away from their threat to impose a 216 00:11:48,600 --> 00:11:51,600 Speaker 1: minimum pay regulation on Uber and Lyft and other drivers 217 00:11:51,840 --> 00:11:55,080 Speaker 1: as long as they stop locking out drivers to avoid 218 00:11:55,160 --> 00:11:58,920 Speaker 1: paying overtime. So, boy, this is very contentious. 219 00:11:58,840 --> 00:12:01,960 Speaker 6: It is. And that's you know, if you hear Uber 220 00:12:02,559 --> 00:12:06,520 Speaker 6: kind of profits jumping forty to fifty percent, then it 221 00:12:06,559 --> 00:12:10,080 Speaker 6: brings so much more attention to these companies because on 222 00:12:10,160 --> 00:12:13,440 Speaker 6: one hand, they are increasing their profitability. On the other hand, 223 00:12:13,480 --> 00:12:17,840 Speaker 6: the drivers feel they're not compensated very well by these companies. 224 00:12:17,480 --> 00:12:19,760 Speaker 1: And marginalized by these companies exactly. 225 00:12:20,040 --> 00:12:22,680 Speaker 6: And so that's the push and pull that you cannot 226 00:12:22,679 --> 00:12:26,760 Speaker 6: show too much profitability because then it brings in too 227 00:12:26,840 --> 00:12:29,440 Speaker 6: much attention to your business. And you know the fact 228 00:12:29,480 --> 00:12:32,200 Speaker 6: that you're not paying enough to your drivers, and I 229 00:12:32,240 --> 00:12:34,800 Speaker 6: think that's not going away, which is why this business 230 00:12:34,880 --> 00:12:37,720 Speaker 6: is so hard. I still feel compared to other tech 231 00:12:37,760 --> 00:12:41,360 Speaker 6: business models, this is the hardest business model to keep showing, 232 00:12:41,760 --> 00:12:43,240 Speaker 6: you know, steady profitability. 233 00:12:43,600 --> 00:12:43,880 Speaker 4: Wow. 234 00:12:44,000 --> 00:12:47,360 Speaker 1: Well, Uber's latest earnings out on Tuesday. Lift on Wednesday 235 00:12:47,400 --> 00:12:51,040 Speaker 1: in our thanks to Mandeep Singh, Bloomberg Intelligence senior tech 236 00:12:51,120 --> 00:12:54,280 Speaker 1: industry analysts. All right, coming up on Bloomberg day Break weekend, 237 00:12:54,280 --> 00:12:58,040 Speaker 1: we'll discuss whether new UK Chancellor Rachel Reeves can sell 238 00:12:58,080 --> 00:13:01,839 Speaker 1: the British dream in a mariera. I'm Tom Busby and 239 00:13:01,960 --> 00:13:16,000 Speaker 1: this is Bloomberg. This is Bloomberg day Break Weekend, our 240 00:13:16,040 --> 00:13:18,400 Speaker 1: global look ahead at the top stories for investors in 241 00:13:18,440 --> 00:13:21,480 Speaker 1: the coming week. I'm Tom Busby in New York. Up 242 00:13:21,559 --> 00:13:23,680 Speaker 1: later in our program and look ahead to some key 243 00:13:23,840 --> 00:13:26,880 Speaker 1: trade data in China and earnings from the Chinese tech 244 00:13:26,920 --> 00:13:30,480 Speaker 1: giant Ali Baba. But first, the UK's new Chancellor of 245 00:13:30,520 --> 00:13:34,360 Speaker 1: the Exchequer, Rachel Reives, has already made her mark auditing 246 00:13:34,480 --> 00:13:38,040 Speaker 1: UK public spending, finding a nearly twenty two bill pounds 247 00:13:38,040 --> 00:13:42,720 Speaker 1: spending whole of unfunded and undisclosed commitments, and now she's 248 00:13:42,760 --> 00:13:45,960 Speaker 1: looking to reign and spending a jumpstart international investment in 249 00:13:45,960 --> 00:13:48,439 Speaker 1: the UK, and to help make that happen, she heads 250 00:13:48,440 --> 00:13:50,960 Speaker 1: to the US this week to wo deep pocketed Wall 251 00:13:50,960 --> 00:13:53,960 Speaker 1: Street executives for more. Let's go to London and bring 252 00:13:54,000 --> 00:13:56,920 Speaker 1: in Bloomberg day Break Europe anchor Stephen Carroll. 253 00:13:57,080 --> 00:13:59,679 Speaker 2: Tom It's been a busy few weeks for Rachel Reeves, 254 00:13:59,679 --> 00:14:02,600 Speaker 2: now in charge of the UK Treasury. The dire state 255 00:14:02,679 --> 00:14:05,080 Speaker 2: of the public finances means she's already had to make 256 00:14:05,080 --> 00:14:08,559 Speaker 2: difficult decisions to cut spending on things like winter fuel 257 00:14:08,559 --> 00:14:12,840 Speaker 2: payments for some pensioners and several infrastructure projects. Next up, though, 258 00:14:12,840 --> 00:14:15,360 Speaker 2: she's jetting after the United States to drum up interest 259 00:14:15,600 --> 00:14:19,040 Speaker 2: from global investors in her new National Wealth Fund. The 260 00:14:19,080 --> 00:14:21,400 Speaker 2: government's plan is to use the equivalent of around nine 261 00:14:21,440 --> 00:14:24,160 Speaker 2: billion dollars of public money to get three times as 262 00:14:24,240 --> 00:14:27,720 Speaker 2: much investment from the private sector, building backing from financial 263 00:14:27,760 --> 00:14:30,560 Speaker 2: stakeholders at home and abroad. As something the Chancellor discussed 264 00:14:30,600 --> 00:14:33,760 Speaker 2: with Bloomberg in her first major broadcast interview in the 265 00:14:33,840 --> 00:14:34,760 Speaker 2: role last month. 266 00:14:35,240 --> 00:14:39,000 Speaker 7: We've introduced to Parliament today the Budget Responsibility Bill that 267 00:14:39,160 --> 00:14:42,960 Speaker 7: was first announced in the King's Speech just yesterday. And 268 00:14:43,000 --> 00:14:46,080 Speaker 7: the purpose of this bill is to provide the fiscal 269 00:14:46,160 --> 00:14:48,760 Speaker 7: lock so that never again can a Prime Minister or 270 00:14:48,920 --> 00:14:52,440 Speaker 7: Chancellor do what Liz Trust and Quasi Cootting did with 271 00:14:52,520 --> 00:14:56,920 Speaker 7: their disastrous mini budget just under two years ago. So 272 00:14:57,360 --> 00:14:59,680 Speaker 7: this will mean that the Office of Budget Responsibility, the 273 00:14:59,720 --> 00:15:03,480 Speaker 7: ind Pendant Office, can always provide a forecast when there 274 00:15:03,520 --> 00:15:08,480 Speaker 7: are significant and permanent tax and spending changes, specifically worth 275 00:15:08,480 --> 00:15:11,600 Speaker 7: more than one percent of GDP. That would have meant 276 00:15:11,640 --> 00:15:15,240 Speaker 7: it would have triggered an OBR forecast back when Liz 277 00:15:15,240 --> 00:15:17,920 Speaker 7: Trust and Cosey Quotin introduced that disastrous Many budget. 278 00:15:18,520 --> 00:15:21,280 Speaker 8: And so that I guess it is something that investors will, 279 00:15:21,400 --> 00:15:24,760 Speaker 8: you know, take solos to You've announced a what the 280 00:15:24,800 --> 00:15:26,440 Speaker 8: Premier has said that you will achieve that two point 281 00:15:26,480 --> 00:15:28,720 Speaker 8: five percent target. Are you confident that's achievable. 282 00:15:29,920 --> 00:15:34,479 Speaker 7: So the purpose of today really was to give businesses, 283 00:15:34,520 --> 00:15:38,840 Speaker 7: give investors that confidence that Britain is a stable place 284 00:15:38,960 --> 00:15:42,120 Speaker 7: to invest and do business. I'm determined to do that. 285 00:15:42,400 --> 00:15:45,720 Speaker 7: We were elected two weeks ago on a mandate to 286 00:15:45,800 --> 00:15:50,360 Speaker 7: grow our economy based on that stability that is so 287 00:15:50,560 --> 00:15:54,520 Speaker 7: essential to underpin any economic decision making, and so that's 288 00:15:54,520 --> 00:15:57,560 Speaker 7: why this bill is so important. Now. I'm under no 289 00:15:57,640 --> 00:16:00,720 Speaker 7: illusions about the scale of the challenge that face in 290 00:16:00,800 --> 00:16:03,880 Speaker 7: this job. There are going to be difficult decisions ahead, 291 00:16:04,360 --> 00:16:07,400 Speaker 7: but I was really clear during the election that everything 292 00:16:07,400 --> 00:16:09,800 Speaker 7: that we put forward, whether that is on the NHS 293 00:16:09,920 --> 00:16:12,640 Speaker 7: or on defense or on tax policy, will always be 294 00:16:12,680 --> 00:16:16,000 Speaker 7: fully costed and fully funded. That's very different so what 295 00:16:16,000 --> 00:16:19,640 Speaker 7: we've had these last fourteen years with decisions with no 296 00:16:19,760 --> 00:16:22,200 Speaker 7: regard to where the money's going to come from, and 297 00:16:22,240 --> 00:16:23,760 Speaker 7: I'm going to be different and. 298 00:16:23,760 --> 00:16:25,800 Speaker 8: Chance for a lot of course of what you're trying 299 00:16:25,800 --> 00:16:28,080 Speaker 8: to put in place will depend on private capital coming 300 00:16:28,120 --> 00:16:28,720 Speaker 8: into the UK. 301 00:16:28,880 --> 00:16:29,360 Speaker 7: Have you had. 302 00:16:29,280 --> 00:16:33,600 Speaker 8: Discussions with institutions, investors, even pension funds of their willingness 303 00:16:33,680 --> 00:16:34,320 Speaker 8: to come to the UK. 304 00:16:34,720 --> 00:16:38,520 Speaker 7: You're absolutely right that our plans to grow the economy 305 00:16:39,040 --> 00:16:43,080 Speaker 7: depend on businesses and investors choosing Britain as a place 306 00:16:43,120 --> 00:16:45,600 Speaker 7: to invest. And I want investors to look at Britain 307 00:16:45,720 --> 00:16:48,400 Speaker 7: and see a country that's got a stable government with 308 00:16:48,480 --> 00:16:51,560 Speaker 7: a clear mandate to grow the economy, and chooses Britain 309 00:16:51,920 --> 00:16:54,560 Speaker 7: as a stable place to invest in an increasingly volatile 310 00:16:54,600 --> 00:16:58,240 Speaker 7: and uncertain world, which is why the fiscal lot today 311 00:16:58,280 --> 00:17:01,440 Speaker 7: is so important, but also the other changes we've announced 312 00:17:01,480 --> 00:17:04,640 Speaker 7: in the last two weeks. We have announced more policies 313 00:17:05,000 --> 00:17:07,480 Speaker 7: to grow the economy than the last government did in 314 00:17:07,520 --> 00:17:11,359 Speaker 7: fourteen years. In the first seventy two hours in the job, 315 00:17:11,880 --> 00:17:16,000 Speaker 7: I made more comprehensive changes to the UK planning system 316 00:17:16,080 --> 00:17:19,040 Speaker 7: than the previous government did in more than a decade, 317 00:17:19,240 --> 00:17:23,120 Speaker 7: because I know that we need to unlock that private 318 00:17:23,200 --> 00:17:26,160 Speaker 7: investment that businesses tell me they are ready to invest 319 00:17:26,520 --> 00:17:28,280 Speaker 7: if we get rid of some of those blockages, and 320 00:17:28,320 --> 00:17:30,480 Speaker 7: the blockages in the planning system I think are more 321 00:17:30,520 --> 00:17:35,280 Speaker 7: significant than anything else. And so those changes to bring 322 00:17:35,320 --> 00:17:39,560 Speaker 7: back mandatory housing targets for local authorities, ending the moratorium 323 00:17:39,800 --> 00:17:43,960 Speaker 7: on shore when calling in planning decisions, on data centers 324 00:17:44,000 --> 00:17:47,359 Speaker 7: and on housing really crucial both to send a signal 325 00:17:47,359 --> 00:17:50,080 Speaker 7: to business that Britain is a place to invest, but 326 00:17:50,200 --> 00:17:52,800 Speaker 7: also to make sure that we can get on with 327 00:17:52,880 --> 00:17:54,560 Speaker 7: things and get building in Britain again. 328 00:17:54,960 --> 00:17:56,760 Speaker 8: And are they listening. Have you gotten cars from big 329 00:17:56,840 --> 00:17:59,359 Speaker 8: investors saying yes, that's a plan that I wanted to 330 00:17:59,359 --> 00:18:00,000 Speaker 8: see and I'm. 331 00:17:59,840 --> 00:18:04,360 Speaker 7: In absolutely so. In my first speech at the Treasury 332 00:18:04,760 --> 00:18:07,159 Speaker 7: a week and a half ago. We had businesses, we 333 00:18:07,240 --> 00:18:10,760 Speaker 7: had investors in the audience met afterwards. The following day 334 00:18:11,160 --> 00:18:14,240 Speaker 7: we announced the creation of a National Wealth Fund, work 335 00:18:14,359 --> 00:18:17,000 Speaker 7: led by Mark Carney. The task force led by Mark 336 00:18:17,040 --> 00:18:19,679 Speaker 7: Carney for the Labor Party when we were in opposition 337 00:18:20,040 --> 00:18:23,480 Speaker 7: now reporting to a Labor government, and on that Wealth 338 00:18:23,520 --> 00:18:26,560 Speaker 7: Fund task Force, we also had Amanda Blank from a 339 00:18:26,640 --> 00:18:32,040 Speaker 7: Viva Vencat, from Berkley's Antonio from Energy and other big 340 00:18:32,200 --> 00:18:36,399 Speaker 7: UK investors. And that is absolutely crucial because there's no 341 00:18:36,560 --> 00:18:39,359 Speaker 7: plans that I can draw up in my new office 342 00:18:39,359 --> 00:18:42,720 Speaker 7: in the Treasury that are going to work unless we 343 00:18:42,840 --> 00:18:45,720 Speaker 7: have business buy in. And I hope that businesses saw 344 00:18:45,720 --> 00:18:48,560 Speaker 7: in Labour's manifesto and also in the plans that we've 345 00:18:48,560 --> 00:18:52,600 Speaker 7: announced in government have the fingerprints of business all over 346 00:18:52,640 --> 00:18:55,760 Speaker 7: them because these plans have been co written with business, 347 00:18:56,000 --> 00:18:59,800 Speaker 7: because they're all about unlocking private sector investment into our economy. 348 00:19:00,240 --> 00:19:03,280 Speaker 8: Chancellor, are you considering tax breaks to either boost pension 349 00:19:03,359 --> 00:19:05,480 Speaker 8: savings or of make UK investments more attractive. 350 00:19:06,320 --> 00:19:09,320 Speaker 7: I'm not going to announce any tax breaks or tax 351 00:19:09,400 --> 00:19:13,600 Speaker 7: changes without saying where the money is going to come from. 352 00:19:13,800 --> 00:19:16,720 Speaker 7: And we will have a budget later this year. But 353 00:19:16,800 --> 00:19:19,520 Speaker 7: I also just need to be really clear and honest 354 00:19:19,520 --> 00:19:22,760 Speaker 7: about the scale of the challenge that we've inherited with 355 00:19:22,840 --> 00:19:26,600 Speaker 7: the public finances. We're going to have to make difficult decisions. 356 00:19:26,680 --> 00:19:29,399 Speaker 7: We need to fix the foundations before we can start 357 00:19:29,440 --> 00:19:33,560 Speaker 7: rebuilding things in Britain. But unlike the previous government, I 358 00:19:33,560 --> 00:19:35,560 Speaker 7: am going to be honest about the scale of the challenge. 359 00:19:35,560 --> 00:19:38,040 Speaker 7: I'm going to level with people and together we're going 360 00:19:38,080 --> 00:19:39,200 Speaker 7: to rebuild our country. 361 00:19:39,720 --> 00:19:43,080 Speaker 2: That was the Chancellor Rachel Reeves speaking to Bloomberg's Francine Lacweb. 362 00:19:43,240 --> 00:19:46,040 Speaker 2: So big ambitions, but will the support measure up. I've 363 00:19:46,040 --> 00:19:48,840 Speaker 2: been discussing what's at stake in the Chancellor's upcoming trip 364 00:19:48,840 --> 00:19:52,360 Speaker 2: to the United States with our UK political editor Alex Wickham. 365 00:19:52,840 --> 00:19:55,000 Speaker 9: It's a big moment for Rachel Reeves. You know, she's 366 00:19:55,040 --> 00:19:58,480 Speaker 9: got this big, gaping hole in the public finances in 367 00:19:58,520 --> 00:20:03,960 Speaker 9: this country. She has ambitious manifesto plans with Keir Starmer 368 00:20:04,240 --> 00:20:06,840 Speaker 9: for the Labor Party that they want to implement that 369 00:20:06,880 --> 00:20:09,639 Speaker 9: are going to cost money. And they see in the 370 00:20:09,640 --> 00:20:12,560 Speaker 9: absence of not really wanting to put everyone's taxes up, 371 00:20:12,680 --> 00:20:15,639 Speaker 9: not really wanting to massively increase borrowing. They see private 372 00:20:15,680 --> 00:20:19,880 Speaker 9: investment as a key piece of solving that puzzle. So 373 00:20:19,920 --> 00:20:23,639 Speaker 9: whether she can raise really tens of billions of pounds 374 00:20:23,720 --> 00:20:25,720 Speaker 9: over the next year or so to pay for things 375 00:20:25,760 --> 00:20:28,280 Speaker 9: like the green transition in this country, it is going 376 00:20:28,359 --> 00:20:31,159 Speaker 9: to be a huge test of the Starma Reeves government. 377 00:20:31,880 --> 00:20:34,440 Speaker 2: What's the message that she'll be selling to those executives 378 00:20:34,440 --> 00:20:36,119 Speaker 2: that should be meeting on wall streets. 379 00:20:37,760 --> 00:20:40,879 Speaker 9: It's very much similar to the message that she was 380 00:20:40,920 --> 00:20:43,920 Speaker 9: successful with voters in this country at the electure earlier 381 00:20:43,960 --> 00:20:46,320 Speaker 9: this month or last month, which was that you know, 382 00:20:46,640 --> 00:20:49,200 Speaker 9: stability is the order of the day now and they 383 00:20:49,240 --> 00:20:53,400 Speaker 9: will run the politics and the economics of this country 384 00:20:53,440 --> 00:20:57,280 Speaker 9: in a way that is predictable and calm and a 385 00:20:57,560 --> 00:21:02,360 Speaker 9: healthy haven for investors. Is certainly compared to perhaps other 386 00:21:02,400 --> 00:21:06,520 Speaker 9: parts of the world where there's more political and economic turmoil. 387 00:21:06,600 --> 00:21:09,160 Speaker 9: That's obviously a far cry from the last few years 388 00:21:09,200 --> 00:21:12,440 Speaker 9: in Britain since Brexit, which had been much more tumultuous. 389 00:21:12,760 --> 00:21:15,199 Speaker 9: So they are going to make the pitch that you know, 390 00:21:15,600 --> 00:21:17,600 Speaker 9: Britain has changed now and is actually more of a 391 00:21:17,640 --> 00:21:19,200 Speaker 9: safe haven for investors. 392 00:21:20,160 --> 00:21:23,119 Speaker 2: Where does the planned National Wealth Fund come into this. 393 00:21:23,280 --> 00:21:26,160 Speaker 2: JJ Reez wants to raise over twenty billion pounds through 394 00:21:26,160 --> 00:21:29,560 Speaker 2: it from the private sector. I mean, how achievable would 395 00:21:29,560 --> 00:21:29,840 Speaker 2: that be. 396 00:21:31,359 --> 00:21:35,000 Speaker 9: They're very confident, and you know, governments always say that 397 00:21:35,000 --> 00:21:37,600 Speaker 9: they want to raise private investment as we're paying for 398 00:21:37,640 --> 00:21:42,080 Speaker 9: things that they want to happen. But Reeves is a 399 00:21:42,119 --> 00:21:45,359 Speaker 9: bit more open about this idea of borrowing to invest 400 00:21:45,400 --> 00:21:48,760 Speaker 9: as well and borrowing to stimulate private investment. She has 401 00:21:48,800 --> 00:21:52,480 Speaker 9: this idea that for every pound that the government invests 402 00:21:52,480 --> 00:21:55,440 Speaker 9: in infrastructure projects, for example, she thinks she can raise 403 00:21:55,480 --> 00:21:59,320 Speaker 9: three pounds from private investors. You know, obviously whether she 404 00:21:59,440 --> 00:22:01,760 Speaker 9: can do that is to be seen. But for things 405 00:22:01,920 --> 00:22:05,160 Speaker 9: like green Transition, where labor has been forced to really 406 00:22:05,240 --> 00:22:08,320 Speaker 9: pair back the amount of state spending that it's willing 407 00:22:08,359 --> 00:22:12,320 Speaker 9: to put forward for huge projects that are absolutely fundamental 408 00:22:12,440 --> 00:22:16,600 Speaker 9: to the government's plan to get economic growth, being able 409 00:22:16,640 --> 00:22:19,919 Speaker 9: to bring in private investments through things like the National 410 00:22:19,920 --> 00:22:23,359 Speaker 9: Wealth Fund, what labor people call the multiplier effect of 411 00:22:23,400 --> 00:22:26,840 Speaker 9: bringing in all this extra private investment is just absolutely 412 00:22:26,880 --> 00:22:28,679 Speaker 9: a key thing for them. So they will want to 413 00:22:28,800 --> 00:22:31,840 Speaker 9: prove early on that there is interest in these sorts 414 00:22:31,840 --> 00:22:32,600 Speaker 9: of ideas. 415 00:22:33,440 --> 00:22:36,840 Speaker 2: This is also a chance for Rachel Reeves to build 416 00:22:36,880 --> 00:22:41,800 Speaker 2: bridges for the UK outside with its neighbors and the 417 00:22:41,920 --> 00:22:44,040 Speaker 2: US of course being a very important partner there too. 418 00:22:44,160 --> 00:22:46,399 Speaker 2: Now she's focused on the financial side of things, but 419 00:22:46,480 --> 00:22:50,800 Speaker 2: this is also part of I suppose Karstarmer's government relaunching 420 00:22:50,840 --> 00:22:54,879 Speaker 2: the UK as a global partner after a tumultuous for years. 421 00:22:56,000 --> 00:22:56,200 Speaker 10: Yeah. 422 00:22:56,200 --> 00:22:59,040 Speaker 9: Absolutely, And we haven't heard very much from Tiers Armor 423 00:22:59,160 --> 00:23:03,600 Speaker 9: on foreign policy for ever really until he took office 424 00:23:03,600 --> 00:23:05,560 Speaker 9: where really at the first couple of weeks he was 425 00:23:05,600 --> 00:23:09,359 Speaker 9: at NATO in DC, then hosted a big summit of 426 00:23:09,400 --> 00:23:13,520 Speaker 9: European leaders in Britain, and he's really been speed dating 427 00:23:13,680 --> 00:23:16,080 Speaker 9: sort of world leaders and allies to try to say 428 00:23:16,480 --> 00:23:19,199 Speaker 9: I think he used the words Britain is back in 429 00:23:19,240 --> 00:23:23,080 Speaker 9: reference to you know, essentially the Brexit years and under 430 00:23:23,080 --> 00:23:26,600 Speaker 9: the Conservatives, saying that you know, no, actually, under my government, 431 00:23:26,640 --> 00:23:30,359 Speaker 9: we won't be retreating from the world stage. So absolutely 432 00:23:30,400 --> 00:23:32,080 Speaker 9: this is a this is a chance for Rachel Reeves 433 00:23:32,119 --> 00:23:34,600 Speaker 9: to do her version of that on the finance side 434 00:23:35,080 --> 00:23:37,400 Speaker 9: in the US and also to you know, really get 435 00:23:37,440 --> 00:23:41,040 Speaker 9: in with perhaps the next generation of Democrat leaders as well. 436 00:23:42,480 --> 00:23:44,880 Speaker 2: Yeah, I mean, at the same time, Rachard Reeves might 437 00:23:44,920 --> 00:23:47,199 Speaker 2: also be happy to escape some of the problems that 438 00:23:47,240 --> 00:23:49,840 Speaker 2: she has at home. We had that you know conference 439 00:23:49,880 --> 00:23:53,480 Speaker 2: in recent days, that announcement of the bigger than expected 440 00:23:53,560 --> 00:23:57,600 Speaker 2: whole in the public finances in the UK two, I mean, 441 00:23:57,960 --> 00:24:02,399 Speaker 2: the difficult questions about the u uka's government finances in 442 00:24:02,400 --> 00:24:04,399 Speaker 2: the future also looking pretty tricky. 443 00:24:05,560 --> 00:24:09,280 Speaker 9: Absolutely, And you know, we always talk about honeymoon periods 444 00:24:09,280 --> 00:24:12,240 Speaker 9: for new governments after they win elections, and certainly first 445 00:24:12,359 --> 00:24:16,480 Speaker 9: a couple of weeks everybody in Westminster was being pretty 446 00:24:16,480 --> 00:24:18,760 Speaker 9: generous to the new Labor government, sort of saying, oh, 447 00:24:18,800 --> 00:24:22,600 Speaker 9: you know, it's interesting to deal with these new people 448 00:24:22,640 --> 00:24:26,160 Speaker 9: in charge. Well, Rachel Reeves on Monday gave a speech 449 00:24:26,200 --> 00:24:28,719 Speaker 9: in which she said she had uncovered that the public 450 00:24:28,760 --> 00:24:31,880 Speaker 9: finances she's inherited from the Conservatives were far worse than 451 00:24:31,920 --> 00:24:35,000 Speaker 9: she previously thought. Now some of that, no doubt is true, 452 00:24:35,000 --> 00:24:37,359 Speaker 9: but there was a bit of political theater involved in 453 00:24:37,400 --> 00:24:39,400 Speaker 9: that as well by Rachel Reeves, and it's very much 454 00:24:39,440 --> 00:24:43,320 Speaker 9: seen as a pitch rolling exercise for her to raise 455 00:24:43,400 --> 00:24:46,440 Speaker 9: taxes at the coming budget in October, which, of course, 456 00:24:46,440 --> 00:24:49,120 Speaker 9: in the general election campaign over only a few weeks ago, 457 00:24:49,400 --> 00:24:51,360 Speaker 9: she said she wasn't going to do so. That has 458 00:24:51,440 --> 00:24:53,720 Speaker 9: left a bit of a sour taste in the mouth 459 00:24:53,880 --> 00:24:58,800 Speaker 9: just four weeks into Kissed Armour's premiership and yeah, absolutely, 460 00:24:58,800 --> 00:25:02,320 Speaker 9: the honeymoon that new governments often enjoy is very much 461 00:25:02,400 --> 00:25:03,160 Speaker 9: over already. 462 00:25:04,359 --> 00:25:07,000 Speaker 2: Perhaps also, Rachel Reeves might be looking for a bit 463 00:25:07,040 --> 00:25:10,800 Speaker 2: of Americans stardust too. When it comes to economic growth. 464 00:25:10,800 --> 00:25:13,520 Speaker 2: They've been a debate during the election campaign here about 465 00:25:13,680 --> 00:25:16,399 Speaker 2: whether or not a two and a half percent growth 466 00:25:16,440 --> 00:25:19,200 Speaker 2: target might be achievable over the lifetime of the government. 467 00:25:19,680 --> 00:25:22,040 Speaker 2: Rachel Reeves might be looking very enviously at some of 468 00:25:22,080 --> 00:25:24,359 Speaker 2: the economic performance in the US as well. 469 00:25:25,680 --> 00:25:28,639 Speaker 9: Yeah, and Labor saying that they want to have the 470 00:25:28,640 --> 00:25:31,959 Speaker 9: best growth in the G seven and economists are skeptical, 471 00:25:32,160 --> 00:25:35,520 Speaker 9: to put it mildly, as to whether that will be achievable. 472 00:25:36,160 --> 00:25:40,480 Speaker 9: The reality is Labor made this big bet on economic 473 00:25:40,520 --> 00:25:45,360 Speaker 9: growth as the solution to Britain's problems unlocked by planning, 474 00:25:45,400 --> 00:25:48,280 Speaker 9: reform and house building. They thought that they would be 475 00:25:48,320 --> 00:25:50,879 Speaker 9: able to growth the economy enough to be able to 476 00:25:51,800 --> 00:25:54,879 Speaker 9: raise money to fix the public services that are ailing 477 00:25:54,920 --> 00:25:58,160 Speaker 9: in Britain on healthcare and justice and all the rest 478 00:25:58,200 --> 00:26:03,760 Speaker 9: of it. Three four weeks into the job, Rachel Reeves has, 479 00:26:03,880 --> 00:26:07,040 Speaker 9: if not jettisoned that sort of growth miracle plan. She 480 00:26:07,240 --> 00:26:10,159 Speaker 9: sort of very much said, Okay, well, we're also going 481 00:26:10,200 --> 00:26:13,080 Speaker 9: to have to put taxes up, which is you know, 482 00:26:13,560 --> 00:26:18,320 Speaker 9: arguably inhibitatetor growth, and she will face really heavy scrutiny 483 00:26:18,400 --> 00:26:21,199 Speaker 9: over the next few months over whether she really is 484 00:26:21,280 --> 00:26:23,880 Speaker 9: still going for growth as the answer, or whether it's 485 00:26:23,920 --> 00:26:26,320 Speaker 9: actually going to be tax risers a long the wealthy 486 00:26:26,640 --> 00:26:30,320 Speaker 9: that pay for fixing public services, as many people suspected 487 00:26:30,320 --> 00:26:32,120 Speaker 9: in the election, but she didn't want to admit. 488 00:26:32,920 --> 00:26:36,399 Speaker 2: Thanks to Bloomberg's UK Political editor Alex Wickham, I'm Stephen 489 00:26:36,400 --> 00:26:38,800 Speaker 2: Carroll in London. You can catch us every weekday morning 490 00:26:38,800 --> 00:26:41,280 Speaker 2: here for Bloomberg Daybreak Europe, beginning at six am in 491 00:26:41,320 --> 00:26:43,520 Speaker 2: London and one am on Wall Street. 492 00:26:43,680 --> 00:26:46,560 Speaker 1: Tom. Thank you, Steven. And coming up on Bloomberg day 493 00:26:46,560 --> 00:26:49,040 Speaker 1: Break weekend to look ahead to earnings from Chinese tech 494 00:26:49,080 --> 00:26:53,119 Speaker 1: giant Ali Barber. I'm Tom Busby, and this is Bloomberg. 495 00:27:04,040 --> 00:27:06,520 Speaker 1: This is Bloomberg day Break Weekend, our global look ahead 496 00:27:06,520 --> 00:27:08,680 Speaker 1: at the top stories for investors in the coming week. 497 00:27:08,920 --> 00:27:12,159 Speaker 1: I'm Tom Busby in New York. Continuing the theme on 498 00:27:12,359 --> 00:27:15,080 Speaker 1: AI from last week, we expect to hear more from 499 00:27:15,080 --> 00:27:18,480 Speaker 1: tech giant Ali Baba's earnings and outlook, and we look 500 00:27:18,520 --> 00:27:20,840 Speaker 1: ahead to trade data out of China. Let's get to 501 00:27:20,840 --> 00:27:24,440 Speaker 1: Bloomberg Daybreak Asia co host Brian Curtis for a preview. 502 00:27:24,760 --> 00:27:28,119 Speaker 3: Tom ali Baba says it will soon launch an AI 503 00:27:28,240 --> 00:27:31,960 Speaker 3: powered search engine to help small and medium sized companies 504 00:27:32,000 --> 00:27:35,640 Speaker 3: improve their sourcing. Ali Baba has been undergoing a turbulent 505 00:27:35,680 --> 00:27:39,880 Speaker 3: restructuring as it's lost market shared to rivals including PDD 506 00:27:40,440 --> 00:27:43,720 Speaker 3: and byte Dance. The company announced other measures, such as 507 00:27:44,080 --> 00:27:47,360 Speaker 3: charging a zero point six percent service fee on both 508 00:27:47,440 --> 00:27:51,800 Speaker 3: Talbau and Timol merchants that could boost revenue. We'll soon 509 00:27:51,880 --> 00:27:54,440 Speaker 3: learn more about what's happening with the company as Ali 510 00:27:54,480 --> 00:27:58,280 Speaker 3: Baba reports earnings in the coming period. Joining us now 511 00:27:58,359 --> 00:28:02,040 Speaker 3: is Katherine Lim Bloomberg and Intelligent, senior analysts for Asia 512 00:28:02,119 --> 00:28:05,679 Speaker 3: Consumer and Technology. Catherine, thank you very much for joining us. 513 00:28:05,720 --> 00:28:08,959 Speaker 3: Let's start off with competition. How stiff is the competition 514 00:28:09,200 --> 00:28:11,800 Speaker 3: for ali Baba now from those firms like I mentioned 515 00:28:12,000 --> 00:28:13,760 Speaker 3: PDD and ByteDance and others. 516 00:28:14,119 --> 00:28:17,280 Speaker 10: Right, you know, on a topic of competition for ali Baba, 517 00:28:17,359 --> 00:28:20,879 Speaker 10: it's coming in multiple directions depending on which of the 518 00:28:20,960 --> 00:28:24,919 Speaker 10: six key business we're talking about. We've got China and 519 00:28:24,960 --> 00:28:29,800 Speaker 10: that's Talbo and Timo. We've got overseas and that's Ali Express, 520 00:28:30,280 --> 00:28:36,080 Speaker 10: you know, against Timu Shian even Amazon in countries like US. 521 00:28:36,480 --> 00:28:38,920 Speaker 10: And then of course we have the cloud business and 522 00:28:38,960 --> 00:28:43,760 Speaker 10: that's where the AI competition is going on with Baydo 523 00:28:44,240 --> 00:28:47,480 Speaker 10: and other players from China as well as overseas. 524 00:28:48,280 --> 00:28:51,520 Speaker 3: So what do we know about Ali Baba's AI powered 525 00:28:51,600 --> 00:28:54,480 Speaker 3: search engine. We mentioned there that this is supposed to 526 00:28:54,520 --> 00:28:57,360 Speaker 3: help small companies with their sourcing. What do we know 527 00:28:57,400 --> 00:28:57,760 Speaker 3: about it? 528 00:28:58,400 --> 00:29:02,120 Speaker 10: So it's currently still on going d trials and you know, 529 00:29:02,200 --> 00:29:04,600 Speaker 10: this shouldn't come as a surprise given that, you know, 530 00:29:04,680 --> 00:29:08,040 Speaker 10: the training of some of these large language models that's 531 00:29:08,120 --> 00:29:11,520 Speaker 10: backing it is really the key here. We've seen the 532 00:29:11,600 --> 00:29:16,240 Speaker 10: initiatives for do you know Ali Expressed, who was the 533 00:29:16,280 --> 00:29:20,240 Speaker 10: sponsor of the Euro twenty twenty four, and they've actually 534 00:29:20,320 --> 00:29:24,640 Speaker 10: trialed some of those for the bigger audience outside of China, 535 00:29:25,280 --> 00:29:27,840 Speaker 10: and then there was that that was going on within 536 00:29:28,040 --> 00:29:31,160 Speaker 10: China as well. So I would say the company is 537 00:29:31,320 --> 00:29:34,800 Speaker 10: again trying to get as many scenarios as they can 538 00:29:35,240 --> 00:29:38,160 Speaker 10: so that you know, the models is better able to adapt. 539 00:29:38,440 --> 00:29:40,600 Speaker 10: And I guess you know the million dollar question when 540 00:29:40,680 --> 00:29:43,120 Speaker 10: will we see results and how it will stack up 541 00:29:43,160 --> 00:29:45,920 Speaker 10: to competition. I think it's gonna take a little bit 542 00:29:45,960 --> 00:29:49,600 Speaker 10: more time. Hopefully by the time we get to you know, 543 00:29:49,680 --> 00:29:52,120 Speaker 10: the year end sale and then you know the big 544 00:29:52,160 --> 00:29:55,960 Speaker 10: singles day sales, you know, for the company itself, we 545 00:29:56,080 --> 00:29:58,440 Speaker 10: may be able to see something a lot more tangible 546 00:29:58,520 --> 00:30:01,080 Speaker 10: and for that to be contributing part reively to the 547 00:30:01,160 --> 00:30:02,440 Speaker 10: company's top line. 548 00:30:02,200 --> 00:30:06,160 Speaker 3: Then and what will the impact be on revenue of 549 00:30:06,240 --> 00:30:10,200 Speaker 3: these of these new fees zero point six percent service fees. 550 00:30:10,560 --> 00:30:13,760 Speaker 10: Right now, that was really a very interesting development and 551 00:30:13,840 --> 00:30:17,200 Speaker 10: I have to actually first you know, remind everyone that 552 00:30:17,400 --> 00:30:21,920 Speaker 10: you know, this technology software service fees have been implemented 553 00:30:22,240 --> 00:30:27,520 Speaker 10: by pdd JD dot com in China for you know, 554 00:30:27,680 --> 00:30:30,520 Speaker 10: since late last year, and in fact earlier even for 555 00:30:30,600 --> 00:30:33,800 Speaker 10: Little rate Book, the social media company and doing as well. 556 00:30:34,320 --> 00:30:39,080 Speaker 10: So Ali Baba is the last to implement this. And really, 557 00:30:39,160 --> 00:30:41,240 Speaker 10: you know, as I speak to the company and understanding 558 00:30:41,240 --> 00:30:44,800 Speaker 10: where they're coming from, they are really keeping it flexible. 559 00:30:45,320 --> 00:30:48,600 Speaker 10: They are probably you know, talking to merchants about what 560 00:30:48,680 --> 00:30:51,400 Speaker 10: are the ways and how to really implement the zero 561 00:30:51,440 --> 00:30:54,200 Speaker 10: point six percent. There are puts that they are giving 562 00:30:54,200 --> 00:30:56,920 Speaker 10: back to the merchants, dough so net net, it may 563 00:30:56,960 --> 00:30:59,960 Speaker 10: not really be that zero point six percent. They are 564 00:31:00,000 --> 00:31:03,720 Speaker 10: growing other things like you know, even you know, delivery subsidies, 565 00:31:03,800 --> 00:31:07,360 Speaker 10: et cetera. If you're able to meet not meet certain things. 566 00:31:07,720 --> 00:31:10,600 Speaker 10: So I wouldn't be too you know, hype up about 567 00:31:10,640 --> 00:31:15,000 Speaker 10: step benefits to the company. From a revenue perspective, it's 568 00:31:15,000 --> 00:31:17,840 Speaker 10: going to take time. And really what I'm watching out 569 00:31:17,880 --> 00:31:21,360 Speaker 10: for is whether PDDJD dot com or doing they're going 570 00:31:21,440 --> 00:31:25,160 Speaker 10: to tweak their zero point six percent fee and it 571 00:31:25,200 --> 00:31:28,440 Speaker 10: comes in different forms. It's zero point five, you know, 572 00:31:28,560 --> 00:31:31,640 Speaker 10: up to one percent as well as I understand the 573 00:31:31,640 --> 00:31:33,200 Speaker 10: next few months yep, so. 574 00:31:33,200 --> 00:31:37,479 Speaker 3: A bit unknown. Alibaba's forward pe is just nine. That 575 00:31:37,560 --> 00:31:41,160 Speaker 3: must be close to the lowest since it went public. 576 00:31:41,480 --> 00:31:45,840 Speaker 3: We have this restructuring where they're trying desperately to add value, 577 00:31:46,200 --> 00:31:48,680 Speaker 3: but has the restructuring kind of stalled. 578 00:31:49,480 --> 00:31:53,080 Speaker 10: Well, the restructuring, you know, I think they've put it 579 00:31:53,120 --> 00:31:55,400 Speaker 10: on the shelf for the now. It's still going to 580 00:31:55,400 --> 00:31:58,560 Speaker 10: be the Alibaba conglomerate that we are seeing right now. 581 00:31:58,960 --> 00:32:02,000 Speaker 10: No IPOs, oh spin off. You're gonna hear more share 582 00:32:02,000 --> 00:32:04,880 Speaker 10: buybacks for them for sure, and you know, don't forget 583 00:32:04,960 --> 00:32:08,560 Speaker 10: that this is a company. They've also started paying out dividends, right, 584 00:32:09,160 --> 00:32:13,920 Speaker 10: so that is the you know capital, you know focus 585 00:32:14,000 --> 00:32:17,320 Speaker 10: that they have for their shareholders in the course of 586 00:32:17,360 --> 00:32:20,840 Speaker 10: the next twelve months, so you know, until we actually 587 00:32:20,840 --> 00:32:23,640 Speaker 10: see more signs of improvements to their core business from 588 00:32:23,680 --> 00:32:26,640 Speaker 10: the e commerce side to the claw cloud. I think 589 00:32:26,680 --> 00:32:29,800 Speaker 10: that is what we can be expecting from the company. 590 00:32:30,640 --> 00:32:33,800 Speaker 3: Ali Baba has been funding and in some cases acquiring 591 00:32:34,080 --> 00:32:39,720 Speaker 3: smaller up and coming tech companies. We mentioned ai earlier well, 592 00:32:39,760 --> 00:32:42,440 Speaker 3: a company by trend is a leader in the generative 593 00:32:42,440 --> 00:32:46,280 Speaker 3: AI space in China. So for those acquisitions, will they 594 00:32:46,320 --> 00:32:48,600 Speaker 3: be paying dividends anytime soon? Oh? 595 00:32:49,040 --> 00:32:51,760 Speaker 10: You Now, most of these starts are startup as far 596 00:32:51,840 --> 00:32:56,240 Speaker 10: as I understand, definitely not you know, making money right now, 597 00:32:56,520 --> 00:33:00,880 Speaker 10: and they're probably gonna need more of the investments from 598 00:33:01,280 --> 00:33:05,000 Speaker 10: the lunch funders like Ali Baba themselves, So I don't 599 00:33:05,000 --> 00:33:08,920 Speaker 10: think we should be expecting any dividends and incrementally, if anything, 600 00:33:09,040 --> 00:33:13,640 Speaker 10: hopefully we see some technological breakthrough that can actually help 601 00:33:13,880 --> 00:33:15,360 Speaker 10: and be something new to the market. 602 00:33:15,680 --> 00:33:17,840 Speaker 3: All right, Catherine, thanks so much for joining us. We 603 00:33:17,920 --> 00:33:21,680 Speaker 3: do appreciate it. Catherine lim Bloomberg Intelligence senior analysts for 604 00:33:21,760 --> 00:33:25,600 Speaker 3: Asia Consumer and Technology. Next up, let's get to our 605 00:33:25,640 --> 00:33:29,240 Speaker 3: co host Doug Krisner for a preview of China's trade data. 606 00:33:29,320 --> 00:33:32,760 Speaker 11: Brian, we know the Chinese economy is struggling. Poor sentiment 607 00:33:33,040 --> 00:33:36,680 Speaker 11: is keeping households and businesses from spending and investing, and 608 00:33:36,680 --> 00:33:40,760 Speaker 11: as a result, domestic demand remained sluggish. If there's a 609 00:33:40,800 --> 00:33:44,120 Speaker 11: bright spot, it's the strength of exports for two straight 610 00:33:44,160 --> 00:33:48,920 Speaker 11: months the increases of top forecast. Now, manufacturing and exports 611 00:33:48,960 --> 00:33:53,880 Speaker 11: remain crucial pillars of China's economic recovery. However, weakness in 612 00:33:53,960 --> 00:33:57,400 Speaker 11: parts of the global economy are creating some headwinds now. 613 00:33:57,400 --> 00:34:01,280 Speaker 11: The latest official manufacturing PMI showed traction for a third 614 00:34:01,280 --> 00:34:04,960 Speaker 11: straight month, and factory gate prices seem to be trapped 615 00:34:04,960 --> 00:34:09,080 Speaker 11: in deflation. Joining us now for further discussion of China's 616 00:34:09,080 --> 00:34:14,160 Speaker 11: economic recovery is Katya Dimitrieva, Bloomberg Asia Economics correspondent. She 617 00:34:14,239 --> 00:34:17,120 Speaker 11: joins us from Hong Kong. Nice of you to drop by. 618 00:34:17,320 --> 00:34:20,399 Speaker 11: Let's begin with the trade data and what this may 619 00:34:20,680 --> 00:34:24,040 Speaker 11: tell us about how well China's economy is doing right now. 620 00:34:24,160 --> 00:34:27,400 Speaker 12: Well, the trade data will tell us a lot, because 621 00:34:27,480 --> 00:34:31,080 Speaker 12: it's been the growth engine of the economy so far 622 00:34:31,160 --> 00:34:35,200 Speaker 12: this year in really surprising ways, I think unexpected ways 623 00:34:35,239 --> 00:34:38,839 Speaker 12: for economists. We were looking for a bit more of 624 00:34:38,880 --> 00:34:42,240 Speaker 12: the consumption to play a role, and that just simply 625 00:34:42,560 --> 00:34:46,439 Speaker 12: hasn't happened basically since January. So the trade data will 626 00:34:46,480 --> 00:34:50,200 Speaker 12: tell us where the economy is going, more so than 627 00:34:50,520 --> 00:34:53,080 Speaker 12: if you're looking at the US or a European economy. 628 00:34:53,080 --> 00:34:56,080 Speaker 12: There's a lot of different pieces that fit together to 629 00:34:56,120 --> 00:34:58,920 Speaker 12: tell the story. But I think for China right now, 630 00:34:59,000 --> 00:35:03,560 Speaker 12: it is so dependent on exports and on manufacturing and 631 00:35:03,640 --> 00:35:08,600 Speaker 12: industrial production. So this in particular will be July figures, 632 00:35:09,160 --> 00:35:12,000 Speaker 12: so we're already halfway through the year. The story so 633 00:35:12,080 --> 00:35:17,360 Speaker 12: far this year for China has been strong manufacturing, strong trade, 634 00:35:17,680 --> 00:35:20,120 Speaker 12: and then a little bit of weakness on prices for 635 00:35:20,160 --> 00:35:23,240 Speaker 12: those exports. The question is what will be the story 636 00:35:23,360 --> 00:35:26,799 Speaker 12: for the second half, and some of the data that 637 00:35:26,840 --> 00:35:31,239 Speaker 12: we've had recently points to this potentially not being as 638 00:35:31,280 --> 00:35:32,080 Speaker 12: good of a story. 639 00:35:32,280 --> 00:35:34,000 Speaker 11: One of the issues that we've heard about as it 640 00:35:34,000 --> 00:35:36,960 Speaker 11: relates to the industrial economy in China is this issue 641 00:35:37,000 --> 00:35:40,200 Speaker 11: of overcapacity. Is that part of what we're seeing right now. 642 00:35:40,520 --> 00:35:44,480 Speaker 12: Over Capacity is an interesting term, and I think you'll 643 00:35:44,719 --> 00:35:47,080 Speaker 12: hear different answers from different people about what that means. 644 00:35:47,080 --> 00:35:50,359 Speaker 12: But I think generally when we talk about overcapacity, it's 645 00:35:50,360 --> 00:35:54,800 Speaker 12: this idea that China is just producing too much stuff, 646 00:35:54,880 --> 00:35:58,200 Speaker 12: and certainly it's producing too much for the domestic market 647 00:35:58,360 --> 00:36:01,440 Speaker 12: and consumers to eat up. And so we're seeing that 648 00:36:01,520 --> 00:36:04,920 Speaker 12: going into exports and as a results, there's so much 649 00:36:05,000 --> 00:36:09,360 Speaker 12: competition and price competition that those prices of exports are dropping. 650 00:36:09,920 --> 00:36:12,480 Speaker 12: And so you know, in the short term that might 651 00:36:12,480 --> 00:36:14,359 Speaker 12: be a good thing. In the short term, you're really 652 00:36:14,480 --> 00:36:17,600 Speaker 12: juicing all of your goods out of the country. It's 653 00:36:17,600 --> 00:36:22,440 Speaker 12: contributing to manufacturing growth, to jobs, to employment, to wages. 654 00:36:22,920 --> 00:36:26,040 Speaker 12: But in the longer term, as you get that price erosion, 655 00:36:26,280 --> 00:36:30,319 Speaker 12: that's actually not good for Chinese companies. The other thing 656 00:36:30,360 --> 00:36:33,200 Speaker 12: we have to remember about China, and it seems silly 657 00:36:33,239 --> 00:36:36,120 Speaker 12: to say, but it is a very big country and 658 00:36:36,200 --> 00:36:41,680 Speaker 12: there's competition among domestic markets as well. So when a 659 00:36:41,920 --> 00:36:45,279 Speaker 12: US or Europe kind of looks at China and says, well, 660 00:36:45,280 --> 00:36:48,399 Speaker 12: there's you know, there's clearly dumping or there's clearly this 661 00:36:48,760 --> 00:36:54,600 Speaker 12: overcapacity issue domestically, it's not orchestrated, right like you have 662 00:36:55,239 --> 00:37:00,520 Speaker 12: domestic producers in various provinces competing to be the best 663 00:37:00,520 --> 00:37:04,399 Speaker 12: province are the best region within China, and so that's 664 00:37:04,440 --> 00:37:07,320 Speaker 12: where you get a lot of that price erosion happening 665 00:37:07,360 --> 00:37:09,960 Speaker 12: because hey, I'm in this province, I'm offering you a 666 00:37:10,000 --> 00:37:12,480 Speaker 12: price that's going to be lower than this other province. 667 00:37:12,920 --> 00:37:17,920 Speaker 12: But the overall that's obviously not good for trade tensions globally. 668 00:37:18,480 --> 00:37:22,560 Speaker 12: We've seen government officials addressing that in the Plenum and 669 00:37:22,600 --> 00:37:25,840 Speaker 12: some of the other annual meetings this year, but like 670 00:37:25,920 --> 00:37:28,880 Speaker 12: with other measures and out so far, it just needs 671 00:37:29,000 --> 00:37:30,360 Speaker 12: a lot more detail. 672 00:37:30,520 --> 00:37:33,319 Speaker 11: So a moment ago, I mentioned that domestic demand is 673 00:37:33,480 --> 00:37:35,960 Speaker 11: very weak right now, and I'm imagining this is going 674 00:37:36,000 --> 00:37:38,840 Speaker 11: to translate into lackluster imports. 675 00:37:38,440 --> 00:37:38,880 Speaker 4: Will it not? 676 00:37:39,280 --> 00:37:42,279 Speaker 12: Yes, And they have been pretty weak. If you look 677 00:37:42,400 --> 00:37:47,560 Speaker 12: at even last month in June June's trade data, you 678 00:37:47,600 --> 00:37:52,239 Speaker 12: would see that exports were over eight percent growth, but 679 00:37:52,400 --> 00:37:56,440 Speaker 12: imports were in the negative. And so that's also something 680 00:37:56,880 --> 00:38:00,759 Speaker 12: that has been heard from Western countries is is they 681 00:38:00,840 --> 00:38:04,000 Speaker 12: want to see consumers in China come back because that's 682 00:38:04,080 --> 00:38:06,600 Speaker 12: kind for their own companies. So it's not just about 683 00:38:06,600 --> 00:38:11,080 Speaker 12: competition and domestic markets with evs or other green tech. 684 00:38:11,200 --> 00:38:14,640 Speaker 12: It's also about their own economy's growth. 685 00:38:14,920 --> 00:38:17,000 Speaker 11: So the next question that I have given everything that 686 00:38:17,040 --> 00:38:19,000 Speaker 11: we've kind of sketched out there the role of the 687 00:38:19,040 --> 00:38:22,160 Speaker 11: government in trying to stimulate both sides of what we're 688 00:38:22,200 --> 00:38:26,120 Speaker 11: describing the import side that would be the domestic demand 689 00:38:26,160 --> 00:38:28,600 Speaker 11: story and the export side where we're talking about a 690 00:38:28,640 --> 00:38:32,760 Speaker 11: reduction reduction in some of the capacity. Is that likely 691 00:38:32,880 --> 00:38:35,080 Speaker 11: will Beijing step in in a meaningful way. 692 00:38:35,280 --> 00:38:40,000 Speaker 12: That's what we've heard from officials. We have heard through 693 00:38:40,080 --> 00:38:42,480 Speaker 12: the Planum. If you look through the document and you 694 00:38:42,520 --> 00:38:46,040 Speaker 12: know the twenty thousand word document that was put out, 695 00:38:46,360 --> 00:38:50,759 Speaker 12: there are a lot of promises of reform and particularly 696 00:38:50,880 --> 00:38:55,359 Speaker 12: reform in the industrial sector and in manufacturing. Does that 697 00:38:55,480 --> 00:39:01,800 Speaker 12: mean sort of big fiscal stimulus and injecting money into 698 00:39:02,280 --> 00:39:07,279 Speaker 12: domestic industries as we saw other countries do during economic crises. 699 00:39:08,120 --> 00:39:13,600 Speaker 12: Probably not. They really want to encourage local industries to 700 00:39:13,680 --> 00:39:18,000 Speaker 12: be self sufficient, especially you know, after they helped pop 701 00:39:18,040 --> 00:39:20,439 Speaker 12: the real estate bubble. You know, there's really a sense 702 00:39:20,480 --> 00:39:23,400 Speaker 12: in the country that they want companies to stand up 703 00:39:23,440 --> 00:39:24,000 Speaker 12: on their own. 704 00:39:24,320 --> 00:39:26,920 Speaker 11: Katya, thank you so much for helping us preview this 705 00:39:26,960 --> 00:39:31,320 Speaker 11: week's trade data for China. Katya Dmitrieva Bloomberg Asia Economics 706 00:39:31,360 --> 00:39:34,520 Speaker 11: correspondent joining us from Hong Kong. I'm Doug Krisner. You 707 00:39:34,520 --> 00:39:37,640 Speaker 11: can join Brian Curtis and myself weekdays here for Bloomberg 708 00:39:37,680 --> 00:39:41,279 Speaker 11: Daybreak Asia beginning at eight am in Hong Kong eight 709 00:39:41,360 --> 00:39:42,680 Speaker 11: pm on Wall Street. 710 00:39:42,880 --> 00:39:46,160 Speaker 1: Tom, Thank you Doug, and thank you Brian. And that 711 00:39:46,200 --> 00:39:48,560 Speaker 1: does it for this edition of Bloomberg day Break Weekend. 712 00:39:48,760 --> 00:39:51,040 Speaker 1: Join us again Monday morning at five am Wall Street 713 00:39:51,040 --> 00:39:53,480 Speaker 1: time for the latest on markets overseas and the news 714 00:39:53,520 --> 00:39:56,760 Speaker 1: you need to start your day. I'm Tom Buzby. Stay 715 00:39:56,760 --> 00:39:59,480 Speaker 1: with us. Top stories and global business headlines are coming 716 00:39:59,560 --> 00:40:00,440 Speaker 1: up right now.