1 00:00:00,240 --> 00:00:07,240 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:10,440 --> 00:00:12,840 Speaker 2: This is Bloomberg day Break Weekend, our global look at 3 00:00:12,840 --> 00:00:14,920 Speaker 2: the top stories in the coming week from our day 4 00:00:14,920 --> 00:00:17,320 Speaker 2: Break anchors all around the world. And straight ahead on 5 00:00:17,360 --> 00:00:20,320 Speaker 2: the program, we'll look ahead to some key inflation data 6 00:00:20,360 --> 00:00:23,840 Speaker 2: in the US how that may impact FED policy moving forward. 7 00:00:24,040 --> 00:00:25,919 Speaker 2: I'm Tom Busby in New York. 8 00:00:26,400 --> 00:00:29,120 Speaker 3: I'm Caroline Headker in London, where we're looking ahead to 9 00:00:29,160 --> 00:00:31,920 Speaker 3: a G twenty meeting without the United States. 10 00:00:32,159 --> 00:00:37,000 Speaker 4: I'm Doug Chrisner looking at the evolving relationship between Presidents Trump. 11 00:00:36,760 --> 00:00:41,280 Speaker 1: And she That's all straight ahead on Bloomberg Daybreak Weekend 12 00:00:41,720 --> 00:00:44,760 Speaker 1: on Bloomberg eleven to three, Yeero, New York, Bloomberg ninety 13 00:00:44,840 --> 00:00:48,519 Speaker 1: nine to one, Washington, DC, Bloomberg ninety two to nine, Boston, 14 00:00:49,040 --> 00:00:53,479 Speaker 1: DAB Digital Radio, London, Sirius XM one twenty one, and 15 00:00:53,600 --> 00:00:56,440 Speaker 1: around the world on Bloomberg Radio, dot Com and the 16 00:00:56,480 --> 00:00:57,760 Speaker 1: Bloomberg Business App. 17 00:01:02,640 --> 00:01:04,480 Speaker 2: Good day to you. I'm Tom Busby, and we begin 18 00:01:04,520 --> 00:01:07,360 Speaker 2: today's program. But we'll look at some key economic data 19 00:01:07,400 --> 00:01:11,479 Speaker 2: here in the US. PCEE read on inflation as well 20 00:01:11,520 --> 00:01:14,760 Speaker 2: as personal spending and personal income data all for the 21 00:01:14,760 --> 00:01:18,040 Speaker 2: month of January that is out on Friday for more 22 00:01:18,120 --> 00:01:20,360 Speaker 2: on what it all means and how this may impact 23 00:01:20,400 --> 00:01:23,720 Speaker 2: Fed policy. We're joined by Stuart Paul, us economists with 24 00:01:23,760 --> 00:01:28,440 Speaker 2: Bloomberg Economics. Stuart, a lot of uncertainty out there, possible 25 00:01:28,480 --> 00:01:31,600 Speaker 2: impact of threatened US tariffs. We've got federal job losses, 26 00:01:31,640 --> 00:01:35,920 Speaker 2: We've got even Walmart this past week seeing sales growth slow. 27 00:01:36,760 --> 00:01:40,679 Speaker 2: One constant is stubbornly high inflation. What's behind it? What 28 00:01:40,720 --> 00:01:43,120 Speaker 2: do you expect to see in the January PCE report 29 00:01:43,160 --> 00:01:45,080 Speaker 2: the Fed's preferred measure of inflation. 30 00:01:45,680 --> 00:01:48,800 Speaker 5: As you mentioned, the core PCE price Index is the 31 00:01:48,880 --> 00:01:53,600 Speaker 5: Fed's preferred measure, and we estimate that monthly core PCEE 32 00:01:53,640 --> 00:01:56,560 Speaker 5: inflation is going to register zero point three percent. That's 33 00:01:56,720 --> 00:02:01,240 Speaker 5: faster than the zero point one percent measured and reported 34 00:02:01,480 --> 00:02:05,280 Speaker 5: in December. So, as you mentioned, stubbornly high inflation, we 35 00:02:05,360 --> 00:02:09,200 Speaker 5: can estimate PCE with a pretty good deal of precision 36 00:02:09,360 --> 00:02:12,919 Speaker 5: because most of its components come from the CPI and 37 00:02:13,000 --> 00:02:16,639 Speaker 5: from the Producer Price Index. So seeing those items earlier 38 00:02:16,680 --> 00:02:20,440 Speaker 5: this month allows us to estimate the PCE index with 39 00:02:20,480 --> 00:02:23,760 Speaker 5: a bit more precision, and from the CPI we're able 40 00:02:23,800 --> 00:02:28,000 Speaker 5: to identify that it's really the price of some discretionary 41 00:02:28,040 --> 00:02:32,400 Speaker 5: services categories, things like accommodations, recreation services that are going 42 00:02:32,440 --> 00:02:36,640 Speaker 5: to be buoying the core PCE measure. From the PPI report, 43 00:02:36,680 --> 00:02:39,720 Speaker 5: we get things like hospital services, and again that's going 44 00:02:39,760 --> 00:02:43,440 Speaker 5: to be boosting the core PCE measure as well. So 45 00:02:43,840 --> 00:02:46,920 Speaker 5: the thing that we now need to consider is whether 46 00:02:47,040 --> 00:02:51,920 Speaker 5: this January increase is really something that's indicative of persistent 47 00:02:51,960 --> 00:02:56,000 Speaker 5: price pressures. We see persistent price pressures, for example, in shelter, 48 00:02:56,280 --> 00:03:00,000 Speaker 5: in auto insurance, some of the some of the category 49 00:03:00,200 --> 00:03:02,760 Speaker 5: is that take a long time to sort of catch 50 00:03:02,840 --> 00:03:05,919 Speaker 5: up to pass price hikes. For example, if it costs 51 00:03:05,919 --> 00:03:08,280 Speaker 5: more to replace your car, it's going to cost more 52 00:03:08,280 --> 00:03:10,760 Speaker 5: to ensure that car as well. So we're still seeing 53 00:03:10,760 --> 00:03:13,480 Speaker 5: some persistent price pressures there. But I do think that 54 00:03:13,520 --> 00:03:17,200 Speaker 5: the January report is going to show some residual seasonality, 55 00:03:17,280 --> 00:03:21,760 Speaker 5: that's to say, annual price increases that aren't fully accounted 56 00:03:21,800 --> 00:03:24,400 Speaker 5: for by the Bureau of Labor Statistics and the Bureau 57 00:03:24,440 --> 00:03:26,960 Speaker 5: of Economic Analysis. I think that we are going to 58 00:03:26,960 --> 00:03:29,920 Speaker 5: see some of that residual seasonality in the January report. 59 00:03:30,560 --> 00:03:34,520 Speaker 2: What about food and energy, you can't ignore those. Everybody 60 00:03:34,560 --> 00:03:38,080 Speaker 2: has to, you know, eat everybody has to heat their home, 61 00:03:38,240 --> 00:03:41,400 Speaker 2: put gas in the car, a real driver for CPI 62 00:03:41,400 --> 00:03:44,320 Speaker 2: and PPI in January, and there's not a whole lot 63 00:03:44,360 --> 00:03:46,880 Speaker 2: of seasonality about it. I mean, except for heating your home, 64 00:03:47,360 --> 00:03:49,880 Speaker 2: that's right. But in the summer you're cooling your homes. 65 00:03:49,720 --> 00:03:52,000 Speaker 5: That's right. So for some energy goods and for some 66 00:03:52,160 --> 00:03:56,000 Speaker 5: energy services, you do have some seasonality. So for example, 67 00:03:56,040 --> 00:04:00,520 Speaker 5: there's summer driving season that boost gasoline prices. Sometimes that's 68 00:04:00,560 --> 00:04:03,320 Speaker 5: more accounted for than at other times in the seasonal 69 00:04:03,320 --> 00:04:06,320 Speaker 5: adjustment factors. What we did see with energy prices, So 70 00:04:06,360 --> 00:04:08,040 Speaker 5: you bring up a really good point about this, is 71 00:04:08,040 --> 00:04:12,040 Speaker 5: that in January it was so incredibly cold that demand 72 00:04:12,120 --> 00:04:17,040 Speaker 5: for power and other utilities was exceptional, and that is 73 00:04:17,680 --> 00:04:21,320 Speaker 5: that is continuing to contribute to headline inflation measures. That's 74 00:04:21,360 --> 00:04:24,719 Speaker 5: why we saw, for example, the major upside surprise in 75 00:04:24,800 --> 00:04:27,560 Speaker 5: headline CPI during the month. It was in large part 76 00:04:27,600 --> 00:04:31,320 Speaker 5: because of energy goods and services. And so that is 77 00:04:31,320 --> 00:04:34,320 Speaker 5: something that consumers are feeling. It is hitting their pocketbooks 78 00:04:34,520 --> 00:04:36,599 Speaker 5: and it is causing them to rain and spending in 79 00:04:36,640 --> 00:04:37,640 Speaker 5: some other categories. 80 00:04:37,760 --> 00:04:40,120 Speaker 2: Well, let's talk about some other data coming out I 81 00:04:40,120 --> 00:04:43,240 Speaker 2: think will tell us a lot personal spending and personal 82 00:04:43,279 --> 00:04:46,640 Speaker 2: incomes for January, the latest monthly jobs report showed that 83 00:04:47,000 --> 00:04:51,200 Speaker 2: wages still increasing. That's not good for inflation. Holiday retail 84 00:04:51,240 --> 00:04:54,320 Speaker 2: spending was strong slowed a little bit just in January. 85 00:04:54,440 --> 00:04:58,480 Speaker 2: But what do you expect to see in those reports? 86 00:04:58,560 --> 00:05:01,160 Speaker 5: It's interesting. I think that the January report is going 87 00:05:01,200 --> 00:05:07,120 Speaker 5: to show a pretty clunky transmission between incomes and spending. 88 00:05:07,600 --> 00:05:09,680 Speaker 5: I think that based on what we saw in the 89 00:05:09,720 --> 00:05:13,400 Speaker 5: jobs report, wages were accelerating during the month, hiring slowed, 90 00:05:13,640 --> 00:05:16,760 Speaker 5: so that tempered personal income growth a little bit, and 91 00:05:16,839 --> 00:05:20,200 Speaker 5: labor intensity, the average number of hours worked per week 92 00:05:20,279 --> 00:05:23,400 Speaker 5: actually declined, so that tempered personal income just a little bit. 93 00:05:23,800 --> 00:05:26,440 Speaker 5: But in January we also get cost of living adjustments 94 00:05:26,440 --> 00:05:28,520 Speaker 5: two and a half percent cost of living adjustments for 95 00:05:28,600 --> 00:05:31,719 Speaker 5: Social Security recipients. We're going to see a higher Medicare 96 00:05:31,720 --> 00:05:35,320 Speaker 5: and Medicaid receipts in a personal income report, and we're 97 00:05:35,440 --> 00:05:39,920 Speaker 5: estimating nearly one percent interest income growth for those who 98 00:05:39,960 --> 00:05:43,640 Speaker 5: are holding financial instruments. So if you factor all of 99 00:05:43,640 --> 00:05:47,520 Speaker 5: those together, we're estimating nearly zero point four percent month 100 00:05:47,560 --> 00:05:50,479 Speaker 5: on month personal income growth. We're a bit higher than consensus, 101 00:05:50,600 --> 00:05:53,960 Speaker 5: and that's a pretty strong personal income growth reading for 102 00:05:54,040 --> 00:05:56,960 Speaker 5: the month of January. On the spending side, though, things 103 00:05:57,000 --> 00:05:59,839 Speaker 5: looked pretty terrible. So nominal spending. 104 00:06:00,080 --> 00:06:00,960 Speaker 2: Don't sugarcoat it. 105 00:06:01,240 --> 00:06:03,120 Speaker 5: No, I'm not going to sugarcoat it. You know that. 106 00:06:03,120 --> 00:06:05,039 Speaker 5: I'll always you know, shoot straight with you here. So 107 00:06:05,640 --> 00:06:09,240 Speaker 5: we estimate that personal income growth declined zero point one 108 00:06:09,279 --> 00:06:12,320 Speaker 5: percent during the month. That's a major retreat from the 109 00:06:12,480 --> 00:06:16,240 Speaker 5: zero point seven percent growth that we saw in December. 110 00:06:16,520 --> 00:06:19,200 Speaker 5: And a big part of that is autos, right, vehicles. 111 00:06:19,560 --> 00:06:23,839 Speaker 5: People purchased vehicles at a way slower pace during the 112 00:06:23,880 --> 00:06:27,000 Speaker 5: month of January, an annualized pace of about fifteen point 113 00:06:27,080 --> 00:06:30,599 Speaker 5: six million units, down from I think nearly sixteen point 114 00:06:30,640 --> 00:06:34,120 Speaker 5: eight million units in December. As I mentioned, weather was 115 00:06:34,160 --> 00:06:37,400 Speaker 5: so terrible you don't want to be out walking on 116 00:06:37,440 --> 00:06:40,440 Speaker 5: an auto dealer's lot in the month of January, especially 117 00:06:40,440 --> 00:06:43,159 Speaker 5: when there was a polar vortex. But beyond that, it 118 00:06:43,200 --> 00:06:46,400 Speaker 5: does look like consumers rained in spending on some of 119 00:06:46,400 --> 00:06:50,839 Speaker 5: the key discretionary goods and services categories, things like furniture, clothing, 120 00:06:51,560 --> 00:06:54,080 Speaker 5: all of those items during the month, even online spending. 121 00:06:54,120 --> 00:06:56,880 Speaker 5: It looks like they really reined it in in January. 122 00:06:57,279 --> 00:07:00,480 Speaker 5: Now here's the thing. Consumers aren't exactly both. During their 123 00:07:00,640 --> 00:07:05,679 Speaker 5: balance sheets, we saw that income growth is pretty high 124 00:07:05,680 --> 00:07:08,479 Speaker 5: and steady. People are raining in their spending, but we 125 00:07:08,600 --> 00:07:10,840 Speaker 5: still think that they're going to have a personal saving 126 00:07:10,920 --> 00:07:13,640 Speaker 5: rate of just about four point three percent during the month. 127 00:07:13,640 --> 00:07:17,000 Speaker 5: That's still exceptionally low. Personal savings is about six and 128 00:07:17,040 --> 00:07:20,720 Speaker 5: a half percent pre COVID, So even as consumers reined 129 00:07:20,720 --> 00:07:23,880 Speaker 5: it in in January, it's still just a lot of 130 00:07:23,880 --> 00:07:25,680 Speaker 5: spending going on on a monthly basis. 131 00:07:25,840 --> 00:07:30,320 Speaker 2: January's Personal Consumption Expenditures Price Index out this Friday, our 132 00:07:30,360 --> 00:07:34,680 Speaker 2: thanks to Stuart paul, Us, economist with Bloomberg Economics. We 133 00:07:34,720 --> 00:07:37,480 Speaker 2: move next to fourth quarter earnings from the artificial intelligence 134 00:07:37,560 --> 00:07:40,880 Speaker 2: chip Giant and Video that is out this Wednesday after 135 00:07:40,920 --> 00:07:43,200 Speaker 2: the close. Now for more on what to expect, we're 136 00:07:43,280 --> 00:07:48,200 Speaker 2: joined by Mandeep Singh, Bloomberg Intelligence Senior tech industry analyst, 137 00:07:48,840 --> 00:07:53,120 Speaker 2: man deep an almost insatiable demand for AI cloud computing, 138 00:07:53,320 --> 00:07:56,720 Speaker 2: data center infrastructure. Are there any headwinds for in Video 139 00:07:56,840 --> 00:07:58,160 Speaker 2: or is it go go go? 140 00:07:58,880 --> 00:08:01,720 Speaker 6: I mean, I would say they're still in their hyper 141 00:08:01,720 --> 00:08:05,320 Speaker 6: growth phase, so that you know, triple digit growth will 142 00:08:05,360 --> 00:08:09,240 Speaker 6: decelerate to maybe you know, fifty percent plus growth this 143 00:08:09,360 --> 00:08:12,600 Speaker 6: quarter is still very impressive and it's still all about 144 00:08:12,680 --> 00:08:16,119 Speaker 6: data centers when it comes to this company. So look, 145 00:08:16,640 --> 00:08:19,800 Speaker 6: there were a few things that happened during the quarter, 146 00:08:20,360 --> 00:08:25,040 Speaker 6: notably the Blackwell shipments. I mean, Jensen said last quarter 147 00:08:25,120 --> 00:08:29,720 Speaker 6: that Blackwell will be a multi billion contributor to this 148 00:08:29,920 --> 00:08:34,319 Speaker 6: quarter's revenue. And then obviously the deep Seek development was 149 00:08:34,400 --> 00:08:39,400 Speaker 6: quite interesting because Nvidia clearly believes that the scaling laws 150 00:08:39,400 --> 00:08:42,000 Speaker 6: are intact when it comes to the scaling of these 151 00:08:42,040 --> 00:08:45,880 Speaker 6: foundational models, and that is the biggest driver of why 152 00:08:46,160 --> 00:08:50,000 Speaker 6: companies are building, you know, massive clusters when it comes 153 00:08:50,000 --> 00:08:55,480 Speaker 6: to two hundred kgpus to one billion GPUs in a cluster. 154 00:08:55,640 --> 00:08:58,400 Speaker 6: So that is supposed to be one of the biggest 155 00:08:58,480 --> 00:09:01,840 Speaker 6: drivers of Nvidia's chip demand, and it would be interesting 156 00:09:01,880 --> 00:09:06,880 Speaker 6: to see if those kind of drivers have changed because 157 00:09:06,920 --> 00:09:07,760 Speaker 6: of Deep Seek. 158 00:09:08,400 --> 00:09:12,160 Speaker 2: Now, Deep Seek, when that bombshell hit Wall Street, they 159 00:09:12,280 --> 00:09:15,040 Speaker 2: say it was using in Vidia chips which they got 160 00:09:15,160 --> 00:09:19,120 Speaker 2: kind of backdoor from Singapore. But let's talk about the 161 00:09:19,200 --> 00:09:22,920 Speaker 2: losses to Nvidia when that happened. Almost six hundred billion 162 00:09:23,000 --> 00:09:24,120 Speaker 2: dollars in market share. 163 00:09:24,720 --> 00:09:27,120 Speaker 6: Yeah, I mean, look, they've recovered a lot of that 164 00:09:27,200 --> 00:09:30,760 Speaker 6: market cap, so it's not as if the losses were permanent. 165 00:09:30,800 --> 00:09:32,960 Speaker 6: I mean, the stock is pretty much back to where 166 00:09:33,440 --> 00:09:36,920 Speaker 6: it was rating prior to Deep Seek. And I think 167 00:09:37,000 --> 00:09:39,800 Speaker 6: in the end it comes down to training versus inferencing. 168 00:09:39,880 --> 00:09:43,360 Speaker 6: These are the two things that everyone is sort of 169 00:09:43,679 --> 00:09:47,200 Speaker 6: focused on when it comes to Invidia's opportunity because a 170 00:09:47,200 --> 00:09:50,880 Speaker 6: lot of these hyperscalers are developing their own chips, and 171 00:09:51,000 --> 00:09:55,360 Speaker 6: hyperscalers make up forty five percent of Nvidia's data center revenue. 172 00:09:55,640 --> 00:09:58,959 Speaker 2: And that's Meta and Amazon, Microsoft. 173 00:10:00,160 --> 00:10:00,719 Speaker 6: Alphabet. 174 00:10:00,840 --> 00:10:01,080 Speaker 7: Yes. 175 00:10:01,600 --> 00:10:05,480 Speaker 6: So, and when you think about Nvidia's data center revenue, 176 00:10:05,480 --> 00:10:07,960 Speaker 6: that's a one hundred and twenty five billion dollar rund 177 00:10:08,040 --> 00:10:13,000 Speaker 6: rate every hyperscaler this quarter guided to CAPEX going up 178 00:10:13,240 --> 00:10:16,320 Speaker 6: and CAPEX going up almost forty to fifty percent for 179 00:10:16,400 --> 00:10:20,520 Speaker 6: twenty twenty five. So if you extrapolate that guide to 180 00:10:20,600 --> 00:10:24,800 Speaker 6: Invidia's numbers, you know, forty five percent revenue exposure, that means, 181 00:10:24,840 --> 00:10:27,319 Speaker 6: you know, Nvidia could very well be doing two hundred 182 00:10:27,360 --> 00:10:30,240 Speaker 6: billion dollars in data center revenue for twenty twenty five 183 00:10:30,679 --> 00:10:33,360 Speaker 6: at you know, and then you layer in the project's 184 00:10:33,440 --> 00:10:38,400 Speaker 6: target announcement, the EU announcement to you know, invest in chips. 185 00:10:38,640 --> 00:10:42,480 Speaker 6: That's incremental revenue from sovereigns, which is a load double 186 00:10:42,520 --> 00:10:47,160 Speaker 6: digit revenue contributor to Nvidia right now. So when you 187 00:10:47,200 --> 00:10:50,320 Speaker 6: put all these things together, the drivers are there for 188 00:10:50,440 --> 00:10:52,920 Speaker 6: Nvidia to do maybe two hundred billion dollars in data 189 00:10:52,960 --> 00:10:54,120 Speaker 6: center revenue this year. 190 00:10:54,320 --> 00:10:56,920 Speaker 2: And some of those hyperscalers are doing their own in 191 00:10:57,400 --> 00:11:00,240 Speaker 2: house GPUs and are they is in Vidio five finding 192 00:11:00,280 --> 00:11:04,440 Speaker 2: new clients new revenue sources besides them. 193 00:11:04,679 --> 00:11:08,920 Speaker 6: Yeah, So that's an interesting point because hyperscalers do have 194 00:11:09,000 --> 00:11:12,520 Speaker 6: their ambitions to use their own chips. I think Google 195 00:11:12,640 --> 00:11:15,520 Speaker 6: is the furthest along in terms of using their own 196 00:11:15,640 --> 00:11:20,720 Speaker 6: TPUs for training and inferencing. Other hyperscalers plan to do that. 197 00:11:21,120 --> 00:11:23,840 Speaker 6: But whether it's going to impact in Video's revenue this 198 00:11:24,000 --> 00:11:26,959 Speaker 6: year or is it more for you know, three four 199 00:11:27,040 --> 00:11:29,920 Speaker 6: years out. I'm more in the camp that this is 200 00:11:29,960 --> 00:11:32,920 Speaker 6: not going to have a big impact this year. But 201 00:11:33,040 --> 00:11:35,120 Speaker 6: clearly that's a big threat. When you have, you know, 202 00:11:35,440 --> 00:11:37,920 Speaker 6: a forty five to fifty percent exposure to four or 203 00:11:37,920 --> 00:11:41,560 Speaker 6: five customers, there is always that concentration risk. 204 00:11:42,120 --> 00:11:45,560 Speaker 2: Well, and that leads to what's next for in video 205 00:11:45,640 --> 00:11:48,160 Speaker 2: this year? Because I know that Blackwell line they've got 206 00:11:48,200 --> 00:11:50,880 Speaker 2: some new products coming out. What are you expecting to see. 207 00:11:51,000 --> 00:11:54,200 Speaker 6: I mean, to me, the key KPI is gross margin 208 00:11:54,280 --> 00:11:57,760 Speaker 6: because last quarter, even though they talked about Blackwell, they 209 00:11:57,760 --> 00:12:02,080 Speaker 6: said gross margins would sort of get compressed a little 210 00:12:02,120 --> 00:12:04,360 Speaker 6: bit in the near term because of the Blackwell ramp 211 00:12:04,360 --> 00:12:06,800 Speaker 6: and they will go back to mid seventy percent once 212 00:12:07,080 --> 00:12:11,120 Speaker 6: Blackwell is fully ramped up. That to me determines the 213 00:12:11,160 --> 00:12:15,000 Speaker 6: supply demand imbalance. The demand commentary is there because there 214 00:12:15,040 --> 00:12:18,000 Speaker 6: is still more demand, but supply seems to be catching 215 00:12:18,040 --> 00:12:21,720 Speaker 6: up when it comes to you know, TSMC adding capacity 216 00:12:21,800 --> 00:12:26,199 Speaker 6: for manufacturing more GPUs. So gross margins is how you 217 00:12:26,360 --> 00:12:28,720 Speaker 6: determined what kind of imbalance we still have. 218 00:12:29,320 --> 00:12:32,719 Speaker 2: Well Nvidia QBOUR earnings out after Wall Street's closing bell 219 00:12:32,840 --> 00:12:36,679 Speaker 2: this coming Wednesday, Our thanks to Mandeep Sing, Bloomberg Intelligence 220 00:12:36,720 --> 00:12:40,400 Speaker 2: senior tech industry analyst. Coming up on Bloomberg day Break weekend, 221 00:12:40,480 --> 00:12:43,200 Speaker 2: we look ahead to a G twenty meeting without the 222 00:12:43,320 --> 00:12:57,880 Speaker 2: United States. I'm Tom Busby, and this is Bloomberg. This 223 00:12:57,960 --> 00:13:00,520 Speaker 2: is Bloomberg Day Break Weekend, our global load at the 224 00:13:00,520 --> 00:13:03,440 Speaker 2: top stories for investors in the coming week. I'm Tom 225 00:13:03,480 --> 00:13:06,160 Speaker 2: Busby in New York. Up later in our program, we'll 226 00:13:06,200 --> 00:13:09,520 Speaker 2: look at the evolving relationship between Washington and Beijing. But 227 00:13:09,640 --> 00:13:13,680 Speaker 2: first global finance ministers will descend on South Africa for 228 00:13:13,720 --> 00:13:16,960 Speaker 2: a G twenty summit this week, following a G twenty 229 00:13:17,000 --> 00:13:20,199 Speaker 2: Foreign ministers meeting just a few days ago. This time, though, 230 00:13:20,240 --> 00:13:24,040 Speaker 2: it's without US Treasury Secretary Scott Besson attending. Can the 231 00:13:24,080 --> 00:13:27,560 Speaker 2: talks be productive without such an important global player choosing 232 00:13:27,600 --> 00:13:30,200 Speaker 2: to be absent? For more, Let's go to London and 233 00:13:30,240 --> 00:13:33,439 Speaker 2: bring in Bloomberg day Break europe Banker Caroline hepgar. 234 00:13:33,559 --> 00:13:36,839 Speaker 3: Tom This year's G twenty gatherings are significant for a 235 00:13:36,920 --> 00:13:39,800 Speaker 3: number of reasons. For one, they're the first meetings to 236 00:13:39,840 --> 00:13:42,800 Speaker 3: take place under the helm of South Africa. They're also 237 00:13:42,840 --> 00:13:45,960 Speaker 3: the first multilateral forums of their kind to be held 238 00:13:46,000 --> 00:13:49,000 Speaker 3: during the new Trump administration, a government that has so 239 00:13:49,160 --> 00:13:53,480 Speaker 3: far made clear its intention to do things differently. In 240 00:13:53,559 --> 00:13:56,240 Speaker 3: terms of the Finance Minister's meeting due to take place 241 00:13:56,280 --> 00:13:59,120 Speaker 3: in the coming days, there couldn't be more on the agenda. 242 00:14:00,080 --> 00:14:05,040 Speaker 3: Trump's paradigm shifting taris will surely likely feature, as will 243 00:14:05,080 --> 00:14:08,600 Speaker 3: growing pressures to ramp up defense spending in the EU 244 00:14:08,720 --> 00:14:12,680 Speaker 3: but perhaps elsewhere. But one leader who won't be participating 245 00:14:12,760 --> 00:14:17,520 Speaker 3: in discussions is US Treasury Secretary Scott Bessent. His decision 246 00:14:17,600 --> 00:14:21,080 Speaker 3: to skip the event comes as Secretary of State Marco 247 00:14:21,200 --> 00:14:26,480 Speaker 3: Rubio also foregoes attending the G twenty Foreign Ministers meeting. Now. 248 00:14:26,560 --> 00:14:29,480 Speaker 3: Rubio said that he was not taking part in those 249 00:14:29,520 --> 00:14:33,680 Speaker 3: discussions because he did not want to quote, waste taxpayer 250 00:14:33,840 --> 00:14:39,520 Speaker 3: money or coddle anti Americanism. Rubio's comments echo President Donald 251 00:14:39,600 --> 00:14:44,560 Speaker 3: Trump's criticism of South Africa's land policy and a threat 252 00:14:44,680 --> 00:14:49,360 Speaker 3: to cut off future funding to the country. In response, 253 00:14:49,400 --> 00:14:53,480 Speaker 3: South Africa's Foreign Ministry reiterated that no land has been 254 00:14:53,560 --> 00:14:58,960 Speaker 3: confiscated and that the expropriation legislation announced by South African 255 00:14:58,960 --> 00:15:03,240 Speaker 3: Presidency Rampa Hoser last month is similar to eminent domain 256 00:15:03,400 --> 00:15:07,200 Speaker 3: laws elsewhere in the world. It also stressed the South 257 00:15:07,200 --> 00:15:12,040 Speaker 3: African government's commitment to addressing global inequality. Now it's unusual 258 00:15:12,080 --> 00:15:15,320 Speaker 3: for a Secretary of State to skip a G twenty summit, 259 00:15:15,640 --> 00:15:19,520 Speaker 3: and Rubio's absence carries perhaps some risks that the US 260 00:15:19,840 --> 00:15:22,360 Speaker 3: is left out of deliberations by some of the world's 261 00:15:22,520 --> 00:15:26,000 Speaker 3: wealthiest countries, and the same is true for Scott Bessent. 262 00:15:26,800 --> 00:15:30,160 Speaker 3: So can a G twenty meeting be effective without the 263 00:15:30,280 --> 00:15:33,880 Speaker 3: United States and what are the implications of this edition 264 00:15:34,200 --> 00:15:37,600 Speaker 3: of the Global leaders gathering for South Africa and for 265 00:15:37,640 --> 00:15:40,120 Speaker 3: the rest of the world. It's something that I've been 266 00:15:40,120 --> 00:15:44,600 Speaker 3: discussing with Bloomberg's Chief Africa correspondent, Jennifer Sabasaja. 267 00:15:45,200 --> 00:15:48,240 Speaker 8: It's important in the sense that this is the first 268 00:15:48,320 --> 00:15:53,240 Speaker 8: convening of the G twenty members as part of South 269 00:15:53,240 --> 00:15:57,640 Speaker 8: Africa's presidency hosting right, and especially if you consider that 270 00:15:57,680 --> 00:16:01,400 Speaker 8: we've seen a changing administration in the US, we're seeing 271 00:16:02,040 --> 00:16:05,640 Speaker 8: changing ties geopolitically with the number of the nations that 272 00:16:05,680 --> 00:16:10,800 Speaker 8: actually make up the G twenty, it is important and 273 00:16:10,880 --> 00:16:13,960 Speaker 8: no doubt it will also carry over into the Finance 274 00:16:14,000 --> 00:16:16,680 Speaker 8: Minister's meeting next week. Now, as you were just mentioning, 275 00:16:17,320 --> 00:16:20,640 Speaker 8: Marco Rubio has said Secretary of Saint Marco Rubio, of 276 00:16:20,640 --> 00:16:22,960 Speaker 8: course from the US, has said he is not attending 277 00:16:23,600 --> 00:16:27,880 Speaker 8: over what he says, our focuses on climate change and 278 00:16:27,920 --> 00:16:32,680 Speaker 8: also DEI we also got word that Finance Treasury Secretary 279 00:16:32,680 --> 00:16:34,800 Speaker 8: excuse me, in the US, Scott Bessett, will also not 280 00:16:34,960 --> 00:16:39,040 Speaker 8: be attending next week, and so you have to wonder, 281 00:16:39,080 --> 00:16:41,920 Speaker 8: really what does the US, how does the US see 282 00:16:41,920 --> 00:16:45,280 Speaker 8: their role within the G twenty moving forward. There are 283 00:16:45,320 --> 00:16:48,080 Speaker 8: still representatives from the US that are going to be here. 284 00:16:48,640 --> 00:16:51,800 Speaker 8: But still South African leaders and officials are planning to 285 00:16:51,840 --> 00:16:55,920 Speaker 8: continue on with this theme of solidarity, equality and sustainability 286 00:16:55,960 --> 00:16:58,600 Speaker 8: and continue to or at least try to strengthen some 287 00:16:58,680 --> 00:17:02,280 Speaker 8: of the relationships of the member nations that are attending. 288 00:17:02,680 --> 00:17:05,719 Speaker 3: And there is a big question about whether discussions can 289 00:17:05,760 --> 00:17:09,320 Speaker 3: be productive without the United States, whether the G twenty 290 00:17:09,359 --> 00:17:12,119 Speaker 3: is still relevant. I mean, these are slightly perennial questions, 291 00:17:12,119 --> 00:17:15,359 Speaker 3: aren't they about G twenty versus G seven or other 292 00:17:15,520 --> 00:17:20,520 Speaker 3: sorts of gatherings, But it's particularly acute now with the US. 293 00:17:20,880 --> 00:17:24,920 Speaker 8: You know, you do bring up a really interesting point, 294 00:17:25,000 --> 00:17:27,800 Speaker 8: especially when you look at the first few weeks of 295 00:17:27,960 --> 00:17:32,920 Speaker 8: the US administration and President Trump choosing to pull from 296 00:17:32,960 --> 00:17:37,199 Speaker 8: a number of multilateral institutions. What we've heard from at 297 00:17:37,280 --> 00:17:40,760 Speaker 8: least South African President Zerial Ramaposa is that he is 298 00:17:40,840 --> 00:17:43,280 Speaker 8: at least trying to get a lot of these more 299 00:17:43,320 --> 00:17:46,800 Speaker 8: developed countries to the table to try and reform some 300 00:17:46,920 --> 00:17:50,320 Speaker 8: of these institutions. And so if we see at least 301 00:17:50,680 --> 00:17:54,000 Speaker 8: a pulling back of the US on the multilateral front, 302 00:17:54,840 --> 00:17:58,080 Speaker 8: what does that mean for a lot of these reforms 303 00:17:58,080 --> 00:17:59,440 Speaker 8: that we are going to see. 304 00:18:00,040 --> 00:18:02,840 Speaker 9: Still, President Ramaposa does believe that he can get a 305 00:18:02,880 --> 00:18:03,280 Speaker 9: lot done. 306 00:18:03,320 --> 00:18:08,200 Speaker 8: There's a number of other issues on his agenda, including 307 00:18:08,240 --> 00:18:12,320 Speaker 8: many things that he has talked about before, including talking 308 00:18:12,359 --> 00:18:15,600 Speaker 8: about debt relief or a number of the nations, a 309 00:18:15,680 --> 00:18:18,560 Speaker 8: number of the Global South as he calls it, and 310 00:18:18,640 --> 00:18:21,439 Speaker 8: also a lot of that being climate finance. Right, we 311 00:18:21,520 --> 00:18:25,560 Speaker 8: talk a lot about how a number of emerging economies 312 00:18:25,760 --> 00:18:28,280 Speaker 8: are the hardest hit when it comes to climate change, 313 00:18:28,280 --> 00:18:30,600 Speaker 8: but of course it's a lot of the developed economies 314 00:18:30,600 --> 00:18:34,040 Speaker 8: that were the actual contributors to that going forward, and 315 00:18:34,080 --> 00:18:36,680 Speaker 8: so there can be some movement on some of these 316 00:18:37,080 --> 00:18:42,480 Speaker 8: to top line priorities, but getting the US to buy 317 00:18:42,560 --> 00:18:45,360 Speaker 8: into some of them is going to be the challenge 318 00:18:45,920 --> 00:18:49,840 Speaker 8: for President Ramoposa, South Africa and the G twenty moving forward. 319 00:18:50,760 --> 00:18:54,840 Speaker 3: Yeah, and how important is it for South Africa that 320 00:18:54,880 --> 00:18:57,560 Speaker 3: these meetings actually go well? I mean they are surely 321 00:18:57,600 --> 00:18:59,520 Speaker 3: banking on this, as you say, to sort of boost 322 00:19:00,119 --> 00:19:05,320 Speaker 3: soft power, but also you know, real things including aid 323 00:19:05,480 --> 00:19:11,120 Speaker 3: for example. Maybe how important is it that these talks 324 00:19:11,200 --> 00:19:14,000 Speaker 3: go well? And we know that South Africa has got 325 00:19:14,200 --> 00:19:18,199 Speaker 3: very high unemployment, there was a dissipation of the support 326 00:19:18,240 --> 00:19:21,520 Speaker 3: for Rama Posa's party at the last election. He's in 327 00:19:21,560 --> 00:19:24,440 Speaker 3: a kind of coalition government. How important is this forum 328 00:19:24,480 --> 00:19:27,720 Speaker 3: then for a proposer and for the future of South Africa. 329 00:19:28,920 --> 00:19:33,720 Speaker 8: Well, the timing of this is pretty unique, especially you 330 00:19:33,920 --> 00:19:37,440 Speaker 8: just talked about how the ruling party or the previously 331 00:19:37,560 --> 00:19:41,640 Speaker 8: ruling party, the ANC, is now in a coalition government 332 00:19:41,720 --> 00:19:45,560 Speaker 8: and so really for the first time we're seeing South 333 00:19:45,600 --> 00:19:50,240 Speaker 8: Africa take the helm as this multi party government on 334 00:19:50,600 --> 00:19:53,840 Speaker 8: the world stage. One person described it to me as 335 00:19:53,880 --> 00:19:57,879 Speaker 8: potentially this is showcasing that democracy is working, at least 336 00:19:58,280 --> 00:20:01,960 Speaker 8: in South Africa. But you know, President Ramaposa is really 337 00:20:02,000 --> 00:20:06,080 Speaker 8: taking this on to progress on a lot of the 338 00:20:06,119 --> 00:20:09,600 Speaker 8: issues that he believes not just South Africa, but a 339 00:20:09,640 --> 00:20:11,520 Speaker 8: lot of African nations the global self. 340 00:20:11,560 --> 00:20:12,800 Speaker 9: As I was mentioning. 341 00:20:12,480 --> 00:20:16,440 Speaker 8: Before, they can put forward a lot of the challenges 342 00:20:16,480 --> 00:20:19,760 Speaker 8: that they've not necessarily been able to because they haven't 343 00:20:19,760 --> 00:20:22,080 Speaker 8: been at the table before. Now they can do that, 344 00:20:22,160 --> 00:20:25,080 Speaker 8: and as the first African nation to hold this G 345 00:20:25,240 --> 00:20:28,760 Speaker 8: twenty presidency, potentially that's an opportunity. 346 00:20:29,200 --> 00:20:30,080 Speaker 9: And it's not just that. 347 00:20:30,200 --> 00:20:31,760 Speaker 8: I mean you take a look at a lot of 348 00:20:31,840 --> 00:20:35,880 Speaker 8: the partnerships here. The EU is a major investor in 349 00:20:36,240 --> 00:20:41,600 Speaker 8: South Africa. China is one of the biggest trade partners 350 00:20:41,600 --> 00:20:44,639 Speaker 8: here with South Africa as well, and so there is 351 00:20:44,720 --> 00:20:48,199 Speaker 8: incentive for a lot of the other member countries to 352 00:20:48,359 --> 00:20:52,159 Speaker 8: also get on board with this. And so yeah, you know, 353 00:20:52,240 --> 00:20:56,320 Speaker 8: I think a good outcome is beneficial for most of 354 00:20:56,359 --> 00:20:57,840 Speaker 8: the members. But you just take a look at the 355 00:20:57,880 --> 00:21:00,560 Speaker 8: geopolitical divisions that we're seeing in the world right now, 356 00:21:00,920 --> 00:21:02,480 Speaker 8: and it's surely going to be a bumpy road. 357 00:21:03,480 --> 00:21:05,800 Speaker 3: Yeah, And with the absence of Marca Rubio and Scott 358 00:21:05,800 --> 00:21:07,960 Speaker 3: Best said, do you think I think that that signals 359 00:21:07,960 --> 00:21:11,280 Speaker 3: that the Trump administration is actually serious about this row? 360 00:21:12,480 --> 00:21:16,240 Speaker 3: You know that their accusations against the South African government 361 00:21:16,560 --> 00:21:20,080 Speaker 3: in terms of the legislation in South Africa, do you 362 00:21:20,119 --> 00:21:22,159 Speaker 3: think that they are going to make good then on 363 00:21:22,240 --> 00:21:24,240 Speaker 3: the threats, for example, to hold AID. 364 00:21:26,080 --> 00:21:30,640 Speaker 8: That's that's the concern here, really, Caroline, because. 365 00:21:30,600 --> 00:21:35,080 Speaker 9: We have seen the back and forth really ramping up. Right. 366 00:21:35,320 --> 00:21:38,720 Speaker 8: It started, as you were mentioning just a few weeks ago, 367 00:21:38,760 --> 00:21:43,760 Speaker 8: when when Trump was criticizing that land Exproporation build that 368 00:21:43,920 --> 00:21:47,120 Speaker 8: you were referencing there, that's a remopos that President Ramoposa 369 00:21:47,200 --> 00:21:47,840 Speaker 8: signed earlier. 370 00:21:47,880 --> 00:21:48,320 Speaker 9: This year. 371 00:21:49,280 --> 00:21:51,439 Speaker 8: But then, of course we've seen in the US the 372 00:21:51,520 --> 00:21:56,359 Speaker 8: retreat from from DEI h and many people would describe 373 00:21:56,920 --> 00:22:00,480 Speaker 8: South Africa at least in its state right now, as 374 00:22:00,560 --> 00:22:04,160 Speaker 8: you know, an example of DEI and so you have 375 00:22:04,240 --> 00:22:07,240 Speaker 8: to wonder what else potentially could the. 376 00:22:07,320 --> 00:22:10,680 Speaker 9: US administration target. It's not just that. 377 00:22:10,760 --> 00:22:14,359 Speaker 8: There's also climate financing, which has been very important for 378 00:22:15,119 --> 00:22:16,560 Speaker 8: South Africa to get on board. 379 00:22:16,600 --> 00:22:19,160 Speaker 9: We know that we've seen the US administration rolling that. 380 00:22:19,240 --> 00:22:23,359 Speaker 8: Back, and also South Africa taking Israel to the ICJ 381 00:22:24,160 --> 00:22:29,239 Speaker 8: over what they see as war crimes, right which we 382 00:22:29,320 --> 00:22:32,800 Speaker 8: know President Trump has a cordial relationship let's call it, 383 00:22:32,840 --> 00:22:36,280 Speaker 8: with Benjamin Netan Yahoo, and so the concern is what 384 00:22:37,000 --> 00:22:39,800 Speaker 8: does this relationship look like. But over the past few 385 00:22:39,800 --> 00:22:42,600 Speaker 8: weeks I've been speaking to a number of South African 386 00:22:42,600 --> 00:22:46,000 Speaker 8: officials about this, and some of them say, on the 387 00:22:46,040 --> 00:22:48,680 Speaker 8: one hand, of course it's a setback if you take 388 00:22:48,680 --> 00:22:51,399 Speaker 8: a look at something like USAID, which has provided a 389 00:22:51,480 --> 00:22:56,000 Speaker 8: number of benefits health benefits for South Africa that could 390 00:22:56,000 --> 00:23:00,520 Speaker 8: be detrimental to this country and to the Africa continent 391 00:23:00,600 --> 00:23:05,280 Speaker 8: more broadly, but it also potentially creates an opportunity for 392 00:23:05,359 --> 00:23:08,280 Speaker 8: other partners. We take a look at bricks, which is 393 00:23:08,359 --> 00:23:13,800 Speaker 8: this block of Brazil, Russia, India, China and South Africa. 394 00:23:14,920 --> 00:23:18,240 Speaker 8: Potentially we see them stepping in. We've seen that over 395 00:23:18,280 --> 00:23:22,040 Speaker 8: the past few years, them trying to make inroads. And 396 00:23:22,119 --> 00:23:25,520 Speaker 8: if we continue to see this retreat, that opens the 397 00:23:25,560 --> 00:23:28,600 Speaker 8: door to some of these other countries to them potentially. 398 00:23:28,119 --> 00:23:28,640 Speaker 9: Fill the gap. 399 00:23:28,880 --> 00:23:31,760 Speaker 8: For what it's worth, before I wrap up, we have 400 00:23:31,920 --> 00:23:35,400 Speaker 8: seen a country like China continue to reiterate its support 401 00:23:35,520 --> 00:23:40,000 Speaker 8: for South Africa, and so you have to wonder whether 402 00:23:40,080 --> 00:23:42,600 Speaker 8: or not this is a gamble the US actually wants 403 00:23:42,680 --> 00:23:47,000 Speaker 8: to take, especially because South Africa is the US's biggest 404 00:23:47,080 --> 00:23:49,960 Speaker 8: trading partner on the African continent. 405 00:23:50,520 --> 00:23:53,119 Speaker 3: Yeah, and I suppose. Finally, then, do you think that 406 00:23:53,200 --> 00:23:55,960 Speaker 3: there is any possibility that South African can try to 407 00:23:56,000 --> 00:23:59,159 Speaker 3: mend its relationships with the Trump White House. 408 00:24:00,960 --> 00:24:05,800 Speaker 8: We've heard President Ramoposa say he is up for negotiation, 409 00:24:06,520 --> 00:24:08,440 Speaker 8: and I think that is key. 410 00:24:09,480 --> 00:24:12,080 Speaker 9: We You know, the expectation was that. 411 00:24:12,240 --> 00:24:16,760 Speaker 8: We were going to see Scott Best and Treasury Secretary 412 00:24:16,800 --> 00:24:20,040 Speaker 8: next week attending the Finance Minister summit. But then also 413 00:24:20,160 --> 00:24:23,439 Speaker 8: later this year, the expectation was that President Trump was 414 00:24:23,520 --> 00:24:26,800 Speaker 8: also going to be here. We don't know yet, what 415 00:24:27,280 --> 00:24:31,040 Speaker 8: this relationship looks like, whether he is physically in attendance 416 00:24:31,119 --> 00:24:33,359 Speaker 8: or not. Though South Africa needs to pass off the 417 00:24:33,400 --> 00:24:37,320 Speaker 8: G twenty presidency to the US for next year, and 418 00:24:37,400 --> 00:24:41,000 Speaker 8: so there needs to be discussions of some sort if 419 00:24:41,000 --> 00:24:46,320 Speaker 8: the US is to remain in the G twenty. But yes, 420 00:24:46,400 --> 00:24:49,040 Speaker 8: you know, we've heard from President Ramoposa saying he wants 421 00:24:49,080 --> 00:24:53,200 Speaker 8: to discuss and to talk about some of the critiques 422 00:24:53,320 --> 00:24:57,280 Speaker 8: that we've heard from the US administration. Many people have 423 00:24:57,440 --> 00:25:00,320 Speaker 8: criticized what we have heard from President Trump about his 424 00:25:00,440 --> 00:25:04,040 Speaker 8: disputes over the land expropriation law, saying it is similar 425 00:25:04,040 --> 00:25:07,440 Speaker 8: to what we see in other countries, and so you know, 426 00:25:08,280 --> 00:25:11,120 Speaker 8: it's going to take quite a bit of mending on 427 00:25:11,200 --> 00:25:13,680 Speaker 8: both parts. And of course we have to note that 428 00:25:13,960 --> 00:25:16,720 Speaker 8: President Trump's very close ally Elon Musk, was born in 429 00:25:16,720 --> 00:25:19,600 Speaker 8: Pretoria here in South Africa, so and he has some 430 00:25:19,640 --> 00:25:21,520 Speaker 8: other advisors that are also from South Africa. 431 00:25:21,640 --> 00:25:25,960 Speaker 9: So definitely one to watch for the next few months. 432 00:25:26,040 --> 00:25:29,240 Speaker 3: Well, my thanks to Bloomberg's Jennifer Zabasaje for speaking to me. 433 00:25:29,359 --> 00:25:32,640 Speaker 3: We'll have full coverage of the upcoming G twenty Finance 434 00:25:32,720 --> 00:25:36,440 Speaker 3: Minister's meeting here on Bloomberg. I'm Caroline Hepka. You can 435 00:25:36,480 --> 00:25:40,040 Speaker 3: catch us every weekday morning for Bloomberg Daybreak Europe, beginning 436 00:25:40,040 --> 00:25:43,000 Speaker 3: at six am in London. That's one am on Wall Street. 437 00:25:43,080 --> 00:25:43,399 Speaker 1: Tom. 438 00:25:43,760 --> 00:25:46,639 Speaker 2: Thank you, Caroline. And coming up on Bloomberg day Break Weekend, 439 00:25:46,720 --> 00:25:50,120 Speaker 2: we'll look at the status of US China relations. I'm 440 00:25:50,160 --> 00:26:03,719 Speaker 2: Tom Busby and this is Bloomberg. This is Bloomberg day 441 00:26:03,720 --> 00:26:05,919 Speaker 2: Break Weekend, our global look ahead of the top stories 442 00:26:05,920 --> 00:26:08,520 Speaker 2: for investors in the coming week. I'm Tom Busby in 443 00:26:08,600 --> 00:26:11,320 Speaker 2: New York. With the threat of even more US tariffs 444 00:26:11,359 --> 00:26:13,280 Speaker 2: looming over China, this may be a good time to 445 00:26:13,280 --> 00:26:17,160 Speaker 2: get a temperature check on relations between Washington and Beijing. 446 00:26:17,600 --> 00:26:20,080 Speaker 2: For more, let's get to the host of the Daybreak 447 00:26:20,080 --> 00:26:22,400 Speaker 2: Asia podcast, Doug Prisner. 448 00:26:22,400 --> 00:26:25,760 Speaker 4: Tom and the week ahead. We'll get China's official PMI figures. 449 00:26:26,080 --> 00:26:26,280 Speaker 2: Now. 450 00:26:26,280 --> 00:26:29,760 Speaker 4: The pmis are a great way to understand sentiment in 451 00:26:29,960 --> 00:26:34,879 Speaker 4: manufacturing and the service's economy. Bloomberg Intelligence says early indicators 452 00:26:34,920 --> 00:26:38,440 Speaker 4: point to weak momentum in both. Now the headwinds for 453 00:26:38,480 --> 00:26:42,600 Speaker 4: the Chinese economy have intensified since President Trump took office. 454 00:26:42,720 --> 00:26:45,480 Speaker 4: For a closer look, let's bring in Jenny Marsh team 455 00:26:45,560 --> 00:26:49,000 Speaker 4: leader for Greater China ECO GOV. She joins us from 456 00:26:49,040 --> 00:26:51,800 Speaker 4: the Bloomberg Studios in Hong Kong. Jenny, thank you for 457 00:26:51,840 --> 00:26:53,639 Speaker 4: making time to chat with us. I think we have 458 00:26:53,720 --> 00:26:55,679 Speaker 4: to begin with the tariff story as a way of 459 00:26:55,800 --> 00:26:59,639 Speaker 4: understanding where US China relations are at the moment. Is 460 00:26:59,640 --> 00:27:00,000 Speaker 4: that fair? 461 00:27:00,600 --> 00:27:03,680 Speaker 7: Absolutely, it's probably you know, the biggest sort of unknown 462 00:27:03,720 --> 00:27:06,360 Speaker 7: factor right that's sort of hanging over the economy this year. 463 00:27:06,560 --> 00:27:08,680 Speaker 4: We know that the US did hike tariffs by ten 464 00:27:08,720 --> 00:27:11,879 Speaker 4: percent on all Chinese imports in early February. Is it 465 00:27:11,920 --> 00:27:14,200 Speaker 4: fair to say that that came a little bit before 466 00:27:14,359 --> 00:27:16,680 Speaker 4: Beijing was prepared for tariffs. 467 00:27:17,160 --> 00:27:19,800 Speaker 7: I would imagine Beijing was prepared for tariffs on day one. 468 00:27:20,080 --> 00:27:23,080 Speaker 7: You know, I remember that first day Trump took office 469 00:27:23,080 --> 00:27:26,080 Speaker 7: and sort of actually the surprise was nothing on China 470 00:27:26,119 --> 00:27:28,439 Speaker 7: on day one. Then of course on day two he 471 00:27:28,480 --> 00:27:32,240 Speaker 7: started talking about tariffs. But you know, I think despite 472 00:27:32,280 --> 00:27:34,200 Speaker 7: all of the sort of claims he's made about sort 473 00:27:34,200 --> 00:27:37,359 Speaker 7: of tariffs on chips and steel and the threats with 474 00:27:37,400 --> 00:27:40,280 Speaker 7: Canada and Mexico, China is the only country right now 475 00:27:40,600 --> 00:27:43,439 Speaker 7: that Trump was actually enacted at tariff on since he 476 00:27:43,480 --> 00:27:46,080 Speaker 7: came into office. And so while it's only ten percent 477 00:27:46,160 --> 00:27:49,040 Speaker 7: right now. They are sort of actually the first in 478 00:27:49,119 --> 00:27:52,320 Speaker 7: the firing line, and there's plenty more reason to think 479 00:27:52,320 --> 00:27:54,520 Speaker 7: that more is to come with that April one deadline 480 00:27:54,520 --> 00:27:57,480 Speaker 7: hanging over them for reviewing the first trade deal that 481 00:27:57,480 --> 00:27:58,200 Speaker 7: Trump has ordered. 482 00:27:58,320 --> 00:28:01,040 Speaker 4: Before we address kind of the US and A relationship, 483 00:28:01,080 --> 00:28:05,000 Speaker 4: how is the impact of these US tariffs impacting sentiment 484 00:28:05,080 --> 00:28:05,919 Speaker 4: right now in China. 485 00:28:06,520 --> 00:28:09,480 Speaker 7: It's actually kind of interesting because you know, the trade 486 00:28:09,560 --> 00:28:11,080 Speaker 7: has been there for a long time, but when you 487 00:28:11,080 --> 00:28:14,639 Speaker 7: speak to economists and sort of people on shore in China, 488 00:28:15,080 --> 00:28:17,280 Speaker 7: what they're actually talking about right now is Deep Seek. 489 00:28:17,760 --> 00:28:20,640 Speaker 7: And so this sort of surprise AI breakthrough from deep Seek, 490 00:28:20,680 --> 00:28:23,560 Speaker 7: which was the consumer platform, was unveiled the day Trump 491 00:28:23,640 --> 00:28:27,080 Speaker 7: came into office. That has sort of given this massive 492 00:28:27,119 --> 00:28:30,200 Speaker 7: sort of boost to animal spirits. So it sparked I 493 00:28:30,200 --> 00:28:32,840 Speaker 7: think it was a one point three trillion rally in 494 00:28:32,960 --> 00:28:35,480 Speaker 7: China stocks. And then she is trying to sort of 495 00:28:35,480 --> 00:28:39,000 Speaker 7: capitalize on that momentum by meeting Jack mar for the 496 00:28:39,040 --> 00:28:42,800 Speaker 7: first time since the crackdown on his company back in 497 00:28:42,840 --> 00:28:45,480 Speaker 7: twenty twenty, and a whole other sort of range of 498 00:28:45,480 --> 00:28:48,760 Speaker 7: sort of tech luminaries earlier this week. So I think people. 499 00:28:49,240 --> 00:28:52,640 Speaker 7: The sort of the negativity from the prospect of tariffs 500 00:28:53,080 --> 00:28:55,080 Speaker 7: is built in, and people have been very prepared for 501 00:28:55,120 --> 00:28:57,560 Speaker 7: that for a while, and really they were facing a 502 00:28:57,560 --> 00:29:01,960 Speaker 7: lot of sort of pressures under Biden too, So in 503 00:29:02,040 --> 00:29:05,440 Speaker 7: terms of sentiment, it isn't this sort of gloomy, worried 504 00:29:05,680 --> 00:29:09,440 Speaker 7: sentiment permeating China necessarily. What actually is capturing the mood 505 00:29:09,480 --> 00:29:11,480 Speaker 7: right now is the AI breakthrough in this sort of 506 00:29:11,480 --> 00:29:14,520 Speaker 7: momentum behind tech and finally some hopes that the private 507 00:29:14,560 --> 00:29:16,640 Speaker 7: sector might be getting back into swing. 508 00:29:17,040 --> 00:29:19,520 Speaker 4: So I'm understanding that as a way to say that 509 00:29:19,560 --> 00:29:23,080 Speaker 4: she is capturing this moment to maybe make the case 510 00:29:23,120 --> 00:29:26,440 Speaker 4: that China can be less reliant on its export economy 511 00:29:26,480 --> 00:29:29,280 Speaker 4: and become a little bit more domestically driven on the 512 00:29:29,320 --> 00:29:32,080 Speaker 4: demand side, which is something that he has been after 513 00:29:32,160 --> 00:29:33,880 Speaker 4: for quite some time exactly. 514 00:29:33,960 --> 00:29:36,320 Speaker 7: And the meeting earlier this week, you know, he had 515 00:29:36,600 --> 00:29:41,160 Speaker 7: the bosses from buid Chow, me Deep Seek, you know, 516 00:29:41,360 --> 00:29:43,760 Speaker 7: Jack Maler was there. It was really a display of 517 00:29:43,800 --> 00:29:46,960 Speaker 7: like these all of our national champions which are rolling 518 00:29:47,000 --> 00:29:50,720 Speaker 7: out well beating innovations. There's plenty of reason to believe 519 00:29:50,720 --> 00:29:53,479 Speaker 7: in this economy. And they have said that boosting domestic 520 00:29:53,520 --> 00:29:56,000 Speaker 7: demand is the number one priority this year, you know, 521 00:29:56,040 --> 00:29:58,479 Speaker 7: and that is the best way they can insulate themselves 522 00:29:58,520 --> 00:30:01,000 Speaker 7: from these tarves that are coming by really sort of 523 00:30:01,920 --> 00:30:03,240 Speaker 7: reving up demand at home. 524 00:30:03,640 --> 00:30:07,520 Speaker 4: So how would you describe the current relationship between Beijing 525 00:30:07,600 --> 00:30:08,800 Speaker 4: and Washington right now? 526 00:30:09,320 --> 00:30:11,680 Speaker 7: I think it's sort of in this holding pattern of 527 00:30:11,720 --> 00:30:14,520 Speaker 7: wait and see. But on the surface of things, you know, 528 00:30:14,600 --> 00:30:17,880 Speaker 7: you've got a US president who is very happy to 529 00:30:17,920 --> 00:30:20,240 Speaker 7: be very sort of dubvish on Sijin paying in public, 530 00:30:20,600 --> 00:30:22,320 Speaker 7: he calls him a great guy. He said that he 531 00:30:22,360 --> 00:30:25,800 Speaker 7: thinks he's brilliant. So in that side of things, I think, 532 00:30:25,840 --> 00:30:29,520 Speaker 7: you know, things are actually warmer than during the Biden administration. 533 00:30:30,200 --> 00:30:32,680 Speaker 7: But obviously, you know, they have this trade war that 534 00:30:32,800 --> 00:30:35,960 Speaker 7: is now underway, and I think for China they're really 535 00:30:36,000 --> 00:30:38,720 Speaker 7: just sort of waiting to see exactly what it is 536 00:30:38,760 --> 00:30:41,400 Speaker 7: that Trump wants. There are all kinds of reports out 537 00:30:41,440 --> 00:30:44,960 Speaker 7: there sort of citing people who are advising Trump saying 538 00:30:44,960 --> 00:30:47,240 Speaker 7: that he now is sort of thinking about this as 539 00:30:47,280 --> 00:30:49,800 Speaker 7: a grand deal that he could strike with Beijing that 540 00:30:49,840 --> 00:30:52,440 Speaker 7: would go beyond trade, So looking at all kinds of 541 00:30:52,480 --> 00:30:56,520 Speaker 7: things like nuclear sort of weapons, rolling back those programs. 542 00:30:56,640 --> 00:30:59,960 Speaker 7: So I think the silence from Beijing during this first 543 00:31:00,120 --> 00:31:02,920 Speaker 7: month of the Trump administration has been extremely telling. They're 544 00:31:02,960 --> 00:31:05,600 Speaker 7: kind of just sitting back and really waiting to see 545 00:31:05,800 --> 00:31:08,280 Speaker 7: what Trump does, sort of what his biggest sort of 546 00:31:08,320 --> 00:31:10,479 Speaker 7: demands are going to be from China, I think, and 547 00:31:10,560 --> 00:31:13,800 Speaker 7: being very very careful not to provoke anything, you know. 548 00:31:14,640 --> 00:31:16,640 Speaker 7: I think it was jd Vance who said overnight sort 549 00:31:16,680 --> 00:31:20,120 Speaker 7: of criticizing Trump is one of the worst negotiating tactics 550 00:31:20,160 --> 00:31:23,040 Speaker 7: that you could ever possibly try to do, and I 551 00:31:23,040 --> 00:31:25,400 Speaker 7: think basically understands that, and you can see from state 552 00:31:25,440 --> 00:31:28,280 Speaker 7: media they're being very very careful not to take any 553 00:31:28,280 --> 00:31:30,920 Speaker 7: swipes or do anything which could sort of hurt themselves. 554 00:31:31,240 --> 00:31:33,240 Speaker 4: One of the things that we've heard from the president 555 00:31:33,720 --> 00:31:36,720 Speaker 4: is his intention on ending war in Ukraine. Can you 556 00:31:36,800 --> 00:31:40,600 Speaker 4: imagine a world where China is a part of this conversation? 557 00:31:41,120 --> 00:31:45,080 Speaker 7: Absolutely. I mean, it's really interesting because a lot of 558 00:31:45,080 --> 00:31:47,360 Speaker 7: what Trump is actually in our sort of saying and 559 00:31:47,400 --> 00:31:50,080 Speaker 7: agreeing to is kind of what China had put forward 560 00:31:50,080 --> 00:31:52,800 Speaker 7: in this peace plan years ago that we was sort 561 00:31:52,800 --> 00:31:55,520 Speaker 7: of derided in the West, but they basically sort of 562 00:31:55,520 --> 00:31:59,160 Speaker 7: advocated for a frozen conflict, a ceasefire that obviously wasn't 563 00:31:59,200 --> 00:32:02,560 Speaker 7: acceptable to UK because it would have involved seeding territory. 564 00:32:02,560 --> 00:32:05,440 Speaker 7: But China's priority is always sort of just to try 565 00:32:05,520 --> 00:32:09,400 Speaker 7: and stop the conflict, and so the deal that Trump 566 00:32:09,440 --> 00:32:13,320 Speaker 7: is trying to strike with Putin is exactly that. And 567 00:32:13,560 --> 00:32:15,480 Speaker 7: Trump himself has sort of talked about having a three 568 00:32:15,480 --> 00:32:18,840 Speaker 7: way meeting with she, Putin and himself. So I can 569 00:32:18,920 --> 00:32:22,000 Speaker 7: see China coming to the table. What China would offer 570 00:32:22,400 --> 00:32:24,680 Speaker 7: in terms of a peace deal, I think is much trickier. 571 00:32:25,040 --> 00:32:27,160 Speaker 7: You know, there have been reports that perhaps China could 572 00:32:27,200 --> 00:32:30,200 Speaker 7: be involved in peacekeeping operations. I think you know, it 573 00:32:30,240 --> 00:32:31,920 Speaker 7: does that in other parts of the world as part 574 00:32:31,960 --> 00:32:35,480 Speaker 7: of the UN framework. I don't see any benefit to 575 00:32:35,560 --> 00:32:39,080 Speaker 7: China for directly sending in troops, particularly with the risk 576 00:32:39,160 --> 00:32:42,240 Speaker 7: looming that you know, this isn't Putin's sort of last 577 00:32:42,320 --> 00:32:45,240 Speaker 7: rodeo in Ukraine. He came for Crimea in twenty fourteen, 578 00:32:45,800 --> 00:32:48,760 Speaker 7: then he went back in in twenty twenty two. You know, 579 00:32:48,800 --> 00:32:51,360 Speaker 7: if you've got Chinese peacekeeping troops on the ground and 580 00:32:51,360 --> 00:32:53,360 Speaker 7: Putin makes another strike in sort of four or five 581 00:32:53,400 --> 00:32:56,320 Speaker 7: years time, that would put China in a very different, 582 00:32:56,480 --> 00:33:00,440 Speaker 7: different and difficult position with Moscow. So I think, you know, 583 00:33:00,600 --> 00:33:03,720 Speaker 7: what China can actually offer really remains to be seen. 584 00:33:04,200 --> 00:33:07,960 Speaker 4: I'm wondering if you look at the Trump administration's approach 585 00:33:08,040 --> 00:33:11,760 Speaker 4: to Ukraine and you maybe draw a conclusion on how 586 00:33:12,000 --> 00:33:15,400 Speaker 4: the Trump administration would deal with China visa VI Taiwan, 587 00:33:15,600 --> 00:33:16,560 Speaker 4: is that a fair statement. 588 00:33:16,960 --> 00:33:19,320 Speaker 7: I think that is one of the big questions, you know. 589 00:33:20,240 --> 00:33:24,840 Speaker 7: I mean, China sees the Ukraine and Taiwan sort of differently. 590 00:33:25,040 --> 00:33:27,960 Speaker 7: But essentially, if the message that putin that Trump gives 591 00:33:28,000 --> 00:33:30,640 Speaker 7: to putin is you have a you know, there was 592 00:33:30,640 --> 00:33:33,440 Speaker 7: a free pass to make this invasion. He blamed. He 593 00:33:33,560 --> 00:33:37,040 Speaker 7: blamed the war on Zelenski, right, So if you're if 594 00:33:37,080 --> 00:33:39,560 Speaker 7: you're cheating paying you know, how do you read that 595 00:33:39,560 --> 00:33:42,120 Speaker 7: in the Taiwan context? You probably think, Okay, you're not 596 00:33:42,120 --> 00:33:45,160 Speaker 7: going to get so much pushback. But I would say 597 00:33:45,600 --> 00:33:48,120 Speaker 7: there's a lot more holding back the Chinese government from 598 00:33:48,160 --> 00:33:50,600 Speaker 7: evade in Taiwan than just US pressure. You know, when 599 00:33:50,640 --> 00:33:53,000 Speaker 7: you go to China and you speak to people there 600 00:33:53,000 --> 00:33:55,320 Speaker 7: who sort of inform the foreign ministry and are in 601 00:33:55,360 --> 00:33:59,280 Speaker 7: policy circles, I've never met anybody who thinks that China 602 00:33:59,480 --> 00:34:01,840 Speaker 7: is on the very of invading Taiwan. You know, they 603 00:34:01,960 --> 00:34:04,840 Speaker 7: much prefer this idea of a peaceful reunification and the 604 00:34:04,840 --> 00:34:07,080 Speaker 7: way that the government is composed right now in Taipei, 605 00:34:07,160 --> 00:34:09,200 Speaker 7: you know the KMT, which is more pro China is 606 00:34:09,520 --> 00:34:12,279 Speaker 7: very very powerful. So it isn't to say that this 607 00:34:12,320 --> 00:34:14,920 Speaker 7: is going to give shooting Pinks for a free pass 608 00:34:14,920 --> 00:34:17,879 Speaker 7: to invade Taiwan, but it certainly gives them a lot 609 00:34:17,880 --> 00:34:19,080 Speaker 7: more space to be bolder. 610 00:34:19,480 --> 00:34:22,920 Speaker 4: So next month in China will have the annual Plannary Sessions. 611 00:34:22,960 --> 00:34:27,400 Speaker 4: That's when the National People's Congress and the Chinese People's 612 00:34:27,520 --> 00:34:31,399 Speaker 4: Political Consultative Conference hold their annual meetings. This is known 613 00:34:31,400 --> 00:34:34,839 Speaker 4: as the two Sessions. Is it likely that the relationship 614 00:34:34,960 --> 00:34:37,719 Speaker 4: between the US and China comes up for discussion during 615 00:34:37,760 --> 00:34:38,640 Speaker 4: this period. 616 00:34:38,560 --> 00:34:41,480 Speaker 7: Well, Foreign Minister Wan Yi will have his annual briefing, 617 00:34:42,239 --> 00:34:44,520 Speaker 7: and that's actually one of the only times in China 618 00:34:44,560 --> 00:34:48,839 Speaker 7: that any sort of senior official takes questions from foreign journalists. 619 00:34:49,200 --> 00:34:52,040 Speaker 7: Obviously it's all very scripted and the questions are submitted 620 00:34:52,040 --> 00:34:54,560 Speaker 7: in advance, But for sure the trade war will come 621 00:34:54,640 --> 00:34:57,440 Speaker 7: up during that session. I imagine Wang Yi, who is 622 00:34:57,480 --> 00:35:01,080 Speaker 7: a very very sort of seasoned top diplomat, he'll be 623 00:35:01,160 --> 00:35:04,279 Speaker 7: very very cautious and how he responds, but it's going 624 00:35:04,320 --> 00:35:06,120 Speaker 7: to be one of the top talking points I imagine 625 00:35:06,160 --> 00:35:07,399 Speaker 7: behind closed doors as well. 626 00:35:07,680 --> 00:35:10,600 Speaker 4: I remember when President She met with President Biden and 627 00:35:10,680 --> 00:35:13,360 Speaker 4: San Francisco a while back, and one of the things 628 00:35:13,440 --> 00:35:16,760 Speaker 4: that she aimed to do was try to increase foreign 629 00:35:16,760 --> 00:35:20,080 Speaker 4: direct investment into China, and some of the latest figures 630 00:35:20,080 --> 00:35:23,719 Speaker 4: that we have seen on inbound investment in China, I 631 00:35:23,719 --> 00:35:25,480 Speaker 4: think it's the weakest start that we have seen in 632 00:35:25,480 --> 00:35:27,680 Speaker 4: about four years. Right now, What do you think that 633 00:35:27,800 --> 00:35:31,279 Speaker 4: China can do that will allow capital if this is 634 00:35:31,360 --> 00:35:35,239 Speaker 4: even a possibility to allow capital from the US to 635 00:35:35,280 --> 00:35:36,560 Speaker 4: flow into China. 636 00:35:37,120 --> 00:35:40,600 Speaker 7: I think if they want to win back sort of 637 00:35:40,640 --> 00:35:44,480 Speaker 7: the confidence of American investors, they have to stabilize the 638 00:35:44,520 --> 00:35:48,080 Speaker 7: business environment. And you know, I think foreign companies, for 639 00:35:48,120 --> 00:35:49,880 Speaker 7: a start, have been asking for a long time for 640 00:35:49,920 --> 00:35:53,040 Speaker 7: a level playing field for their companies, so you know, 641 00:35:53,120 --> 00:35:55,640 Speaker 7: the same access to sort of procurement and bidding on 642 00:35:55,719 --> 00:35:59,920 Speaker 7: deals that state owned companies get, the same sort of preferences. 643 00:36:00,120 --> 00:36:04,320 Speaker 7: So just stability, and that was really the big signal 644 00:36:04,360 --> 00:36:07,279 Speaker 7: from she meeting Jack Marer earlier this week. Jack mar 645 00:36:07,320 --> 00:36:08,719 Speaker 7: was sort of the face, if you like, of the 646 00:36:08,760 --> 00:36:12,520 Speaker 7: regulatory crackdowns because he was the biggest target. I mean 647 00:36:12,560 --> 00:36:14,560 Speaker 7: that meeting was sort of taken by economists to sort 648 00:36:14,560 --> 00:36:19,000 Speaker 7: of signal that era of crackdowns is truly over and 649 00:36:19,160 --> 00:36:21,719 Speaker 7: there's a stable business environment here. The government that's going 650 00:36:21,760 --> 00:36:25,399 Speaker 7: to give private enterprises a free hand, take his full 651 00:36:25,400 --> 00:36:28,600 Speaker 7: off the pedal and sort of really let enterprise flourish 652 00:36:28,680 --> 00:36:31,280 Speaker 7: and you don't have to worry about raids on foreign 653 00:36:31,320 --> 00:36:33,719 Speaker 7: consultancies or the rug being pulled under an industry you 654 00:36:33,840 --> 00:36:36,839 Speaker 7: just invested in. With also the specter of a trade 655 00:36:36,880 --> 00:36:39,960 Speaker 7: war hanging over by the actual ties, you know, it 656 00:36:40,080 --> 00:36:42,600 Speaker 7: is a hard job that she has to convince American 657 00:36:42,640 --> 00:36:45,960 Speaker 7: investors in particular and American companies they're welcome. I mean, 658 00:36:46,000 --> 00:36:49,880 Speaker 7: particularly when the retaliation that China took towards Trump's initial 659 00:36:49,880 --> 00:36:53,719 Speaker 7: tariffs included an antitrust probe into Google, and that was 660 00:36:53,840 --> 00:36:56,480 Speaker 7: mostly symbolic because Google doesn't do much business in China 661 00:36:56,560 --> 00:36:59,560 Speaker 7: right now, but it was a signal to other American companies. 662 00:37:00,000 --> 00:37:02,879 Speaker 7: But if this continues, then you know their fair game 663 00:37:02,920 --> 00:37:04,719 Speaker 7: in the tit for tat responses. 664 00:37:04,360 --> 00:37:06,640 Speaker 4: Jenny, Before I let you go, I have to ask 665 00:37:06,719 --> 00:37:10,640 Speaker 4: you about President Trump's advisor, Elon Musk. We know that Tesla, 666 00:37:10,719 --> 00:37:14,200 Speaker 4: his electric vehicle company, has a big presence in Shanghai. 667 00:37:14,719 --> 00:37:19,360 Speaker 4: What is Musk's relationship with Trump and Musk's relationship with Beijing. 668 00:37:19,880 --> 00:37:22,600 Speaker 4: How does that kind of come together in understanding the 669 00:37:22,680 --> 00:37:25,080 Speaker 4: dynamics that may end up playing out as we look 670 00:37:25,120 --> 00:37:25,720 Speaker 4: to the future. 671 00:37:26,480 --> 00:37:29,080 Speaker 7: Now. I think Musk is probably one of the most 672 00:37:29,120 --> 00:37:33,400 Speaker 7: sort of dubvish on China voices in Trump's ear. And 673 00:37:33,440 --> 00:37:36,360 Speaker 7: it's really notable actually that since Trump came to office, 674 00:37:36,440 --> 00:37:40,200 Speaker 7: Musk has said nothing about China. In the interview bis 675 00:37:40,200 --> 00:37:42,600 Speaker 7: Sean Hannity, there was one question that was put to 676 00:37:42,840 --> 00:37:46,080 Speaker 7: Musk that was framed in China context, and he didn't answer. 677 00:37:46,120 --> 00:37:49,239 Speaker 7: He mentioned the Taliban, I think in response. Instead, he 678 00:37:50,000 --> 00:37:53,279 Speaker 7: has huge business interests in China, very very good ties 679 00:37:53,320 --> 00:37:56,040 Speaker 7: of the Chinese government. When he visits Beijing, they roll 680 00:37:56,080 --> 00:37:59,080 Speaker 7: out the red carpet. He gets meetings with Premier Li Chang, 681 00:37:59,640 --> 00:38:01,600 Speaker 7: you know, and I think the Chinese government see him 682 00:38:01,640 --> 00:38:04,840 Speaker 7: is a very very useful person in this administration because 683 00:38:04,880 --> 00:38:08,239 Speaker 7: they have an interlocutor who is directly into Trump's air, 684 00:38:08,760 --> 00:38:12,000 Speaker 7: who is a business person with huge interest in China. 685 00:38:12,120 --> 00:38:15,520 Speaker 7: So someone who has a vested interest in maintaining business 686 00:38:15,560 --> 00:38:19,360 Speaker 7: ties and who actually is aligned with President cheated and 687 00:38:19,360 --> 00:38:22,319 Speaker 7: paying on many many sort of policy points, including their 688 00:38:22,320 --> 00:38:25,440 Speaker 7: position on Taiwan. So I think for Beijing, Mosk is 689 00:38:25,480 --> 00:38:27,600 Speaker 7: a very useful person and it'll be interesting to see 690 00:38:27,600 --> 00:38:28,600 Speaker 7: how that sort of plays out. 691 00:38:28,680 --> 00:38:30,919 Speaker 4: Oh, no doubt about that, Jenny. Thank you so much, 692 00:38:31,040 --> 00:38:34,320 Speaker 4: Jenny Marsh, their team leader for Greater China ECO GOV. 693 00:38:34,440 --> 00:38:37,640 Speaker 4: Joining from our studios in Hong Kong, and I'm Doug Prisner. 694 00:38:37,680 --> 00:38:40,719 Speaker 4: You can catch us weekdays for the Daybreak Asia podcast. 695 00:38:41,120 --> 00:38:43,560 Speaker 4: It's available wherever you get your podcast. 696 00:38:43,880 --> 00:38:46,520 Speaker 2: Tom, Thank you, Doug. And that does it for this 697 00:38:46,680 --> 00:38:49,400 Speaker 2: edition of Bloomberg day Break Weekend. Join us again Monday 698 00:38:49,400 --> 00:38:51,600 Speaker 2: morning at five am Wall Street Time for the latest 699 00:38:51,640 --> 00:38:54,000 Speaker 2: on markets overseas and the news you need to start 700 00:38:54,040 --> 00:38:57,440 Speaker 2: your day. I'm Tom Buzby. Stay with us. Top stories 701 00:38:57,440 --> 00:38:59,959 Speaker 2: and global business headlines are coming up right now.