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Speaker 1: Global business news twenty four hours a day. If Bloomberg

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Speaker 1: this is a Bloomberg Business flag from Bloomberg World Handquarters.

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Speaker 1: I'm Charlie Pellett. Young Brands numbers are out. Young Brands,

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Speaker 1: of course, the parent of Taco Bell, KFC and Pizza Hut,

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Speaker 1: reporting second quarter adjusted EPs of seventy five cents. Estimates

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Speaker 1: there seventy four cents. Second quarter revenue three point oh

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Speaker 1: one billion. The estimate for Young was three point o

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Speaker 1: nine billion. Stocks moving higher, SMP five hundred indexes climbed

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Speaker 1: in nine of the last eleven days, a record. The

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Speaker 1: SMP up by less than half a point. Little change

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Speaker 1: there at twenty one fifty two, but an update nonetheless,

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Speaker 1: Dow Industrials up twenty four points, also a record at

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Speaker 1: eighteen thousand, three hundred seventy two, a game of point

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Speaker 1: one percent. Nestack declined by three tenths of one percent,

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Speaker 1: ten You up twelve thirty seconds the old one point

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Speaker 1: four six percent, Gold up eight sixty v thirty three,

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Speaker 1: a gain of six tenths of one percent, and crude

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Speaker 1: oil down three point six A barrel of West Texas

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Speaker 1: intermediate Now at I'm Charlie Pollock. That's a Bloomberg Business Flash.

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Speaker 1: This is taking Stock with Pim Box and Kathleen Mays

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Speaker 1: on Bloomberg Radio. China in Focus. A ruling by an

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Speaker 1: international court on the South China Sea dispute hits the

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Speaker 1: world overnight today. It looks like China maybe more willing

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Speaker 1: to negotiate on this, taking some focus on Brexit and

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Speaker 1: certainly putting the focus back on Asia. Eric Shim joins

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Speaker 1: this now, policy adviser for the International Trade and Regulatory

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Speaker 1: Group at Alston and Bird in Washington, d C. So Eric,

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Speaker 1: start with the tribunals ruling, what they said, and China's

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Speaker 1: response today seeming a bit more cooperative. I don't know

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Speaker 1: if I go so far as as cooperative today. You know,

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Speaker 1: yesterday the Chinese Foreign Ministry very quickly came out and

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Speaker 1: and rejected the ruling in its entirety. Today in China,

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Speaker 1: the Foreign Ministry followed up with a ninety minute press

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Speaker 1: conference that was broadcast twice live uh to the nation,

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Speaker 1: in which the Foreign Ministry rolled out about a thirteen

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Speaker 1: thousand word position paper in which it defended all of

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Speaker 1: the claims that China had made and which the tribunal

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Speaker 1: in the Hague rejected yesterday. UH, So it's definitely rather

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Speaker 1: firm rhetoric from China. Another senior Chinese official also declared

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Speaker 1: that that China has the right to UH demarcate an

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Speaker 1: air defense identification zone over the disputed islands where China

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Speaker 1: has has claimed sovereignty. So they're not relinquishing any claims today. Eric.

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Speaker 1: Just to be clear, this case was brought by the Philippines. Right.

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Speaker 1: This is we're a dispute with China regarding the right

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Speaker 1: of the Philippines to exploit natural resources in what is

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Speaker 1: described as the exclusive economic zone. It extends from territory

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Speaker 1: that it claims in the South China Sea. That's right.

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Speaker 1: This stems from a long running dispute between China and

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Speaker 1: the Philippines over territory around the Spratley Islands UH, and

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Speaker 1: territory that extends it's within UH, mainly within the Philippines

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Speaker 1: exclusive two nautical mile UM exclusive economic zone. Over the

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Speaker 1: past several years, China has built artificial reefs UH and

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Speaker 1: other structures within those waters UH, in effect laying sovereign

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Speaker 1: claim to that territory and by extension, to to all

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Speaker 1: the waters where where the Philippines had had previously enjoyed

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Speaker 1: sovereign control. Well, you know, you have noted that there

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Speaker 1: are real risks to train in commerce through the South

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Speaker 1: China Sea and all this. But is there a military

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Speaker 1: risk here? There is a military risk, and I would

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Speaker 1: say that the military and commercial are linked. Uh. There's

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Speaker 1: now a lot of immediate public opinion pressure in the

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Speaker 1: Philippines saying, hey, we've been vindicated. Uh, those waters are

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Speaker 1: ours to fish or the ones that are not ours

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Speaker 1: are at least now internationally open high seas. Uh. The

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Speaker 1: Philippines has a very lucrative national fishing industry. Many of

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Speaker 1: those fishing vessels have lost significant revenues over the past

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Speaker 1: couple of years as they've been increasingly denied access to

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Speaker 1: their traditional fishing grounds by UH by either the Chinese

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Speaker 1: military vessels or by what's known as China's maritime militia,

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Speaker 1: which essentially are fishing fishing fleets under the under the

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Speaker 1: supervision of China's military. Now we could see uh, you know,

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Speaker 1: all manner of fishing vessels, whether they be Filipino or

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Speaker 1: Vietnamese or Indonesian, seeking to return to those international high

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Speaker 1: seas areas where where China's claims were we're rejected by

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Speaker 1: the tribunal. The question is are those going to be

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Speaker 1: met by Chinese navel or other vessels? Are those going

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Speaker 1: to provoke clashes at SEE which could lead to greater

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Speaker 1: military involvement by all the parties UH in the region Erica.

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Speaker 1: Other members of the region include Japan and I wonder

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Speaker 1: if you could comment on the dispute between Japan and

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Speaker 1: China in the East China Sea and also the dispute

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Speaker 1: that really comes when you talk about economic issues because

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Speaker 1: it has to do with the natural gas projects that

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Speaker 1: Beijing has been constructing. That's right. The China and Japan

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Speaker 1: have had UH an extremely long running UH argument over

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Speaker 1: the Senkaku or as the Chinese city of Dayu islands

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Speaker 1: in the East China Sea UH. That is a hotbed

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Speaker 1: for natural resource development, with both National oilk On both

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Speaker 1: the Chinese National oilk Company in various Japanese oil companies

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Speaker 1: competing for UH for seabed exploration find um. The Japanese

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Speaker 1: have long been considering whether or not to submit their

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Speaker 1: case to arbitration at the Hague, and the Japanese strongly

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Speaker 1: supported yesterday's ruling, So we might might expect the Japanese

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Speaker 1: effectively to to take China to court uh sooner than later,

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Speaker 1: believing that now they've got the weight of international maritime

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Speaker 1: law on their side. Eric quickly back to China. Those

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Speaker 1: social media flooded with thousands of comments testy, often for

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Speaker 1: fane nationalism one of our Bloomberg view people rights, uh,

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Speaker 1: some even calling for war. This was you know, blocked

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Speaker 1: to a certain extent. But the fact that the Chinese

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Speaker 1: let any of these testy comments out does it show?

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Speaker 1: Is this a little waving a warning flag at the US? Certainly?

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Speaker 1: Um uh typical Chinese UM behavior. I mean they have

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Speaker 1: a uh, they have a public that has that has

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Speaker 1: grown in its awareness of their country's strength, both economic

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Speaker 1: and military over the last decade and a half. Uh.

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Speaker 1: In a way, the she government UM may have put

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Speaker 1: itself in a bit of a corner by sticking out

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Speaker 1: such a strong position. So it's going to be hard

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Speaker 1: for China to climb down. And that's where the US

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Speaker 1: and a lot of diplomatic players will have to enter

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Speaker 1: and find a creative way to move forward. Thank you

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Speaker 1: very much. Eric Schimp, his policy advisor, International Trade and

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Speaker 1: regulatory group for Austin Bird in Washington, d C. Home

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Speaker 1: to one and one oh five point seven FM h

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Speaker 1: D two. This is taking Stockheim pim Fox my co

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Speaker 1: host Kathleen Hayes, and this is Bloomberg coming up. Bloomberg

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