WEBVTT - The Risks Of War & China Chip Clampdown

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<v Speaker 1>Good morning. It's Monday, the sixteenth of October here in London.

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<v Speaker 1>This is the Blueberg Daybreak europe podcaster. I'm Caroline Hepge.

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<v Speaker 1>Coming up today a diplomatic drive. America scrambles to contain

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<v Speaker 1>the fallout from the Israel Hamas war as the risk

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<v Speaker 1>of escalation grows. The US also prepares to tighten curbs

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<v Speaker 1>on China's access to advanced chip technology. Plus housing in

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<v Speaker 1>growth data in the UK point to pessimism about the

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<v Speaker 1>prospects for the economy. Here, let's start with a roundup

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<v Speaker 1>of our top stories. President Joe Biden is considering a

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<v Speaker 1>trip to Israel as Western nations rampop efforts to prevent

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<v Speaker 1>the war with ha Mass from engulfing the region. The

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<v Speaker 1>diplomatic push comes as the US confirmed that the country

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<v Speaker 1>has held back channel talks with Iran, warning Tehran against

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<v Speaker 1>escalating the conflict. The efforts to keep the crisis from

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<v Speaker 1>further escalating comes as Israel continues to prepare for a

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<v Speaker 1>likely ground invasion of Gaza. In an interview with CBS's

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<v Speaker 1>news is sixty Minutes, President Biden stressed his belief that

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<v Speaker 1>Israel will act in accordance with international law. But stressing

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<v Speaker 1>he doesn't believe the country should control the territory long term.

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<v Speaker 2>I think it'd be a big mistake. Look what happened

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<v Speaker 2>in Gaza. In my view is Hamas in the extreme

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<v Speaker 2>elements of mass don't represent all the Palestinian people, and

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<v Speaker 2>I think that it would be a mistake, prettys real

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<v Speaker 2>to occupy Garz again.

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<v Speaker 1>Meanwhile, Israel's ambassador to the United States, Michael Herzog, spoke

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<v Speaker 1>to see an End State of the Union about the

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<v Speaker 1>country's likely invasion of the Gaza Strip.

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<v Speaker 3>We have no desire to occupy or reoccupy Gaza. We

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<v Speaker 3>have no desire to rule over the lives of over

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<v Speaker 3>two million Palestinians, and certainly want people to go back

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<v Speaker 3>to the homes. We're talking about innocent civilians and we

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<v Speaker 3>are doing everything we can to keep them out of

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<v Speaker 3>harms way, while Hamas is doing everything it can to

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<v Speaker 3>keep them in harm's way. That's a situation we are at.

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<v Speaker 1>Hertzog spoke after the Israeli military released a statement saying

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<v Speaker 1>that they are now preparing for an attack on the

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<v Speaker 1>Gaza Strip from quote air, sea and land. Palaesinian authorities

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<v Speaker 1>say that close to two and half thousand people have

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<v Speaker 1>been killed during Israel's bombardment of Gaza. The bombings come

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<v Speaker 1>in response to the initial attack by Hamas, which killed

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<v Speaker 1>at least one thousand, three hundred people. This as the

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<v Speaker 1>UN estimates that Garza's main hospital is close to running

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<v Speaker 1>out of fuel to power its generators. Doctor Kassan Abusita

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<v Speaker 1>is a Mezza sin Frantier surgeon working there. He says

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<v Speaker 1>that the civilian cost of a ground invasion will be

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<v Speaker 1>hard to bear.

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<v Speaker 4>It'll be in absolute catastrophe carnage. Gaza is so densely populated,

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<v Speaker 4>two and a quarter million people in a very small

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<v Speaker 4>area of lab This is a turky shoot, and if

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<v Speaker 4>you go into Gaza, you go in knowing that you're

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<v Speaker 4>going to have to commit massacres.

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<v Speaker 1>Those comments come as the Israeli military said that it

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<v Speaker 1>believes that more than six hundred thousand people have left

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<v Speaker 1>Girlza city and the surrounding area for the south of

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<v Speaker 1>the territory. Meanwhile, the only border crossing between Egypt and

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<v Speaker 1>Gaza is expected to open this morning, allowing aid to

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<v Speaker 1>enter and foreign nationals to evacuate. Now onto some other

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<v Speaker 1>stories this morning, the United States is planning to tighten

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<v Speaker 1>measures on China's access to advance semiconductors and chip making

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<v Speaker 1>equipment with more his Bloombergs head Baxter.

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<v Speaker 5>The first round happened in October, described as sweeping. So

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<v Speaker 5>what this will do is tighten the measures already in

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<v Speaker 5>place to refine to close loopholes controls on selling graphic

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<v Speaker 5>chips for AI and advanced chip making equipt the Chinese firms.

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<v Speaker 5>The US will also add Chinese chip design firms to

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<v Speaker 5>a trade restriction list on AI and impose additional checks

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<v Speaker 5>to firms trying to evade restrictions already in place by

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<v Speaker 5>routing through other nations, Ed Baxter, Bloomberg Radio.

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<v Speaker 1>Poland's opposition leader, Donald Tusk, has declared victory in the

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<v Speaker 1>country's general election, mocking a possible shift in the tide

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<v Speaker 1>of populist forces in europe An. Exit poll predicts that

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<v Speaker 1>the ruling nationalist Law and Justice Party has lost its

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<v Speaker 1>majority in parliament to a coalition led by the former

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<v Speaker 1>European Council President. Turnout was estimated at seventy three percent,

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<v Speaker 1>a record. The upset could steer the country back into

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<v Speaker 1>the European mainstream after the EU withheld more than thirty

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<v Speaker 1>five billion Euros to punish Warsaw for curbing the independence

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<v Speaker 1>of judges and the media. Here in the UK, home

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<v Speaker 1>seller is a tr trimming their expectations, with October's asking

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<v Speaker 1>prices rising by the smallest amounts since two thousand and eight.

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<v Speaker 1>Bloomberg's James Walcock reports.

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<v Speaker 6>Right Moves say the housing market is the most price

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<v Speaker 6>sensitive it's ever been. The toxic cocktail of higher mortgage

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<v Speaker 6>rates and inflation is hitting seller confidence, with sales down

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<v Speaker 6>seventeen percent compared to October last year. Landlords are also

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<v Speaker 6>being hard, paying forty percent more in mortgage interests than

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<v Speaker 6>a year ago. That's led many to pass on costs

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<v Speaker 6>to renters or leave the market altogether in London, James Wilcock,

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<v Speaker 6>Bloomberg Radio.

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<v Speaker 7>Now.

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<v Speaker 1>In US politics, House Democrats say that they are having

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<v Speaker 1>informal talks with Republicans about a potential bipartisan solution to

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<v Speaker 1>find a speaker. Democratic leader Hakim Jeffries has told NBC's

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<v Speaker 1>Meet the Press that politicians need to move onto the

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<v Speaker 1>people's real priorities.

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<v Speaker 8>We want to continue to put people over politics and

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<v Speaker 8>to fight for things like lower costs, better paying jobs,

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<v Speaker 8>safer communities, and to build an economy that works from

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<v Speaker 8>the middle out and the bottom up. On the other hand,

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<v Speaker 8>House Republicans have been focused on fighting each other. It's

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<v Speaker 8>time to in the Republican civil war.

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<v Speaker 1>Hakeem Jeffreys added that he would support changes to the

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<v Speaker 1>House's rules to prevent hardline Republicans who ousted the Speaker,

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<v Speaker 1>Kevin McCarthy from setting the agenda. Representative Jim Jordan is

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<v Speaker 1>currently the front runner for the speaker position, but a

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<v Speaker 1>number of moderate Republicans have said that they will not

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<v Speaker 1>support him. A word then, on the specific response to

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<v Speaker 1>what's happening in Israel here in the UK. Over the weekend,

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<v Speaker 1>thousands of people demonstrated in support of Palestinians. Be gathering

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<v Speaker 1>in London attracted large crowds but also more than a

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<v Speaker 1>thousand Metropolitan Police offices. The police had warned in advance

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<v Speaker 1>that anyone showing support for Hamas could face arrests. There

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<v Speaker 1>were also rallies in Manchester and Edinburgh. The UK government,

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<v Speaker 1>though remained steadfast in it support of Israel. There have

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<v Speaker 1>been concerns, of course, about the scale of the Israeli response,

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<v Speaker 1>but Rishi Sunac saying that at least on Friday and

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<v Speaker 1>over the weekend. The country has every right to defend itself,

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<v Speaker 1>although he stressed that civilian safety is paramount in our mind,

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<v Speaker 1>so that the response from the UK Prime Minister Rishi

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<v Speaker 1>Sunac I mean a similar response also from the opposition

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<v Speaker 1>Labor Party. It must be said, but it was noteworthy

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<v Speaker 1>that there are those demonstrations in the UK over the weekend. Meanwhile,

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<v Speaker 1>the spokesman for the Israeli embassy here in the UK

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<v Speaker 1>insisted that Israel is not targeting civilians, but to talk

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<v Speaker 1>about the impact and the casualties of the conflict with

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<v Speaker 1>Hamas in Gaza, meaning that is innocent people will pay

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<v Speaker 1>tragically with their life. So that's the view then from

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<v Speaker 1>the UK. Let's also talk, though more broadly, about what's

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<v Speaker 1>happening diplomatically. So the US Secretary of State Anthony Blincoln

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<v Speaker 1>is returning to Israel after diplomatic talks with Saudi Arabia

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<v Speaker 1>and Egypt and a warning from the US to Iran

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<v Speaker 1>against escalating the conflict. President Biden may also visit Israel soon.

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<v Speaker 1>He has told US media that he believes Israel would

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<v Speaker 1>act by the rules of war. The Israeli army is

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<v Speaker 1>poised to stage a large scale offensive in girls, something

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<v Speaker 1>that we've heard now for a number of days. Joining

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<v Speaker 1>us in the studio, Bloomberg's news director in Europe, the

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<v Speaker 1>Middle East and Africa, Rosslyn Mathis, and good Morning Rolls.

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<v Speaker 1>Thank you so much for being with us. How does

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<v Speaker 1>Israel firstly wipe out Hamas on the ground, it stated aim?

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<v Speaker 1>How can that objective be realized?

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<v Speaker 7>Well, that is the big question in fact, ken it

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<v Speaker 7>wipe out Hamas on the ground as well as how

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<v Speaker 7>and does it really want to? You're talking about a

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<v Speaker 7>group that does have a leadership structure and a lot

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<v Speaker 7>of organization, but it's also really quite a morphis in

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<v Speaker 7>many ways, and so sort of splinter groups that come

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<v Speaker 7>off at, support groups that come off it, and a

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<v Speaker 7>load of tentacles everywhere through the region. So the question

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<v Speaker 7>is how do you destroy all of that once and

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<v Speaker 7>for all, And in doing so, can you destroy the

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<v Speaker 7>support for it as well? Because you can say that

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<v Speaker 7>you've decimated Harmas, but does something else just grow back

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<v Speaker 7>in its place. It's like a many headed hydra in

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<v Speaker 7>a way. So is the realistic goal to destroy Hamas

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<v Speaker 7>or is it simply to get hermas so denuded to

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<v Speaker 7>the point that it can never again mount the attack

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<v Speaker 7>of the kind that we saw just over a week

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<v Speaker 7>ago inside Israeli's soil. Of course, with the mass casualties

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<v Speaker 7>on the civilian side, is the goal ultimately to weaken

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<v Speaker 7>it to the point that it really is such a

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<v Speaker 7>shell of itself that an attack like that can never

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<v Speaker 7>happen again.

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<v Speaker 1>Will Palestinians get more access to food, to water, to supplies?

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<v Speaker 1>Pas in Biden even mentioned a safe zone the border

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<v Speaker 1>crossing it rafa. What is the situation for Palestinians.

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<v Speaker 7>It's still pretty desperate. We're hearing that the Rougher crossing

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<v Speaker 7>may open for a limited amount of time today. We've

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<v Speaker 7>had that, of course several times over the past few days,

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<v Speaker 7>and it's not really eventuated. And even if it does,

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<v Speaker 7>the US is cautioning like it may not be safe

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<v Speaker 7>to cross, even if there is an ability to do

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<v Speaker 7>so for several hours. So the options for Palestinians and

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<v Speaker 7>Gars will remain very limited. And also for sort of

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<v Speaker 7>Americans who are there, others who are trying to get out,

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<v Speaker 7>how can you leave even if you want to, So

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<v Speaker 7>that's one question. Also, the conditions inside Gars we know

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<v Speaker 7>are pretty terrible. We know in the hospitals in the north.

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<v Speaker 7>There are loads of people, tens of thousands of people

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<v Speaker 7>crowded into hospitals to seek sort of some sort of

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<v Speaker 7>safe haven in the event of a war. We know

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<v Speaker 7>that water did get turned back on to the southern

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<v Speaker 7>part of Gaza. That's possibly designed to coax people to

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<v Speaker 7>move south. If you go there, you will at least

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<v Speaker 7>have access to water. But right now there's no sort

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<v Speaker 7>of clear passageway for people to get or also for

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<v Speaker 7>stuff to get in, which includes food.

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<v Speaker 1>I use this phrase advisedly, but there does seem to

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<v Speaker 1>be a palpable sense of panic from the intensive shottle diplomacy.

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<v Speaker 1>What are the worries about a wider conflict currently?

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<v Speaker 6>Well, that's right.

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<v Speaker 7>I was trying to think back to the last time

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<v Speaker 7>a US Secretary of State had visited so many countries

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<v Speaker 7>in quick succession. We were talking about nine countries, some

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<v Speaker 7>of them twice in about four days. Going back to

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<v Speaker 7>Israel today, now talk the US President Johan Biden may

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<v Speaker 7>even make a lightning visit to Israel within days, And

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<v Speaker 7>all of that is conveying this growing sense that we're

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<v Speaker 7>hurtling towards something big and broad in the region and

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<v Speaker 7>this sort of effort to do several things. One is

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<v Speaker 7>possibly to persuade Israel simply to stave off a ground

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<v Speaker 7>war inside Gaza. The other is to talk to countries

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<v Speaker 7>in the region to try and negotiate things like hostage transfer,

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<v Speaker 7>safe passage of people from Gaza, humanitarian aid and so on.

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<v Speaker 7>And the third one, of course is to disuade around

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<v Speaker 7>and others from getting involved. That if a grand war

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<v Speaker 7>does kick off and you've got Hiszbala of course supported

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<v Speaker 7>by Iran to the north of Israel, and there's skirmish

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<v Speaker 7>is going on there obviously already. So the real sense

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<v Speaker 7>of concern in the US, also in Europe and in

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<v Speaker 7>the region is that this is going to at some

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<v Speaker 7>point draw in those other actors, and then where does

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<v Speaker 7>this war end?

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<v Speaker 1>Yeah, indeed, Roslin, thank you so much for being with

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<v Speaker 1>us this morning, Bloomberg's news director in Europe, the Middle

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<v Speaker 1>East and Africa, Roslyn Matheson, as we will watch the

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<v Speaker 1>Sectary of State Anthony Blincoln, expected to return to Israel today. Now,

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<v Speaker 1>the United States is planning to tighten measures against China

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<v Speaker 1>to restrict its access to advanced semiconductors and chip making gear.

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<v Speaker 1>This is an update to curbs that were announced a

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<v Speaker 1>year ago that were criticized for failing to get support

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<v Speaker 1>from Kili's, notably the Netherlands in Japan. So I want

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<v Speaker 1>to speak to our Bloomberg Chi and Economy and government.

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<v Speaker 1>Edited Jill Deesis this morning. Good morning, Jail, thanks for

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<v Speaker 1>being with us. How effective were the restrictions lost? Yeah,

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<v Speaker 1>I mean this is a significant point of tension between

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<v Speaker 1>the US and China.

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<v Speaker 9>Yes, Caroline, well, I think, you know, it's a pretty

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<v Speaker 9>complicated topic for some reasons. I'm sure we'll get into

0:13:18.080 --> 0:13:20.400
<v Speaker 9>in a few moments, but the short of it is that,

0:13:20.440 --> 0:13:24.199
<v Speaker 9>as you just said, you know, those restrictions were unveiled

0:13:24.320 --> 0:13:27.800
<v Speaker 9>before the US got the support of key allies, including

0:13:27.840 --> 0:13:31.800
<v Speaker 9>the Netherlands and Japan. That essentially allowed equipment companies in

0:13:31.840 --> 0:13:34.880
<v Speaker 9>those countries to continue selling advanced gear to Chinese customers.

0:13:34.880 --> 0:13:37.360
<v Speaker 9>It's part of it. But I think what ultimately they're

0:13:37.400 --> 0:13:41.360
<v Speaker 9>trying to accomplish with this proposed set of you know,

0:13:41.400 --> 0:13:44.560
<v Speaker 9>refining and closing some loopholes, is looking to strengthen some

0:13:44.600 --> 0:13:47.840
<v Speaker 9>controls on selling graphics chips for AI applications. That's a

0:13:47.840 --> 0:13:50.040
<v Speaker 9>big part of it. They also want to try to

0:13:50.040 --> 0:13:52.640
<v Speaker 9>figure out how they can, you know, restrict additional advanced

0:13:52.679 --> 0:13:55.560
<v Speaker 9>chip makeing equipment to Chinese firms through other ways. And

0:13:55.320 --> 0:13:58.040
<v Speaker 9>they also just want to impose additional checks and Chinese

0:13:58.080 --> 0:14:00.880
<v Speaker 9>firms that are trying to evade export restrictions by routing

0:14:00.880 --> 0:14:05.080
<v Speaker 9>shipments through other nations. So ideally what the US would

0:14:05.120 --> 0:14:08.400
<v Speaker 9>be looking at is maybe adding design firms in China

0:14:08.440 --> 0:14:10.800
<v Speaker 9>to a trade restriction list, and so that trying to

0:14:10.880 --> 0:14:12.840
<v Speaker 9>trying to show up things there. But yes, I think ultimately,

0:14:12.920 --> 0:14:16.240
<v Speaker 9>I think it's really just about trying to find ways

0:14:16.280 --> 0:14:20.280
<v Speaker 9>to stop these Chinese companies from routing things through other

0:14:20.360 --> 0:14:25.040
<v Speaker 9>countries or ultimately using things for applications in advanced tech

0:14:25.080 --> 0:14:27.160
<v Speaker 9>that the US is reluctant to a lot of them

0:14:27.200 --> 0:14:27.400
<v Speaker 9>to do.

0:14:27.480 --> 0:14:30.080
<v Speaker 1>So, okay, so trying to tighten not the rules, close

0:14:30.120 --> 0:14:32.280
<v Speaker 1>off the loopholes. I mean there have been, though, in

0:14:32.320 --> 0:14:36.360
<v Speaker 1>the meantime, quite notable successes for China in developing its

0:14:36.400 --> 0:14:38.160
<v Speaker 1>own domestic capabilities.

0:14:38.280 --> 0:14:40.720
<v Speaker 9>Right, Yes, I'm glad you brought that up, because I

0:14:40.760 --> 0:14:44.120
<v Speaker 9>think that that's ultimately what makes this the effectiveness of

0:14:44.160 --> 0:14:46.480
<v Speaker 9>those rules last year such an open question. So the

0:14:46.480 --> 0:14:50.200
<v Speaker 9>big one that made a huge splash was just a

0:14:50.240 --> 0:14:54.800
<v Speaker 9>few weeks ago when Huawei, the major Chinese telecoms tech

0:14:55.600 --> 0:14:58.720
<v Speaker 9>maker that the US has been imposing restrictions on since

0:14:58.720 --> 0:15:00.640
<v Speaker 9>twenty nineteen as part of, you know, sort of the

0:15:01.080 --> 0:15:05.240
<v Speaker 9>poster child really for those big, big US China tensions

0:15:05.440 --> 0:15:07.440
<v Speaker 9>during during the trade war, as they were trying to

0:15:07.440 --> 0:15:11.479
<v Speaker 9>short up these things, they had this pretty massive breakthrough

0:15:11.560 --> 0:15:14.480
<v Speaker 9>with a phone we tore down actually just a few

0:15:14.480 --> 0:15:18.360
<v Speaker 9>weeks ago that showed they produced this chip by a

0:15:18.440 --> 0:15:21.960
<v Speaker 9>Chinese company that developed these manufacturing capabilities that the US

0:15:22.000 --> 0:15:25.640
<v Speaker 9>thought were well beyond where they thought that the company

0:15:25.680 --> 0:15:28.120
<v Speaker 9>had stopped advancing. So their ability to sort of create

0:15:28.480 --> 0:15:31.720
<v Speaker 9>this phone that had really really competitive tech within the

0:15:31.800 --> 0:15:33.640
<v Speaker 9>Chinese consumer market, I think has raised a lot of

0:15:33.720 --> 0:15:37.640
<v Speaker 9>questions about, you know, how advanced China is able to get.

0:15:37.680 --> 0:15:40.240
<v Speaker 9>The US is still investigating that phone and trying to

0:15:40.240 --> 0:15:43.400
<v Speaker 9>figure out exactly where things happened there, But I think

0:15:43.400 --> 0:15:45.400
<v Speaker 9>that that kind of came as a surprise and ultimately

0:15:45.520 --> 0:15:47.920
<v Speaker 9>is facilitating some of these new restriction announcements.

0:15:48.840 --> 0:15:50.840
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