1 00:00:02,920 --> 00:00:12,680 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Daybreak Weekend, 2 00:00:12,680 --> 00:00:14,640 Speaker 1: our global look at the top stories in the coming 3 00:00:14,640 --> 00:00:17,239 Speaker 1: week from our Daybreak anchors all around the world, and 4 00:00:17,280 --> 00:00:19,560 Speaker 1: straight ahead on the program, a look at the struggling 5 00:00:19,760 --> 00:00:22,639 Speaker 1: US housing market. I'm Tom Busby in New York. 6 00:00:22,880 --> 00:00:25,280 Speaker 2: I'm Stephen carlon London, where we're looking ahead to how 7 00:00:25,320 --> 00:00:28,360 Speaker 2: issues around trade and the war in Ukraine will feature 8 00:00:28,440 --> 00:00:31,320 Speaker 2: at the upcoming meeting of G seven finance ministers and 9 00:00:31,480 --> 00:00:32,920 Speaker 2: central bankers in Italy. 10 00:00:33,280 --> 00:00:35,839 Speaker 3: I'm Brian Curtis in Hong Kong. We look ahead to 11 00:00:35,880 --> 00:00:39,680 Speaker 3: the inauguration of Taiwan President elect Lyiching Da and what 12 00:00:39,760 --> 00:00:42,880 Speaker 3: it means for Taiwan, US and China relations. 13 00:00:43,880 --> 00:00:47,159 Speaker 4: That's all straight ahead on Bloomberg day Break Weekend on 14 00:00:47,320 --> 00:00:50,160 Speaker 4: Bloomberg Ey Look the Free Own New York, Bloomberg ninety 15 00:00:50,240 --> 00:00:53,800 Speaker 4: nine to one, Washington, d C, Bloomberg one O six one, Boston, 16 00:00:53,880 --> 00:00:58,680 Speaker 4: Bloomberg nine sixty, San Francisco, DAB, Digital Radio, London, Sirius 17 00:00:58,840 --> 00:01:02,080 Speaker 4: XM one nineteen and around the world on Bloomberg Radio 18 00:01:02,160 --> 00:01:04,400 Speaker 4: dot com and via the Bloomberg Business App. 19 00:01:08,800 --> 00:01:09,320 Speaker 5: Good day to you. 20 00:01:09,440 --> 00:01:11,920 Speaker 1: I'm Tom Busby, and we begin today's program with home 21 00:01:12,000 --> 00:01:14,560 Speaker 1: sales for the month of April, the heart of the 22 00:01:14,600 --> 00:01:18,119 Speaker 1: spring home buying season. We get existing home sales on Wednesday, 23 00:01:18,640 --> 00:01:21,959 Speaker 1: new home sales on Thursday. What will these reports tell 24 00:01:22,040 --> 00:01:24,600 Speaker 1: us about the health of the US housing market, about 25 00:01:24,640 --> 00:01:28,480 Speaker 1: housing affordability and the overall economy? For more, we're joined 26 00:01:28,480 --> 00:01:33,320 Speaker 1: by Drew Redding, Bloomberg Intelligence US home Building Analysts. Drew, 27 00:01:33,440 --> 00:01:34,560 Speaker 1: thanks for being here. 28 00:01:34,840 --> 00:01:35,360 Speaker 6: Travl me. 29 00:01:35,720 --> 00:01:38,240 Speaker 1: All right, so what do you expect to see this week? 30 00:01:38,680 --> 00:01:41,600 Speaker 6: Well, I think some context is important here. We've been 31 00:01:41,720 --> 00:01:45,880 Speaker 6: describing the housing market as a tail to markets. Existing 32 00:01:45,920 --> 00:01:50,280 Speaker 6: home sales finally broke back about four million annalyzed run 33 00:01:50,360 --> 00:01:53,280 Speaker 6: rate two months ago, and we think we'll probably remain 34 00:01:53,320 --> 00:01:55,120 Speaker 6: above those levels. But what you have to keep in 35 00:01:55,160 --> 00:01:58,480 Speaker 6: mind is the data that we're seeing now still reflects 36 00:01:58,760 --> 00:02:02,520 Speaker 6: a period where rates were in that high six percent range. 37 00:02:02,920 --> 00:02:05,960 Speaker 6: Subsequently rates rose to over you know, seven and a 38 00:02:06,000 --> 00:02:07,840 Speaker 6: half percent, So we think that date is going to 39 00:02:08,320 --> 00:02:10,360 Speaker 6: trickle in into the next couple of months. We expect 40 00:02:10,360 --> 00:02:13,560 Speaker 6: some volatility on the existing home front side, you know, 41 00:02:13,760 --> 00:02:15,960 Speaker 6: over the next couple of months and through the summer. 42 00:02:16,320 --> 00:02:19,160 Speaker 6: But big picture, you know, it's It's difficult to get 43 00:02:19,240 --> 00:02:22,600 Speaker 6: too excited about a significant rebound in existing home sales 44 00:02:22,639 --> 00:02:25,680 Speaker 6: when you have mortgage rates that are still hovering around 45 00:02:25,720 --> 00:02:28,600 Speaker 6: seven percent. We just actually fell below that for the 46 00:02:28,639 --> 00:02:31,399 Speaker 6: first time since April. We're at about six point nine 47 00:02:31,480 --> 00:02:34,000 Speaker 6: right now, so you know that will add a little 48 00:02:34,040 --> 00:02:36,440 Speaker 6: momentum to the market. But big picture, we're not expecting 49 00:02:36,440 --> 00:02:39,200 Speaker 6: any type of significant, you know, rebound maybe until we 50 00:02:39,200 --> 00:02:42,080 Speaker 6: get to twenty twenty five and even into twenty twenty six. 51 00:02:42,440 --> 00:02:44,480 Speaker 6: Now you can trust that what we're seeing in the 52 00:02:44,520 --> 00:02:46,800 Speaker 6: new home market. Demand in the new home sign has 53 00:02:46,840 --> 00:02:49,360 Speaker 6: been a lot stronger, and that's because builders have been 54 00:02:49,400 --> 00:02:53,360 Speaker 6: successful in pulling the levers in terms of financing incentives, 55 00:02:53,400 --> 00:02:56,320 Speaker 6: closing costs, assistance, and things like that. So you know, 56 00:02:56,320 --> 00:02:58,440 Speaker 6: they've been able to make the monthly payment a little 57 00:02:58,480 --> 00:03:01,200 Speaker 6: more palatable than what you see on the resale side. 58 00:03:01,360 --> 00:03:04,440 Speaker 1: Well, that's the problem, isn't it. Home affordability. You've got 59 00:03:04,520 --> 00:03:07,320 Speaker 1: rates near seven percent, You've got record high prices for 60 00:03:07,440 --> 00:03:10,359 Speaker 1: new and used homes. Plus you know there's just a 61 00:03:10,440 --> 00:03:12,560 Speaker 1: lack of homes on the market. I mean, how are 62 00:03:13,000 --> 00:03:13,880 Speaker 1: people affording this? 63 00:03:14,600 --> 00:03:18,840 Speaker 6: It's one hundred percent all about afford affordability is, you know, 64 00:03:18,919 --> 00:03:22,040 Speaker 6: hovering near the worst levels on record. We were looking 65 00:03:22,080 --> 00:03:24,400 Speaker 6: at some data from redfind It actually shows the medium 66 00:03:24,400 --> 00:03:27,520 Speaker 6: monthly payment is about twenty nine hundred dollars, which is 67 00:03:27,560 --> 00:03:30,760 Speaker 6: fourteen percent above last month, and that's more than double 68 00:03:30,760 --> 00:03:34,280 Speaker 6: where we were prior to the pandemic. You've had prices 69 00:03:34,320 --> 00:03:37,360 Speaker 6: which increased more than fifty percent since the beginning of 70 00:03:37,400 --> 00:03:39,960 Speaker 6: twenty twenty, and you know, depending on the index that 71 00:03:40,000 --> 00:03:42,520 Speaker 6: you look at, we're either pretty close to those levels now, 72 00:03:43,000 --> 00:03:46,480 Speaker 6: if not higher. And there's been certainly been some momentum 73 00:03:46,680 --> 00:03:48,800 Speaker 6: of late with pricing, and part of that has to 74 00:03:48,800 --> 00:03:52,000 Speaker 6: do with what you mentioned. Inventory in the resale market, 75 00:03:52,000 --> 00:03:54,520 Speaker 6: we're still at about three months of supply, which is 76 00:03:54,800 --> 00:03:58,000 Speaker 6: historically low, and that's putting a floor on the prices. 77 00:03:58,040 --> 00:03:59,800 Speaker 6: There's there's demand out there and there's not a whole 78 00:03:59,800 --> 00:04:01,760 Speaker 6: lot of inventory that's pushing prices up. 79 00:04:02,160 --> 00:04:02,360 Speaker 3: Now. 80 00:04:02,400 --> 00:04:05,880 Speaker 6: We have seen inventory in some markets start to rise, 81 00:04:05,920 --> 00:04:07,560 Speaker 6: which is something we where to keep our eye on. 82 00:04:07,680 --> 00:04:10,760 Speaker 6: You look at markets in Florida, a couple of markets 83 00:04:10,760 --> 00:04:14,360 Speaker 6: in Texas like Austin, so that could have implications for 84 00:04:14,440 --> 00:04:17,640 Speaker 6: prices should inventories continue to rise. But but you're right 85 00:04:17,680 --> 00:04:20,320 Speaker 6: at this point, it's just difficult for the consumer to 86 00:04:20,400 --> 00:04:23,160 Speaker 6: afford a house, and that's really what's held the market back. 87 00:04:23,640 --> 00:04:26,560 Speaker 1: Now, this has also impacted the troubles in housing the 88 00:04:26,600 --> 00:04:30,880 Speaker 1: broader economy not always bad or not all bad, but 89 00:04:31,080 --> 00:04:34,640 Speaker 1: like home builders, home renovation still going pretty strong, but 90 00:04:35,000 --> 00:04:38,520 Speaker 1: people aren't buying big ticket appliances. Home Depot confirming that 91 00:04:39,080 --> 00:04:43,680 Speaker 1: high margin items grills, power washers, refrigerators. You know, it's 92 00:04:43,720 --> 00:04:45,760 Speaker 1: really impacting a lot of other businesses. 93 00:04:46,240 --> 00:04:49,120 Speaker 6: It's certainly been a challenging backdrop for the consumer. You 94 00:04:49,120 --> 00:04:52,400 Speaker 6: have to remember, you know, they're battling the cumulative impact 95 00:04:52,440 --> 00:04:54,839 Speaker 6: of inflation. So you know, even when you see inflation 96 00:04:54,960 --> 00:04:57,720 Speaker 6: coming down to three percent, it's still inflation and it's 97 00:04:57,760 --> 00:05:01,280 Speaker 6: been going on for years. So it's really the cumulative 98 00:05:01,320 --> 00:05:04,159 Speaker 6: impact that we're seeing. You're seeing credit card balances rise, 99 00:05:04,760 --> 00:05:06,280 Speaker 6: and you know, when you talk about some of the 100 00:05:06,360 --> 00:05:09,520 Speaker 6: names that we cover, like A Home Depot and A Lows, 101 00:05:09,640 --> 00:05:12,240 Speaker 6: they're really seeing it on the discretionary side and on 102 00:05:12,320 --> 00:05:15,480 Speaker 6: the big ticket products in particular. You know, they've got 103 00:05:15,520 --> 00:05:19,320 Speaker 6: a little bit of a unique situation in that, you know, 104 00:05:19,400 --> 00:05:21,880 Speaker 6: some of the products they sell are what they call 105 00:05:21,960 --> 00:05:24,240 Speaker 6: one time purchases. So if you think about, you know, 106 00:05:24,279 --> 00:05:26,400 Speaker 6: the early days of the pandemic, people loaded up on 107 00:05:26,880 --> 00:05:30,200 Speaker 6: you know, grill's patio furniture, lawn mowers and things like that, 108 00:05:30,720 --> 00:05:32,640 Speaker 6: and that's just something that you don't need to replace 109 00:05:32,640 --> 00:05:35,320 Speaker 6: as frequently. So they've been contending with that. But at 110 00:05:35,320 --> 00:05:38,240 Speaker 6: the same time, something they mentioned this quarter that was 111 00:05:38,279 --> 00:05:42,120 Speaker 6: pretty interesting is that they're seeing weakness in projects that 112 00:05:42,160 --> 00:05:45,200 Speaker 6: are typically debt financed, which goes back to that mortgage 113 00:05:45,240 --> 00:05:48,359 Speaker 6: rate or the interest rate dynamic, and that it's just 114 00:05:48,520 --> 00:05:51,400 Speaker 6: a lot more expensive to get these projects done. So 115 00:05:51,440 --> 00:05:55,200 Speaker 6: we're seeing you know, kitchens and bath projects being deferred, 116 00:05:55,440 --> 00:05:59,040 Speaker 6: or we're seeing projects, you know, kind of being toned 117 00:05:59,080 --> 00:06:01,640 Speaker 6: down in size. We've heard that from home DEEPO, We've 118 00:06:01,640 --> 00:06:03,760 Speaker 6: heard that some from a handful of the building product 119 00:06:03,839 --> 00:06:04,920 Speaker 6: manufacturers as well. 120 00:06:05,240 --> 00:06:07,400 Speaker 1: Yeah you need a new roof, you've got to get 121 00:06:07,400 --> 00:06:10,560 Speaker 1: a new roof, but maybe not a new kitchen. Looking ahead, 122 00:06:10,600 --> 00:06:13,920 Speaker 1: do you see or can you see any green shoots 123 00:06:14,120 --> 00:06:16,760 Speaker 1: later in the year or into twenty twenty five or 124 00:06:16,800 --> 00:06:19,240 Speaker 1: does it all depend on maybe what the FED does 125 00:06:19,279 --> 00:06:20,279 Speaker 1: with interest rates. 126 00:06:20,520 --> 00:06:22,520 Speaker 6: Yeah, well, look, I think that I think Holsing Broadley 127 00:06:22,640 --> 00:06:25,120 Speaker 6: is going to continue to EBB and flow with what 128 00:06:25,200 --> 00:06:28,240 Speaker 6: happens with interest rates. That being said, I mean, if 129 00:06:28,279 --> 00:06:30,960 Speaker 6: you could call this a bright picture, I mean, existing 130 00:06:30,960 --> 00:06:33,280 Speaker 6: home sales are the lowest level they's been in you know, 131 00:06:33,320 --> 00:06:37,479 Speaker 6: two decades, so we think we've probably reached are very 132 00:06:37,520 --> 00:06:40,520 Speaker 6: close to trough levels. So we do think that if 133 00:06:40,600 --> 00:06:42,359 Speaker 6: rates start to pull back a little bit and you 134 00:06:42,360 --> 00:06:45,240 Speaker 6: get to that mid six percent range, you know, you 135 00:06:45,279 --> 00:06:47,800 Speaker 6: could start to see some growth towards the back end 136 00:06:47,800 --> 00:06:50,840 Speaker 6: of this year and as we get into twenty twenty five. 137 00:06:50,960 --> 00:06:52,800 Speaker 6: So the way we look at it now is there's 138 00:06:52,880 --> 00:06:55,960 Speaker 6: not a whole lot of downside risk with where the 139 00:06:56,000 --> 00:06:59,159 Speaker 6: economy stands now, with where employment stands now. You know, 140 00:06:59,240 --> 00:07:02,880 Speaker 6: obviously if those things deteriorate further, that's a concern, you know, 141 00:07:02,920 --> 00:07:05,240 Speaker 6: But looking ahead, we think you could start to build 142 00:07:05,240 --> 00:07:07,359 Speaker 6: a little bit momentum looking into next year. And on 143 00:07:07,400 --> 00:07:10,840 Speaker 6: the remodeling side, we think that a lot of these projects, 144 00:07:10,840 --> 00:07:13,200 Speaker 6: as we mentioned, are being deferred, So we think there's 145 00:07:13,200 --> 00:07:15,200 Speaker 6: a lot of pent up demand that starts to get 146 00:07:15,280 --> 00:07:18,480 Speaker 6: unleashed in twenty twenty five and twenty twenty six. As 147 00:07:18,560 --> 00:07:21,520 Speaker 6: rates pull back, people are able to tap that record 148 00:07:21,520 --> 00:07:23,920 Speaker 6: amount of home equity they have, and we think that 149 00:07:23,920 --> 00:07:26,640 Speaker 6: that'll ultimately support a rebound in big ticket spending. 150 00:07:27,120 --> 00:07:29,480 Speaker 1: So if you're a painter or a drywall guide, just 151 00:07:29,520 --> 00:07:32,680 Speaker 1: told on tight Well our thanks to Drew Redding, Bloomberg 152 00:07:32,800 --> 00:07:36,160 Speaker 1: Intelligence US home building analyst. We move now to big 153 00:07:36,200 --> 00:07:38,440 Speaker 1: tech and chip maker and Video, which has been on 154 00:07:38,520 --> 00:07:41,640 Speaker 1: a roll, seeing its market value balloon thanks to demand 155 00:07:41,640 --> 00:07:44,920 Speaker 1: for its artificial intelligence chips, also its data center and 156 00:07:45,000 --> 00:07:47,800 Speaker 1: gaming offerings. What does it all mean for the company's 157 00:07:47,840 --> 00:07:50,640 Speaker 1: earnings out this Wednesday. Well for more, we're joined by 158 00:07:50,680 --> 00:07:56,520 Speaker 1: Kunjan Sobanni, Bloomberg Intelligence Senior semiconductor analyst, Konjohn Thanks for 159 00:07:56,600 --> 00:07:58,840 Speaker 1: joining us. Why don't you start right away? What do 160 00:07:58,880 --> 00:08:01,520 Speaker 1: you expect to see in vidious first quarter earnings? 161 00:08:02,160 --> 00:08:04,160 Speaker 7: Well, just similar to what we have been seeing for 162 00:08:04,200 --> 00:08:07,400 Speaker 7: the past almost six plus quarters, We again expect a 163 00:08:07,720 --> 00:08:11,960 Speaker 7: solid beaten race coming into this earnings. Throughout the quarter, 164 00:08:12,040 --> 00:08:18,360 Speaker 7: we have seen multiple strong demand signals, namely its largest 165 00:08:18,400 --> 00:08:23,720 Speaker 7: cloud and hyperscaled customers all upsiding their hapexpend guidance for 166 00:08:23,800 --> 00:08:27,640 Speaker 7: AI for twenty twenty four and twenty five. Second, we 167 00:08:27,760 --> 00:08:32,160 Speaker 7: have seen strong demand from outside of the cloud players, 168 00:08:32,240 --> 00:08:38,520 Speaker 7: namely Sogn, Wild Government, entities, other enterprises, large enterprises like 169 00:08:38,559 --> 00:08:41,959 Speaker 7: the deal we saw about Elon purchasing about ten billion 170 00:08:42,000 --> 00:08:45,040 Speaker 7: dollars of AI capacity from Oracle, etc. 171 00:08:45,640 --> 00:08:47,400 Speaker 6: So and all the same. 172 00:08:47,240 --> 00:08:50,000 Speaker 7: Time, we have seen the h one hundred lean times 173 00:08:50,040 --> 00:08:52,959 Speaker 7: continue to shrink. What that means is supply continue to 174 00:08:53,080 --> 00:08:56,160 Speaker 7: keeps up for that product family. So the combination of 175 00:08:56,200 --> 00:08:59,200 Speaker 7: all of this gives us confidence again they will be 176 00:08:59,280 --> 00:09:00,480 Speaker 7: coming out with US Beta. 177 00:09:00,559 --> 00:09:03,800 Speaker 1: DACE now in video appears to be far ahead of 178 00:09:03,840 --> 00:09:06,839 Speaker 1: a lot of US competitors on AI. And how important 179 00:09:06,880 --> 00:09:09,200 Speaker 1: is that for this earnings and for the company? 180 00:09:09,800 --> 00:09:13,400 Speaker 7: I mean, it is important, and that's why you see 181 00:09:13,400 --> 00:09:18,640 Speaker 7: this level of positive sentiment around the stock and what 182 00:09:18,720 --> 00:09:21,520 Speaker 7: you've seen in the return. I mean, it still continues 183 00:09:21,559 --> 00:09:24,680 Speaker 7: to be the market leader and has a market share 184 00:09:24,720 --> 00:09:29,560 Speaker 7: in the mid nineties, which we expected to continue at 185 00:09:29,679 --> 00:09:34,000 Speaker 7: least for the foreseeable future. So that is definitely a 186 00:09:34,040 --> 00:09:36,000 Speaker 7: big part of the story right now. 187 00:09:36,640 --> 00:09:40,319 Speaker 1: And to keep up with that demand, How is it growing? 188 00:09:40,440 --> 00:09:44,479 Speaker 1: Where is Nvidia expanding here in the US and worldwide? 189 00:09:45,040 --> 00:09:47,000 Speaker 7: I mean it is global at this point if you 190 00:09:47,000 --> 00:09:51,160 Speaker 7: think about it. Look, it's the only sort of almost 191 00:09:51,600 --> 00:09:54,800 Speaker 7: the only game in the town, and the town being globally, 192 00:09:55,040 --> 00:09:58,080 Speaker 7: if you want to set up a high end AI 193 00:09:58,240 --> 00:10:03,040 Speaker 7: server to train model, there's only really one go to 194 00:10:03,240 --> 00:10:04,520 Speaker 7: full tax solution right now. 195 00:10:04,520 --> 00:10:05,240 Speaker 6: We just in media. 196 00:10:05,679 --> 00:10:07,840 Speaker 7: We do have AMD, which has entered the game, but 197 00:10:07,920 --> 00:10:11,120 Speaker 7: again the scale is significantly different. 198 00:10:11,280 --> 00:10:13,839 Speaker 6: Here in Media's making is going to. 199 00:10:13,760 --> 00:10:17,120 Speaker 7: Be generating about in the sort of between fifty to 200 00:10:17,200 --> 00:10:20,040 Speaker 7: eighty billion dollars from its data center it's here, and 201 00:10:20,640 --> 00:10:23,520 Speaker 7: on the contrast, AMD is projected to generate about four 202 00:10:23,559 --> 00:10:26,280 Speaker 7: billion from its cview business. So, I mean, look, the 203 00:10:26,320 --> 00:10:29,640 Speaker 7: demand is globally now when it comes to allocation. When 204 00:10:29,640 --> 00:10:32,920 Speaker 7: it comes to where its customers are residing, a big 205 00:10:32,960 --> 00:10:36,840 Speaker 7: portion majority is in US in the West, but it 206 00:10:36,920 --> 00:10:40,280 Speaker 7: is also trying to allocate as much as it can 207 00:10:40,440 --> 00:10:42,360 Speaker 7: to most of its consider outside of US. 208 00:10:42,600 --> 00:10:44,760 Speaker 1: Well, that brings me to the next point, the growing 209 00:10:44,800 --> 00:10:47,640 Speaker 1: trade war between the US and China. There was a 210 00:10:47,800 --> 00:10:52,520 Speaker 1: ban on advanced chips selling them another technology to China, 211 00:10:52,600 --> 00:10:56,120 Speaker 1: implemented last year. We know that President Biden just last 212 00:10:56,160 --> 00:10:59,439 Speaker 1: week up the nite with a whole bunch of tariffs 213 00:10:59,760 --> 00:11:03,480 Speaker 1: on all kinds of Chinese products. How has that impacted 214 00:11:03,480 --> 00:11:07,040 Speaker 1: in video and the wider chip you know, semiconductor market 215 00:11:07,080 --> 00:11:08,040 Speaker 1: here in the US. 216 00:11:08,400 --> 00:11:11,280 Speaker 7: Yeah, it has impacted Nvidia, I would say the most. 217 00:11:11,960 --> 00:11:15,240 Speaker 7: If you actually go back almost two years back, the 218 00:11:15,679 --> 00:11:20,440 Speaker 7: very first ban in this data center space came on 219 00:11:20,679 --> 00:11:25,400 Speaker 7: in media specific chips. So from that time when China 220 00:11:25,480 --> 00:11:30,880 Speaker 7: represented about mid twenties percentage of revenue of its data 221 00:11:30,920 --> 00:11:34,080 Speaker 7: center segment, all the way to now this year, we 222 00:11:34,160 --> 00:11:37,880 Speaker 7: expected to be somewhere between mid single digit to high 223 00:11:37,960 --> 00:11:40,800 Speaker 7: single digits. So that gives you a magnitude that it 224 00:11:40,880 --> 00:11:44,480 Speaker 7: has lost the potential that it could have been shipped 225 00:11:44,520 --> 00:11:47,200 Speaker 7: in absence of these bands and billions of dollars to China. 226 00:11:47,280 --> 00:11:49,720 Speaker 7: So that's the company that has most been impacted. And 227 00:11:50,120 --> 00:11:54,440 Speaker 7: I think a lot of restrictions and bands have heavily 228 00:11:54,480 --> 00:11:57,640 Speaker 7: focused on in media chips initially. What you're seeing now 229 00:11:57,720 --> 00:12:01,319 Speaker 7: is sort of those bands get ex span, their range 230 00:12:01,360 --> 00:12:05,800 Speaker 7: getting expand As again, regulation always runs behind technology, So 231 00:12:05,840 --> 00:12:08,200 Speaker 7: what you're seeing is now out those impacting in other 232 00:12:08,280 --> 00:12:11,840 Speaker 7: players like Intel, like Caulcom and AMD, etc. 233 00:12:12,640 --> 00:12:14,920 Speaker 1: And Vidia's the big name, and in Vidia's first quarter 234 00:12:14,960 --> 00:12:18,800 Speaker 1: earnings out this Wednesday. Our thanks to Kunjan Sobanni, Bloomberg 235 00:12:18,840 --> 00:12:23,120 Speaker 1: Intelligence Senior semiconductor analyst, coming up on Bloomberg Day Break 236 00:12:23,120 --> 00:12:25,320 Speaker 1: weekend to look ahead to the upcoming meeting of G 237 00:12:25,600 --> 00:12:30,160 Speaker 1: seven finance ministers and central bankers in Italy. I'm Tom 238 00:12:30,200 --> 00:12:43,800 Speaker 1: Busby and this is Bloomberg. This is Bloomberg day Break weekend, 239 00:12:43,800 --> 00:12:46,199 Speaker 1: our global look ahead at the top stories for investors 240 00:12:46,200 --> 00:12:48,640 Speaker 1: in the coming week. I'm Tom Busby in New York. 241 00:12:48,920 --> 00:12:50,840 Speaker 1: Up later on our program, we look ahead to the 242 00:12:50,840 --> 00:12:55,160 Speaker 1: inauguration of Taiwan President elect Ley ching Da and what 243 00:12:55,200 --> 00:12:59,520 Speaker 1: it means for Taiwan, the US and China relations. But first, 244 00:13:00,080 --> 00:13:02,720 Speaker 1: G seven finance ministers meeting this week in the northern 245 00:13:02,800 --> 00:13:06,120 Speaker 1: Italian town of Stressa as representatives to reflect on the 246 00:13:06,200 --> 00:13:09,960 Speaker 1: fragmentation of global trade. For more, Let's go to London 247 00:13:10,000 --> 00:13:13,360 Speaker 1: and bring in Bloomberg Daybreak. Europe Banker Stephen Carroll. 248 00:13:13,840 --> 00:13:16,880 Speaker 2: Tom, Italy's Finance Minister and Central Bank governor, will be 249 00:13:16,920 --> 00:13:20,400 Speaker 2: hosting this G seven meeting on the banks of Lake Majore. 250 00:13:20,760 --> 00:13:24,280 Speaker 2: It's a majestic setting to discuss some weighty topics, not 251 00:13:24,400 --> 00:13:27,320 Speaker 2: least the latest ratcheting up of trade tensions between the 252 00:13:27,400 --> 00:13:30,840 Speaker 2: United States and China, as well as Russia's war in 253 00:13:31,040 --> 00:13:34,120 Speaker 2: Ukraine and the Ukrainian Finance Minister will be attending with 254 00:13:34,200 --> 00:13:38,160 Speaker 2: issues around the use of frozen Russian assets on the agenda. 255 00:13:38,600 --> 00:13:41,400 Speaker 2: Both the United States and the European Union have struggled 256 00:13:41,440 --> 00:13:44,559 Speaker 2: to mobilize the help that Kiev needs to defend itself, 257 00:13:44,720 --> 00:13:47,240 Speaker 2: as AID has been caught up in other political debates 258 00:13:47,679 --> 00:13:50,120 Speaker 2: in the EU. There's also a discussion about how best 259 00:13:50,200 --> 00:13:54,600 Speaker 2: to bolster the European defense industry. Here's what European Investment 260 00:13:54,600 --> 00:13:58,560 Speaker 2: Bank President Nadia Calvino told Bloomberg that her institution is 261 00:13:58,600 --> 00:13:59,360 Speaker 2: doing about this. 262 00:14:00,160 --> 00:14:02,040 Speaker 8: I think it's quite clear that we need to step 263 00:14:02,120 --> 00:14:05,240 Speaker 8: up our support to Europe's security and defense industry. We 264 00:14:05,280 --> 00:14:10,760 Speaker 8: need to reinforce our capacity in this area, and the 265 00:14:10,920 --> 00:14:14,240 Speaker 8: European Investment Bank is ready to play its role in 266 00:14:14,280 --> 00:14:16,040 Speaker 8: supporting Europe's defense industry. 267 00:14:16,600 --> 00:14:17,600 Speaker 9: From this point of view. 268 00:14:17,679 --> 00:14:20,400 Speaker 8: What we have done is put forward an action plan 269 00:14:20,480 --> 00:14:24,720 Speaker 8: which has been endorsed by our board last week and 270 00:14:24,800 --> 00:14:27,760 Speaker 8: this up and running since first of May, and which 271 00:14:27,800 --> 00:14:34,120 Speaker 8: will indeed allow us to finance dual use technologies and infrastructures, 272 00:14:34,400 --> 00:14:37,560 Speaker 8: removing a constraint that existed which required that more than 273 00:14:37,600 --> 00:14:41,080 Speaker 8: fifty percent of future revenues should come from the civil 274 00:14:41,200 --> 00:14:42,440 Speaker 8: use side for it to be. 275 00:14:42,440 --> 00:14:45,120 Speaker 10: Financed right, and so now it's zero percent, but there 276 00:14:45,160 --> 00:14:47,640 Speaker 10: still is this mandate of dual use. So just for 277 00:14:47,800 --> 00:14:50,840 Speaker 10: to understand better how this actually works, because this doesn't 278 00:14:50,880 --> 00:14:52,920 Speaker 10: mean that you can, for example, invest in something that 279 00:14:52,960 --> 00:14:56,000 Speaker 10: produces a ammunition, which isn't what is in high sort 280 00:14:56,040 --> 00:14:58,120 Speaker 10: of need right now for Ukraine and in Europe. 281 00:14:58,120 --> 00:14:58,480 Speaker 11: Correct. 282 00:14:58,640 --> 00:15:01,040 Speaker 8: Well, we are an investment bank and the mandate from 283 00:15:01,040 --> 00:15:03,560 Speaker 8: European leaders was cleared that we should step up our 284 00:15:03,560 --> 00:15:07,880 Speaker 8: support to europe security and defense industry while safeguarding our 285 00:15:08,000 --> 00:15:09,040 Speaker 8: financing capacity. 286 00:15:09,360 --> 00:15:11,640 Speaker 9: And this is what we have been doing. This is 287 00:15:11,680 --> 00:15:12,640 Speaker 9: what we are doing. 288 00:15:13,120 --> 00:15:16,280 Speaker 8: The reaction of financial markets is confirming that we're on 289 00:15:16,320 --> 00:15:19,640 Speaker 8: the right track, and our Board of Directors endorsed our 290 00:15:19,680 --> 00:15:23,000 Speaker 8: strategy as recently as last week. And so now we 291 00:15:23,080 --> 00:15:25,720 Speaker 8: have this action plan which should allow us to speed 292 00:15:25,800 --> 00:15:29,440 Speaker 8: up with the investment of the six billion euros which 293 00:15:29,480 --> 00:15:31,240 Speaker 8: are already earmarked for this industry. 294 00:15:31,320 --> 00:15:33,040 Speaker 10: Yeah, and so those also, I mean six billion is 295 00:15:33,040 --> 00:15:35,680 Speaker 10: also quite a small proportion of the entire fund. Are 296 00:15:35,680 --> 00:15:38,000 Speaker 10: you looking at potentially boosting that over the years, just 297 00:15:38,040 --> 00:15:39,880 Speaker 10: given the scale of the need that there is in 298 00:15:39,960 --> 00:15:40,800 Speaker 10: European defense. 299 00:15:41,360 --> 00:15:42,760 Speaker 9: We have six billion euros. 300 00:15:42,840 --> 00:15:47,080 Speaker 8: Actually the program was had eight billion euros ear marked, 301 00:15:47,120 --> 00:15:50,280 Speaker 8: we have only invested two billion euros. We're focusing right 302 00:15:50,360 --> 00:15:52,720 Speaker 8: now in speeding up the investment of these six billion 303 00:15:52,720 --> 00:15:56,120 Speaker 8: euros and also getting up and running a capital investment 304 00:15:56,200 --> 00:15:59,240 Speaker 8: of one hundred and seventy five million euros in startups, 305 00:15:59,240 --> 00:16:01,440 Speaker 8: innovative startups also in this area. 306 00:16:01,520 --> 00:16:03,280 Speaker 10: And for those two billion, was it just because there 307 00:16:03,320 --> 00:16:04,960 Speaker 10: wasn't demand for the loans or is it because there 308 00:16:04,960 --> 00:16:06,840 Speaker 10: were all these rules around and you hope that that 309 00:16:06,960 --> 00:16:08,320 Speaker 10: capital can get to work well. 310 00:16:08,360 --> 00:16:13,240 Speaker 8: Obviously, we are now expanding, enlarging the scope of projects 311 00:16:13,360 --> 00:16:16,360 Speaker 8: that we can finance. We are also speeding up these 312 00:16:16,400 --> 00:16:20,880 Speaker 8: divestments with a single stop shop with a dedicated team, 313 00:16:21,160 --> 00:16:23,280 Speaker 8: and we're going to be proactively reaching out. 314 00:16:23,320 --> 00:16:24,880 Speaker 9: Actually, we have launched a call for. 315 00:16:24,880 --> 00:16:27,960 Speaker 8: Projects, and so our expectation is that in the second 316 00:16:27,960 --> 00:16:30,080 Speaker 8: part of the year there will be more projects, more 317 00:16:30,120 --> 00:16:33,480 Speaker 8: demand as you named it, and that we will be 318 00:16:33,520 --> 00:16:35,680 Speaker 8: able to step up our support to europe security and 319 00:16:35,720 --> 00:16:38,960 Speaker 8: defense industry while safeguarding our financing capacity, which is the 320 00:16:39,000 --> 00:16:39,680 Speaker 8: mandate from MARS. 321 00:16:39,760 --> 00:16:42,680 Speaker 10: When you say safeguarding your financing capacity is to do 322 00:16:42,720 --> 00:16:44,720 Speaker 10: with the credit rating, you think that could be jeopardized 323 00:16:44,720 --> 00:16:46,840 Speaker 10: by investing in these sorts of companies, what exactly is 324 00:16:46,880 --> 00:16:47,880 Speaker 10: the relationship there? 325 00:16:48,040 --> 00:16:52,080 Speaker 8: Well, obviously rating agencies, but also investors are looking carefully 326 00:16:52,120 --> 00:16:55,800 Speaker 8: at many areas that have to do with our financing capacity. 327 00:16:56,520 --> 00:16:59,520 Speaker 8: So far, as I was saying, financial markets are responding 328 00:16:59,520 --> 00:17:03,280 Speaker 8: as we had anticipated, and our Board of Directors indoors 329 00:17:03,360 --> 00:17:06,000 Speaker 8: last week our action plan which will allow us to 330 00:17:06,040 --> 00:17:06,959 Speaker 8: step up our support. 331 00:17:07,359 --> 00:17:10,000 Speaker 10: And in terms of the eb's rule and rebuilding Ukraine 332 00:17:10,000 --> 00:17:12,440 Speaker 10: and funding that, how do you imagine the ib's role 333 00:17:12,440 --> 00:17:12,639 Speaker 10: in that. 334 00:17:13,200 --> 00:17:15,040 Speaker 9: Well, we're playing a very important role already. 335 00:17:15,080 --> 00:17:20,320 Speaker 8: We're probably the key financing investor partner to the Ukrainian government. 336 00:17:20,359 --> 00:17:21,560 Speaker 9: We're very close contact. 337 00:17:21,880 --> 00:17:24,800 Speaker 8: Only some weeks ago I signed a memorandrov of understanding 338 00:17:24,840 --> 00:17:27,760 Speaker 8: with Prime Minister Smichael, and I hope that in June 339 00:17:27,760 --> 00:17:30,679 Speaker 8: we will be able to already sign some specific projects 340 00:17:30,800 --> 00:17:33,720 Speaker 8: and speed up our investments on the ground in large 341 00:17:33,760 --> 00:17:39,440 Speaker 8: infrastructures energy transport, also in municipal and local projects having 342 00:17:39,480 --> 00:17:45,680 Speaker 8: to do with restoring and renovating, rebuilding schools, hospital houses, 343 00:17:46,000 --> 00:17:48,760 Speaker 8: and also supporting the private sector. Many of these projects 344 00:17:48,800 --> 00:17:52,399 Speaker 8: are already ongoing and as of the signature of the 345 00:17:52,480 --> 00:17:54,760 Speaker 8: memorandum of understanding, I think we will be able to 346 00:17:54,800 --> 00:17:58,159 Speaker 8: do more while the war is unfortunately going on. I 347 00:17:58,200 --> 00:18:00,240 Speaker 8: hope we will be able to step up our support 348 00:18:00,480 --> 00:18:03,120 Speaker 8: with the rebuilding of the country once the war is over. 349 00:18:03,640 --> 00:18:07,080 Speaker 2: That's the European Investment Bank President Nadia Calvino there speaking 350 00:18:07,160 --> 00:18:10,320 Speaker 2: to Bloomberg's Oliver Crook in recent days. Now, Oliver will 351 00:18:10,320 --> 00:18:13,720 Speaker 2: also be attending the G seven meeting in Straisa along 352 00:18:13,760 --> 00:18:16,639 Speaker 2: with finance ministers and central bankers. I've been speaking to 353 00:18:16,720 --> 00:18:18,920 Speaker 2: him about it and started by asking him how much 354 00:18:19,000 --> 00:18:23,119 Speaker 2: the latest announcement of increased US tariffs on Chinese goods 355 00:18:23,359 --> 00:18:25,439 Speaker 2: will be weighing on ministers' minds. 356 00:18:26,359 --> 00:18:28,520 Speaker 10: I think it'll be weighing on their minds very very much, 357 00:18:28,520 --> 00:18:30,480 Speaker 10: in part because it's so fresh and it just sort 358 00:18:30,480 --> 00:18:32,520 Speaker 10: of dropped just you know, just before the meeting. And 359 00:18:32,520 --> 00:18:33,960 Speaker 10: then on the other side of the meeting, of course, 360 00:18:34,000 --> 00:18:36,160 Speaker 10: you're going to get the initial report from the EU 361 00:18:36,200 --> 00:18:38,520 Speaker 10: in terms of the ev probe that they're going into China. 362 00:18:38,600 --> 00:18:40,200 Speaker 10: So trade is really going to be front and center 363 00:18:40,280 --> 00:18:43,159 Speaker 10: for both the finance ministers and the central bankers, who 364 00:18:43,200 --> 00:18:45,719 Speaker 10: are both present there. For the central bankers, obviously this 365 00:18:45,760 --> 00:18:47,840 Speaker 10: is also a big question in terms of inflation because 366 00:18:47,840 --> 00:18:50,719 Speaker 10: if we're dealing with just one off things, that's one thing. 367 00:18:50,720 --> 00:18:53,080 Speaker 10: If we're talking about basically the beginning of another kind 368 00:18:53,119 --> 00:18:55,119 Speaker 10: of trade war and tit for tat, this could have 369 00:18:55,200 --> 00:18:58,399 Speaker 10: huge implications for inflation to what degrees. So they'll be 370 00:18:58,440 --> 00:19:00,680 Speaker 10: exchanging notes, you know, it's the ec be the FED 371 00:19:00,720 --> 00:19:02,920 Speaker 10: will be there much. The FED is setting the tone 372 00:19:02,920 --> 00:19:05,080 Speaker 10: for global interest rates, and of course the question will 373 00:19:05,119 --> 00:19:08,520 Speaker 10: be will China retaliate. Biden has been quite targeted in 374 00:19:08,560 --> 00:19:11,159 Speaker 10: terms of this. These sounds like a lot of import 375 00:19:11,280 --> 00:19:13,800 Speaker 10: tariffs on the evs, you know, quadrupling, but really it's 376 00:19:13,800 --> 00:19:16,800 Speaker 10: only touching about eighteen billion dollars a trade because obviously 377 00:19:16,800 --> 00:19:19,080 Speaker 10: he's very conscious of not wanting to get those prices 378 00:19:19,119 --> 00:19:21,200 Speaker 10: going up, particularly in an election year. 379 00:19:21,640 --> 00:19:24,240 Speaker 2: Yeah, indeed, that's a big concern for them too. Around 380 00:19:24,240 --> 00:19:28,080 Speaker 2: the G seven table though, Ali, how much divergence is 381 00:19:28,119 --> 00:19:31,120 Speaker 2: there on the approach, the approach to China and trades. 382 00:19:31,680 --> 00:19:33,240 Speaker 10: So I think it's interesting if you look at just 383 00:19:33,280 --> 00:19:35,479 Speaker 10: the United States and Europe, you know what I mean. 384 00:19:35,520 --> 00:19:37,640 Speaker 10: I mean, you have them sort of singing a bit 385 00:19:37,680 --> 00:19:39,840 Speaker 10: from the same hymn sheet in terms of the sort 386 00:19:39,880 --> 00:19:43,280 Speaker 10: of general message, which is that China has engaged in 387 00:19:43,359 --> 00:19:46,240 Speaker 10: unfair trade practices. But ma Cole, for example, has really 388 00:19:46,320 --> 00:19:48,000 Speaker 10: kept the door open saying that he's not going to 389 00:19:48,000 --> 00:19:50,639 Speaker 10: be dragged in around the world by US foreign policy, 390 00:19:50,640 --> 00:19:52,879 Speaker 10: which is sort of an allusion to Taiwan and the 391 00:19:52,920 --> 00:19:55,800 Speaker 10: evidence of that. That's a message that's kind of resounded 392 00:19:55,800 --> 00:19:58,679 Speaker 10: with Hashijiping because he came to France. You know, he 393 00:19:58,720 --> 00:20:00,840 Speaker 10: came to Europe for the first time in five years. 394 00:20:00,960 --> 00:20:03,359 Speaker 10: He came to France, but he also came to Hungary, 395 00:20:03,359 --> 00:20:05,240 Speaker 10: which is another country that kind of takes us to 396 00:20:05,280 --> 00:20:08,359 Speaker 10: the within Europe question of China. You know, China has 397 00:20:08,400 --> 00:20:11,280 Speaker 10: had huge manufacturing production in Hungary. The you know, c 398 00:20:11,440 --> 00:20:14,160 Speaker 10: atl the battery manufacturer, has opened up a factory. Now 399 00:20:14,160 --> 00:20:17,119 Speaker 10: we understand byd is there the Europeans are looking at 400 00:20:17,119 --> 00:20:20,040 Speaker 10: this because Hungary is often a political outlier. Could this 401 00:20:20,160 --> 00:20:22,239 Speaker 10: drive a further wedge within Europe and could it get 402 00:20:22,280 --> 00:20:25,359 Speaker 10: really China a seat at the table politically within there? 403 00:20:25,440 --> 00:20:28,160 Speaker 10: And there's also a disagreement even between Schultz and macohone right, 404 00:20:28,320 --> 00:20:30,480 Speaker 10: Schultz was even saying that listen, we want to put 405 00:20:30,480 --> 00:20:32,639 Speaker 10: these ev tariffs up. Okay, but let's think about the 406 00:20:32,640 --> 00:20:35,720 Speaker 10: consequences here. Half of the EV's coming into Europe from 407 00:20:35,880 --> 00:20:38,520 Speaker 10: China are not Chinese, they are Europeans. 408 00:20:39,720 --> 00:20:39,960 Speaker 4: Yeah. 409 00:20:40,040 --> 00:20:43,040 Speaker 2: Indeed, I mean the Ukraine's finance minister is going to 410 00:20:43,040 --> 00:20:46,399 Speaker 2: be attending this meeting as well. What will he be 411 00:20:46,520 --> 00:20:48,879 Speaker 2: looking to hear from his counterparts? 412 00:20:49,040 --> 00:20:50,199 Speaker 10: Well, I think a lot of it is going to 413 00:20:50,200 --> 00:20:52,040 Speaker 10: be a message of reassurance, right, and we saw that 414 00:20:52,080 --> 00:20:54,119 Speaker 10: with Blincoln when he was in Kiev saying that you know, 415 00:20:54,160 --> 00:20:56,879 Speaker 10: we're still here, We're still supporting Ukraine. And the reason 416 00:20:56,880 --> 00:20:59,400 Speaker 10: that there is you know, potentially some desire to doubt 417 00:20:59,440 --> 00:21:02,280 Speaker 10: that is because of how long that aid package took 418 00:21:02,320 --> 00:21:04,280 Speaker 10: to get to Ukraine. Remember that was stalled in the 419 00:21:04,320 --> 00:21:07,960 Speaker 10: House for six months. That sixty billion dollar package eventually 420 00:21:07,960 --> 00:21:10,320 Speaker 10: got there and that will mean you know, some military 421 00:21:10,320 --> 00:21:13,120 Speaker 10: relief and some financial relief for Ukraine, but it's cost 422 00:21:13,200 --> 00:21:16,440 Speaker 10: them very dearly on the battlefield. We've seen infrastructure behead there, 423 00:21:16,440 --> 00:21:19,080 Speaker 10: swatting very a lot fewer of the missiles out of 424 00:21:19,080 --> 00:21:21,400 Speaker 10: the skies. And the question for the G seven going 425 00:21:21,440 --> 00:21:23,920 Speaker 10: forward is how do you get the financing for Ukraine 426 00:21:24,240 --> 00:21:26,119 Speaker 10: on sustainable footing? And that will be one of the 427 00:21:26,160 --> 00:21:27,960 Speaker 10: direct and central conversations there. 428 00:21:28,359 --> 00:21:30,879 Speaker 2: Yeah, because the U ass is proposed seizing the Russian 429 00:21:30,920 --> 00:21:33,520 Speaker 2: assets that were frozen by the G seven after the 430 00:21:33,520 --> 00:21:37,840 Speaker 2: invasion of Ukraine. Is that a proposal that has much support. 431 00:21:37,960 --> 00:21:40,399 Speaker 10: So it doesn't have that much support in Europe solicited. 432 00:21:40,440 --> 00:21:41,879 Speaker 10: To be clear about what we're talking about here, What 433 00:21:41,920 --> 00:21:44,359 Speaker 10: the Europeans favor is they want to take the proceeds 434 00:21:44,359 --> 00:21:46,359 Speaker 10: from the Russian assets being sold that are kind of 435 00:21:46,480 --> 00:21:49,200 Speaker 10: accruing interests and making profits. They want to take those 436 00:21:49,640 --> 00:21:51,760 Speaker 10: and give that to Ukraine. But that's only about three 437 00:21:51,800 --> 00:21:54,640 Speaker 10: billion dollars a year. The United States is very keen 438 00:21:54,680 --> 00:21:57,680 Speaker 10: on taking the underlying assets. We're talking about three hundred 439 00:21:57,720 --> 00:22:00,760 Speaker 10: billion dollars of Russian central bank assets that are scattered 440 00:22:00,760 --> 00:22:02,960 Speaker 10: across the world that are currently being held. They want 441 00:22:02,960 --> 00:22:05,480 Speaker 10: to bring that directly to Ukraine. The Europeans have resistant 442 00:22:05,520 --> 00:22:07,359 Speaker 10: to that. What has been interesting is some of the 443 00:22:07,400 --> 00:22:09,760 Speaker 10: debates on how to maybe do it to make everyone happy. 444 00:22:09,800 --> 00:22:12,680 Speaker 10: The United States, for example, has suggested these so called 445 00:22:12,720 --> 00:22:15,080 Speaker 10: freedom bonds, you know, and putting American branding on it, 446 00:22:15,240 --> 00:22:18,199 Speaker 10: which basically is issuing bonds and using the underlying assets 447 00:22:18,200 --> 00:22:20,800 Speaker 10: as collateral, so you don't touch the underlying asset, but 448 00:22:20,880 --> 00:22:22,600 Speaker 10: you can still monetize it and get more of that 449 00:22:22,640 --> 00:22:23,600 Speaker 10: money to Ukraine. 450 00:22:24,080 --> 00:22:27,080 Speaker 2: Now, central bankers, as you mentioned Oli, will be attending 451 00:22:27,119 --> 00:22:29,880 Speaker 2: this meeting as well. Of course, inflations still a big 452 00:22:29,960 --> 00:22:33,879 Speaker 2: question for these major global economies. Should we expect to 453 00:22:33,880 --> 00:22:36,840 Speaker 2: hear much about the broader issues around the path I 454 00:22:36,880 --> 00:22:38,119 Speaker 2: had for interest rights? 455 00:22:38,320 --> 00:22:40,000 Speaker 10: I would think so. I mean, wherever there are central 456 00:22:40,040 --> 00:22:42,040 Speaker 10: bankers there is a rate debate, and if Bloomberg is 457 00:22:42,080 --> 00:22:43,800 Speaker 10: there will certainly be chasing it and we may be 458 00:22:43,880 --> 00:22:45,960 Speaker 10: speaking to a few of them. I can't tell you 459 00:22:46,000 --> 00:22:48,160 Speaker 10: who exactly because we haven't confirmed it, but there will 460 00:22:48,160 --> 00:22:51,359 Speaker 10: be certainly a conversation about what the stance is on 461 00:22:51,480 --> 00:22:53,960 Speaker 10: rate policy going forward. And of course, how does this 462 00:22:54,280 --> 00:22:56,960 Speaker 10: trade question now front and center? How does that read through? 463 00:22:57,000 --> 00:22:59,359 Speaker 10: I mean, the debate forming at the ECB is not 464 00:22:59,400 --> 00:23:01,000 Speaker 10: whether or not the going to be a cut, it's 465 00:23:01,040 --> 00:23:04,160 Speaker 10: what happens after the cut. What is the default sort 466 00:23:04,160 --> 00:23:06,200 Speaker 10: of stance for the ECB? Does it have a neutral 467 00:23:06,240 --> 00:23:08,639 Speaker 10: bias or an easing bias? And you have people on 468 00:23:08,680 --> 00:23:10,480 Speaker 10: either side of that. You have Panetta from Italy who's 469 00:23:10,480 --> 00:23:12,600 Speaker 10: saying that really we should have an easing bias, maybe 470 00:23:12,600 --> 00:23:15,040 Speaker 10: pushing that for it. In the Nogle from the Bundesbag 471 00:23:15,160 --> 00:23:17,040 Speaker 10: saying no, we need to stay neutral until we see 472 00:23:17,040 --> 00:23:17,520 Speaker 10: what happens. 473 00:23:18,680 --> 00:23:20,760 Speaker 2: Yes, that's another debate that's going to be happening at 474 00:23:20,800 --> 00:23:24,560 Speaker 2: the G seven two. I mean more broadly, Oliver, is 475 00:23:24,600 --> 00:23:27,840 Speaker 2: the G seven a forum that's fit for purpose. We're 476 00:23:27,880 --> 00:23:31,159 Speaker 2: talking about some of very diverse issues being discussed at 477 00:23:31,160 --> 00:23:34,800 Speaker 2: this forum as well, but does it actually produce concrete decision? 478 00:23:35,119 --> 00:23:37,080 Speaker 10: Well, let's think about what this forum is, right, the 479 00:23:37,119 --> 00:23:39,280 Speaker 10: G seven. For a very long time, this was the 480 00:23:39,359 --> 00:23:41,800 Speaker 10: G eight, right, and now it is the G seven, 481 00:23:41,800 --> 00:23:43,840 Speaker 10: And that happened ten years ago. And I was actually 482 00:23:43,840 --> 00:23:45,680 Speaker 10: just looking at a picture of the last G eight, 483 00:23:46,000 --> 00:23:50,280 Speaker 10: you know, meeting. It's sort of astounding. You see fonswau Land, Obama, 484 00:23:50,680 --> 00:23:53,800 Speaker 10: David Cameron smiling, Merkle is there and Putin is there. 485 00:23:53,960 --> 00:23:54,160 Speaker 4: Right. 486 00:23:54,440 --> 00:23:56,280 Speaker 10: And in the last sort of ten years, ever since 487 00:23:56,320 --> 00:23:58,920 Speaker 10: the sort of invasion of Crimea, we've seen a real bifurcation, 488 00:23:59,000 --> 00:24:01,919 Speaker 10: of fragmentation of global order. So there's the question of 489 00:24:02,000 --> 00:24:04,280 Speaker 10: the broader G twenty in the sort of breakoff of 490 00:24:04,320 --> 00:24:06,560 Speaker 10: the bricks, as you mentioned, you know, there's this you know, 491 00:24:06,760 --> 00:24:09,199 Speaker 10: G came to Europe and then Putin went to Beijing 492 00:24:09,280 --> 00:24:11,200 Speaker 10: saying that they're going to have a very good relationship 493 00:24:11,240 --> 00:24:13,520 Speaker 10: for generations to come. So there's a question of how 494 00:24:13,600 --> 00:24:16,200 Speaker 10: much influence the G seven has over others. But even 495 00:24:16,240 --> 00:24:18,520 Speaker 10: within the G seven there is all this talk about 496 00:24:18,560 --> 00:24:21,880 Speaker 10: sort of protectionistic policies of China, the G seven itself 497 00:24:21,920 --> 00:24:24,520 Speaker 10: within there is being protectionist itself. I mean the Inflation 498 00:24:24,600 --> 00:24:26,600 Speaker 10: Reduction Act. There's not a lot of talk going on 499 00:24:26,720 --> 00:24:29,480 Speaker 10: around it. But this hits Europe very very hard. And 500 00:24:29,520 --> 00:24:32,560 Speaker 10: you're not hearing so much about the American European relationship. 501 00:24:32,680 --> 00:24:34,919 Speaker 10: You know, post pandemic, it was all about friend shoring 502 00:24:34,960 --> 00:24:38,359 Speaker 10: and securing supply chains that way. But really even under Biden, 503 00:24:38,520 --> 00:24:41,240 Speaker 10: you're hearing a slightly more America first kind of policy 504 00:24:41,240 --> 00:24:43,840 Speaker 10: and Europe alone, and that is really hanging over this 505 00:24:43,920 --> 00:24:44,879 Speaker 10: G seven meeting. 506 00:24:45,400 --> 00:24:48,040 Speaker 2: Thanks to our correspondent Oliver Crook, who will be bringing 507 00:24:48,119 --> 00:24:50,959 Speaker 2: us coverage on Bloomberg Radio and television of the G 508 00:24:51,040 --> 00:24:54,600 Speaker 2: seven finance ministers meeting in Italy in the coming days, 509 00:24:55,000 --> 00:24:57,440 Speaker 2: I'm Stephen Carol in London. You can count us every 510 00:24:57,440 --> 00:25:00,359 Speaker 2: weekday morning here for Bloomberg Daybreak Europe, beginning out six 511 00:25:00,400 --> 00:25:03,280 Speaker 2: am in London and what am on Wall Streets. 512 00:25:03,359 --> 00:25:06,520 Speaker 1: Tom, thank you Steven, and coming up on Bloomberg day 513 00:25:06,520 --> 00:25:09,560 Speaker 1: Break weekend, we look ahead to the inauguration of Taiwan's 514 00:25:09,760 --> 00:25:24,480 Speaker 1: president elect. I'm Tom Busby and this is Bloomberg. I'm 515 00:25:24,480 --> 00:25:26,560 Speaker 1: Tom Busby in New York with your global look ahead 516 00:25:26,560 --> 00:25:28,720 Speaker 1: at the top stories for investors in the coming week. 517 00:25:29,119 --> 00:25:32,879 Speaker 1: Taiwan's president elect Lee Ching Da will be inaugurated in 518 00:25:32,960 --> 00:25:35,960 Speaker 1: the coming week. Let's go to Bloomberg Daybreak Asia host 519 00:25:36,000 --> 00:25:38,680 Speaker 1: Brian Curtis and Doug Krisner for more. 520 00:25:39,119 --> 00:25:42,439 Speaker 3: Tom William Lai takes office at a critical time, with 521 00:25:42,640 --> 00:25:46,760 Speaker 3: tensions running high. In recent days, China said live faces 522 00:25:46,800 --> 00:25:51,720 Speaker 3: a choice between peace and confrontation. On Wednesday, Beijing said 523 00:25:51,720 --> 00:25:55,600 Speaker 3: that it would sanction five taiwan political commentators and roll 524 00:25:55,600 --> 00:25:58,080 Speaker 3: out a new law to punish separatists. 525 00:25:58,119 --> 00:26:01,440 Speaker 12: In addition, Taiwan finds itself in the middle of worsening 526 00:26:01,480 --> 00:26:05,000 Speaker 12: relations between the US and China. Now on the economic side, 527 00:26:05,119 --> 00:26:09,200 Speaker 12: President Biden just slapped new tariffs on Chinese imports and 528 00:26:09,480 --> 00:26:13,440 Speaker 12: accused China of cheating on trade. Then there's the political front. 529 00:26:13,520 --> 00:26:17,439 Speaker 12: China's Foreign Ministry bristled it reports on the US and 530 00:26:17,520 --> 00:26:20,119 Speaker 12: Taiwan conducting naval drills last month. 531 00:26:20,680 --> 00:26:24,400 Speaker 3: Additionally, the US will send a delegation of former officials 532 00:26:24,440 --> 00:26:28,080 Speaker 3: to the inauguration. The fact that their former officials may 533 00:26:28,119 --> 00:26:31,720 Speaker 3: placate China to a certain degree, but Beijing still won't 534 00:26:31,720 --> 00:26:34,320 Speaker 3: be happy as such, Doug and I thought it would 535 00:26:34,320 --> 00:26:36,399 Speaker 3: be a good time to take a closer look at 536 00:26:36,440 --> 00:26:40,080 Speaker 3: the trilateral relationship and see how it might change under 537 00:26:40,119 --> 00:26:43,800 Speaker 3: the presidency of Lei ching Dug. We asked John Liu, 538 00:26:43,960 --> 00:26:48,600 Speaker 3: Bloomberg Executive editor in Beijing, if Taiwan is at a crossroads. 539 00:26:48,880 --> 00:26:52,760 Speaker 13: Taiwan is definitely the most dangerous flashpoint in this relationship 540 00:26:52,800 --> 00:26:56,840 Speaker 13: between the United States and China. Whether William Lae's ascendence 541 00:26:56,880 --> 00:26:59,840 Speaker 13: to the presidential office will be the spark that sets 542 00:26:59,840 --> 00:27:03,520 Speaker 13: off some sort of conflict, I think that looks relatively 543 00:27:03,640 --> 00:27:07,440 Speaker 13: unlikely at the moment. We are expecting him to stick 544 00:27:07,680 --> 00:27:11,000 Speaker 13: to the line from the previous administration of Tiing I. 545 00:27:11,200 --> 00:27:14,000 Speaker 13: He has said that publicly he plans to be a 546 00:27:14,040 --> 00:27:17,520 Speaker 13: continuity president of anything. I think the speech that he 547 00:27:17,600 --> 00:27:21,399 Speaker 13: will be giving at his inauguration will be tuned to 548 00:27:21,560 --> 00:27:25,200 Speaker 13: try and both show him and his party is defending Taiwan, 549 00:27:25,280 --> 00:27:29,440 Speaker 13: but also not to cause any upsetness in Beijing or Washington. 550 00:27:29,800 --> 00:27:33,960 Speaker 3: Bloomberg Executive editor in Beijing, John Liu, Now for discussion 551 00:27:34,000 --> 00:27:36,879 Speaker 3: on this. We're joined by Bloomberg's Type A bureau chief 552 00:27:37,000 --> 00:27:41,320 Speaker 3: Samson Ellis and deputy Bureau chief Cindy Wong. So, Sam, 553 00:27:41,440 --> 00:27:43,400 Speaker 3: let me go to you first. Is John Wright there 554 00:27:43,560 --> 00:27:48,520 Speaker 3: that Lai is likely to be pragmatic and push for continuity. 555 00:27:48,680 --> 00:27:52,000 Speaker 11: Those are certainly the indications we have right now. Obviously 556 00:27:52,400 --> 00:27:55,480 Speaker 11: we're speaking before he has taken power, But over the 557 00:27:55,520 --> 00:28:00,359 Speaker 11: past year he has strenuously emphasized that he will to 558 00:28:01,080 --> 00:28:04,320 Speaker 11: size previous line of being willing to talk to China, 559 00:28:04,480 --> 00:28:07,719 Speaker 11: but only on the basis of equality, that the two 560 00:28:07,800 --> 00:28:10,240 Speaker 11: sides sit down and speak to each other as equals. 561 00:28:10,840 --> 00:28:14,480 Speaker 11: That's obviously a condition that China is very unlikely to 562 00:28:14,520 --> 00:28:17,560 Speaker 11: be able to accept. Plus he's also said that there 563 00:28:17,560 --> 00:28:20,360 Speaker 11: will be no formal action for him to in some 564 00:28:20,400 --> 00:28:25,360 Speaker 11: way formalize Taiwan's independent So I think that's his way 565 00:28:25,359 --> 00:28:27,760 Speaker 11: of signaling to the United States and to Beijing and 566 00:28:27,840 --> 00:28:29,760 Speaker 11: to the time Inese public and the world at large 567 00:28:29,800 --> 00:28:32,959 Speaker 11: that there isn't going to be some kind of declaration 568 00:28:33,000 --> 00:28:37,000 Speaker 11: of independence during his presidency to try and put people 569 00:28:37,040 --> 00:28:39,760 Speaker 11: at ease that he's not going to be a troublemaker 570 00:28:39,800 --> 00:28:40,680 Speaker 11: throughout his term. 571 00:28:40,840 --> 00:28:44,520 Speaker 12: Cindy, from what I understand, William Lai took about forty 572 00:28:44,560 --> 00:28:46,760 Speaker 12: percent of the popular vote. When you look at a 573 00:28:46,840 --> 00:28:50,400 Speaker 12: number like that, you may conclude that the mandate that 574 00:28:50,480 --> 00:28:52,720 Speaker 12: William Lai has is not that strong. Am I right 575 00:28:52,760 --> 00:28:53,080 Speaker 12: about that? 576 00:28:53,360 --> 00:28:53,560 Speaker 6: Yeah? 577 00:28:53,640 --> 00:28:57,200 Speaker 14: Exactly. He only got forty percent of the vote in 578 00:28:57,240 --> 00:29:01,280 Speaker 14: the general election, and that made him the first Taiwan 579 00:29:01,320 --> 00:29:05,200 Speaker 14: president since year two thousand that didn't win an outright 580 00:29:05,280 --> 00:29:09,400 Speaker 14: majority vote, So that's relatively weak man day. And also 581 00:29:09,520 --> 00:29:13,240 Speaker 14: the Taiwanese voters just gave the majority of the legislature 582 00:29:13,360 --> 00:29:16,920 Speaker 14: to the opposition KMT, hoping that there would be some 583 00:29:17,160 --> 00:29:20,120 Speaker 14: check and balance in the government. So I think with 584 00:29:20,360 --> 00:29:24,960 Speaker 14: that challenges that that means lies any policies or reforms 585 00:29:25,120 --> 00:29:30,479 Speaker 14: is going to face the legislative hurdles. So going forward 586 00:29:30,720 --> 00:29:32,800 Speaker 14: the next four years is going to be a very 587 00:29:32,880 --> 00:29:35,080 Speaker 14: daunting tax ahead for him, Cindy. 588 00:29:35,160 --> 00:29:38,440 Speaker 3: One would think that lie, given his past and sort 589 00:29:38,480 --> 00:29:42,240 Speaker 3: of leaning toward Taiwan independence, that he would be even 590 00:29:42,520 --> 00:29:45,600 Speaker 3: less popular with China than signing one was. 591 00:29:46,000 --> 00:29:49,000 Speaker 14: Yeah, definitely. So just to give you a little bit 592 00:29:49,040 --> 00:29:53,040 Speaker 14: of contest. The ruling Democratic Progressive Party or the DPP 593 00:29:53,480 --> 00:29:57,680 Speaker 14: champion that strong sense of Taiwan identity distinct from China, 594 00:29:58,200 --> 00:30:02,200 Speaker 14: and Lai used to being for his pro independent stance. 595 00:30:02,320 --> 00:30:05,960 Speaker 14: He used to describe himself as a pragmatic worker of 596 00:30:06,000 --> 00:30:09,600 Speaker 14: Taiwan independence. Although during the presidential campaign he has been 597 00:30:09,760 --> 00:30:13,240 Speaker 14: very measured. He didn't talked about independence at all. Instead, 598 00:30:13,280 --> 00:30:16,120 Speaker 14: he said Taiwan is already a de facto state and 599 00:30:16,200 --> 00:30:20,880 Speaker 14: there's no need to declare independence. Still, the past comments 600 00:30:20,880 --> 00:30:24,920 Speaker 14: and past records made him very unpopular with China. China 601 00:30:25,000 --> 00:30:28,880 Speaker 14: revealed lie with deep suspicion and deep distrust, and China 602 00:30:28,960 --> 00:30:32,880 Speaker 14: has already labeled him as an instigator of war or 603 00:30:33,360 --> 00:30:36,920 Speaker 14: a separatist. So it is believed that going forward for 604 00:30:37,000 --> 00:30:40,080 Speaker 14: the next four years, since China has already cut off 605 00:30:40,200 --> 00:30:43,760 Speaker 14: all the communication with Taiwan since President's Hi took office 606 00:30:43,800 --> 00:30:47,120 Speaker 14: in twenty sixteen, and for the next four years, it's 607 00:30:47,200 --> 00:30:53,160 Speaker 14: unlikely that it would possibly resume any communication with Taiwan 608 00:30:53,640 --> 00:30:57,680 Speaker 14: given their dis deep distrust of life. So one important 609 00:30:57,680 --> 00:31:00,800 Speaker 14: thing to watch from lives inaugurate speed each would be 610 00:31:01,320 --> 00:31:04,680 Speaker 14: if he has any comments or new narrative about the 611 00:31:04,720 --> 00:31:08,520 Speaker 14: cross relations going forward, or if he is able to 612 00:31:08,600 --> 00:31:12,240 Speaker 14: propose any kind of framework that could break the deadlock 613 00:31:12,360 --> 00:31:15,800 Speaker 14: between China and Taiwan and resume the communication between the 614 00:31:15,840 --> 00:31:16,360 Speaker 14: two sides. 615 00:31:16,360 --> 00:31:19,680 Speaker 12: Again, Sam, the current President Sin Wing has been in 616 00:31:19,720 --> 00:31:23,640 Speaker 12: office for eight years now, two terms term limited. During 617 00:31:23,680 --> 00:31:26,520 Speaker 12: a big chunk of that period, since about twenty nineteen, 618 00:31:26,560 --> 00:31:29,160 Speaker 12: I think that we have seen a much harder line 619 00:31:29,560 --> 00:31:32,040 Speaker 12: from Beijing when it comes to Hong Kong, and I'm 620 00:31:32,120 --> 00:31:36,800 Speaker 12: curious about possible ripple effects. Has a harder line on 621 00:31:36,880 --> 00:31:40,520 Speaker 12: Hong Kong impacted the politics of Taiwan in any way. 622 00:31:40,480 --> 00:31:43,120 Speaker 11: Well, it certainly did in twenty nineteen and twenty twenty, 623 00:31:43,400 --> 00:31:47,800 Speaker 11: the last election, when Taiwan a resounding re election. You know, 624 00:31:48,080 --> 00:31:49,880 Speaker 11: at that point we were at the height of the 625 00:31:50,440 --> 00:31:53,600 Speaker 11: authorities cracked down against protesters in Hong Kong, and that 626 00:31:54,240 --> 00:31:59,280 Speaker 11: definitely engendered a sense of sympathy from voters in Taiwan 627 00:31:59,360 --> 00:32:04,200 Speaker 11: and a you know, no desire to move towards a 628 00:32:04,240 --> 00:32:08,520 Speaker 11: friendlier stance with Beijing. But then there's the long term 629 00:32:08,520 --> 00:32:13,000 Speaker 11: repercussions of that. Certainly that you know, China's offer for 630 00:32:13,080 --> 00:32:15,400 Speaker 11: Taiwan essentially as you know, the same as to Hong 631 00:32:15,520 --> 00:32:18,840 Speaker 11: Kong one country, two systems, except that you're part of 632 00:32:18,920 --> 00:32:23,240 Speaker 11: China and will let you keep your democratic system and 633 00:32:23,280 --> 00:32:26,880 Speaker 11: your way of life largely untouched. But the big lesson 634 00:32:26,920 --> 00:32:29,160 Speaker 11: from Hong Kong obviously is that they promised to keep 635 00:32:29,160 --> 00:32:30,760 Speaker 11: that for fifty years and then they didn't. They just 636 00:32:30,760 --> 00:32:34,480 Speaker 11: swooped in and they have radically changed how things are 637 00:32:34,560 --> 00:32:37,160 Speaker 11: run in Hong Kong, and that really has served as 638 00:32:37,480 --> 00:32:39,600 Speaker 11: a lesson for Taiwan as a whole. 639 00:32:39,640 --> 00:32:42,320 Speaker 3: And Taiwan people have spoken very clearly that that is 640 00:32:42,360 --> 00:32:47,280 Speaker 3: not something that they can accept. But on the other hand, Samson, 641 00:32:47,280 --> 00:32:49,719 Speaker 3: and this is something we've talked about before. We often 642 00:32:49,840 --> 00:32:52,880 Speaker 3: hear that, you know, despite what you hear from pundits 643 00:32:52,920 --> 00:32:57,280 Speaker 3: about all of this geopolitical fear and threats, Taiwan people 644 00:32:57,320 --> 00:33:00,400 Speaker 3: are actually pretty relaxed. They've they've been dealing with this 645 00:33:00,840 --> 00:33:04,040 Speaker 3: for more than seventy years. Is that likely to continue 646 00:33:04,040 --> 00:33:06,320 Speaker 3: to think over the next four years underline? 647 00:33:06,320 --> 00:33:08,440 Speaker 11: For sure. I mean, one of the remarkable things about 648 00:33:08,440 --> 00:33:12,200 Speaker 11: being in Taiwan, living in Taiwan is seeing how much 649 00:33:12,280 --> 00:33:17,760 Speaker 11: more nervous people outside of Taiwan are than people inside Taiwan. 650 00:33:18,200 --> 00:33:21,440 Speaker 11: Will often, you know, get very worried phone calls from 651 00:33:21,480 --> 00:33:24,480 Speaker 11: Hong Kong or Singapore or London on New York people 652 00:33:24,480 --> 00:33:26,840 Speaker 11: worried of you know, is the invasion about to happen? 653 00:33:26,880 --> 00:33:29,960 Speaker 11: How worried are you? And in Taiwan life goes on 654 00:33:30,040 --> 00:33:32,280 Speaker 11: as normal, you know, people, as you say, they're very 655 00:33:32,400 --> 00:33:36,280 Speaker 11: used to these threats or these tensions with China. As 656 00:33:36,320 --> 00:33:39,600 Speaker 11: for how things will play out over the coming four years, 657 00:33:39,600 --> 00:33:42,880 Speaker 11: that that's going to be very interesting to see. Sources 658 00:33:42,960 --> 00:33:45,720 Speaker 11: do indicate to us that there's a good chance that 659 00:33:46,280 --> 00:33:49,480 Speaker 11: China slowly starts to ratchet up the tension. As you 660 00:33:49,560 --> 00:33:52,920 Speaker 11: pointed out at the beginning of this conversation, they appear 661 00:33:52,960 --> 00:33:58,760 Speaker 11: to already be doing that with new sanctions against certain 662 00:33:58,840 --> 00:34:02,720 Speaker 11: individuals in Taiwan. So these are the so called gray 663 00:34:02,840 --> 00:34:07,400 Speaker 11: zone tactics that China deploys, like a range of measures 664 00:34:07,440 --> 00:34:10,960 Speaker 11: that fall below the threshold of outright warfare that are 665 00:34:11,000 --> 00:34:17,120 Speaker 11: designed to influence and coerce Taiwan to do Beijing's bidding. 666 00:34:18,080 --> 00:34:20,919 Speaker 11: The thinking is that we're likely to see a big 667 00:34:20,960 --> 00:34:23,480 Speaker 11: increase in these kinds of tactics over the coming four 668 00:34:23,560 --> 00:34:27,719 Speaker 11: years in an effort to stop Taiwan and voted in 669 00:34:27,719 --> 00:34:32,560 Speaker 11: particular from wanting to give the DPP another four year term. 670 00:34:32,760 --> 00:34:35,040 Speaker 12: Cindy, It's remarkable when you look at the degree of 671 00:34:35,080 --> 00:34:40,200 Speaker 12: concentration of semiconductor manufacturing in Taiwan. This is obviously a 672 00:34:40,280 --> 00:34:43,520 Speaker 12: TSMC story, but we know one of the things that 673 00:34:43,880 --> 00:34:46,520 Speaker 12: the US has been doing, to a lesser extent Europe 674 00:34:46,560 --> 00:34:51,360 Speaker 12: addressing this perhaps over concentration and trying to diversify away 675 00:34:52,040 --> 00:34:55,520 Speaker 12: from Taiwan. Is there concern about that when you look 676 00:34:55,560 --> 00:34:57,400 Speaker 12: at the economics of the island. 677 00:34:57,640 --> 00:35:01,800 Speaker 14: Yeah, there is certainly some concerns and bait within Taiwan 678 00:35:01,920 --> 00:35:05,600 Speaker 14: about whether we should let TSMC to continue to broad 679 00:35:05,800 --> 00:35:09,080 Speaker 14: its ship plants overseas. And that's also a question that 680 00:35:09,120 --> 00:35:13,200 Speaker 14: we asked the incoming President Lighting the last August when 681 00:35:13,239 --> 00:35:15,799 Speaker 14: we had a chance to sit down with him, and 682 00:35:15,840 --> 00:35:19,040 Speaker 14: then Light said at that time that he won't stop 683 00:35:19,120 --> 00:35:22,759 Speaker 14: TSMC from building more chip plants in the US or 684 00:35:22,800 --> 00:35:26,880 Speaker 14: in other countries because he thinks Taiwan has a responsibility 685 00:35:27,239 --> 00:35:31,240 Speaker 14: to the world and the fact that TSMC is diversifying 686 00:35:31,280 --> 00:35:34,560 Speaker 14: its ship plans and building chip plants overseas, it's to 687 00:35:34,680 --> 00:35:39,240 Speaker 14: show that Taiwan's economic advantage and the power of Taiwan. 688 00:35:39,760 --> 00:35:42,560 Speaker 3: That said Cindy. We spoke with Sean Darby from the 689 00:35:42,680 --> 00:35:46,000 Speaker 3: Zuho Securities and he said that the global trend of 690 00:35:46,080 --> 00:35:51,239 Speaker 3: on shoring will actually mean that semiconductor output in Taiwan 691 00:35:51,640 --> 00:35:55,200 Speaker 3: will slow. Now it'll still be TSMC to a certain 692 00:35:55,239 --> 00:35:59,240 Speaker 3: degree and other companies, but jobs in Taiwan may suffer. 693 00:35:59,400 --> 00:36:03,760 Speaker 5: The irony is that the competitive part of Taiwan's semiconductors 694 00:36:04,080 --> 00:36:07,279 Speaker 5: is to some extent being hollowed out through this, you know, 695 00:36:07,320 --> 00:36:10,160 Speaker 5: sort of on shoring in the developed world, and in 696 00:36:10,200 --> 00:36:13,280 Speaker 5: that respect, you're not going to get the same level 697 00:36:13,320 --> 00:36:16,640 Speaker 5: of output growth that you would have had in pre 698 00:36:16,760 --> 00:36:19,719 Speaker 5: proceeding cycles. You know, sometime in two or three years 699 00:36:19,719 --> 00:36:22,799 Speaker 5: from now, in fairness that time, one is going to 700 00:36:22,920 --> 00:36:26,040 Speaker 5: sort of see below trend growth from twenty twenty five 701 00:36:26,160 --> 00:36:29,680 Speaker 5: twenty six purely because they don't have that same facilities 702 00:36:29,680 --> 00:36:30,560 Speaker 5: in situ. 703 00:36:30,800 --> 00:36:33,520 Speaker 3: And Cindy, will that be a problem for a Taiwan 704 00:36:33,640 --> 00:36:35,400 Speaker 3: that some of these jobs will move offshore. 705 00:36:35,800 --> 00:36:38,920 Speaker 14: I think that's definitely something people will keep and close 706 00:36:38,920 --> 00:36:43,560 Speaker 14: eye on from incoming present. Lyes in inaugura speech, it 707 00:36:43,640 --> 00:36:46,640 Speaker 14: is believed that he will certainly talk about his plans 708 00:36:46,640 --> 00:36:50,960 Speaker 14: to boost Taiwan's economy, and also he has already previously 709 00:36:51,000 --> 00:36:56,799 Speaker 14: avowed to continue strengthening Taiwan's chip sectors. We know that 710 00:36:57,120 --> 00:37:01,240 Speaker 14: before his inauguration, he's already set up meeting with representatives 711 00:37:01,400 --> 00:37:05,359 Speaker 14: from the chip industry is trying to understand what would 712 00:37:05,400 --> 00:37:08,319 Speaker 14: be the best policies for the industry and for the 713 00:37:08,360 --> 00:37:12,759 Speaker 14: country as well. So we're sure that from his inaugural 714 00:37:12,800 --> 00:37:16,240 Speaker 14: speech next Monday, we're going to hear more details about 715 00:37:16,239 --> 00:37:19,360 Speaker 14: his plan to beef up Taiwan's economy and how to 716 00:37:19,400 --> 00:37:21,520 Speaker 14: strengthen the chip industry going forward. 717 00:37:21,760 --> 00:37:23,960 Speaker 12: Sam and Cindy, thank you so much for joining us 718 00:37:23,960 --> 00:37:27,960 Speaker 12: and helping us set up the inauguration of Taiwan's new president, 719 00:37:28,120 --> 00:37:31,320 Speaker 12: Light ching Da that will be happening in the week ahead. 720 00:37:31,600 --> 00:37:35,319 Speaker 12: Samson Ellis is Bloomberg's Taipei bureau chief and Cindy Wong 721 00:37:35,600 --> 00:37:40,040 Speaker 12: is deputy bureau chief. In our Taipay newsroom, I'm Dereg 722 00:37:40,080 --> 00:37:42,239 Speaker 12: Krisner along with Brian Curtis in Hong Kong. You can 723 00:37:42,320 --> 00:37:45,200 Speaker 12: catch us weekdays here for Bloomberg Day Break Asia beginning 724 00:37:45,200 --> 00:37:49,000 Speaker 12: at eight am in Hong Kong eight pm on Wall Street. Tom. 725 00:37:49,280 --> 00:37:51,640 Speaker 1: Thank you, Doug, and thank you Brian. And that does 726 00:37:51,680 --> 00:37:54,239 Speaker 1: it for this edition of Bloomberg day Break Weekend. Join 727 00:37:54,360 --> 00:37:56,560 Speaker 1: us again Monday morning at five am Wall Street Time 728 00:37:56,560 --> 00:37:59,000 Speaker 1: for the latest on markets overseas and the news you 729 00:37:59,160 --> 00:38:02,600 Speaker 1: need to start your day. I'm Tom Buzzby. Stay with us. 730 00:38:02,840 --> 00:38:06,000 Speaker 1: Top stories and global business headlines are coming up right now.