1
00:00:02,360 --> 00:00:10,200
Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. This is the Bloomberg

2
00:00:10,240 --> 00:00:13,440
Speaker 1: Daybreak Asia podcast. I'm Doug Prisner. You can join Brian

3
00:00:13,520 --> 00:00:16,400
Speaker 1: Curtis and myself for the stories making news and moving

4
00:00:16,440 --> 00:00:19,279
Speaker 1: markets in the APAC region. You can subscribe to the

5
00:00:19,320 --> 00:00:22,840
Speaker 1: show anywhere you get your podcast and always on Bloomberg Radio,

6
00:00:23,040 --> 00:00:25,840
Speaker 1: the Bloomberg Terminal, and the Bloomberg Business app.

7
00:00:28,400 --> 00:00:31,760
Speaker 2: And joining us now is Jennifer Welch, Bloomberg Economics Chief

8
00:00:31,880 --> 00:00:35,519
Speaker 2: geoeconomics analyst, for a look at her big day piece

9
00:00:35,600 --> 00:00:40,600
Speaker 2: on what the US presidential election means for China. So, Jennifer,

10
00:00:40,640 --> 00:00:42,760
Speaker 2: thanks very much for joining us here. It's something of

11
00:00:42,800 --> 00:00:45,560
Speaker 2: a parlor game out here for us and who China

12
00:00:45,560 --> 00:00:49,080
Speaker 2: would like to see most or who do they fear most,

13
00:00:49,120 --> 00:00:52,760
Speaker 2: And it seems like from this piece the it's kind

14
00:00:52,760 --> 00:00:54,840
Speaker 2: of a lose lose situation for China.

15
00:00:54,920 --> 00:00:58,560
Speaker 3: Explain that's right, and thank you so much for having me.

16
00:00:59,040 --> 00:01:00,960
Speaker 3: I think that's a tough game. That's a tough bet

17
00:01:01,000 --> 00:01:04,640
Speaker 3: to make given that both of the most likely candidates

18
00:01:04,680 --> 00:01:09,280
Speaker 3: in November's election, current President Biden former President Trump, when

19
00:01:09,319 --> 00:01:11,840
Speaker 3: you look at their records on China and also what

20
00:01:11,920 --> 00:01:15,040
Speaker 3: they are planning to do if given more time in office.

21
00:01:15,319 --> 00:01:19,039
Speaker 3: It suggests they're both pretty tough on China in very

22
00:01:19,080 --> 00:01:22,640
Speaker 3: similar ways we saw obviously under former President Trump he

23
00:01:22,760 --> 00:01:25,640
Speaker 3: launched a trade war against China. He's promising if he's

24
00:01:25,640 --> 00:01:29,399
Speaker 3: given a second term, to expand that trade war, intensify

25
00:01:29,440 --> 00:01:32,920
Speaker 3: it further with higher tariffs on China. And we saw

26
00:01:33,080 --> 00:01:36,560
Speaker 3: President Biden when he came into office, retained those TIFFs

27
00:01:36,680 --> 00:01:40,600
Speaker 3: from President Trump. There's discussion now reports that he may

28
00:01:40,680 --> 00:01:43,880
Speaker 3: seek to expand them in certain areas like evs and

29
00:01:43,920 --> 00:01:46,920
Speaker 3: clean energy products. And he's also taken a number of

30
00:01:46,959 --> 00:01:51,000
Speaker 3: measures targeting China's access to things like advanced semiconductors. So

31
00:01:51,320 --> 00:01:55,160
Speaker 3: I think from Beijing's perspective, it certainly is a challenging

32
00:01:56,080 --> 00:01:58,400
Speaker 3: election for them that, no matter what, they're likely to

33
00:01:58,400 --> 00:02:01,120
Speaker 3: face sustained US pressure regardless of who wins.

34
00:02:01,360 --> 00:02:03,760
Speaker 1: If we can put the partisanship aside for the moment,

35
00:02:03,800 --> 00:02:08,080
Speaker 1: I would really appreciate your critique of the effectiveness of

36
00:02:08,080 --> 00:02:11,720
Speaker 1: these strategies. On one hand, Trump former President Trump saying

37
00:02:11,760 --> 00:02:15,200
Speaker 1: he would actually raise the level of tariffs by sixty

38
00:02:15,240 --> 00:02:19,360
Speaker 1: percent on all Chinese imports. What would then impact be

39
00:02:19,440 --> 00:02:22,600
Speaker 1: on the economy and compare and contrast that with the

40
00:02:22,639 --> 00:02:27,800
Speaker 1: Biden administration kind of targeted export controls, and I'm wondering

41
00:02:27,840 --> 00:02:30,960
Speaker 1: whether or not there would be more Valuele's imagine a

42
00:02:31,000 --> 00:02:34,640
Speaker 1: world where foreign direct investment into China from the US

43
00:02:34,680 --> 00:02:40,200
Speaker 1: becomes more scrutiny scrutinized by the US administration. Could you

44
00:02:40,360 --> 00:02:41,920
Speaker 1: just kind of address those two points?

45
00:02:42,800 --> 00:02:45,760
Speaker 3: Sure, thinks so. On the first question of what would

46
00:02:45,800 --> 00:02:48,720
Speaker 3: happen if former President Trump followed through on his pledge

47
00:02:48,760 --> 00:02:52,400
Speaker 3: to increase arras to sixty percent, we modeled this and

48
00:02:52,560 --> 00:02:56,120
Speaker 3: according to our estimates, it would reduce US imports of

49
00:02:56,200 --> 00:03:02,080
Speaker 3: Chinese goods almost entirely to nearly zero. And that's affecting,

50
00:03:02,240 --> 00:03:04,960
Speaker 3: you know, going off of just what he said, pretty

51
00:03:05,040 --> 00:03:08,160
Speaker 3: much all sectors in which the United States is importing

52
00:03:08,200 --> 00:03:11,240
Speaker 3: anything from China. The impact that that could have is

53
00:03:11,280 --> 00:03:14,240
Speaker 3: pretty wide ranging, in part because it depends on how

54
00:03:14,320 --> 00:03:17,679
Speaker 3: much of that trade could shift to other countries. Mexico,

55
00:03:17,840 --> 00:03:20,760
Speaker 3: Southeast Asia, the EU, India might pick up some of

56
00:03:20,800 --> 00:03:23,399
Speaker 3: the slack, but then the rest of it would either

57
00:03:23,480 --> 00:03:25,840
Speaker 3: have to be a remaining gap or would have to

58
00:03:25,880 --> 00:03:28,840
Speaker 3: shift to production in the US, and particularly for US

59
00:03:28,919 --> 00:03:32,120
Speaker 3: companies that are dependent on any intermediate goods coming from

60
00:03:32,280 --> 00:03:35,720
Speaker 3: China that could lead to higher prices for US consumers.

61
00:03:35,760 --> 00:03:38,440
Speaker 3: They could be paying more for their goods if you're

62
00:03:38,440 --> 00:03:41,000
Speaker 3: looking at you know what President Biden is proposing in

63
00:03:41,080 --> 00:03:44,480
Speaker 3: terms of a more targeting increase in tariffs that specifically

64
00:03:44,520 --> 00:03:51,160
Speaker 3: aimed at things like evs at advanced sorry, older generation semiconductors,

65
00:03:51,480 --> 00:03:54,600
Speaker 3: goods where the administration might be concerned that China is

66
00:03:54,680 --> 00:03:58,640
Speaker 3: able to produce them cheaper and essentially dump them into

67
00:03:58,680 --> 00:04:00,880
Speaker 3: the US market in ways that are going to disadvantage

68
00:04:00,960 --> 00:04:06,160
Speaker 3: US producer. So would likewise potentially result and US consumers

69
00:04:06,200 --> 00:04:09,000
Speaker 3: not having access to those cheaper goods. But the intent

70
00:04:09,240 --> 00:04:14,800
Speaker 3: is to protect US companies from competition with Chinese companies

71
00:04:14,840 --> 00:04:16,279
Speaker 3: that receive massive subsidies.

72
00:04:16,960 --> 00:04:19,240
Speaker 2: I'm interested what you heard from people you talk to

73
00:04:19,640 --> 00:04:24,600
Speaker 2: on this piece about the following. It's apparent that Donald

74
00:04:24,640 --> 00:04:29,320
Speaker 2: Trump seems to have a better relationship with autocratic regimes

75
00:04:30,120 --> 00:04:34,120
Speaker 2: than say Joe Biden does. And so, you know, once

76
00:04:34,160 --> 00:04:37,880
Speaker 2: you get away from just the mathematics of the tariffs,

77
00:04:38,040 --> 00:04:41,839
Speaker 2: what about the general approach of the two men towards

78
00:04:41,839 --> 00:04:45,239
Speaker 2: a country like like China, which is a one party state.

79
00:04:46,680 --> 00:04:48,640
Speaker 3: You know, it's interesting when you listen to former President

80
00:04:48,760 --> 00:04:52,359
Speaker 3: Trump talk even publicly about China, it is somewhat of

81
00:04:52,440 --> 00:04:55,320
Speaker 3: two minds. Even in talking about the sixty percent tariffs,

82
00:04:55,360 --> 00:04:57,599
Speaker 3: I think he prefaced that by saying that he doesn't

83
00:04:57,680 --> 00:05:01,920
Speaker 3: have any personal problems or at China. What he has

84
00:05:01,960 --> 00:05:04,279
Speaker 3: a problem with is the trade practices and the impact

85
00:05:04,320 --> 00:05:07,039
Speaker 3: that housed on the US economy. And I think that's

86
00:05:07,040 --> 00:05:11,880
Speaker 3: a really good descriptor of his approach to rivals like China,

87
00:05:12,000 --> 00:05:15,600
Speaker 3: where he has taken a very tough, in firm approach.

88
00:05:15,680 --> 00:05:17,920
Speaker 3: And you know, in addition to the trade war, which

89
00:05:17,960 --> 00:05:21,040
Speaker 3: is I think what attracted so much attention during his tenure.

90
00:05:21,080 --> 00:05:23,080
Speaker 3: If you look at his last year in office, there

91
00:05:23,120 --> 00:05:28,320
Speaker 3: was this surge of financial sanctions, trade blacklists, executive orders

92
00:05:28,360 --> 00:05:31,920
Speaker 3: all targeting China, and that was when some major steps happened,

93
00:05:32,160 --> 00:05:35,440
Speaker 3: like declaring China's team and rights practices in Shinjiang and

94
00:05:35,520 --> 00:05:41,159
Speaker 3: genocide closing China's conflict in Houston, Texas. So by all

95
00:05:41,240 --> 00:05:44,000
Speaker 3: means a very tough and firm approach to China, but

96
00:05:44,040 --> 00:05:47,479
Speaker 3: at the same time, the rhetoric tens can balance between

97
00:05:47,640 --> 00:05:50,640
Speaker 3: very very tough and very very firm, and then things

98
00:05:50,640 --> 00:05:53,560
Speaker 3: that seem to be a little bit more complementary of China,

99
00:05:53,600 --> 00:05:55,760
Speaker 3: and I think that's just sort of the duality of

100
00:05:55,839 --> 00:05:57,240
Speaker 3: the former president.

101
00:05:57,160 --> 00:05:59,400
Speaker 1: Two different worlds when it comes to the issue of

102
00:05:59,400 --> 00:06:02,240
Speaker 1: climate chain and we know that the Biden administration has

103
00:06:02,560 --> 00:06:05,839
Speaker 1: pretty aggressive plans. Is it possible for the US to

104
00:06:05,960 --> 00:06:11,120
Speaker 1: execute on its goals of reducing carbon admissions without embracing

105
00:06:11,160 --> 00:06:14,280
Speaker 1: what China has to offer in terms of manufacturing, whether

106
00:06:14,279 --> 00:06:16,800
Speaker 1: you're talking about wind or solar.

107
00:06:17,920 --> 00:06:20,120
Speaker 3: I think that's the key debate that has happened in

108
00:06:20,160 --> 00:06:22,680
Speaker 3: the US policy community, and it's happened in part not

109
00:06:22,839 --> 00:06:27,640
Speaker 3: just over this concern about, for example, Chinese evs and

110
00:06:27,720 --> 00:06:30,400
Speaker 3: clean energy products, but it actually started earlier on in

111
00:06:30,360 --> 00:06:32,560
Speaker 3: the administration when there was a concern about how do

112
00:06:32,640 --> 00:06:36,240
Speaker 3: they reconcile concerns about human rights practices in Shinjiang and

113
00:06:36,360 --> 00:06:39,919
Speaker 3: use of forced labor with things like solar panels, which

114
00:06:40,520 --> 00:06:44,520
Speaker 3: China produces a great amount of. I think the way

115
00:06:44,520 --> 00:06:46,760
Speaker 3: in which President Biden reframe it is that it is

116
00:06:46,839 --> 00:06:49,680
Speaker 3: possible to do both of these things, and the path

117
00:06:49,839 --> 00:06:53,240
Speaker 3: that he sees towards that is through bringing manufacturing back

118
00:06:53,240 --> 00:06:56,240
Speaker 3: to the United States, which has other economic benefits, and

119
00:06:56,279 --> 00:07:00,000
Speaker 3: working with allies and partners to stand up other supply chains.

120
00:07:00,360 --> 00:07:02,680
Speaker 3: Of course, the devil is in the details in terms

121
00:07:02,720 --> 00:07:06,320
Speaker 3: of how that's implemented and the efficiency of industrial policy

122
00:07:06,360 --> 00:07:08,960
Speaker 3: and getting you to that point. But I think that's

123
00:07:09,040 --> 00:07:11,960
Speaker 3: the means through which he is attempting to square that circle.

124
00:07:12,040 --> 00:07:13,920
Speaker 1: All right, Jennifer, we'll leave it there. Thanks so much.

125
00:07:14,000 --> 00:07:18,520
Speaker 1: Jennifer Welsh, Bloomberg Economics Chief geo Economics analyst and the

126
00:07:18,920 --> 00:07:21,760
Speaker 1: big take of the day in the Trump Biden twenty

127
00:07:21,800 --> 00:07:32,080
Speaker 1: twenty four rematch, the only sure loser is China.

128
00:07:32,880 --> 00:07:37,200
Speaker 2: We've got Diana Massina with us. You want to introduce.

129
00:07:36,920 --> 00:07:39,600
Speaker 1: No, no, you can. I mean. Deanna is a deputy

130
00:07:39,680 --> 00:07:44,080
Speaker 1: chief economist at AMP Australia. She joins us from Sydney. Deanna,

131
00:07:44,120 --> 00:07:47,000
Speaker 1: thank you so much for being with us. Hope you

132
00:07:47,000 --> 00:07:48,880
Speaker 1: having me on. Yeah, you're doing well. I know that

133
00:07:48,960 --> 00:07:51,720
Speaker 1: Australia was up and running. Everybody else in the neighborhood

134
00:07:51,720 --> 00:07:54,760
Speaker 1: was on holiday yesterday, so you were at the office,

135
00:07:54,800 --> 00:07:58,480
Speaker 1: I'm sure crunching numbers on the inflation story that we've

136
00:07:58,520 --> 00:08:01,560
Speaker 1: been tracking very closely. Here we're waiting for the CPI

137
00:08:01,680 --> 00:08:05,600
Speaker 1: data Tuesday morning. How well, how effective do you think

138
00:08:05,680 --> 00:08:09,160
Speaker 1: central banks have been in bringing down inflation to the

139
00:08:09,200 --> 00:08:11,760
Speaker 1: point where I mean, we really don't need to worry

140
00:08:11,760 --> 00:08:13,760
Speaker 1: about it the way we were a year ago.

141
00:08:15,600 --> 00:08:18,600
Speaker 4: Well, yes, sir, I was enjoying highlights from the Super

142
00:08:18,640 --> 00:08:21,000
Speaker 4: Bowl actually and looking at all those pictures of Taylor

143
00:08:21,040 --> 00:08:24,640
Speaker 4: and Travis actually, and you know, finally enough today Taylor's

144
00:08:24,640 --> 00:08:27,880
Speaker 4: coming to Australia in two weeks time and they actually

145
00:08:27,880 --> 00:08:29,920
Speaker 4: announced some more tickets. I'm going to be desperately trying

146
00:08:29,920 --> 00:08:32,800
Speaker 4: to get those days. But anyways, onto more interesting things

147
00:08:32,840 --> 00:08:36,920
Speaker 4: like inflation. I think, I mean, central banks have actually

148
00:08:36,960 --> 00:08:41,240
Speaker 4: done a very good job in bringing down inflation without

149
00:08:41,280 --> 00:08:43,720
Speaker 4: causing too much pain in the economies. What are economists

150
00:08:43,760 --> 00:08:47,840
Speaker 4: are calling immaculate disinflation. But we don't want to get

151
00:08:47,880 --> 00:08:51,480
Speaker 4: too excited that there's no damage being done because history

152
00:08:51,520 --> 00:08:55,280
Speaker 4: tells us that there are usually some consequences from very

153
00:08:55,320 --> 00:08:59,080
Speaker 4: severe tightening cycles. So I think that while we have

154
00:08:59,200 --> 00:09:01,360
Speaker 4: had pretty good out in the past six or twelve

155
00:09:01,400 --> 00:09:03,920
Speaker 4: months in terms of reducing inflation, and we do think

156
00:09:04,040 --> 00:09:07,200
Speaker 4: more there is more downside to inflation. Based on some

157
00:09:07,240 --> 00:09:09,680
Speaker 4: of the leading indicators of prices that we look at,

158
00:09:10,080 --> 00:09:14,120
Speaker 4: I think that there could be some more impacts from

159
00:09:14,280 --> 00:09:16,200
Speaker 4: higher interest rates around the world, so I think we

160
00:09:16,240 --> 00:09:18,040
Speaker 4: need to be mindful that growth this year is still

161
00:09:18,080 --> 00:09:19,680
Speaker 4: likely to be pretty low because of that.

162
00:09:20,920 --> 00:09:21,719
Speaker 1: It's a little.

163
00:09:21,440 --> 00:09:24,560
Speaker 2: Tricky in Australia at the moment because you have business

164
00:09:24,559 --> 00:09:28,840
Speaker 2: conditions easing. We've reported that data this morning. Confidence is

165
00:09:28,880 --> 00:09:33,680
Speaker 2: not particularly strong, but inflation is sticky and the RBA

166
00:09:33,760 --> 00:09:37,920
Speaker 2: is kind of holding on to a kind of tighter profile.

167
00:09:38,400 --> 00:09:40,840
Speaker 2: What's that going to mean for the economy going forward?

168
00:09:40,880 --> 00:09:44,520
Speaker 2: If you have confidence down, inflation up, and a tight

169
00:09:44,600 --> 00:09:45,200
Speaker 2: central bank.

170
00:09:48,080 --> 00:09:50,880
Speaker 4: Well, in Australia we lag the rest of the world

171
00:09:50,920 --> 00:09:52,880
Speaker 4: in terms of the up tenn and inflation, so we

172
00:09:52,920 --> 00:09:54,720
Speaker 4: are also lagging the rest of the world on the

173
00:09:54,760 --> 00:09:58,760
Speaker 4: way down, so we do have higher CPI numbers compared

174
00:09:58,760 --> 00:10:02,200
Speaker 4: to countries like the US, Eurozone, New Zealand and the

175
00:10:02,240 --> 00:10:05,160
Speaker 4: parts of inflation that still worry the Reserve Bank are

176
00:10:05,200 --> 00:10:10,080
Speaker 4: things like rants construction costs or just generally the costs

177
00:10:10,120 --> 00:10:13,960
Speaker 4: of building new homes, things like insurance and finance, some

178
00:10:14,360 --> 00:10:17,880
Speaker 4: household services. So there are sticky parts to inflation. But

179
00:10:19,600 --> 00:10:23,480
Speaker 4: the overall story around inflation is still quite positive in

180
00:10:23,520 --> 00:10:27,400
Speaker 4: Australia as well, because we've seen pretty large declines in

181
00:10:27,480 --> 00:10:32,800
Speaker 4: prices for a lot of discretionary related spending goods. Inflation

182
00:10:34,240 --> 00:10:37,880
Speaker 4: very clearly, interest rates are working to slow down consumer spending.

183
00:10:37,920 --> 00:10:40,640
Speaker 4: And actually in Australia we have much lower growth than

184
00:10:41,040 --> 00:10:43,880
Speaker 4: in countries like the US, and the consumer has responded

185
00:10:43,960 --> 00:10:47,360
Speaker 4: much quicker compared to the US because consumers are much

186
00:10:47,360 --> 00:10:49,840
Speaker 4: more leveraged here and also because of the way our

187
00:10:49,840 --> 00:10:52,840
Speaker 4: housing market is structured, more people take out variable or

188
00:10:52,840 --> 00:10:57,120
Speaker 4: short term mortgage loans unlike the US. So the pockets

189
00:10:57,120 --> 00:10:59,720
Speaker 4: of that sticky inflation or the concern that the Reserve

190
00:10:59,760 --> 00:11:03,480
Speaker 4: Bank is really only in some parts. We are still

191
00:11:03,520 --> 00:11:07,240
Speaker 4: seeing that the breadth of high CPI rises has come

192
00:11:07,280 --> 00:11:09,480
Speaker 4: down a lot in Australia, and I think in the

193
00:11:09,520 --> 00:11:11,960
Speaker 4: next six months we're going to see inflation come back

194
00:11:11,960 --> 00:11:14,000
Speaker 4: in within the RBA's targetban.

195
00:11:14,360 --> 00:11:18,000
Speaker 1: Australia's big trading partners. Obviously, China different story there. When

196
00:11:18,000 --> 00:11:20,480
Speaker 1: it comes to inflation, it's non existent. I mean we're

197
00:11:20,520 --> 00:11:24,600
Speaker 1: talking about deflation. Is this a precarious position right now

198
00:11:24,640 --> 00:11:25,960
Speaker 1: that China finds itself in.

199
00:11:27,960 --> 00:11:31,040
Speaker 4: Yeah, for China, it's a big problem because you don't

200
00:11:31,200 --> 00:11:33,960
Speaker 4: I mean, we know from history that countries that have

201
00:11:34,679 --> 00:11:38,719
Speaker 4: deflation suffer big problems in terms of the impact to

202
00:11:38,800 --> 00:11:44,160
Speaker 4: corporate revenue, household purchasing power, and generally confidence. In some ways,

203
00:11:44,240 --> 00:11:48,840
Speaker 4: deflation can be worse than hyperinflation because with hyper inflation

204
00:11:48,920 --> 00:11:52,040
Speaker 4: there are normally more policy tools that you can use

205
00:11:52,720 --> 00:11:56,319
Speaker 4: to combat that. It is a big negative for China,

206
00:11:56,360 --> 00:12:00,200
Speaker 4: and I guess another negative risk for the economy. I

207
00:12:00,200 --> 00:12:03,240
Speaker 4: think that growth this year in China will be about

208
00:12:03,280 --> 00:12:06,000
Speaker 4: four percent, which is pretty poor, but that's probably enough

209
00:12:06,040 --> 00:12:10,160
Speaker 4: to keep that demand for commodities from Australia enough for

210
00:12:10,280 --> 00:12:11,240
Speaker 4: our trade balance.

211
00:12:12,679 --> 00:12:15,079
Speaker 2: Can I just go back to something you said earlier

212
00:12:15,200 --> 00:12:18,360
Speaker 2: and some people will kill me for this, but what

213
00:12:18,559 --> 00:12:21,600
Speaker 2: is the cultural phenomenon that is Taylor Swift?

214
00:12:24,440 --> 00:12:27,679
Speaker 4: To some extent, I think that maybe it's just everyone

215
00:12:27,760 --> 00:12:30,360
Speaker 4: getting on the bandwagon, because I know many people that

216
00:12:30,440 --> 00:12:33,360
Speaker 4: are I'm not really as swifty, but have just decided that,

217
00:12:33,440 --> 00:12:35,760
Speaker 4: you know, her concert looks amazing, and there's so much

218
00:12:35,880 --> 00:12:38,400
Speaker 4: press around it. You kind of just get swept up

219
00:12:38,559 --> 00:12:38,920
Speaker 4: in the.

220
00:12:39,000 --> 00:12:39,800
Speaker 3: Hype that it is.

221
00:12:39,840 --> 00:12:42,880
Speaker 4: I think it's more just the media hyping her up

222
00:12:42,920 --> 00:12:45,200
Speaker 4: and everyone getting a bit of fomo that they kind

223
00:12:45,200 --> 00:12:45,600
Speaker 4: of tend.

224
00:12:46,600 --> 00:12:49,960
Speaker 1: Yeah, but definitely there's an economic impact. I do have

225
00:12:50,480 --> 00:12:52,840
Speaker 1: a guess on what that impact could be when she

226
00:12:53,000 --> 00:12:55,559
Speaker 1: visits Australia and we.

227
00:12:55,559 --> 00:13:00,360
Speaker 4: Tried to look at these numbers. There's a joke and

228
00:13:00,440 --> 00:13:02,520
Speaker 4: economics that if you don't know what the impact of

229
00:13:02,559 --> 00:13:04,240
Speaker 4: something's going to be, just say it's going to be

230
00:13:04,320 --> 00:13:08,040
Speaker 4: zero point three. It doesn't seem too high, it doesn't

231
00:13:08,040 --> 00:13:09,880
Speaker 4: seem too low. So I'm going to say zero point

232
00:13:09,880 --> 00:13:10,960
Speaker 4: three percentage points.

233
00:13:11,320 --> 00:13:13,040
Speaker 1: All right, Well, go ahead, Brian.

234
00:13:13,440 --> 00:13:15,719
Speaker 2: Well the reason I raised it, Doug was she had

235
00:13:15,720 --> 00:13:18,480
Speaker 2: mentioned that she was going to desperately try to get tickets,

236
00:13:18,520 --> 00:13:22,079
Speaker 2: so I thought, you know, it was fair enough game anyway, Deanna,

237
00:13:22,120 --> 00:13:24,840
Speaker 2: thanks so much for joining us. Diana Mossina, Deputy Chief

238
00:13:24,840 --> 00:13:26,800
Speaker 2: Economist at AMP Australia.

239
00:13:26,920 --> 00:13:28,199
Speaker 5: This is Bloomberg.

240
00:13:34,920 --> 00:13:37,920
Speaker 2: Time check in with Bloomberg Opinion. Were joined by opinion

241
00:13:37,960 --> 00:13:43,000
Speaker 2: columnist Geroyd Redy, who's writing about two superstars, Taylor Swift

242
00:13:43,000 --> 00:13:45,760
Speaker 2: and Lionel Messi, and their recent Japan visit there on

243
00:13:45,800 --> 00:13:48,520
Speaker 2: the same night and what that means for the country

244
00:13:48,559 --> 00:13:52,200
Speaker 2: compared to other places like Hong Kong. It seems like

245
00:13:52,240 --> 00:13:55,520
Speaker 2: from reading the piece that while there are some challenges,

246
00:13:56,320 --> 00:13:57,240
Speaker 2: Japan is back.

247
00:13:59,360 --> 00:14:02,520
Speaker 5: That's right that you know, just coincidentally That basically was

248
00:14:02,559 --> 00:14:05,480
Speaker 5: the theme of an op ed in the Washington Post

249
00:14:05,480 --> 00:14:08,200
Speaker 5: as well today by the US Ambassador to Japan, Ram

250
00:14:08,200 --> 00:14:11,199
Speaker 5: and Manuel. As I speak, as you mentioned, and that

251
00:14:11,320 --> 00:14:13,080
Speaker 5: you know that the market's update there, the nick A

252
00:14:13,480 --> 00:14:16,959
Speaker 5: is nearly back at thirty eight thousand, closing in on

253
00:14:17,280 --> 00:14:20,040
Speaker 5: its all time high. And then we had in you know,

254
00:14:20,360 --> 00:14:23,360
Speaker 5: star contrast to Hong Kong, we had the sight of

255
00:14:23,960 --> 00:14:26,720
Speaker 5: two of the biggest stars in the worlds Messi and

256
00:14:27,000 --> 00:14:31,600
Speaker 5: Taylor Swift on stage or on the pitch at exactly

257
00:14:31,600 --> 00:14:33,920
Speaker 5: the same time. It's it's an interesting moment to be here.

258
00:14:34,160 --> 00:14:37,080
Speaker 1: So are we speaking to you from the Japanese capital.

259
00:14:37,200 --> 00:14:41,000
Speaker 1: Are you in Tokyo? That's right, yes, So anecdotally, what

260
00:14:41,000 --> 00:14:42,960
Speaker 1: does it feel like, I mean, give me a sense

261
00:14:42,960 --> 00:14:44,920
Speaker 1: of the vibe there, if I can use that term.

262
00:14:46,320 --> 00:14:48,920
Speaker 5: I mean, it's it's interesting because it's not exactly you know,

263
00:14:48,960 --> 00:14:51,080
Speaker 5: it's not it's not necessarily a sort of like a

264
00:14:51,120 --> 00:14:57,040
Speaker 5: bubbly moment. But after the years of COVID and the pandemic,

265
00:14:57,320 --> 00:14:59,840
Speaker 5: and when you know, the borders were closed, compared to

266
00:14:59,840 --> 00:15:02,240
Speaker 5: the that there's so much life in the city. There's

267
00:15:02,240 --> 00:15:07,360
Speaker 5: so many tourists, particularly in Tokyo. The tourist levels are

268
00:15:07,400 --> 00:15:11,200
Speaker 5: something like thirty percent higher than they were in twenty nineteen, which,

269
00:15:11,320 --> 00:15:14,120
Speaker 5: you know, before the pandemic hit, was the highest they

270
00:15:14,160 --> 00:15:19,120
Speaker 5: previously were. You know, economically, things are going pretty well.

271
00:15:19,160 --> 00:15:22,080
Speaker 5: The wage negotiations are going on here at the moment.

272
00:15:23,000 --> 00:15:26,360
Speaker 5: A lot of places are seeing wages increase. There is

273
00:15:26,800 --> 00:15:30,920
Speaker 5: a small, but you know, manageable amount of inflation, which

274
00:15:31,520 --> 00:15:34,160
Speaker 5: stands in contrast to the years of deflation that we

275
00:15:34,280 --> 00:15:37,040
Speaker 5: had before. So it's an interesting moment. I don't think

276
00:15:37,080 --> 00:15:40,840
Speaker 5: anyone's getting carried away at the moment. And obviously there

277
00:15:40,840 --> 00:15:43,360
Speaker 5: are sort of significant challenges as well, as you mentioned.

278
00:15:44,360 --> 00:15:46,240
Speaker 2: If we talk about Tokyo, I want to kind of

279
00:15:46,280 --> 00:15:49,880
Speaker 2: get you to contrast is it a great city or

280
00:15:49,960 --> 00:15:53,440
Speaker 2: a great international city. I mean, you point out that

281
00:15:53,440 --> 00:15:56,080
Speaker 2: there are a lot of great things about Japan, generally,

282
00:15:56,160 --> 00:15:59,960
Speaker 2: that the public transport is excellent, you don't need a car,

283
00:16:00,400 --> 00:16:03,920
Speaker 2: healthcare is cheap, you can get plain in affordable housing.

284
00:16:04,520 --> 00:16:08,840
Speaker 2: And yet you know, Japan is an enigma. There's not

285
00:16:08,960 --> 00:16:12,360
Speaker 2: much English spoken, and you wonder how much of an

286
00:16:12,360 --> 00:16:15,560
Speaker 2: embracing of foreigners there is. There's a kind of shunning

287
00:16:15,640 --> 00:16:16,320
Speaker 2: of immigration.

288
00:16:18,080 --> 00:16:20,640
Speaker 5: Well, you know, that is the I think the stereotype

289
00:16:20,720 --> 00:16:23,200
Speaker 5: of Japan. If you look at the figures, there has

290
00:16:23,240 --> 00:16:26,200
Speaker 5: been a huge increase in the number of foreign workers

291
00:16:26,280 --> 00:16:29,320
Speaker 5: here in the last decade, not just in Tokyo but

292
00:16:29,360 --> 00:16:32,400
Speaker 5: in the country in general. I think that figure passed

293
00:16:32,720 --> 00:16:37,400
Speaker 5: two million in data that was released last week. And

294
00:16:37,480 --> 00:16:41,440
Speaker 5: that's just workers. That doesn't include you know, students and

295
00:16:41,720 --> 00:16:46,080
Speaker 5: spouses and people like that. It is certainly it is

296
00:16:46,120 --> 00:16:48,360
Speaker 5: a very different city to you know, to Hong Kong

297
00:16:48,440 --> 00:16:52,160
Speaker 5: or Singapore places like that, where English is more you know,

298
00:16:52,720 --> 00:16:54,920
Speaker 5: is one of the spoken languages. But a lot of

299
00:16:54,920 --> 00:16:57,080
Speaker 5: those barriers, you know, aren't the barriers that they used

300
00:16:57,120 --> 00:17:00,200
Speaker 5: to be with. You know, online translation with apps can

301
00:17:00,240 --> 00:17:03,320
Speaker 5: help you figure out where to go, and you know,

302
00:17:03,400 --> 00:17:06,000
Speaker 5: that will sort of bridge that communication gap. And I

303
00:17:06,040 --> 00:17:07,600
Speaker 5: think a lot of people are coming to Japan and

304
00:17:07,600 --> 00:17:10,320
Speaker 5: they're seeing that maybe for the first time. There's definitely

305
00:17:10,359 --> 00:17:13,120
Speaker 5: a lot of people is sense who are coming here

306
00:17:13,160 --> 00:17:15,320
Speaker 5: for the first time. Maybe they saved up over COVID

307
00:17:15,400 --> 00:17:17,359
Speaker 5: because they always wanted to come here, and they're like

308
00:17:17,680 --> 00:17:20,400
Speaker 5: they arrive here and they're like, well, things actually work

309
00:17:20,920 --> 00:17:23,680
Speaker 5: pretty well here, you know, in terms of like the

310
00:17:23,680 --> 00:17:26,800
Speaker 5: public transport and healthcare and stuff that you mentioned.

311
00:17:27,119 --> 00:17:30,040
Speaker 1: I'm wondering if a weak currency has been benefiting the

312
00:17:30,080 --> 00:17:34,000
Speaker 1: situation to the extent where if you are an official

313
00:17:34,840 --> 00:17:37,320
Speaker 1: within let's say, the Ministry of Finance or even at

314
00:17:37,320 --> 00:17:41,119
Speaker 1: the BOJ, whether you'd be very careful about changing, you know,

315
00:17:41,160 --> 00:17:44,040
Speaker 1: the structure of that relationship with other major currencies.

316
00:17:45,480 --> 00:17:48,280
Speaker 5: Yeah. I mean, obviously it is either way it goes.

317
00:17:48,320 --> 00:17:51,200
Speaker 5: It's a double edged sword. It is very promising for

318
00:17:51,359 --> 00:17:55,040
Speaker 5: tourism at the moment. On the flip side, it makes

319
00:17:55,080 --> 00:17:56,960
Speaker 5: it very difficult for people who are getting paid in

320
00:17:57,040 --> 00:17:59,840
Speaker 5: yen to travel abroad, and you see that in you know,

321
00:17:59,880 --> 00:18:02,680
Speaker 5: the number of Japanese going abroad as well, below pre

322
00:18:02,800 --> 00:18:05,159
Speaker 5: COVID levels, a number of people who even have a

323
00:18:05,160 --> 00:18:09,199
Speaker 5: passport has declined quite a lot. So that that is,

324
00:18:09,440 --> 00:18:13,479
Speaker 5: you know, there are obviously benefits and downsides to that

325
00:18:13,560 --> 00:18:15,720
Speaker 5: as well in terms of you know, the direction of

326
00:18:15,800 --> 00:18:18,119
Speaker 5: the yen. I think that is all going to be

327
00:18:18,119 --> 00:18:22,920
Speaker 5: based on you know, essentially BOJ and FED policy over

328
00:18:22,960 --> 00:18:25,040
Speaker 5: the next couple of months. I'm not sure there's much

329
00:18:25,119 --> 00:18:27,800
Speaker 5: really that anyone in the Ministry of Finance could even do,

330
00:18:28,680 --> 00:18:29,560
Speaker 5: even if they want to do.

331
00:18:31,040 --> 00:18:33,959
Speaker 2: Every time I go there. I enjoy it and so

332
00:18:34,000 --> 00:18:37,000
Speaker 2: don't get me wrong about some of the angles that

333
00:18:37,040 --> 00:18:39,040
Speaker 2: we took there. But you have to say, I think

334
00:18:39,080 --> 00:18:40,800
Speaker 2: for most people who've been there for a long time,

335
00:18:40,800 --> 00:18:43,800
Speaker 2: and perhaps you're in that category, that it's not as

336
00:18:43,840 --> 00:18:47,240
Speaker 2: inclusive as it could be. What's the biggest challenge for

337
00:18:47,359 --> 00:18:48,200
Speaker 2: Japan at the moment?

338
00:18:50,040 --> 00:18:52,040
Speaker 5: I mean, yeah, I've been I've been here twenty years

339
00:18:52,040 --> 00:18:56,520
Speaker 5: and obviously you've seen or I've seen, you know, things,

340
00:18:57,400 --> 00:19:00,080
Speaker 5: things change. I mean, I think one of the the

341
00:19:00,080 --> 00:19:04,719
Speaker 5: biggest issues is that the PACER change is definitely different

342
00:19:04,920 --> 00:19:08,480
Speaker 5: to what people expect. And I wouldn't be surprised to see,

343
00:19:08,520 --> 00:19:11,600
Speaker 5: you know, we have this, you know, very excited stock

344
00:19:11,640 --> 00:19:13,880
Speaker 5: market at the moment. I wouldn't be surprised to see

345
00:19:13,920 --> 00:19:17,679
Speaker 5: that go away of the previous you know, the previous

346
00:19:17,720 --> 00:19:20,040
Speaker 5: ones a couple of decades ago, where people sort of

347
00:19:20,040 --> 00:19:21,520
Speaker 5: lose interest in they look elsewhere.

348
00:19:21,880 --> 00:19:25,000
Speaker 2: But he's garing me there with anyway, Garoyd, thanks so

349
00:19:25,080 --> 00:19:29,359
Speaker 2: much for joining us. Bloomberg opinion columnist Geroid Ready, This

350
00:19:29,520 --> 00:19:30,119
Speaker 2: is Bloomberg.

351
00:19:31,920 --> 00:19:34,840
Speaker 1: This has been the Bloomberg Daybreak Asia podcast, bringing you

352
00:19:34,920 --> 00:19:37,520
Speaker 1: the stories making news and moving markets in the Asia

353
00:19:37,560 --> 00:19:41,400
Speaker 1: Pacific Visit the Bloomberg Podcast channel on YouTube to get

354
00:19:41,440 --> 00:19:45,160
Speaker 1: more episodes of this and other shows from Bloomberg. Subscribe

355
00:19:45,200 --> 00:19:49,119
Speaker 1: to the podcast on Apple, Spotify, or anywhere else you listen,

356
00:19:49,200 --> 00:19:52,280
Speaker 1: and always on Bloomberg Radio, the Bloomberg Terminal, and the

357
00:19:52,320 --> 00:19:53,400
Speaker 1: Bloomberg Business app.