Speaker 1: Welcome to the Bloomberg Markets Podcast. I'm Paul Sweeney, along
Speaker 1: with my co host of Bonnie Quinn. Every business day
Speaker 1: we bring you interviews from CEOs, market pros, and Bloomberg experts,
Speaker 1: along with essential market moving news. Find the Bloomberg Markets
Speaker 1: Podcast on Apple Podcasts or wherever you listen to podcasts,
Speaker 1: and on Bloomberg dot com. Just over the last twenty
Speaker 1: four hours, we've had a lot of news, it seems,
Speaker 1: about the hacking of various computer systems. We had the
Speaker 1: Twitter hack where a lot of the big name accounts
Speaker 1: were hacked on Twitter yesterday Today news that the UK,
Speaker 1: US and Canada jointly accusing Russia of cyber tax against
Speaker 1: coronavirus research centers. So again, cybersecurity right back into four
Speaker 1: which we're fortunate now to have Clint Watts joined us
Speaker 1: to talk about this. He's a distinguished Research Fellow with
Speaker 1: the Foreign Policy Research Institute's also senior Fellow the Centator
Speaker 1: for Cyber and Holy and Security at George Washington University. Clint,
Speaker 1: thanks so much for joining us. I think I want
Speaker 1: to start with the potential allegations that the Russians have
Speaker 1: been trying to hack into some of the coronavirus testing sites.
Speaker 1: What do you know about that? Yeah, it's it's not surprising. Um,
Speaker 1: it's a little bit different for them. Traditionally we think
Speaker 1: of the Chinese hacking for intellectual property. That's always been
Speaker 1: a big concern, particularly in the United States. UM. But
Speaker 1: the truth of it is, whoever gets the vaccine first,
Speaker 1: or whoever it can replicate it very cheaply and accelerate
Speaker 1: their ability to get that vaccine, not only are they
Speaker 1: going to be able to protect their own country and
Speaker 1: help their own country, but they will be able to
Speaker 1: really move economically as an exporter. It almost becomes a
Speaker 1: valuable asset for a country if they can gain that.
Speaker 1: So I think any of these countries that are lagging behind,
Speaker 1: that really don't have the ability to develop such a
Speaker 1: vaccine are going to take targets. And one of the
Speaker 1: strategic assets of Russians have we know this from election
Speaker 1: to now is they use hackers prolifically to gain information
Speaker 1: in the UK UH and this at this point not
Speaker 1: just today with the vaccines, but also announcing with their
Speaker 1: parliament UH interpretence from twenty nineteen, it seems to be
Speaker 1: a big target for Russia. It does seem to be
Speaker 1: in the DNA, so to speak. But Clint, isn't there
Speaker 1: an agreement among global superpowers or the ones that months
Speaker 1: were superpowers, that there will be sharing If there is,
Speaker 1: you know, significant breakthroughs when it comes to vaccines and viruses,
Speaker 1: it's in everybody's interest to share this. It is. But
Speaker 1: in this case, and it's interesting because that that was
Speaker 1: really kind of Bill Gates mandate, right. He was taking
Speaker 1: that on to make sure that all these vaccine could
Speaker 1: could be used by everybody. But you have to look
Speaker 1: at it in terms of who's going to be able
Speaker 1: to have the capacity to develop it, who's going to
Speaker 1: have the economic structure and incentives behind it once they
Speaker 1: do develop it and be able to distribute it rapidly
Speaker 1: and all over And whatever country can get out in
Speaker 1: front of that first, he is going to have an advantage.
Speaker 1: You'd just be able to replicate it. You'd be able
Speaker 1: to make more of the vaccine, you be able to
Speaker 1: distribute it quicker, which gives you a leg up geopolitically
Speaker 1: across all countries. I do think there will be sharing, um,
Speaker 1: But just imagine the United States right now, what a
Speaker 1: dire need we have for vaccines so that we can
Speaker 1: get back up on our feet, and if we had
Speaker 1: a competitor that could maybe hold that overhead to a
Speaker 1: different degree, it just becomes a strategic asset over time.
Speaker 1: But do we have any idea as to the uh,
Speaker 1: the protections the security that the healthcare sties, big farmer companies,
Speaker 1: biotopic biotech companies have you know, in place right now
Speaker 1: to protect kind of they're testing and the results. This
Speaker 1: is one of those interesting things where sector by sector,
Speaker 1: as a sector you get hit, the cybersecurity of protections
Speaker 1: become better. So the first people who really get hit,
Speaker 1: we're banks and financials, right, and they stood up to it.
Speaker 1: You saw that with manufacturing next, but healthcare and the
Speaker 1: health care sector lagged, and so did research and development
Speaker 1: for a very long time. Many of the big companies
Speaker 1: UM are very good in terms of protecting their their
Speaker 1: I P in their their networks and their systems. However,
Speaker 1: you're talking about a global, you know, a global vaccine
Speaker 1: race where you see many many companies coming online, probably
Speaker 1: companies that weren't traditionally even trying to pursue a vaccine
Speaker 1: that maybe have an ability to jump over trying to
Speaker 1: enter that market, you're probably going to see excessive communication
Speaker 1: and people that are in a rush. When you're in
Speaker 1: a hurry, you're always more vulnerable for cyber incident or
Speaker 1: a cyber attack. It's easier to be socially engineered. And
Speaker 1: so if you put all these circumstances together, people get hasty,
Speaker 1: people are moving very quickly. It's just a lot of
Speaker 1: opportunities there for someone to penetrate in network. So it
Speaker 1: might be a little less you know, disingenuous or or dangerous.
Speaker 1: Let's say, but until we heard about Russia hacking on vaccines, potentially,
Speaker 1: we yesterday got some major accounts hacked at Twitter, and
Speaker 1: you know, bitcoins come going around the likes of Bill Gates,
Speaker 1: Joe Biden, Brock Obama, Jeff Bezos, Warren buff that they
Speaker 1: were all affected. Who might have been behind this? I mean,
Speaker 1: could it have been some kid with not very much
Speaker 1: to to, you know, to prove except that he could
Speaker 1: do this, or could it have been something more sinister?
Speaker 1: I think it's definitely something more sophisticated than one off
Speaker 1: lucky hacker or individual. This seems to be an organized syndicate.
Speaker 1: What strange is that they chose bitcoin or as a
Speaker 1: bitcoin sort of like aggregation operation. Uh, there's a lot
Speaker 1: of different ways to do cyber attacks to make money.
Speaker 1: That's not one that's necessarily the most profitable. But it
Speaker 1: did really illustrate a weakness or of vulnerability, which is
Speaker 1: if you can get inside Twitter systems and you can
Speaker 1: gravitate towards and be able to manipulate accounts with a
Speaker 1: very high following, which is what they did. They really
Speaker 1: focused on outstanding influencers, big companies. Uh, if you have
Speaker 1: that ability, you can broadcast, you can enter into the
Speaker 1: information space in a very dynamic way. And so you know,
Speaker 1: this seems to be a financial scam and I'm sure
Speaker 1: will get more for Twitter, But imagine how to spend
Speaker 1: the day before the election or the day of the election. Um,
Speaker 1: what if they had taken over media accounts like Bloomberg
Speaker 1: or any of the mainstream media outlets right and started
Speaker 1: putting out in authentic results of elections or ballots. It
Speaker 1: would be would cause mass chaos in an election in
Speaker 1: a scenari and way. We are going to have to
Speaker 1: continue this conversation. It is a fascinating one and it
Speaker 1: will be with us throughout the election and beyond our
Speaker 1: thanks to you, Clint there for joining us well. Given
Speaker 1: the market action that we've seen over the last couple
Speaker 1: of months that bounce off the bottom, a lot of
Speaker 1: investors are asking themselves, you know, how do I play this?
Speaker 1: Do I get in? Is it too late? Even Bill
Speaker 1: Miller uh said value stocks advantages is probably short lived.
Speaker 1: He's counting on a comeback for growth stocks to get
Speaker 1: a sense of kind of maybe where we move from here.
Speaker 1: We welcome Barry Ridholts, Bloomberg opinion columnists and host of
Speaker 1: Masters in Business on Bloomberg. Ready is also founder and
Speaker 1: chief investment officer of Ridholt's Wealth Management. Barry, thanks so
Speaker 1: much for joining us here. Bill Miller talking about growth stocks?
Speaker 1: What do you make of that? So Bill nowhere tells
Speaker 1: a fascinating story about his um come to Jesus moment
Speaker 1: after the eighty seven crash. You know, they had put
Speaker 1: together a nice track record, but in eighty nine they
Speaker 1: really were struggling, and he went back and re evaluated,
Speaker 1: under what circumstances does value beat growth and how can
Speaker 1: we better measure value? When they came up with a
Speaker 1: series of um variations that are different than the traditional
Speaker 1: price to earnings ratio one is straight up return on capitol.
Speaker 1: And as soon as they began to implement these, he
Speaker 1: had a spectacular run from one to two thousand and five,
Speaker 1: fifteen consecutive years of a major fund beating the SMP five.
Speaker 1: There's never been another streak like that in his three
Speaker 1: So when when Bill Miller says, hey, coming out of
Speaker 1: a recession, value is cyclical, it tends to be more
Speaker 1: sensitive to interest rates and to inflation, and it tends
Speaker 1: to to do better. But in a very low yield environment,
Speaker 1: growth is going to be advant is going to have
Speaker 1: the advantage. So don't expect the value stops to be
Speaker 1: growth for very much longer. And Barry has now done
Speaker 1: two Masters in Business podcasts with the legendary Bill Miller.
Speaker 1: I can't recommend them enough. Some things that you really
Speaker 1: would not expect to be in there in there, including
Speaker 1: what Barry has just voiced about, you know, a legendary
Speaker 1: value investor talking about growth stocks so much so, Barry,
Speaker 1: what about finings? I mean, are we do for sort
Speaker 1: of a rollover? You know? I keep seeing these comparisons
Speaker 1: between the run up of the fang stock and and
Speaker 1: the dot com collapse in the late everybody wants to
Speaker 1: draw the wrong lesson from from the implosion we saw
Speaker 1: in two thousand and I think there are There are
Speaker 1: several really specific differences that that are important to note.
Speaker 1: The first is in the nineties, the tech stocks had
Speaker 1: a thousand percent appreciation over five years. Over the past
Speaker 1: five years, uh, the big Tex stocks are up about
Speaker 1: a hundred and seventy. That's a huge difference. It's you know,
Speaker 1: it was five times more aggressive back then than than
Speaker 1: it is today. So that's number one. Second, you cannot
Speaker 1: help but look at the big Tex stocks and notice,
Speaker 1: dear lord, these are cash machines. Microsoft and Apple and
Speaker 1: Google and Facebook. They are just printing money. And and
Speaker 1: now you throw in Netflix, Amazon another one just gaining
Speaker 1: market share, printing money. And on top of everything else,
Speaker 1: Amazon Cloud Services a big profit engine, so very different
Speaker 1: era today, a with profits, not only revenue, but profits
Speaker 1: versus the nineties. Certainly a big difference. But but I
Speaker 1: think the most the difference that explains why the market
Speaker 1: is confounding people to such a large degree. You know,
Speaker 1: people look around and they see the U. S. Economy
Speaker 1: is not doing great. It's improving, but it's still wildly
Speaker 1: off from where it was in this time last year
Speaker 1: or even you know, January February, and the reopening has
Speaker 1: gone poorly. We've we've bungled the whole COVID nineteen management.
Speaker 1: But you look around the rest of the world and
Speaker 1: places like Germany and South Korea and Taiwan and China
Speaker 1: are all doing a better job than than we are.
Speaker 1: And to tie that back to the fangs, to tie
Speaker 1: that back to the big tech companies, these companies derive
Speaker 1: the majority of their revenues from non US sources appled
Speaker 1: most of all, as much as six in some quarters. Uh, Microsoft, Facebook, Google,
Speaker 1: in the you know, about half, maybe a little more Amazon, Netflix,
Speaker 1: also a little more. Amazon is the lagguar because so
Speaker 1: much of the retail sales between whole foods and the
Speaker 1: delivery service is in the US. Um So not only
Speaker 1: are most of the big tech companies getting the majority
Speaker 1: of their revenues from overseas, but overseas is their fastest
Speaker 1: growth markets. Also, it really explains why we could have
Speaker 1: such a mediocre economy in the US and why the
Speaker 1: big text box are doing so well. It's not as
Speaker 1: irrational as it appears. So Barry, I think I know
Speaker 1: a lot of folks would agree with you that the
Speaker 1: US federal governments bungled, to use your term, that the
Speaker 1: response to COVID nineteen. At some point, do the markets
Speaker 1: need to see some significant coordination improvement here to move higher,
Speaker 1: because it seems like despite some of the weaknesses that
Speaker 1: we've seen in key markets at California, Texas, US Florida,
Speaker 1: the market has been generally pretty nonchalant about this flare
Speaker 1: up here. Yeah, so some of that is the improvement overseas.
Speaker 1: Some of that is we were expecting a second wave
Speaker 1: in the fall, and I think some people are incorrectly
Speaker 1: considering this a second wave. This is just an extension
Speaker 1: of the first wave. And I can't help but feel
Speaker 1: that the run of very positive news about UM, the
Speaker 1: various vaccines MODERNA is one and the one out of
Speaker 1: Oxford is the other, and and the improving treatments for
Speaker 1: people even if they do get UM catch coronavirus kind
Speaker 1: of has people looking past this flare up and the
Speaker 1: full flare up to hey, we're very likely to have
Speaker 1: by this time next year, there should be some sort
Speaker 1: of a widespread vaccine. That's a fair guest from a
Speaker 1: non doctor, and I think a lot of the investors
Speaker 1: share my lack of qualifications to open on this, but
Speaker 1: it appears that we're moving in the right direction on
Speaker 1: the medical treatment. Even if we mess up the reopening
Speaker 1: and we mess up the herd immunity, uh, there'll be
Speaker 1: a magic bullet that will allow us to return to
Speaker 1: normal sometime in the future. And and just the market
Speaker 1: seems to be saying, hey, it's a mulligan. Just forget
Speaker 1: about it. Let's look towards Barry, always amazing chatting with you.
Speaker 1: Wanted to talk to you sometimes about Robin Hood as well,
Speaker 1: because apparently yesterday he saw the Robin Hood traders jump
Speaker 1: on the modern A bandwagon as well, and so we'll
Speaker 1: have to see how that plays out. But Barry is
Speaker 1: always full of really down to worth interesting market thoughts.
Speaker 1: He's founder of Riddle's Wealth Management. He's also, of course
Speaker 1: a Bloomberg opinion columnist, and he is also host of
Speaker 1: Masters in Business and do go and have a look
Speaker 1: at those Bill Miller Masters in Business podcasts that he
Speaker 1: put out. One is for a couple of years ago
Speaker 1: and the other is just this week. So really interesting
Speaker 1: stories there from Bill Miller, a legendary investor Barry Rittle's
Speaker 1: thank you. The World Trade Organization has been in existence
Speaker 1: for twenty five years, but it's never been more front
Speaker 1: of mind than in the last couple of years. President
Speaker 1: Trump and Brexit, of course, keeping the w t O
Speaker 1: in the news headlines constantly. Well, the referee at the
Speaker 1: w t O is the apple At Body. Let's welcome
Speaker 1: now the former chairman of the Apple Body of the
Speaker 1: w t O, Jim Bakas Distinguished University Professor of Global
Speaker 1: Affairs at the University of Central Florida and an adjunct
Speaker 1: scholar at the Cato Institute as well. His latest work
Speaker 1: is The Willing World, Shaping and Sharing a sustainable Global Prosperity,
Speaker 1: and that's out from Cambridge University Press. So Mr Bacas,
Speaker 1: thank you so much for joining. Where does the apple
Speaker 1: At Body at the w t O stand at the moment?
Speaker 1: In terms of world significance? Of the Apple at bog
Speaker 1: body stands still because under the rules of the w
Speaker 1: t O Treaty UH, the I Thought Body cannot hear
Speaker 1: any new appeals unless it has at least three members.
Speaker 1: It ordinarily has seven, it currently has one and um
Speaker 1: this is entirely because the United States under President Trump
Speaker 1: has refused to join in the needed consensus with other
Speaker 1: WTO members to appoint two judges. The significance of this
Speaker 1: is that it undermines the ability of the w t
Speaker 1: O to make binding and enforceable judgments in inevitable international
Speaker 1: trade disputes, as it is done in hundreds of cases
Speaker 1: vary successfully over the past twenty five years. Were now
Speaker 1: suddenly back to the days before the w t O,
Speaker 1: in which in effect, any one country can block ruling
Speaker 1: against it by a w t O panel. Thus, we're
Speaker 1: heading towards a situation which anything goes, especially for the
Speaker 1: larger company countries that have the political and economic leverage
Speaker 1: to get away with ignoring w t t TOO rulings.
Speaker 1: So far, the US has been one and the only
Speaker 1: one that has tried this approach. So, Jim, give us
Speaker 1: a sense of how you think this might play out
Speaker 1: at the w t O. Again, as vy as mentioning
Speaker 1: it's been in existence for twenty five years, the US
Speaker 1: has been a willing and able participant in the w
Speaker 1: t of the World Trade Organization to the extent we
Speaker 1: get a new administration in a matter of months, will
Speaker 1: that change perhaps the the way the US views it's
Speaker 1: rolled in the w t O. I think it will um.
Speaker 1: Donald Trump is not going to chan change, support him
Speaker 1: or oppose him. I think we can all agree on that.
Speaker 1: And if he's reelected, this stalemate is likely to continue
Speaker 1: with previous effects in world trade for the United States
Speaker 1: and for all other countries. If Joe Biden is elected,
Speaker 1: I think we'll see a return by the United States
Speaker 1: to more multilateral approaches that give more emphasis to international cooperation.
Speaker 1: The w t O is one of those places in
Speaker 1: which we uh will see that, I think and I
Speaker 1: predict that one of the first evidences of that new
Speaker 1: approach would be the United States joining with other members
Speaker 1: of the w t O to resume the work of
Speaker 1: the Appellate Body. Mr Backus, I mean, we should remind
Speaker 1: people that one of the reasons why the Appellate Body
Speaker 1: is so important is that it protects countries really from
Speaker 1: retaliation against trade partners with you know, without fear of
Speaker 1: expressing their opinion or of you know, not having a
Speaker 1: referee in between the two. So smaller states, you know,
Speaker 1: might be at a disadvantage if it weren't for this
Speaker 1: kind of referee, this global referee. But as we move
Speaker 1: into a period and we've were already in it really
Speaker 1: of countries turning inwards, of you know, states being more
Speaker 1: important again and so on. How can the w t
Speaker 1: O Appellate Body referee in a world like that where
Speaker 1: even trade is almost less important. Well, I don't think
Speaker 1: trade is less important. It's been declining during the pandemic,
Speaker 1: but I think trade links are all the more important
Speaker 1: as they go forward in the world. We have to
Speaker 1: increase global wealth so that we'll be able to address
Speaker 1: all the many problems we have, and we can't increase
Speaker 1: proces verity if we're decreasing trade. As for the Appellate Body, uh,
Speaker 1: it is a panel of jurists. They are independent and
Speaker 1: impartial referee, as you rightly said, and it's important to
Speaker 1: have them there so that we can resolve peacefully and
Speaker 1: positively the trade disputes that inevitably occur in the n
Speaker 1: of all world commerce that it falls within the scope
Speaker 1: of the w q O Treaty. Without an impartial and
Speaker 1: independent judge of these disputes, there is much more danger
Speaker 1: that the disputes could get out of hand, especially in
Speaker 1: today's more precarious and perilous world. Um people forget that
Speaker 1: one of the reasons we invented the trading system in
Speaker 1: the first place, UH after World War two was to
Speaker 1: help prevent World War three, and so far we succeeded
Speaker 1: in that. But in order to continue to see seed
Speaker 1: in that, we need to have a global trading system
Speaker 1: based on agreed rules in which the rules are upheld
Speaker 1: fairly under the rule of law. That's where the impellate
Speaker 1: body comes in. Yeah, it's interesting. We have to play
Speaker 1: continue to follow this, Jim Backus, thanks so much for
Speaker 1: joining us. Jim as a professor of Global affairs at
Speaker 1: the University of Central Florida, Florida and the former chairman
Speaker 1: of the Appellate Body of the World Trade Organization. I
Speaker 1: think it's a really exesting conversation, Vonnie, to think about
Speaker 1: the future of the World Trade Organization, what role is
Speaker 1: going to play in global trade. As as you mentioned, Vannie,
Speaker 1: a lot of countries, not just the United States, a
Speaker 1: lot of countries are starting to look more inward, perhaps
Speaker 1: a little bit less international, a little bit less global,
Speaker 1: And we'll have to see if that is a trend
Speaker 1: that continues. Certainly in the pandemic will certainly have some
Speaker 1: impact on that. It is time for Bloomberg Opinion. We
Speaker 1: are joined by Bloomberg Opinion columnist Michael Schumann. He's author
Speaker 1: UH and columnist Bloomberg Opinion based in Hong Kong. An interesting,
Speaker 1: really fascinating column out today talking about, you know, amid
Speaker 1: the rising tensions between the U S and China, the
Speaker 1: question is to what extent can US companies really decouple
Speaker 1: from China? Michael, thanks so much for joining us. So
Speaker 1: again let's go to that issue there. What are we
Speaker 1: seeing from corporate Americas it thinks about how to deal
Speaker 1: with China, both as a supplier and as a customer. Well,
Speaker 1: I think what what CEO is have to have to
Speaker 1: kind of weak up to is that, you know, there's
Speaker 1: a lot of debate in the US about well, should
Speaker 1: should the US the couple from China? Shouldn't the US
Speaker 1: the couple? What should the strategy be? The reality on
Speaker 1: the ground is that it's kind of already happening. I mean,
Speaker 1: we don't know how far it's going to go. Are
Speaker 1: these two economies really going to pull totally, totally pull apart?
Speaker 1: Probably not. But I think if you're if you're running
Speaker 1: a company, you have to have in your head that
Speaker 1: the relationship with China is changing going forward, and it's
Speaker 1: it's it doesn't look like it's it's really going to
Speaker 1: reverse back to the way things were. So I don't
Speaker 1: even if you don't wanted the couple, even if you
Speaker 1: don't you don't want to change your your business in China,
Speaker 1: I think you have to be thinking out five ten
Speaker 1: years ahead. Well, what are what are my alternatives? What
Speaker 1: you know, what can I do to either decrease my
Speaker 1: reliance on China to diversify both in terms of where
Speaker 1: I'm making my products, will also where I'm selling my products.
Speaker 1: And Michael, this isn't because solely geopolitical issues are causing,
Speaker 1: you know, a bit of a deterioration in the relationship.
Speaker 1: It's also for very practical reasons. You point out in
Speaker 1: your piece, for example, that it's a more useful consumer
Speaker 1: in Southeast Asia than it is and will be in
Speaker 1: China for some time to come. And also that an
Speaker 1: age in China will lose thirty million people whereas the
Speaker 1: Asian region is going to add forty million working age
Speaker 1: people by well, look, you know you can't replace China
Speaker 1: as a consumer market, right, It's I mean, it's one
Speaker 1: point for billion people and they're getting increasingly wealthy and
Speaker 1: they and they increasingly like to spend more and more money.
Speaker 1: So you know, it's not like O, G. I don't
Speaker 1: need this market. At the same time, you know, if
Speaker 1: you're if you're looking to diversify, you're looking for new
Speaker 1: sources of customers, they are out there. When you look
Speaker 1: at projections, for example, the growth of the middle class
Speaker 1: and in places like India, UH, Southeast Asia as you mentioned, uh,
Speaker 1: you know, there's a tremendous amount of potential growth out there.
Speaker 1: And in some cases you know where where China is
Speaker 1: actually forth aging and the working age populations you said,
Speaker 1: they're shrinking in some of these areas for example, and
Speaker 1: you know in Southeast Asia you have much better demographics.
Speaker 1: You're actually you know, any working age people who are
Speaker 1: going to be you know, earning, earning more and more money.
Speaker 1: So you know, again, you know, I don't think anyone
Speaker 1: wants to pull out of the Chinese market and lose
Speaker 1: all that business. But you know, if you're looking to diversify,
Speaker 1: if you're looking for you know, kind of hedging, hedging
Speaker 1: your bets, you know, there are other places out there
Speaker 1: where there's a lot of potential will make a lot
Speaker 1: of money. So it's entering how much of this do
Speaker 1: you think is a result of President Trump and his
Speaker 1: you know, you know, America First type of policy, and
Speaker 1: that perhaps if we were to get a different administration
Speaker 1: here in several months, a Joe Biden administration, uh, that
Speaker 1: presumably would have more traditional globalist views, internationalist views, that
Speaker 1: this trend may be reversed. How much of it is
Speaker 1: politically driven? Do you think? Well, you know, on on
Speaker 1: the U. S side, Uh, you know, I think what's
Speaker 1: really remarkable what's happened in the last let's say three
Speaker 1: to four years, is how how China has really lost
Speaker 1: its friends in Washington. You know. I I don't see
Speaker 1: the Democrats being particularly software on China at this point
Speaker 1: than than the Trump administration is. I think if there's
Speaker 1: a change, if there is a change in the White House,
Speaker 1: maybe some of the tone will be different, some of
Speaker 1: the policies may be different. But are is China going
Speaker 1: to have a friendlier a White House? Probably not in
Speaker 1: kind of the big picture sense, you know. And then
Speaker 1: on the other side, there's politics, you know, going on
Speaker 1: in China as well, And when you look at what's
Speaker 1: happening with decoupling. You know, the Chinese have actually been
Speaker 1: much more aggressive in this. I think I think Beijing,
Speaker 1: looking out in the future, has already decided that China
Speaker 1: is going to have uh, you know, China is not
Speaker 1: going to have the same relationship with the US going
Speaker 1: forward over forty years that they've had in the past
Speaker 1: forty years. And a lot of Chinese policy, let's say,
Speaker 1: on on technology, you know, has really been designed to
Speaker 1: decrease Chinese reliance on on the US. So, you know,
Speaker 1: whatever is happening with US politics, you also have to
Speaker 1: look at what's happening in China, Chinese where Chinese policy
Speaker 1: is going in and Chinese policy is also kind of
Speaker 1: heading in the direction we are looking at decreasing their
Speaker 1: relationship in the United States. So incremental moves like, for example,
Speaker 1: the Secretary of State Mike Pompeo talking about restricting visas
Speaker 1: for some Quawei workers yesterday, and the substantially greater move
Speaker 1: by the UK to actually restrict the use of Huawei
Speaker 1: elements in in in teleconstructure and infrastructure over there. How
Speaker 1: does that impact China? Does it cause China to make
Speaker 1: a sort of a proactive decision about these countries or
Speaker 1: can China afford to ignore those kinds of soft power moves. Well,
Speaker 1: you know, I think what's really interesting about what's going
Speaker 1: on now is I think you're seeing more and more
Speaker 1: governments around the world. You know, you mentioned the UK
Speaker 1: decision on away. I mean, I think you're seeing more
Speaker 1: and more governments around the world reacting very negatively the
Speaker 1: Chinese policy right now, both economic policy would also in
Speaker 1: terms of Hong Kong and and other matters. Uh. And
Speaker 1: you know is the Chinese obviously feels strong enough at
Speaker 1: this moment that they feel that they can do this
Speaker 1: and and uh. But you know, looking at it from
Speaker 1: a pure economic standpoint, Uh, you know, this is still
Speaker 1: an emerging economy. It's it's it's still relatively poor, it
Speaker 1: still needs technology from the rest of the world. And
Speaker 1: China also has huge ambitions to be a technology leader. Uh.
Speaker 1: And if it's going to see doors closing uh to
Speaker 1: it and its companies and its technology around the world,
Speaker 1: you know, that's that's really really negative for China, China's
Speaker 1: economic future. So I I mean, I would hope in
Speaker 1: Beijing that there's a rethink of some of the things
Speaker 1: that they're doing they're doing there does not seem to
Speaker 1: be one at this point. But you know, this is
Speaker 1: not an economic vehicle that that can continue in isolation. Alright,
Speaker 1: Michael's thank you. Fascinating conversations there, and Michael of course
Speaker 1: joining us from Hong Kong. We'll have to ask him
Speaker 1: about the situation on the ground next time he's on.
Speaker 1: Michael Schuman's author Bloomberg opinion columnist and his latest book,
Speaker 1: author of Superpower interrupted the Chinese History of the World,
Speaker 1: and it is fascinating bold because to certain extent, China
Speaker 1: is already well beyond the US in terms of infrastructure,
Speaker 1: in terms of its major cities, and it was maybe
Speaker 1: supposed to be the promised land for American business, as
Speaker 1: Michael Schuman said, but calls are growing louder and louder
Speaker 1: for the two economies to the couplic can be. Yeah,
Speaker 1: that's gonna be really interesting to see, if you know,
Speaker 1: from a supply chain perspective, so much of the product
Speaker 1: we have here in the US comes from China. And
Speaker 1: then of course on the other end, Vannie, you know,
Speaker 1: it's such a big market for so many US companies
Speaker 1: and Western companies in general. So I'll have to see
Speaker 1: how this plays opp it fascinating. Thanks for listening to
Speaker 1: the Boomberg Markets podcast. You can subscribe and listen to
Speaker 1: interviews at Apple, Old Podcasts, or whatever a podcast platform
Speaker 1: you prefer. I'm Bonnie Quinn, I'm on Twitter at Bonnie Quinn,
Speaker 1: and I'm Paul Sweeney. I'm on Twitter at pt Sweeney.
Speaker 1: Before the podcast, you can always catch us worldwide at
Speaker 1: Bloomberg Radio