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Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along

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Speaker 1: with my co host of Bonnie Quinn. Every business day

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Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,

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Speaker 1: along with essential market moving news. Find the Bloomberg Markets

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Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,

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Speaker 1: and on Bloomberg dot com. Just over the last twenty

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Speaker 1: four hours, we've had a lot of news, it seems,

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Speaker 1: about the hacking of various computer systems. We had the

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Speaker 1: Twitter hack where a lot of the big name accounts

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Speaker 1: were hacked on Twitter yesterday Today news that the UK,

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Speaker 1: US and Canada jointly accusing Russia of cyber tax against

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Speaker 1: coronavirus research centers. So again, cybersecurity right back into four

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Speaker 1: which we're fortunate now to have Clint Watts joined us

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Speaker 1: to talk about this. He's a distinguished Research Fellow with

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Speaker 1: the Foreign Policy Research Institute's also senior Fellow the Centator

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Speaker 1: for Cyber and Holy and Security at George Washington University. Clint,

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Speaker 1: thanks so much for joining us. I think I want

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Speaker 1: to start with the potential allegations that the Russians have

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Speaker 1: been trying to hack into some of the coronavirus testing sites.

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Speaker 1: What do you know about that? Yeah, it's it's not surprising. Um,

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Speaker 1: it's a little bit different for them. Traditionally we think

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Speaker 1: of the Chinese hacking for intellectual property. That's always been

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Speaker 1: a big concern, particularly in the United States. UM. But

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Speaker 1: the truth of it is, whoever gets the vaccine first,

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Speaker 1: or whoever it can replicate it very cheaply and accelerate

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Speaker 1: their ability to get that vaccine, not only are they

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Speaker 1: going to be able to protect their own country and

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Speaker 1: help their own country, but they will be able to

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Speaker 1: really move economically as an exporter. It almost becomes a

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Speaker 1: valuable asset for a country if they can gain that.

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Speaker 1: So I think any of these countries that are lagging behind,

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Speaker 1: that really don't have the ability to develop such a

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Speaker 1: vaccine are going to take targets. And one of the

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Speaker 1: strategic assets of Russians have we know this from election

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Speaker 1: to now is they use hackers prolifically to gain information

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Speaker 1: in the UK UH and this at this point not

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Speaker 1: just today with the vaccines, but also announcing with their

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Speaker 1: parliament UH interpretence from twenty nineteen, it seems to be

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Speaker 1: a big target for Russia. It does seem to be

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Speaker 1: in the DNA, so to speak. But Clint, isn't there

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Speaker 1: an agreement among global superpowers or the ones that months

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Speaker 1: were superpowers, that there will be sharing If there is,

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Speaker 1: you know, significant breakthroughs when it comes to vaccines and viruses,

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Speaker 1: it's in everybody's interest to share this. It is. But

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Speaker 1: in this case, and it's interesting because that that was

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Speaker 1: really kind of Bill Gates mandate, right. He was taking

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Speaker 1: that on to make sure that all these vaccine could

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Speaker 1: could be used by everybody. But you have to look

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Speaker 1: at it in terms of who's going to be able

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Speaker 1: to have the capacity to develop it, who's going to

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Speaker 1: have the economic structure and incentives behind it once they

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Speaker 1: do develop it and be able to distribute it rapidly

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Speaker 1: and all over And whatever country can get out in

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Speaker 1: front of that first, he is going to have an advantage.

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Speaker 1: You'd just be able to replicate it. You'd be able

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Speaker 1: to make more of the vaccine, you be able to

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Speaker 1: distribute it quicker, which gives you a leg up geopolitically

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Speaker 1: across all countries. I do think there will be sharing, um,

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Speaker 1: But just imagine the United States right now, what a

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Speaker 1: dire need we have for vaccines so that we can

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Speaker 1: get back up on our feet, and if we had

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Speaker 1: a competitor that could maybe hold that overhead to a

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Speaker 1: different degree, it just becomes a strategic asset over time.

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Speaker 1: But do we have any idea as to the uh,

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Speaker 1: the protections the security that the healthcare sties, big farmer companies,

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Speaker 1: biotopic biotech companies have you know, in place right now

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Speaker 1: to protect kind of they're testing and the results. This

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Speaker 1: is one of those interesting things where sector by sector,

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Speaker 1: as a sector you get hit, the cybersecurity of protections

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Speaker 1: become better. So the first people who really get hit,

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Speaker 1: we're banks and financials, right, and they stood up to it.

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Speaker 1: You saw that with manufacturing next, but healthcare and the

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Speaker 1: health care sector lagged, and so did research and development

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Speaker 1: for a very long time. Many of the big companies

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Speaker 1: UM are very good in terms of protecting their their

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Speaker 1: I P in their their networks and their systems. However,

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Speaker 1: you're talking about a global, you know, a global vaccine

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Speaker 1: race where you see many many companies coming online, probably

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Speaker 1: companies that weren't traditionally even trying to pursue a vaccine

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Speaker 1: that maybe have an ability to jump over trying to

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Speaker 1: enter that market, you're probably going to see excessive communication

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Speaker 1: and people that are in a rush. When you're in

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Speaker 1: a hurry, you're always more vulnerable for cyber incident or

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Speaker 1: a cyber attack. It's easier to be socially engineered. And

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Speaker 1: so if you put all these circumstances together, people get hasty,

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Speaker 1: people are moving very quickly. It's just a lot of

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Speaker 1: opportunities there for someone to penetrate in network. So it

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Speaker 1: might be a little less you know, disingenuous or or dangerous.

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Speaker 1: Let's say, but until we heard about Russia hacking on vaccines, potentially,

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Speaker 1: we yesterday got some major accounts hacked at Twitter, and

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Speaker 1: you know, bitcoins come going around the likes of Bill Gates,

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Speaker 1: Joe Biden, Brock Obama, Jeff Bezos, Warren buff that they

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Speaker 1: were all affected. Who might have been behind this? I mean,

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Speaker 1: could it have been some kid with not very much

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Speaker 1: to to, you know, to prove except that he could

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Speaker 1: do this, or could it have been something more sinister?

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Speaker 1: I think it's definitely something more sophisticated than one off

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Speaker 1: lucky hacker or individual. This seems to be an organized syndicate.

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Speaker 1: What strange is that they chose bitcoin or as a

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Speaker 1: bitcoin sort of like aggregation operation. Uh, there's a lot

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Speaker 1: of different ways to do cyber attacks to make money.

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Speaker 1: That's not one that's necessarily the most profitable. But it

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Speaker 1: did really illustrate a weakness or of vulnerability, which is

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Speaker 1: if you can get inside Twitter systems and you can

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Speaker 1: gravitate towards and be able to manipulate accounts with a

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Speaker 1: very high following, which is what they did. They really

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Speaker 1: focused on outstanding influencers, big companies. Uh, if you have

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Speaker 1: that ability, you can broadcast, you can enter into the

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Speaker 1: information space in a very dynamic way. And so you know,

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Speaker 1: this seems to be a financial scam and I'm sure

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Speaker 1: will get more for Twitter, But imagine how to spend

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Speaker 1: the day before the election or the day of the election. Um,

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Speaker 1: what if they had taken over media accounts like Bloomberg

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Speaker 1: or any of the mainstream media outlets right and started

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Speaker 1: putting out in authentic results of elections or ballots. It

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Speaker 1: would be would cause mass chaos in an election in

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Speaker 1: a scenari and way. We are going to have to

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Speaker 1: continue this conversation. It is a fascinating one and it

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Speaker 1: will be with us throughout the election and beyond our

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Speaker 1: thanks to you, Clint there for joining us well. Given

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Speaker 1: the market action that we've seen over the last couple

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Speaker 1: of months that bounce off the bottom, a lot of

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Speaker 1: investors are asking themselves, you know, how do I play this?

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Speaker 1: Do I get in? Is it too late? Even Bill

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Speaker 1: Miller uh said value stocks advantages is probably short lived.

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Speaker 1: He's counting on a comeback for growth stocks to get

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Speaker 1: a sense of kind of maybe where we move from here.

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Speaker 1: We welcome Barry Ridholts, Bloomberg opinion columnists and host of

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Speaker 1: Masters in Business on Bloomberg. Ready is also founder and

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Speaker 1: chief investment officer of Ridholt's Wealth Management. Barry, thanks so

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Speaker 1: much for joining us here. Bill Miller talking about growth stocks?

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Speaker 1: What do you make of that? So Bill nowhere tells

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Speaker 1: a fascinating story about his um come to Jesus moment

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Speaker 1: after the eighty seven crash. You know, they had put

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Speaker 1: together a nice track record, but in eighty nine they

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Speaker 1: really were struggling, and he went back and re evaluated,

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Speaker 1: under what circumstances does value beat growth and how can

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Speaker 1: we better measure value? When they came up with a

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Speaker 1: series of um variations that are different than the traditional

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Speaker 1: price to earnings ratio one is straight up return on capitol.

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Speaker 1: And as soon as they began to implement these, he

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Speaker 1: had a spectacular run from one to two thousand and five,

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Speaker 1: fifteen consecutive years of a major fund beating the SMP five.

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Speaker 1: There's never been another streak like that in his three

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Speaker 1: So when when Bill Miller says, hey, coming out of

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Speaker 1: a recession, value is cyclical, it tends to be more

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Speaker 1: sensitive to interest rates and to inflation, and it tends

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Speaker 1: to to do better. But in a very low yield environment,

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Speaker 1: growth is going to be advant is going to have

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Speaker 1: the advantage. So don't expect the value stops to be

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Speaker 1: growth for very much longer. And Barry has now done

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Speaker 1: two Masters in Business podcasts with the legendary Bill Miller.

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Speaker 1: I can't recommend them enough. Some things that you really

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Speaker 1: would not expect to be in there in there, including

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Speaker 1: what Barry has just voiced about, you know, a legendary

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Speaker 1: value investor talking about growth stocks so much so, Barry,

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Speaker 1: what about finings? I mean, are we do for sort

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Speaker 1: of a rollover? You know? I keep seeing these comparisons

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Speaker 1: between the run up of the fang stock and and

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Speaker 1: the dot com collapse in the late everybody wants to

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Speaker 1: draw the wrong lesson from from the implosion we saw

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Speaker 1: in two thousand and I think there are There are

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Speaker 1: several really specific differences that that are important to note.

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Speaker 1: The first is in the nineties, the tech stocks had

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Speaker 1: a thousand percent appreciation over five years. Over the past

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Speaker 1: five years, uh, the big Tex stocks are up about

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Speaker 1: a hundred and seventy. That's a huge difference. It's you know,

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Speaker 1: it was five times more aggressive back then than than

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Speaker 1: it is today. So that's number one. Second, you cannot

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Speaker 1: help but look at the big Tex stocks and notice,

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Speaker 1: dear lord, these are cash machines. Microsoft and Apple and

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Speaker 1: Google and Facebook. They are just printing money. And and

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Speaker 1: now you throw in Netflix, Amazon another one just gaining

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Speaker 1: market share, printing money. And on top of everything else,

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Speaker 1: Amazon Cloud Services a big profit engine, so very different

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Speaker 1: era today, a with profits, not only revenue, but profits

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Speaker 1: versus the nineties. Certainly a big difference. But but I

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Speaker 1: think the most the difference that explains why the market

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Speaker 1: is confounding people to such a large degree. You know,

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Speaker 1: people look around and they see the U. S. Economy

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Speaker 1: is not doing great. It's improving, but it's still wildly

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Speaker 1: off from where it was in this time last year

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Speaker 1: or even you know, January February, and the reopening has

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Speaker 1: gone poorly. We've we've bungled the whole COVID nineteen management.

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Speaker 1: But you look around the rest of the world and

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Speaker 1: places like Germany and South Korea and Taiwan and China

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Speaker 1: are all doing a better job than than we are.

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Speaker 1: And to tie that back to the fangs, to tie

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Speaker 1: that back to the big tech companies, these companies derive

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Speaker 1: the majority of their revenues from non US sources appled

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Speaker 1: most of all, as much as six in some quarters. Uh, Microsoft, Facebook, Google,

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Speaker 1: in the you know, about half, maybe a little more Amazon, Netflix,

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Speaker 1: also a little more. Amazon is the lagguar because so

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Speaker 1: much of the retail sales between whole foods and the

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Speaker 1: delivery service is in the US. Um So not only

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Speaker 1: are most of the big tech companies getting the majority

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Speaker 1: of their revenues from overseas, but overseas is their fastest

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Speaker 1: growth markets. Also, it really explains why we could have

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Speaker 1: such a mediocre economy in the US and why the

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Speaker 1: big text box are doing so well. It's not as

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Speaker 1: irrational as it appears. So Barry, I think I know

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Speaker 1: a lot of folks would agree with you that the

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Speaker 1: US federal governments bungled, to use your term, that the

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Speaker 1: response to COVID nineteen. At some point, do the markets

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Speaker 1: need to see some significant coordination improvement here to move higher,

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Speaker 1: because it seems like despite some of the weaknesses that

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Speaker 1: we've seen in key markets at California, Texas, US Florida,

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Speaker 1: the market has been generally pretty nonchalant about this flare

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Speaker 1: up here. Yeah, so some of that is the improvement overseas.

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Speaker 1: Some of that is we were expecting a second wave

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Speaker 1: in the fall, and I think some people are incorrectly

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Speaker 1: considering this a second wave. This is just an extension

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Speaker 1: of the first wave. And I can't help but feel

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Speaker 1: that the run of very positive news about UM, the

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Speaker 1: various vaccines MODERNA is one and the one out of

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Speaker 1: Oxford is the other, and and the improving treatments for

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Speaker 1: of has people looking past this flare up and the

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Speaker 1: full flare up to hey, we're very likely to have

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Speaker 1: by this time next year, there should be some sort

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Speaker 1: of a widespread vaccine. That's a fair guest from a

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Speaker 1: non doctor, and I think a lot of the investors

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Speaker 1: share my lack of qualifications to open on this, but

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Speaker 1: it appears that we're moving in the right direction on

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Speaker 1: the medical treatment. Even if we mess up the reopening

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Speaker 1: and we mess up the herd immunity, uh, there'll be

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Speaker 1: a magic bullet that will allow us to return to

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Speaker 1: normal sometime in the future. And and just the market

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Speaker 1: seems to be saying, hey, it's a mulligan. Just forget

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Speaker 1: about it. Let's look towards Barry, always amazing chatting with you.

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Speaker 1: Wanted to talk to you sometimes about Robin Hood as well,

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Speaker 1: because apparently yesterday he saw the Robin Hood traders jump

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Speaker 1: on the modern A bandwagon as well, and so we'll

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Speaker 1: have to see how that plays out. But Barry is

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Speaker 1: always full of really down to worth interesting market thoughts.

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Speaker 1: He's founder of Riddle's Wealth Management. He's also, of course

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Speaker 1: a Bloomberg opinion columnist, and he is also host of

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Speaker 1: Masters in Business and do go and have a look

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Speaker 1: at those Bill Miller Masters in Business podcasts that he

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Speaker 1: put out. One is for a couple of years ago

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Speaker 1: and the other is just this week. So really interesting

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Speaker 1: stories there from Bill Miller, a legendary investor Barry Rittle's

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Speaker 1: thank you. The World Trade Organization has been in existence

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Speaker 1: for twenty five years, but it's never been more front

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Speaker 1: of mind than in the last couple of years. President

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Speaker 1: Trump and Brexit, of course, keeping the w t O

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Speaker 1: in the news headlines constantly. Well, the referee at the

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Speaker 1: w t O is the apple At Body. Let's welcome

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Speaker 1: now the former chairman of the Apple Body of the

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Speaker 1: w t O, Jim Bakas Distinguished University Professor of Global

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Speaker 1: Affairs at the University of Central Florida and an adjunct

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Speaker 1: scholar at the Cato Institute as well. His latest work

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Speaker 1: is The Willing World, Shaping and Sharing a sustainable Global Prosperity,

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Speaker 1: and that's out from Cambridge University Press. So Mr Bacas,

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Speaker 1: thank you so much for joining. Where does the apple

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Speaker 1: At Body at the w t O stand at the moment?

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Speaker 1: In terms of world significance? Of the Apple at bog

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Speaker 1: body stands still because under the rules of the w

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Speaker 1: t O Treaty UH, the I Thought Body cannot hear

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Speaker 1: any new appeals unless it has at least three members.

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Speaker 1: It ordinarily has seven, it currently has one and um

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Speaker 1: this is entirely because the United States under President Trump

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Speaker 1: has refused to join in the needed consensus with other

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Speaker 1: WTO members to appoint two judges. The significance of this

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Speaker 1: is that it undermines the ability of the w t

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Speaker 1: O to make binding and enforceable judgments in inevitable international

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Speaker 1: trade disputes, as it is done in hundreds of cases

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Speaker 1: vary successfully over the past twenty five years. Were now

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Speaker 1: suddenly back to the days before the w t O,

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Speaker 1: in which in effect, any one country can block ruling

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Speaker 1: against it by a w t O panel. Thus, we're

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Speaker 1: heading towards a situation which anything goes, especially for the

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Speaker 1: larger company countries that have the political and economic leverage

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Speaker 1: to get away with ignoring w t t TOO rulings.

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Speaker 1: So far, the US has been one and the only

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Speaker 1: one that has tried this approach. So, Jim, give us

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Speaker 1: a sense of how you think this might play out

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Speaker 1: at the w t O. Again, as vy as mentioning

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Speaker 1: it's been in existence for twenty five years, the US

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Speaker 1: has been a willing and able participant in the w

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Speaker 1: t of the World Trade Organization to the extent we

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Speaker 1: get a new administration in a matter of months, will

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Speaker 1: that change perhaps the the way the US views it's

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Speaker 1: rolled in the w t O. I think it will um.

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Speaker 1: Donald Trump is not going to chan change, support him

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Speaker 1: or oppose him. I think we can all agree on that.

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Speaker 1: And if he's reelected, this stalemate is likely to continue

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Speaker 1: with previous effects in world trade for the United States

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Speaker 1: and for all other countries. If Joe Biden is elected,

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Speaker 1: I think we'll see a return by the United States

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Speaker 1: to more multilateral approaches that give more emphasis to international cooperation.

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Speaker 1: The w t O is one of those places in

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Speaker 1: which we uh will see that, I think and I

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Speaker 1: predict that one of the first evidences of that new

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Speaker 1: approach would be the United States joining with other members

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Speaker 1: of the w t O to resume the work of

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Speaker 1: the Appellate Body. Mr Backus, I mean, we should remind

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Speaker 1: people that one of the reasons why the Appellate Body

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Speaker 1: is so important is that it protects countries really from

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Speaker 1: retaliation against trade partners with you know, without fear of

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Speaker 1: expressing their opinion or of you know, not having a

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Speaker 1: referee in between the two. So smaller states, you know,

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Speaker 1: might be at a disadvantage if it weren't for this

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Speaker 1: kind of referee, this global referee. But as we move

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Speaker 1: into a period and we've were already in it really

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Speaker 1: of countries turning inwards, of you know, states being more

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Speaker 1: important again and so on. How can the w t

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Speaker 1: O Appellate Body referee in a world like that where

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Speaker 1: even trade is almost less important. Well, I don't think

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Speaker 1: trade is less important. It's been declining during the pandemic,

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Speaker 1: but I think trade links are all the more important

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Speaker 1: as they go forward in the world. We have to

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Speaker 1: increase global wealth so that we'll be able to address

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Speaker 1: all the many problems we have, and we can't increase

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Speaker 1: proces verity if we're decreasing trade. As for the Appellate Body, uh,

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Speaker 1: it is a panel of jurists. They are independent and

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Speaker 1: impartial referee, as you rightly said, and it's important to

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Speaker 1: have them there so that we can resolve peacefully and

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Speaker 1: positively the trade disputes that inevitably occur in the n

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Speaker 1: of all world commerce that it falls within the scope

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Speaker 1: of the w q O Treaty. Without an impartial and

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Speaker 1: independent judge of these disputes, there is much more danger

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Speaker 1: that the disputes could get out of hand, especially in

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Speaker 1: today's more precarious and perilous world. Um people forget that

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Speaker 1: one of the reasons we invented the trading system in

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Speaker 1: the first place, UH after World War two was to

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Speaker 1: help prevent World War three, and so far we succeeded

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Speaker 1: in that. But in order to continue to see seed

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Speaker 1: in that, we need to have a global trading system

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Speaker 1: based on agreed rules in which the rules are upheld

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Speaker 1: fairly under the rule of law. That's where the impellate

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Speaker 1: body comes in. Yeah, it's interesting. We have to play

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Speaker 1: continue to follow this, Jim Backus, thanks so much for

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Speaker 1: joining us. Jim as a professor of Global affairs at

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Speaker 1: the University of Central Florida, Florida and the former chairman

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Speaker 1: of the Appellate Body of the World Trade Organization. I

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Speaker 1: think it's a really exesting conversation, Vonnie, to think about

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Speaker 1: the future of the World Trade Organization, what role is

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Speaker 1: going to play in global trade. As as you mentioned, Vannie,

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Speaker 1: a lot of countries, not just the United States, a

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Speaker 1: lot of countries are starting to look more inward, perhaps

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Speaker 1: a little bit less international, a little bit less global,

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Speaker 1: And we'll have to see if that is a trend

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Speaker 1: that continues. Certainly in the pandemic will certainly have some

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Speaker 1: impact on that. It is time for Bloomberg Opinion. We

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Speaker 1: are joined by Bloomberg Opinion columnist Michael Schumann. He's author

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Speaker 1: UH and columnist Bloomberg Opinion based in Hong Kong. An interesting,

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Speaker 1: really fascinating column out today talking about, you know, amid

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Speaker 1: the rising tensions between the U S and China, the

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Speaker 1: question is to what extent can US companies really decouple

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Speaker 1: from China? Michael, thanks so much for joining us. So

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Speaker 1: again let's go to that issue there. What are we

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Speaker 1: seeing from corporate Americas it thinks about how to deal

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Speaker 1: with China, both as a supplier and as a customer. Well,

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Speaker 1: I think what what CEO is have to have to

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Speaker 1: kind of weak up to is that, you know, there's

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Speaker 1: a lot of debate in the US about well, should

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Speaker 1: should the US the couple from China? Shouldn't the US

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Speaker 1: the couple? What should the strategy be? The reality on

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Speaker 1: the ground is that it's kind of already happening. I mean,

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Speaker 1: we don't know how far it's going to go. Are

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Speaker 1: these two economies really going to pull totally, totally pull apart?

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Speaker 1: Probably not. But I think if you're if you're running

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Speaker 1: a company, you have to have in your head that

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Speaker 1: the relationship with China is changing going forward, and it's

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Speaker 1: it's it doesn't look like it's it's really going to

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Speaker 1: reverse back to the way things were. So I don't

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Speaker 1: even if you don't wanted the couple, even if you

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Speaker 1: don't you don't want to change your your business in China,

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Speaker 1: I think you have to be thinking out five ten

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Speaker 1: years ahead. Well, what are what are my alternatives? What

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Speaker 1: you know, what can I do to either decrease my

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Speaker 1: reliance on China to diversify both in terms of where

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Speaker 1: I'm making my products, will also where I'm selling my products.

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Speaker 1: And Michael, this isn't because solely geopolitical issues are causing,

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Speaker 1: you know, a bit of a deterioration in the relationship.

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Speaker 1: It's also for very practical reasons. You point out in

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Speaker 1: your piece, for example, that it's a more useful consumer

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Speaker 1: in Southeast Asia than it is and will be in

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Speaker 1: China for some time to come. And also that an

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Speaker 1: age in China will lose thirty million people whereas the

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Speaker 1: Asian region is going to add forty million working age

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Speaker 1: people by well, look, you know you can't replace China

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Speaker 1: as a consumer market, right, It's I mean, it's one

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Speaker 1: point for billion people and they're getting increasingly wealthy and

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Speaker 1: they and they increasingly like to spend more and more money.

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Speaker 1: So you know, it's not like O, G. I don't

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Speaker 1: need this market. At the same time, you know, if

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Speaker 1: you're if you're looking to diversify, you're looking for new

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Speaker 1: sources of customers, they are out there. When you look

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Speaker 1: at projections, for example, the growth of the middle class

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Speaker 1: and in places like India, UH, Southeast Asia as you mentioned, uh,

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Speaker 1: you know, there's a tremendous amount of potential growth out there.

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Speaker 1: And in some cases you know where where China is

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Speaker 1: actually forth aging and the working age populations you said,

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Speaker 1: they're shrinking in some of these areas for example, and

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Speaker 1: you know in Southeast Asia you have much better demographics.

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Speaker 1: You're actually you know, any working age people who are

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Speaker 1: going to be you know, earning, earning more and more money.

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Speaker 1: So you know, again, you know, I don't think anyone

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Speaker 1: wants to pull out of the Chinese market and lose

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Speaker 1: all that business. But you know, if you're looking to diversify,

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Speaker 1: if you're looking for you know, kind of hedging, hedging

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Speaker 1: your bets, you know, there are other places out there

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Speaker 1: where there's a lot of potential will make a lot

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Speaker 1: of money. So it's entering how much of this do

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Speaker 1: you think is a result of President Trump and his

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Speaker 1: you know, you know, America First type of policy, and

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Speaker 1: that perhaps if we were to get a different administration

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Speaker 1: here in several months, a Joe Biden administration, uh, that

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Speaker 1: presumably would have more traditional globalist views, internationalist views, that

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Speaker 1: this trend may be reversed. How much of it is

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Speaker 1: politically driven? Do you think? Well, you know, on on

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Speaker 1: the U. S side, Uh, you know, I think what's

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Speaker 1: really remarkable what's happened in the last let's say three

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Speaker 1: to four years, is how how China has really lost

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Speaker 1: its friends in Washington. You know. I I don't see

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Speaker 1: the Democrats being particularly software on China at this point

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Speaker 1: than than the Trump administration is. I think if there's

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Speaker 1: a change, if there is a change in the White House,

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Speaker 1: maybe some of the tone will be different, some of

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Speaker 1: the policies may be different. But are is China going

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Speaker 1: to have a friendlier a White House? Probably not in

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Speaker 1: kind of the big picture sense, you know. And then

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Speaker 1: on the other side, there's politics, you know, going on

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Speaker 1: in China as well, And when you look at what's

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Speaker 1: happening with decoupling. You know, the Chinese have actually been

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Speaker 1: much more aggressive in this. I think I think Beijing,

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Speaker 1: looking out in the future, has already decided that China

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Speaker 1: is going to have uh, you know, China is not

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Speaker 1: going to have the same relationship with the US going

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00:25:48,240 --> 00:25:50,359
Speaker 1: forward over forty years that they've had in the past

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00:25:50,400 --> 00:25:52,680
Speaker 1: forty years. And a lot of Chinese policy, let's say,

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00:25:52,680 --> 00:25:56,280
Speaker 1: on on technology, you know, has really been designed to

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00:25:56,480 --> 00:26:01,520
Speaker 1: decrease Chinese reliance on on the US. So, you know,

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00:26:02,040 --> 00:26:04,159
Speaker 1: whatever is happening with US politics, you also have to

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00:26:04,200 --> 00:26:07,040
Speaker 1: look at what's happening in China, Chinese where Chinese policy

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00:26:07,119 --> 00:26:09,920
Speaker 1: is going in and Chinese policy is also kind of

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00:26:10,520 --> 00:26:13,520
Speaker 1: heading in the direction we are looking at decreasing their

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00:26:13,560 --> 00:26:17,399
Speaker 1: relationship in the United States. So incremental moves like, for example,

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00:26:17,440 --> 00:26:21,280
Speaker 1: the Secretary of State Mike Pompeo talking about restricting visas

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00:26:21,320 --> 00:26:26,240
Speaker 1: for some Quawei workers yesterday, and the substantially greater move

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00:26:26,359 --> 00:26:30,320
Speaker 1: by the UK to actually restrict the use of Huawei

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00:26:30,480 --> 00:26:36,040
Speaker 1: elements in in in teleconstructure and infrastructure over there. How

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00:26:36,080 --> 00:26:39,320
Speaker 1: does that impact China? Does it cause China to make

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00:26:39,440 --> 00:26:42,000
Speaker 1: a sort of a proactive decision about these countries or

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00:26:42,200 --> 00:26:48,720
Speaker 1: can China afford to ignore those kinds of soft power moves. Well,

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00:26:48,800 --> 00:26:51,520
Speaker 1: you know, I think what's really interesting about what's going

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00:26:51,560 --> 00:26:55,520
Speaker 1: on now is I think you're seeing more and more

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00:26:55,640 --> 00:26:58,960
Speaker 1: governments around the world. You know, you mentioned the UK

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00:26:59,080 --> 00:27:01,520
Speaker 1: decision on away. I mean, I think you're seeing more

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00:27:01,560 --> 00:27:05,240
Speaker 1: and more governments around the world reacting very negatively the

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00:27:05,400 --> 00:27:08,680
Speaker 1: Chinese policy right now, both economic policy would also in

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00:27:08,800 --> 00:27:12,639
Speaker 1: terms of Hong Kong and and other matters. Uh. And

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00:27:12,760 --> 00:27:16,280
Speaker 1: you know is the Chinese obviously feels strong enough at

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00:27:16,320 --> 00:27:18,360
Speaker 1: this moment that they feel that they can do this

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00:27:18,440 --> 00:27:22,000
Speaker 1: and and uh. But you know, looking at it from

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00:27:22,040 --> 00:27:25,560
Speaker 1: a pure economic standpoint, Uh, you know, this is still

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00:27:25,600 --> 00:27:29,159
Speaker 1: an emerging economy. It's it's it's still relatively poor, it

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00:27:29,240 --> 00:27:31,600
Speaker 1: still needs technology from the rest of the world. And

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00:27:31,760 --> 00:27:36,000
Speaker 1: China also has huge ambitions to be a technology leader. Uh.

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00:27:36,000 --> 00:27:39,040
Speaker 1: And if it's going to see doors closing uh to

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00:27:39,280 --> 00:27:42,760
Speaker 1: it and its companies and its technology around the world,

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00:27:42,800 --> 00:27:45,840
Speaker 1: you know, that's that's really really negative for China, China's

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00:27:45,880 --> 00:27:48,520
Speaker 1: economic future. So I I mean, I would hope in

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00:27:48,640 --> 00:27:51,280
Speaker 1: Beijing that there's a rethink of some of the things

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00:27:51,359 --> 00:27:53,639
Speaker 1: that they're doing they're doing there does not seem to

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00:27:53,680 --> 00:27:56,840
Speaker 1: be one at this point. But you know, this is

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00:27:56,840 --> 00:28:02,879
Speaker 1: not an economic vehicle that that can continue in isolation. Alright,

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00:28:02,920 --> 00:28:05,920
Speaker 1: Michael's thank you. Fascinating conversations there, and Michael of course

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00:28:05,960 --> 00:28:08,679
Speaker 1: joining us from Hong Kong. We'll have to ask him

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00:28:08,720 --> 00:28:10,919
Speaker 1: about the situation on the ground next time he's on.

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Speaker 1: Michael Schuman's author Bloomberg opinion columnist and his latest book,

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00:28:14,960 --> 00:28:19,360
Speaker 1: author of Superpower interrupted the Chinese History of the World,

475
00:28:19,840 --> 00:28:23,680
Speaker 1: and it is fascinating bold because to certain extent, China

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00:28:23,840 --> 00:28:27,160
Speaker 1: is already well beyond the US in terms of infrastructure,

477
00:28:27,200 --> 00:28:30,240
Speaker 1: in terms of its major cities, and it was maybe

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00:28:30,320 --> 00:28:33,040
Speaker 1: supposed to be the promised land for American business, as

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00:28:33,040 --> 00:28:35,679
Speaker 1: Michael Schuman said, but calls are growing louder and louder

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00:28:35,680 --> 00:28:38,440
Speaker 1: for the two economies to the couplic can be. Yeah,

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00:28:38,480 --> 00:28:40,160
Speaker 1: that's gonna be really interesting to see, if you know,

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00:28:40,200 --> 00:28:43,640
Speaker 1: from a supply chain perspective, so much of the product

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00:28:43,760 --> 00:28:45,880
Speaker 1: we have here in the US comes from China. And

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00:28:45,920 --> 00:28:47,560
Speaker 1: then of course on the other end, Vannie, you know,

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00:28:48,000 --> 00:28:50,400
Speaker 1: it's such a big market for so many US companies

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00:28:50,440 --> 00:28:52,400
Speaker 1: and Western companies in general. So I'll have to see

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00:28:52,400 --> 00:28:55,760
Speaker 1: how this plays opp it fascinating. Thanks for listening to

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00:28:55,760 --> 00:28:59,080
Speaker 1: the Boomberg Markets podcast. You can subscribe and listen to

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00:28:59,160 --> 00:29:02,440
Speaker 1: interviews at Apple, Old Podcasts, or whatever a podcast platform

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00:29:02,520 --> 00:29:05,960
Speaker 1: you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn,

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00:29:06,080 --> 00:29:08,480
Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney.

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00:29:08,520 --> 00:29:11,200
Speaker 1: Before the podcast, you can always catch us worldwide at

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00:29:11,200 --> 00:29:12,000
Speaker 1: Bloomberg Radio