1 00:00:02,480 --> 00:00:06,800 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,640 --> 00:00:12,840 Speaker 2: This is the Bloomberg Daybreak Asia podcast. I'm Doug Krisner. 3 00:00:12,920 --> 00:00:15,400 Speaker 2: You can join Brian Curtis and myself for the stories, 4 00:00:15,440 --> 00:00:18,560 Speaker 2: making news and moving markets in the APAC region. You 5 00:00:18,600 --> 00:00:21,439 Speaker 2: can subscribe to the show anywhere you get your podcast 6 00:00:21,520 --> 00:00:24,919 Speaker 2: and always on Bloomberg Radio, the Bloomberg Terminal, and the 7 00:00:24,920 --> 00:00:26,120 Speaker 2: Bloomberg Business app. 8 00:00:27,280 --> 00:00:30,680 Speaker 3: Leland Miller joins us now CEO of China Beijebook to 9 00:00:30,720 --> 00:00:34,600 Speaker 3: take a closer look at China's new stimulus measures. So Leland, 10 00:00:34,640 --> 00:00:36,760 Speaker 3: thank you for joining us here on the program. Do 11 00:00:36,840 --> 00:00:40,320 Speaker 3: you like this shot of adrenaline that the Chinese economy 12 00:00:40,400 --> 00:00:43,680 Speaker 3: is getting? One? Do you think it will work? And two? 13 00:00:44,640 --> 00:00:47,440 Speaker 3: As a sort of tack on, will there be benefits 14 00:00:47,440 --> 00:00:50,560 Speaker 3: for the US economy as well? 15 00:00:50,720 --> 00:00:52,680 Speaker 1: Well, there's a couple of different aspects of this. So 16 00:00:53,280 --> 00:00:56,120 Speaker 1: you know, you've got some big moves on property, you've 17 00:00:56,120 --> 00:00:58,200 Speaker 1: got them on credit, and you've got them on stocks, 18 00:00:58,200 --> 00:01:00,680 Speaker 1: and they're all trying to do very different things. Uh, 19 00:01:00,800 --> 00:01:03,200 Speaker 1: you know, will will the will anything on credit work 20 00:01:03,920 --> 00:01:06,600 Speaker 1: very unlikely? You know, everyone's excited by the idea that 21 00:01:06,640 --> 00:01:09,480 Speaker 1: they're going to be chopping the rates down cutting cutting 22 00:01:09,520 --> 00:01:13,360 Speaker 1: rates on all these different measures and and potential benchmark rates. 23 00:01:13,800 --> 00:01:16,600 Speaker 1: What's actually the key here is that we've tracked this 24 00:01:16,640 --> 00:01:19,600 Speaker 1: for years now, is that costs of capital has been 25 00:01:19,600 --> 00:01:21,760 Speaker 1: going down in China quite considerably since the beginning of 26 00:01:21,800 --> 00:01:24,759 Speaker 1: twenty twenty three. So rates reported by businesses have been 27 00:01:24,800 --> 00:01:27,400 Speaker 1: going down and down and down, and the reaction that 28 00:01:27,680 --> 00:01:29,880 Speaker 1: has been absolutely nothing. Firms do not want to borrow 29 00:01:29,920 --> 00:01:31,520 Speaker 1: because they look ahead at the future and they see 30 00:01:31,520 --> 00:01:34,200 Speaker 1: everything is gloomy right now, and and until they have 31 00:01:34,319 --> 00:01:36,720 Speaker 1: a sense of confidence return, they're not going to want 32 00:01:36,720 --> 00:01:38,280 Speaker 1: to borrow. So the idea that they're going to be 33 00:01:38,280 --> 00:01:40,399 Speaker 1: cutting capital, you know, the cutting cost of capital more 34 00:01:41,000 --> 00:01:43,160 Speaker 1: isn't something that's that's probably going to have a very 35 00:01:43,160 --> 00:01:45,040 Speaker 1: big impact. 36 00:01:45,160 --> 00:01:45,399 Speaker 4: Now. 37 00:01:45,560 --> 00:01:48,480 Speaker 1: Stepping in on property and and and and supporting some 38 00:01:48,560 --> 00:01:51,400 Speaker 1: buying can can can set a floor in certain things. 39 00:01:51,560 --> 00:01:53,160 Speaker 1: But I think that this is this is the key. 40 00:01:53,600 --> 00:01:56,400 Speaker 1: This is about setting a floor on the economy. It's 41 00:01:56,400 --> 00:01:58,680 Speaker 1: not about reaching a new ceiling. And I think that's 42 00:01:58,680 --> 00:02:00,000 Speaker 1: what investors are missing. 43 00:01:59,840 --> 00:02:02,600 Speaker 2: In terms of sentiment. How much of this has to 44 00:02:02,640 --> 00:02:04,360 Speaker 2: do with the fact that when you're stuck in a 45 00:02:04,440 --> 00:02:11,880 Speaker 2: deflationary trap like this and population sees asset values continuing 46 00:02:11,919 --> 00:02:14,799 Speaker 2: to go down, you have really less incentive to kind 47 00:02:14,800 --> 00:02:16,920 Speaker 2: of try to catch the falling knife. I mean, I 48 00:02:16,919 --> 00:02:20,640 Speaker 2: think that's the proverbial metaphor here. How much of what 49 00:02:20,680 --> 00:02:23,080 Speaker 2: we're seeing now is tied to that, A. 50 00:02:23,120 --> 00:02:24,600 Speaker 1: Huge chunk of it. I mean, a lot of what 51 00:02:24,639 --> 00:02:26,920 Speaker 1: they're doing right now is trying to improve sentiment. But 52 00:02:27,040 --> 00:02:30,079 Speaker 1: sentiment is really what's stopping and improving the economy. You know, 53 00:02:30,760 --> 00:02:33,639 Speaker 1: if you look at what's been happening in the property sector, 54 00:02:33,720 --> 00:02:35,679 Speaker 1: it's been intentional. They have been trying to deflate the 55 00:02:35,680 --> 00:02:38,680 Speaker 1: property sector. But it's very tough for Chinese households who 56 00:02:38,680 --> 00:02:42,760 Speaker 1: have seventy percent or so of household wealth in property assets. 57 00:02:42,960 --> 00:02:45,160 Speaker 1: So when they see these falling prices, they're not very 58 00:02:45,160 --> 00:02:46,919 Speaker 1: happy and they don't want to go out and spend. 59 00:02:47,120 --> 00:02:48,720 Speaker 1: They also see what's happening in the stock market. The 60 00:02:48,760 --> 00:02:50,919 Speaker 1: stock market's been going down, which which makes them feel 61 00:02:50,960 --> 00:02:53,400 Speaker 1: even poorer. So it's a whole bunch of different things 62 00:02:53,400 --> 00:02:56,720 Speaker 1: that haven't been going well. None of them are catastrophic 63 00:02:56,840 --> 00:02:59,480 Speaker 1: to the economy, but all of them are impeding a 64 00:02:59,520 --> 00:03:02,519 Speaker 1: more signal at recovery. So what China's Beajing's trying to 65 00:03:02,560 --> 00:03:05,280 Speaker 1: do right now is step in and just do enough 66 00:03:05,600 --> 00:03:07,639 Speaker 1: to set a floor so they could focus on things 67 00:03:07,639 --> 00:03:10,480 Speaker 1: that they care about more and don't risk some sort 68 00:03:10,520 --> 00:03:11,560 Speaker 1: of doom confidence loop. 69 00:03:12,160 --> 00:03:14,880 Speaker 3: I'd say that some would say, you know, they're trying 70 00:03:14,880 --> 00:03:17,720 Speaker 3: to rebuild confidence. They need to get confidence going and 71 00:03:17,760 --> 00:03:21,000 Speaker 3: you get the animal spirits going. And this was sort 72 00:03:21,000 --> 00:03:24,160 Speaker 3: of an across the bow, pretty big move here. So 73 00:03:24,320 --> 00:03:26,440 Speaker 3: let let's you know, let's give it some time and 74 00:03:26,440 --> 00:03:28,880 Speaker 3: wait and see whether or not it's putting a floor 75 00:03:28,960 --> 00:03:32,800 Speaker 3: or stiking confidence. I mean, there's quite a gap between 76 00:03:32,840 --> 00:03:35,640 Speaker 3: the two. We had a guest on yesterday mentioned pay 77 00:03:35,880 --> 00:03:38,880 Speaker 3: from Claremont College. He was saying that it's really more 78 00:03:38,920 --> 00:03:43,760 Speaker 3: about confidence in political leadership and in policymaking, and that 79 00:03:44,280 --> 00:03:47,440 Speaker 3: it's lacking in China. Now do you do you think 80 00:03:47,480 --> 00:03:49,560 Speaker 3: it's going to take some time for that to get 81 00:03:49,560 --> 00:03:51,640 Speaker 3: restoked well again. 82 00:03:51,680 --> 00:03:53,440 Speaker 1: You know, one of the things that's been happening over 83 00:03:53,440 --> 00:03:55,360 Speaker 1: the course of the last five ten years is that 84 00:03:55,600 --> 00:03:57,760 Speaker 1: the party has become more and more of the state, 85 00:03:57,840 --> 00:04:00,000 Speaker 1: more and more of the economy, and chijin Ping in particular. 86 00:04:00,360 --> 00:04:03,240 Speaker 1: So if things are not going well, that makes the 87 00:04:03,240 --> 00:04:05,320 Speaker 1: party look worse. It makes sheen Pain look worse since 88 00:04:05,360 --> 00:04:07,280 Speaker 1: he's head of everything, He's head of the parties, head 89 00:04:07,320 --> 00:04:09,200 Speaker 1: of the states, head of the economy, so there is 90 00:04:09,240 --> 00:04:11,720 Speaker 1: there is a political aspect to all this. You know, 91 00:04:11,800 --> 00:04:14,400 Speaker 1: I think right now the Chinese, when the Chinese leadership 92 00:04:14,440 --> 00:04:16,680 Speaker 1: is looking at their economy, you know, it has had 93 00:04:16,800 --> 00:04:19,120 Speaker 1: a lot of troubles in twenty twenty four, no question 94 00:04:19,160 --> 00:04:21,800 Speaker 1: about it. But I think what they're really worried about 95 00:04:22,160 --> 00:04:26,240 Speaker 1: are are broader, more significant national security issues. They want 96 00:04:26,279 --> 00:04:29,600 Speaker 1: to build a domestic chip ecosystem. They're worried about supply 97 00:04:29,720 --> 00:04:32,960 Speaker 1: chain resiliency. You know, US and Western leverage over their 98 00:04:33,000 --> 00:04:37,000 Speaker 1: supply chains and their technology and their payment systems. So 99 00:04:37,040 --> 00:04:39,200 Speaker 1: they're looking at all these big things, and then you know, 100 00:04:39,320 --> 00:04:41,680 Speaker 1: when it comes to GDP targets, this is the focus 101 00:04:41,720 --> 00:04:44,840 Speaker 1: mostly of Western analysts. You know, she doesn't want the 102 00:04:44,880 --> 00:04:46,680 Speaker 1: economy to get on the toilet, but I don't think 103 00:04:46,680 --> 00:04:48,440 Speaker 1: he spends his night worrying about whether they're going to 104 00:04:48,520 --> 00:04:50,479 Speaker 1: hit five percent. They have to do just enough so 105 00:04:50,520 --> 00:04:53,719 Speaker 1: that they can set a floor, make sure that things 106 00:04:53,760 --> 00:04:56,640 Speaker 1: are not looking too terrible, and they can go about 107 00:04:56,640 --> 00:04:58,480 Speaker 1: their way focusing on things they truly care about. 108 00:04:58,600 --> 00:05:00,800 Speaker 2: It's interesting. We had a story on the terminal earlier 109 00:05:00,800 --> 00:05:04,560 Speaker 2: today highlighting the fact that China's over the counter crypto 110 00:05:04,680 --> 00:05:09,240 Speaker 2: brokers have been attracting unprecedented inflows over the last three 111 00:05:09,320 --> 00:05:11,640 Speaker 2: quarters ending in June. I think the total was over 112 00:05:11,720 --> 00:05:16,120 Speaker 2: seventy five billion. It's obvious a reflection of a lack 113 00:05:16,160 --> 00:05:18,320 Speaker 2: of confidence here. But I want to go to a 114 00:05:18,400 --> 00:05:20,599 Speaker 2: note that you kind of shared with us. You right, 115 00:05:20,839 --> 00:05:23,920 Speaker 2: in no way is this a bazuka of any kind. Okay, 116 00:05:24,000 --> 00:05:27,480 Speaker 2: let's accept that what does bazuka look like. 117 00:05:29,200 --> 00:05:31,560 Speaker 1: Well, bazuoka would be something similar to what they did 118 00:05:31,800 --> 00:05:34,160 Speaker 1: back in two thousand and nine, ten eleven, when they 119 00:05:34,200 --> 00:05:36,760 Speaker 1: just sort of unleash the you know, the floodgates and 120 00:05:36,839 --> 00:05:39,839 Speaker 1: they and they went big, big fiscal that built a 121 00:05:39,839 --> 00:05:41,440 Speaker 1: lot of things. You know, a lot of people have 122 00:05:41,480 --> 00:05:44,040 Speaker 1: been waiting for China to just realize or Exigon Ping 123 00:05:44,080 --> 00:05:46,000 Speaker 1: to realize the air of his ways and to say, 124 00:05:46,000 --> 00:05:48,200 Speaker 1: you know what, we want these higher levels of growth 125 00:05:48,200 --> 00:05:51,400 Speaker 1: we had before. We want these foreign these investor returns 126 00:05:51,440 --> 00:05:53,080 Speaker 1: to go back up. You know, we want to return 127 00:05:53,120 --> 00:05:55,760 Speaker 1: the old stimulus playbook. You know, Beijing has moved on. 128 00:05:55,800 --> 00:05:59,479 Speaker 1: There's a different economic you know, sense of governance right now, 129 00:05:59,480 --> 00:06:02,520 Speaker 1: there's parties have changed, the stimulus playbook has changed, so 130 00:06:02,640 --> 00:06:05,239 Speaker 1: right now they're looking at at at much lower levels 131 00:06:05,240 --> 00:06:08,040 Speaker 1: of growth and focusing on these national security priorities that 132 00:06:08,200 --> 00:06:11,520 Speaker 1: are really front and center. So I think what investors 133 00:06:11,520 --> 00:06:14,760 Speaker 1: would love to see is some large fiscal package that 134 00:06:14,880 --> 00:06:17,800 Speaker 1: really got them spend spend, spend, spend spend, But they 135 00:06:17,880 --> 00:06:19,600 Speaker 1: do not want to do that. They think that this 136 00:06:19,640 --> 00:06:22,840 Speaker 1: big deficit spending is a you know, is a threat 137 00:06:22,880 --> 00:06:25,000 Speaker 1: to the economy. Is because it's a threat to the party, 138 00:06:25,000 --> 00:06:27,640 Speaker 1: because it's a threat to the economy. So I think, 139 00:06:27,920 --> 00:06:30,440 Speaker 1: you know that the prospect of them going bigger outside 140 00:06:30,480 --> 00:06:32,520 Speaker 1: of a break the glass emergency, it's just it's just 141 00:06:32,680 --> 00:06:34,440 Speaker 1: something they do not want to do. 142 00:06:35,040 --> 00:06:37,080 Speaker 3: So something I asked you about right at the outset 143 00:06:37,200 --> 00:06:38,920 Speaker 3: was whether or not this could be positive for the 144 00:06:39,000 --> 00:06:41,560 Speaker 3: US economy. It seems like you're saying it's probably not 145 00:06:41,600 --> 00:06:44,520 Speaker 3: going to be very positive even for the Chinese economy, 146 00:06:44,560 --> 00:06:46,960 Speaker 3: much less the global economy or the US. 147 00:06:47,880 --> 00:06:52,800 Speaker 1: Yeah, these aren't things with major implications abroad. I mean, 148 00:06:52,960 --> 00:06:55,479 Speaker 1: what what is important for the going on in the 149 00:06:55,520 --> 00:06:58,760 Speaker 1: Chinese economy right now? For for for foreign for other 150 00:06:58,760 --> 00:07:03,560 Speaker 1: countries or for foreign firms. It's the manufacturing platform. It's 151 00:07:03,560 --> 00:07:07,440 Speaker 1: the new quality productive forces that they've been talking about, 152 00:07:07,440 --> 00:07:09,200 Speaker 1: which is they're going to want to produce a lot 153 00:07:09,240 --> 00:07:11,200 Speaker 1: more and they're going export a lot more, which is 154 00:07:11,240 --> 00:07:14,080 Speaker 1: a politically sensitive topic because they're talking about despite the 155 00:07:14,120 --> 00:07:16,640 Speaker 1: fact that they've got these enormous trade surpluses and enormous 156 00:07:16,640 --> 00:07:19,600 Speaker 1: goods surpluses, and specifically they're going to export more and 157 00:07:19,600 --> 00:07:21,800 Speaker 1: more and more to trading partners and that's going to 158 00:07:21,880 --> 00:07:27,240 Speaker 1: cause political friction. And so that's really the dominant issue 159 00:07:27,320 --> 00:07:29,960 Speaker 1: right now when it comes to China's exports, and you know, 160 00:07:30,040 --> 00:07:33,520 Speaker 1: China looking abroad and the global you know, the global 161 00:07:33,600 --> 00:07:35,679 Speaker 1: view of China. A lot of these things that happened 162 00:07:35,680 --> 00:07:38,040 Speaker 1: in the property sector are not relevant to the global economy. 163 00:07:38,640 --> 00:07:42,680 Speaker 1: If they did some sort of enormous building program, yes 164 00:07:42,720 --> 00:07:44,800 Speaker 1: you'd have a commodities demand go up, and that could 165 00:07:44,800 --> 00:07:47,120 Speaker 1: be relevant, but like I said, that's not what they 166 00:07:47,160 --> 00:07:49,160 Speaker 1: want to do, and you know, we certainly don't expect it. 167 00:07:49,840 --> 00:07:52,880 Speaker 3: All right, thanks very much, Leland Leland Miller, CEO of 168 00:07:52,960 --> 00:08:02,480 Speaker 3: China bish Book, Richard Harris, CEO of Port Shelter Investment, 169 00:08:02,600 --> 00:08:06,080 Speaker 3: management with us live here in our studios. So, Richard, 170 00:08:06,080 --> 00:08:08,640 Speaker 3: we had these broad measures in China. We can debate 171 00:08:08,680 --> 00:08:11,280 Speaker 3: a little bit about how big they were and whether 172 00:08:11,320 --> 00:08:14,600 Speaker 3: or not they will be enough to reverse the Chinese 173 00:08:14,640 --> 00:08:18,280 Speaker 3: economies slow down. But there are some that are calling 174 00:08:18,400 --> 00:08:21,320 Speaker 3: for more of political backing as well. So a lot 175 00:08:21,360 --> 00:08:24,720 Speaker 3: of this came from Pangong Chong from the PBOC. Do 176 00:08:24,760 --> 00:08:27,480 Speaker 3: we need maybe some comments from President Hujenping. 177 00:08:28,080 --> 00:08:31,520 Speaker 4: Well, I guess it's always nice to see a higher 178 00:08:31,520 --> 00:08:33,920 Speaker 4: authority do these things. But we all know what China's like, 179 00:08:33,960 --> 00:08:37,400 Speaker 4: and we all know that mister Pang would not have 180 00:08:37,679 --> 00:08:40,960 Speaker 4: said what he did without the blessing from much higher up. 181 00:08:41,080 --> 00:08:45,559 Speaker 4: So I think, unlike many other situations in other countries 182 00:08:45,559 --> 00:08:47,160 Speaker 4: in the world, we can probably take it that this 183 00:08:47,240 --> 00:08:52,560 Speaker 4: comes from the top the measures. I think actually I 184 00:08:52,679 --> 00:08:56,880 Speaker 4: rather embarrassingly forecast them coming through in about February, and 185 00:08:56,920 --> 00:09:00,640 Speaker 4: now they've come through sometime later, so they've come through 186 00:09:00,679 --> 00:09:02,839 Speaker 4: at a measured pace. But I would say that this 187 00:09:02,960 --> 00:09:05,560 Speaker 4: is a mid level move. It's not the big bazooka 188 00:09:05,640 --> 00:09:10,000 Speaker 4: I think that is probably needed, but it's certainly a 189 00:09:10,080 --> 00:09:12,680 Speaker 4: step along the way, and I think that quite a 190 00:09:12,720 --> 00:09:15,000 Speaker 4: positive sign for Chinese markets. 191 00:09:15,240 --> 00:09:18,600 Speaker 2: Does it cause you to maybe become a little interested 192 00:09:18,880 --> 00:09:21,679 Speaker 2: in taking on risk and so far as Chinese assets 193 00:09:21,679 --> 00:09:22,720 Speaker 2: are concerned. 194 00:09:22,960 --> 00:09:25,800 Speaker 4: Yeah, I think so, Doug. I think the situation is 195 00:09:25,920 --> 00:09:31,960 Speaker 4: that we've seen China underperforming dramatically over the last few years, 196 00:09:32,040 --> 00:09:35,200 Speaker 4: actually some quite some years, and I think what we're 197 00:09:35,240 --> 00:09:37,520 Speaker 4: maybe about to see now is that at least the 198 00:09:37,559 --> 00:09:41,040 Speaker 4: market starts to bottom out, at least it stops underperforming 199 00:09:41,080 --> 00:09:43,840 Speaker 4: other world markets. And that's a positive because I think 200 00:09:43,880 --> 00:09:46,480 Speaker 4: then investors, if they take that view, they can say, well, 201 00:09:46,480 --> 00:09:48,480 Speaker 4: it's probably worth going in. We're not going to lose 202 00:09:48,520 --> 00:09:51,679 Speaker 4: money against say an overall index, We're not going to underperform, 203 00:09:51,720 --> 00:09:56,120 Speaker 4: and who knows, we may outperform because valuations are very low. 204 00:09:56,440 --> 00:09:58,960 Speaker 4: It's a very under owned market, and it is the 205 00:09:58,960 --> 00:10:00,560 Speaker 4: second largest economy in the world. 206 00:10:01,120 --> 00:10:03,640 Speaker 3: It's kind of a double whammy to the positive side 207 00:10:03,679 --> 00:10:06,920 Speaker 3: for Hong Kong. It's a small place, doesn't influence China 208 00:10:06,960 --> 00:10:09,480 Speaker 3: as much as it used to. But with the FED 209 00:10:09,520 --> 00:10:12,199 Speaker 3: cutting interest rates for fifty basis points and then this, 210 00:10:12,800 --> 00:10:14,280 Speaker 3: how does Hong Kong look to you now? 211 00:10:14,520 --> 00:10:14,679 Speaker 5: Well? 212 00:10:14,720 --> 00:10:16,959 Speaker 4: I always see Hong Kong as an option on China. 213 00:10:17,080 --> 00:10:19,360 Speaker 4: You know, when China does badly, Hong Kong does worse. 214 00:10:19,440 --> 00:10:22,320 Speaker 4: When China does better, Hong Kong does better. And part 215 00:10:22,400 --> 00:10:24,840 Speaker 4: of that is because you know, we are a small 216 00:10:25,160 --> 00:10:27,800 Speaker 4: microcosm of a sort of mix between China and the 217 00:10:27,840 --> 00:10:31,400 Speaker 4: rest of the world, very internationalized city, but we are 218 00:10:31,440 --> 00:10:34,040 Speaker 4: also the fourteenth largest city in China now, so it's 219 00:10:34,040 --> 00:10:36,720 Speaker 4: sort of caught in between this. But I think one 220 00:10:36,760 --> 00:10:38,600 Speaker 4: of the key things, of course, is we have our 221 00:10:38,600 --> 00:10:40,760 Speaker 4: own currency, the Hong Kong dollar, which is linked to 222 00:10:40,760 --> 00:10:43,840 Speaker 4: the US dollar. Interest rates coming down there, so that's 223 00:10:43,960 --> 00:10:46,760 Speaker 4: likely to be positive. Much of Hong Kong's wealth is 224 00:10:46,800 --> 00:10:48,920 Speaker 4: tied up in property, and of course that's an interest 225 00:10:49,000 --> 00:10:50,080 Speaker 4: rate sensitive market. 226 00:10:50,559 --> 00:10:52,960 Speaker 2: So I'm curious about the themes that you want to 227 00:10:53,040 --> 00:10:55,120 Speaker 2: tease out here. If you were to go long an 228 00:10:55,160 --> 00:10:58,560 Speaker 2: asset right now, what industry or theme would it be 229 00:10:58,600 --> 00:10:59,160 Speaker 2: connected to. 230 00:11:00,200 --> 00:11:02,440 Speaker 4: Well, if you're looking at China, I still think you 231 00:11:02,520 --> 00:11:04,760 Speaker 4: have to look at tech, and there are a couple 232 00:11:04,760 --> 00:11:07,280 Speaker 4: of reasons for that. One is that tech, after all 233 00:11:07,280 --> 00:11:09,719 Speaker 4: around the world is the darling of our age. You know, 234 00:11:10,200 --> 00:11:12,880 Speaker 4: it used to be TV, used to be steel, used 235 00:11:12,880 --> 00:11:16,720 Speaker 4: to be shipbuilding, our age. Tech is the darling. Of course, 236 00:11:16,760 --> 00:11:18,280 Speaker 4: we're getting to the stage where you need to be 237 00:11:18,440 --> 00:11:20,840 Speaker 4: relatively more careful where you look. But I think the 238 00:11:20,840 --> 00:11:23,640 Speaker 4: tech sector in China is definitely a place to look. 239 00:11:23,679 --> 00:11:25,680 Speaker 4: The other thing, too, is that there will be a 240 00:11:25,679 --> 00:11:28,679 Speaker 4: lot of state support and state interest in the tech sector. 241 00:11:28,679 --> 00:11:30,920 Speaker 4: And I'm talking about the commercial side of the tech sector, 242 00:11:31,520 --> 00:11:34,880 Speaker 4: not just the military side, because of the sanctions process, 243 00:11:34,920 --> 00:11:38,040 Speaker 4: and the sanctions process is likely to lead to much 244 00:11:38,080 --> 00:11:43,520 Speaker 4: more interest in developing much more sophisticated technological solutions in China, 245 00:11:43,600 --> 00:11:46,040 Speaker 4: and I think that that's going to be the kind 246 00:11:46,080 --> 00:11:48,320 Speaker 4: of area that investors should be looking at first. 247 00:11:49,000 --> 00:11:51,040 Speaker 3: On the political side, what I was hinting at with 248 00:11:51,080 --> 00:11:53,800 Speaker 3: the first question is whether or not we might see 249 00:11:53,800 --> 00:11:57,760 Speaker 3: some comments from Hijinping about relations with the rest of 250 00:11:57,800 --> 00:12:01,920 Speaker 3: the world, the conditions to which Hong Kong is operating, 251 00:12:02,400 --> 00:12:05,880 Speaker 3: something like that, any sort of political gesture that perhaps 252 00:12:05,920 --> 00:12:11,080 Speaker 3: strengthens Hong Kong's semi autonomy that we've long been promised 253 00:12:11,120 --> 00:12:12,520 Speaker 3: and seems to be eroding. 254 00:12:12,960 --> 00:12:15,760 Speaker 4: I don't think they're necessarily related. I think at the moment, 255 00:12:15,800 --> 00:12:18,640 Speaker 4: the administration is focused on the economy and how to 256 00:12:18,640 --> 00:12:22,920 Speaker 4: get the economy back up to shape. I think political 257 00:12:23,000 --> 00:12:26,480 Speaker 4: pronouncements are likely to come later at a different time, 258 00:12:26,800 --> 00:12:31,280 Speaker 4: maybe associated with a new president in the US or 259 00:12:30,880 --> 00:12:34,640 Speaker 4: new old president in the US, where clearly they're going 260 00:12:34,679 --> 00:12:38,560 Speaker 4: to have to chat and, if not make up, at 261 00:12:38,640 --> 00:12:40,719 Speaker 4: least get to understand each other. So I think that's 262 00:12:40,760 --> 00:12:43,319 Speaker 4: the sort of time when you might expect a political 263 00:12:44,520 --> 00:12:46,439 Speaker 4: discussion to come out from China. 264 00:12:46,520 --> 00:12:49,199 Speaker 2: It's interesting you make that point. In my hands right 265 00:12:49,240 --> 00:12:52,360 Speaker 2: now have the latest edition of Bloomberg BusinessWeek, the hard 266 00:12:52,400 --> 00:12:57,319 Speaker 2: copy story by our own Tom Orlick of Bloomberg Economics 267 00:12:57,320 --> 00:13:01,760 Speaker 2: saying that Trump's tariffs would simply and trade with China 268 00:13:02,080 --> 00:13:06,440 Speaker 2: full stop. Is that an exaggeration, I think so. 269 00:13:06,480 --> 00:13:08,800 Speaker 4: I'm very impressed, Doug, that you're still reading paper copies 270 00:13:08,840 --> 00:13:11,599 Speaker 4: of it old school like me. 271 00:13:12,679 --> 00:13:14,800 Speaker 1: But I think no. 272 00:13:14,960 --> 00:13:18,080 Speaker 4: I think what happens with taris somebody's got to pay 273 00:13:18,080 --> 00:13:19,439 Speaker 4: for it at the end of the day, and it's 274 00:13:19,480 --> 00:13:21,920 Speaker 4: always the consumer. It may take a little while, but 275 00:13:21,960 --> 00:13:24,680 Speaker 4: it's always the consumer. But at the same time, the 276 00:13:24,760 --> 00:13:27,719 Speaker 4: consumer will still demand goods, they'll still be the law 277 00:13:27,760 --> 00:13:30,760 Speaker 4: of comparative advantage still working, They'll still be trade. So 278 00:13:31,200 --> 00:13:33,640 Speaker 4: I don't think we're looking at a complete cutoff in trade, 279 00:13:33,679 --> 00:13:37,040 Speaker 4: And in any case, as we've seen with trade through Mexico. 280 00:13:37,840 --> 00:13:39,680 Speaker 4: There are plenty of loopholes of this sort of thing. 281 00:13:40,240 --> 00:13:41,400 Speaker 4: These are things can work through. 282 00:13:41,520 --> 00:13:44,520 Speaker 3: Sneak in a final one here switching the attention to 283 00:13:44,559 --> 00:13:47,800 Speaker 3: the US cutting interest rates by the Fed. Do you 284 00:13:47,840 --> 00:13:48,880 Speaker 3: like the US at the moment? 285 00:13:49,920 --> 00:13:50,360 Speaker 1: I do? 286 00:13:50,720 --> 00:13:50,960 Speaker 3: You know? 287 00:13:51,080 --> 00:13:54,560 Speaker 4: We're still in the situation where the consumer is fairly strong. 288 00:13:54,640 --> 00:13:56,680 Speaker 4: You have to keep an eye on unemployment, but you know, 289 00:13:56,800 --> 00:14:00,800 Speaker 4: unemployment's really quite low. The consumers still taking away with 290 00:14:00,920 --> 00:14:03,240 Speaker 4: starting to get a little bit of weakness here and there, 291 00:14:03,280 --> 00:14:05,920 Speaker 4: but yep, I'm still holding the US. 292 00:14:06,400 --> 00:14:08,560 Speaker 3: Richard, thank you very much for joining us here. Good 293 00:14:08,600 --> 00:14:11,120 Speaker 3: to see you back in town and we'll have to 294 00:14:11,840 --> 00:14:16,480 Speaker 3: get together soon. Outside of work, Richard Harris joins us 295 00:14:16,520 --> 00:14:25,480 Speaker 3: the CEO of Ports Shelter Investment Manager. Joining us in 296 00:14:25,520 --> 00:14:28,560 Speaker 3: our Hong Kong studios is Daniel ten Kate Bloomberg Asia 297 00:14:28,600 --> 00:14:32,000 Speaker 3: Eco goov executive editor to take a closer look at 298 00:14:32,040 --> 00:14:35,680 Speaker 3: this rollout of economic stimulus in China, Dan, thanks very 299 00:14:35,760 --> 00:14:39,880 Speaker 3: much for coming in. So almost everybody is portraying this 300 00:14:40,280 --> 00:14:43,880 Speaker 3: as a broad package of monetary stimulus. It seems to 301 00:14:43,920 --> 00:14:47,520 Speaker 3: have caused a fairly positive response here. There are some 302 00:14:47,680 --> 00:14:51,160 Speaker 3: questions about its sustainability, and there are also some questions 303 00:14:51,560 --> 00:14:54,640 Speaker 3: about whether or not there is broad political support for this. 304 00:14:54,720 --> 00:14:58,680 Speaker 3: So we'll keep the political part for perhaps a moment 305 00:14:58,840 --> 00:15:01,640 Speaker 3: or two. Let's start off with does this Is this 306 00:15:01,760 --> 00:15:04,920 Speaker 3: the kind of package that could work well? 307 00:15:04,960 --> 00:15:08,040 Speaker 6: Certainly in the short term, it looks to be doing 308 00:15:08,240 --> 00:15:12,480 Speaker 6: what policy makers intended it to do. The criticism up 309 00:15:12,520 --> 00:15:15,760 Speaker 6: to now has been the measures have been very piecemeal, 310 00:15:16,600 --> 00:15:19,280 Speaker 6: kind of you know, authorities waiting to see if they 311 00:15:19,280 --> 00:15:22,400 Speaker 6: can actually hit this growth target that they set of 312 00:15:22,440 --> 00:15:26,200 Speaker 6: around five percent, and what we've seen in recent weeks 313 00:15:26,240 --> 00:15:28,360 Speaker 6: is a lot of downgrades from from some of the 314 00:15:28,360 --> 00:15:30,760 Speaker 6: big banks saying that no, they're actually on track to 315 00:15:30,760 --> 00:15:33,960 Speaker 6: miss that target. So this was kind of a bit 316 00:15:34,000 --> 00:15:37,920 Speaker 6: of showmanship here from the PBOC and the financial regulators 317 00:15:38,760 --> 00:15:41,520 Speaker 6: all getting together at the same time and rolling out 318 00:15:41,600 --> 00:15:45,520 Speaker 6: all of these measures all at once, so that that's 319 00:15:45,800 --> 00:15:48,560 Speaker 6: stunned the market a bit. It wasn't not normally the 320 00:15:48,600 --> 00:15:51,400 Speaker 6: way that the PBC operates to come out and have 321 00:15:51,440 --> 00:15:55,840 Speaker 6: the governor, you know, take questions and announce rate cuts 322 00:15:55,880 --> 00:15:59,600 Speaker 6: and r R cuts all at the same time, including 323 00:15:59,600 --> 00:16:04,000 Speaker 6: more for banks, incentives to buy homes, stock stables, there's 324 00:16:04,040 --> 00:16:06,520 Speaker 6: some fun. So all of these things have been called for, 325 00:16:06,640 --> 00:16:09,840 Speaker 6: but the fact that they were like, hey, here we are, 326 00:16:09,920 --> 00:16:12,520 Speaker 6: we're all together, we're taking this seriously, We're laying all 327 00:16:12,560 --> 00:16:14,960 Speaker 6: these things out at the same time. Markets loved that. 328 00:16:15,920 --> 00:16:20,280 Speaker 6: They kind of swored in the aftermath yesterday, and now 329 00:16:20,320 --> 00:16:24,400 Speaker 6: most economists, including Bloomberg Economics, is saying, yes, what they 330 00:16:24,400 --> 00:16:27,640 Speaker 6: did on the monetary side is definitely enough to hit 331 00:16:27,720 --> 00:16:29,120 Speaker 6: that target this year. 332 00:16:29,680 --> 00:16:32,920 Speaker 2: That's interesting. I was looking at research from Bloomberg Economics. 333 00:16:33,280 --> 00:16:36,560 Speaker 2: You mentioned the fact that these measures were unveiled together, 334 00:16:36,720 --> 00:16:40,680 Speaker 2: that being in and of itself unusual, but Bloomberg Economics 335 00:16:40,760 --> 00:16:43,120 Speaker 2: was talking about the fact that it essentially speaks to 336 00:16:43,160 --> 00:16:47,320 Speaker 2: the urgency felt in Beijing to head off deflationary risk. 337 00:16:47,400 --> 00:16:49,720 Speaker 2: I mean, is that the big concern right now is 338 00:16:50,160 --> 00:16:51,800 Speaker 2: getting stuck in deflation. 339 00:16:53,160 --> 00:16:56,960 Speaker 6: Yes, that's the longer term concern. So what this package 340 00:16:56,960 --> 00:16:59,360 Speaker 6: did was basically allowed them to hit that growth target 341 00:16:59,360 --> 00:17:03,560 Speaker 6: this year. But the big looming question is how are 342 00:17:03,560 --> 00:17:08,080 Speaker 6: they going to stem this deflationary spiral. You know, the 343 00:17:08,240 --> 00:17:13,480 Speaker 6: GDP deflator has been negative for four or five quarters. 344 00:17:13,520 --> 00:17:18,119 Speaker 6: That's you know, the longest stretch sincerely nineteen nineties and 345 00:17:18,400 --> 00:17:21,199 Speaker 6: the consensus is basically that this is enough to the 346 00:17:21,240 --> 00:17:24,000 Speaker 6: growth target, but it's not enough to like bring back 347 00:17:24,080 --> 00:17:27,520 Speaker 6: confidence more broadly in the economy, and that's what is 348 00:17:27,560 --> 00:17:28,640 Speaker 6: going to be needed going forward. 349 00:17:28,680 --> 00:17:30,320 Speaker 3: Yeah, And that's what I was hinting at with some 350 00:17:30,359 --> 00:17:33,040 Speaker 3: political support. And it's also noted in the China Today 351 00:17:33,080 --> 00:17:37,600 Speaker 3: column that Penguong Chung did about all he can to 352 00:17:38,000 --> 00:17:40,600 Speaker 3: help stimulate the economy, and now it's up to President 353 00:17:40,720 --> 00:17:44,400 Speaker 3: Chijin Ping and the top political leadership to follow through. 354 00:17:44,480 --> 00:17:48,040 Speaker 3: Now I'm not sure what they mean by following through, 355 00:17:48,119 --> 00:17:51,320 Speaker 3: but are there some other things that the political authorities 356 00:17:51,320 --> 00:17:53,280 Speaker 3: can do to rebuild confidence. 357 00:17:52,840 --> 00:17:54,240 Speaker 1: In the electorate? 358 00:17:54,880 --> 00:17:57,440 Speaker 3: Why I say electra, but I mean in the populace. 359 00:17:57,200 --> 00:18:02,040 Speaker 6: The populace, yes, the Yeah, I think there was always 360 00:18:02,080 --> 00:18:05,560 Speaker 6: a sense that the quickest way you could do this 361 00:18:05,720 --> 00:18:08,760 Speaker 6: was on the monetary policy side, and the quickest thing 362 00:18:08,760 --> 00:18:11,160 Speaker 6: you could do is lower interest rates and get more 363 00:18:11,200 --> 00:18:14,520 Speaker 6: money flowing in the system, and that's what they did yesterday. 364 00:18:16,000 --> 00:18:20,360 Speaker 6: You know, we have reporting that President she and top 365 00:18:20,480 --> 00:18:22,760 Speaker 6: leaders of the Crimes Party in the past couple of 366 00:18:22,800 --> 00:18:26,359 Speaker 6: weeks have held urgent meetings on the economy, and that 367 00:18:26,520 --> 00:18:30,639 Speaker 6: this briefing stemmed from that. So they are feeling the 368 00:18:30,680 --> 00:18:34,159 Speaker 6: heat in that sense. And now the spotlight goes to 369 00:18:34,200 --> 00:18:37,240 Speaker 6: the finance ministry. What can they do on the fiscal side, 370 00:18:37,359 --> 00:18:41,520 Speaker 6: And that's a much tougher question than lowering rates. You know, 371 00:18:41,560 --> 00:18:45,600 Speaker 6: that involves getting local governments to spend money, to find 372 00:18:45,640 --> 00:18:49,760 Speaker 6: projects to spend money on, and that's not something that's 373 00:18:49,800 --> 00:18:53,200 Speaker 6: easy to do in China right now. The other thing 374 00:18:53,320 --> 00:18:57,320 Speaker 6: kind of handcuffing Chinese authorities is a reluctance to do 375 00:18:57,760 --> 00:18:59,720 Speaker 6: what a lot of other governments do around the world, 376 00:19:00,240 --> 00:19:04,560 Speaker 6: give cash directly to people. That's something that China just 377 00:19:04,640 --> 00:19:07,520 Speaker 6: hasn't done before and that the authorities don't want to do. 378 00:19:08,040 --> 00:19:13,399 Speaker 6: You know, they're worried about entrenching expectations among you know, 379 00:19:13,440 --> 00:19:19,080 Speaker 6: more than a billion people for welfare handouts and you know, 380 00:19:19,160 --> 00:19:23,160 Speaker 6: basically creating a system of social spending that they can't 381 00:19:23,240 --> 00:19:25,919 Speaker 6: afford over the long run. So what they're coming up 382 00:19:25,960 --> 00:19:30,320 Speaker 6: with are kind of targeted measures that would allow people 383 00:19:30,400 --> 00:19:32,720 Speaker 6: to you know, to be absolutely sure that they'll spend 384 00:19:32,720 --> 00:19:34,840 Speaker 6: the money. I mean, China has one of the largest 385 00:19:34,880 --> 00:19:36,960 Speaker 6: savings rates in the world. So the feeling is even 386 00:19:36,960 --> 00:19:39,760 Speaker 6: if you give everyone one hundred dollars. They're going to 387 00:19:39,840 --> 00:19:42,959 Speaker 6: save most of that and not spend a lot of it. 388 00:19:43,080 --> 00:19:47,080 Speaker 6: So that's the fear among policymakers in Beijing. How do 389 00:19:47,160 --> 00:19:48,679 Speaker 6: we do that? How do we get people spending? 390 00:19:48,800 --> 00:19:50,439 Speaker 2: I think we can agree that the one of the 391 00:19:50,440 --> 00:19:52,560 Speaker 2: bright spots of the Chinese economy has been on the 392 00:19:52,600 --> 00:19:56,679 Speaker 2: export side. And I'm wondering with all the risk maybe 393 00:19:56,720 --> 00:19:59,760 Speaker 2: that certain industries may be up against tariffs, whether it's 394 00:20:00,040 --> 00:20:05,520 Speaker 2: evs coming from the US, Canada, Europe, whether China's trading 395 00:20:05,560 --> 00:20:09,560 Speaker 2: partners realize the vulnerability right now and will use that 396 00:20:09,640 --> 00:20:13,679 Speaker 2: to their advantage in trying to negotiate better trade deals. 397 00:20:13,680 --> 00:20:15,879 Speaker 2: Do you think that's a possibility. 398 00:20:16,960 --> 00:20:21,080 Speaker 6: I think as far as the whole plan for the 399 00:20:21,160 --> 00:20:25,240 Speaker 6: Chinese economy, and she's what she is doing is to 400 00:20:25,400 --> 00:20:28,439 Speaker 6: double down on manufacturing and really pour money into that, 401 00:20:28,480 --> 00:20:33,200 Speaker 6: particularly new productive forces is what he calls them, evs, batteries, 402 00:20:33,240 --> 00:20:35,919 Speaker 6: solar panels, that kind of stuff that is really what 403 00:20:36,080 --> 00:20:38,919 Speaker 6: is driving the economy at the moment, and they're trying 404 00:20:38,960 --> 00:20:41,199 Speaker 6: to what they did yesterday was trying to stop the 405 00:20:41,240 --> 00:20:44,040 Speaker 6: bleeding on the on the property side in particular, which 406 00:20:44,119 --> 00:20:46,920 Speaker 6: is a drag on growth. As far as the rest 407 00:20:46,960 --> 00:20:50,840 Speaker 6: of the world. You know, tariffs are probably the best answer, 408 00:20:50,840 --> 00:20:53,359 Speaker 6: and we saw the EU doing that, we see Donald 409 00:20:53,400 --> 00:20:56,560 Speaker 6: Trump threatening that in the US. But as long as 410 00:20:56,600 --> 00:21:02,720 Speaker 6: China is producing goods at the and price that they're producing, 411 00:21:03,920 --> 00:21:06,080 Speaker 6: a lot of consumers around the world they're just going 412 00:21:06,160 --> 00:21:10,080 Speaker 6: to buy those so and that is already spurning trade 413 00:21:10,080 --> 00:21:14,760 Speaker 6: tenngins along the way, because you know, a lot of 414 00:21:14,760 --> 00:21:17,320 Speaker 6: countries just can't compete with what China's doing on the 415 00:21:17,359 --> 00:21:21,520 Speaker 6: manufacturing side right now. So the question is, okay, how 416 00:21:21,560 --> 00:21:23,440 Speaker 6: do you stop that? And a lot of countries are 417 00:21:23,800 --> 00:21:28,359 Speaker 6: moving to tariffs so that Chinese companies invest in those 418 00:21:28,400 --> 00:21:31,840 Speaker 6: countries and put up factories in the in other places. 419 00:21:32,119 --> 00:21:34,720 Speaker 3: All right, Dan, thanks very much. Daniel ten K Bloomberg 420 00:21:34,760 --> 00:21:36,520 Speaker 3: Asia Eco Gov Executive Editor. 421 00:21:44,000 --> 00:21:46,679 Speaker 2: So, New York City, this is where the UN General 422 00:21:46,720 --> 00:21:51,400 Speaker 2: Assembly is taking place this week. And when Antonio Guterrez, 423 00:21:51,520 --> 00:21:55,840 Speaker 2: the Secretary General, gave his opening address the other day, 424 00:21:55,920 --> 00:21:58,879 Speaker 2: he spoke about a powder keg of risk engulfing the world, 425 00:21:58,920 --> 00:22:03,200 Speaker 2: impunity and quality and uncertainty. He went on to say 426 00:22:03,200 --> 00:22:06,520 Speaker 2: that in recent years, the global situation is becoming intolerable 427 00:22:06,560 --> 00:22:10,640 Speaker 2: and unsustainable, and he put it bluntly, we can't go 428 00:22:10,720 --> 00:22:14,120 Speaker 2: on like this. Let's check in now what is happening 429 00:22:14,200 --> 00:22:17,000 Speaker 2: at the General Assembly with a Bloomberg Managing editor for 430 00:22:17,040 --> 00:22:20,720 Speaker 2: Breaking News in South Asia, Derek Wallbank joins us from 431 00:22:20,720 --> 00:22:23,040 Speaker 2: our studios in Singapore. Derek, thanks for making time to 432 00:22:23,119 --> 00:22:25,000 Speaker 2: chat with us. One of the things that I think 433 00:22:25,119 --> 00:22:28,520 Speaker 2: is on the top of many people's minds the wars 434 00:22:28,560 --> 00:22:30,840 Speaker 2: that are raging in the Mid East, Ukraine and Sudan. 435 00:22:30,960 --> 00:22:35,040 Speaker 5: Right, Yeah, I think that's exactly right. And indeed those 436 00:22:35,080 --> 00:22:39,640 Speaker 5: conflicts dominated a lot of the proceedings at the United Nations. 437 00:22:40,680 --> 00:22:45,080 Speaker 5: From Joe Biden's remarks that you mentioned, to remarks from 438 00:22:45,200 --> 00:22:51,320 Speaker 5: Iran's new leader, to remarks from Turkey's Erdawan, we were 439 00:22:51,440 --> 00:22:57,760 Speaker 5: hearing about these conflicts, laced through with questions about how 440 00:22:57,800 --> 00:23:00,480 Speaker 5: they come to a resolution, as well as a little 441 00:23:00,480 --> 00:23:05,359 Speaker 5: bit of introspection in terms of how the UN itself 442 00:23:05,520 --> 00:23:09,680 Speaker 5: is able to engage conflicts at this stage. I mean, look, 443 00:23:09,720 --> 00:23:14,040 Speaker 5: it's no secret that in two of the main conflicts 444 00:23:14,080 --> 00:23:16,120 Speaker 5: that we've got going on at the minute, and I'm 445 00:23:16,160 --> 00:23:18,560 Speaker 5: thinking specifically about in the Middle East, and I'm thinking 446 00:23:18,600 --> 00:23:23,440 Speaker 5: specifically about Russian Ukraine, they involve in the Russia Ukraine situation, 447 00:23:24,040 --> 00:23:26,920 Speaker 5: a country that has a veto on the UN Security 448 00:23:26,960 --> 00:23:33,639 Speaker 5: Council and in the Israel Hamas and Israel has blog conflict. 449 00:23:34,000 --> 00:23:37,960 Speaker 5: It involves a country that has an almost protecting power 450 00:23:37,960 --> 00:23:40,280 Speaker 5: in the form of the United States to Israel that 451 00:23:40,440 --> 00:23:42,800 Speaker 5: has a veto on the UN Security Council, And so 452 00:23:43,400 --> 00:23:47,879 Speaker 5: I think there is a lot of mounting frustration at 453 00:23:48,040 --> 00:23:54,600 Speaker 5: that body and at that body's inability to be able 454 00:23:54,640 --> 00:23:58,399 Speaker 5: to in some way structurally take on some of the 455 00:23:58,400 --> 00:23:59,560 Speaker 5: world's biggest problems. 456 00:24:00,000 --> 00:24:03,480 Speaker 3: So, Derek, for President Biden to call for constructive coalitions 457 00:24:03,480 --> 00:24:07,359 Speaker 3: would suggest that there's some duress there. And it doesn't 458 00:24:07,400 --> 00:24:11,600 Speaker 3: seem like there's really too much duress in the coalition 459 00:24:11,680 --> 00:24:15,000 Speaker 3: against Russia on its actions in Ukraine, but certainly with 460 00:24:15,160 --> 00:24:19,280 Speaker 3: Israel that would seem to be a problem area. And 461 00:24:19,400 --> 00:24:22,399 Speaker 3: it's not a huge coalition, it's basically Israel and the 462 00:24:22,480 --> 00:24:26,520 Speaker 3: United States. But is there a real issue there that 463 00:24:26,600 --> 00:24:27,760 Speaker 3: the US is concerned about? 464 00:24:28,320 --> 00:24:31,240 Speaker 5: Well, I think that when I hear Joe Biden speak 465 00:24:31,280 --> 00:24:32,920 Speaker 5: in those terms, one of the things I think he's 466 00:24:32,960 --> 00:24:35,480 Speaker 5: speaking about is to the future as well. Right, you know, 467 00:24:35,520 --> 00:24:38,159 Speaker 5: there's a lot of question about what sort of United 468 00:24:38,160 --> 00:24:40,560 Speaker 5: states the world is going to be dealing with after 469 00:24:40,600 --> 00:24:46,159 Speaker 5: the next election. You know, I happen to recall twenty 470 00:24:46,200 --> 00:24:49,840 Speaker 5: twenty five years ago, we'd have American presidential elections in 471 00:24:49,880 --> 00:24:51,520 Speaker 5: the question and it would be all that. You know, 472 00:24:51,560 --> 00:24:53,880 Speaker 5: these are two sides of the same coin. It's basically 473 00:24:53,920 --> 00:24:56,760 Speaker 5: going to be the same US foreign policy regardless of 474 00:24:56,800 --> 00:25:00,520 Speaker 5: who wins. That's really not the case right now. You know, 475 00:25:00,800 --> 00:25:04,720 Speaker 5: Kamala Harris and Donald Trump have very vastly different visions 476 00:25:05,320 --> 00:25:07,840 Speaker 5: for what they would do on the world stage, even 477 00:25:07,840 --> 00:25:12,440 Speaker 5: if parts of that may overlap. Ukraine may be one 478 00:25:12,440 --> 00:25:16,359 Speaker 5: of the biggest difference points between them, and so I 479 00:25:16,440 --> 00:25:20,199 Speaker 5: do think that when Joe Biden is telling the world 480 00:25:20,359 --> 00:25:24,840 Speaker 5: that they need to stand with coalitions, he is also 481 00:25:25,000 --> 00:25:27,800 Speaker 5: somewhat speaking into the mirror of his own country. 482 00:25:27,920 --> 00:25:30,680 Speaker 2: Yeah, we heard, as you mentioned, from Iran's new president, 483 00:25:30,800 --> 00:25:35,560 Speaker 2: Masud Position accusing Israel of seeking a wider war, and 484 00:25:35,600 --> 00:25:38,160 Speaker 2: he went on to say the attacks in Lebanon recently 485 00:25:38,600 --> 00:25:43,560 Speaker 2: on the targets of Hezballah cannot go unanswered. Later in 486 00:25:43,600 --> 00:25:46,240 Speaker 2: the week, we're going to hear from Mahammoud Abbas, the 487 00:25:46,280 --> 00:25:50,120 Speaker 2: Palestinian president, and I think on Friday Benjamin Netanyahu, the 488 00:25:50,240 --> 00:25:53,200 Speaker 2: Prime Minister of Israel, will be speaking as well. This 489 00:25:53,240 --> 00:25:55,880 Speaker 2: is in my mind, just going to kind of lay 490 00:25:55,920 --> 00:25:59,480 Speaker 2: bare a lot of where these animosities lie and the 491 00:25:59,520 --> 00:26:02,480 Speaker 2: degree to which this conflict right now, is it a 492 00:26:02,560 --> 00:26:03,160 Speaker 2: rolling boil? 493 00:26:04,200 --> 00:26:06,560 Speaker 5: Well, yes, and you know, I think one of the 494 00:26:06,640 --> 00:26:09,960 Speaker 5: biggest questions here is how do you kind of contain 495 00:26:10,040 --> 00:26:14,240 Speaker 5: and how do you draw a line under and get 496 00:26:14,280 --> 00:26:17,480 Speaker 5: to a point where there's not guns and bombs and 497 00:26:17,520 --> 00:26:19,840 Speaker 5: explosions and things of that nature. And that's really what 498 00:26:20,000 --> 00:26:22,639 Speaker 5: you know, Joe Biden was trying to to try and 499 00:26:22,720 --> 00:26:28,160 Speaker 5: find a path toward. It's a very difficult thing to do. 500 00:26:28,359 --> 00:26:28,600 Speaker 3: You know. 501 00:26:28,680 --> 00:26:31,600 Speaker 5: The leader of Iran will be well aware that in 502 00:26:31,840 --> 00:26:37,760 Speaker 5: Israel's retaliation with the exploding pagers and things against Hasbla, 503 00:26:37,880 --> 00:26:43,119 Speaker 5: that Iran's own ambassador was injured in that Israel draws 504 00:26:44,119 --> 00:26:47,679 Speaker 5: a logical inference therefrom and and there's really, you know, 505 00:26:47,720 --> 00:26:49,760 Speaker 5: we've got in this sort of situation a lot of 506 00:26:49,840 --> 00:26:55,440 Speaker 5: kind of proxy conflict, which is which is in some 507 00:26:55,480 --> 00:27:00,320 Speaker 5: ways a very difficult problem to unwind because, as Ron 508 00:27:00,400 --> 00:27:05,480 Speaker 5: will say, its proxies do not necessarily seek its permission 509 00:27:05,560 --> 00:27:08,919 Speaker 5: to do what they will and So how do you 510 00:27:09,080 --> 00:27:12,560 Speaker 5: stop a thing that a conflict that is operating both 511 00:27:12,880 --> 00:27:16,639 Speaker 5: both obviously and also in diplomatic gray zones. That is 512 00:27:16,680 --> 00:27:19,840 Speaker 5: a very very complicated thing on top of the Mid 513 00:27:19,920 --> 00:27:23,440 Speaker 5: East already complex histories. 514 00:27:23,400 --> 00:27:26,800 Speaker 3: And briefly on Ukraine, Vladimir Zelenski will meet Biden on 515 00:27:26,840 --> 00:27:30,679 Speaker 3: Thursday and also Harris with a victory plan to end 516 00:27:30,720 --> 00:27:32,199 Speaker 3: the war in thirty seconds. 517 00:27:32,240 --> 00:27:32,840 Speaker 1: What might that be? 518 00:27:34,000 --> 00:27:37,280 Speaker 5: Well, I think that, you know, again, we'll see what 519 00:27:37,359 --> 00:27:39,040 Speaker 5: he has to say. But I think that the big 520 00:27:39,119 --> 00:27:42,000 Speaker 5: question that he has in his mind right now is 521 00:27:42,040 --> 00:27:44,840 Speaker 5: what is a durable strategy that can shore up support 522 00:27:45,520 --> 00:27:47,520 Speaker 5: both from the US and from the rest of the 523 00:27:47,520 --> 00:27:50,399 Speaker 5: world to hedge against whatever is going to happen in 524 00:27:50,440 --> 00:27:51,520 Speaker 5: the US political election. 525 00:27:52,080 --> 00:27:53,920 Speaker 2: Derek, always a pleasure. We'll leave it there. Thank you 526 00:27:54,000 --> 00:27:55,600 Speaker 2: so much for making time to chat with us. I 527 00:27:55,640 --> 00:27:58,560 Speaker 2: know it's a busy week for you. Derek Wallbank. He 528 00:27:58,760 --> 00:28:01,480 Speaker 2: is a Bloomberg managing at it for breaking news in 529 00:28:01,920 --> 00:28:05,359 Speaker 2: Asia South, joining us from our studios in Singapore, helping 530 00:28:05,440 --> 00:28:08,920 Speaker 2: us understand what's been happening this week as the UN 531 00:28:09,200 --> 00:28:11,240 Speaker 2: General Assembly meets in New York. 532 00:28:13,920 --> 00:28:17,359 Speaker 3: This is the Bloomberg Daybreak Asia podcast, bringing you the 533 00:28:17,400 --> 00:28:20,880 Speaker 3: stories making news and moving markets in the Asia Pacific. 534 00:28:21,119 --> 00:28:24,240 Speaker 3: Visit the Bloomberg Podcast channel on YouTube to get more 535 00:28:24,280 --> 00:28:28,119 Speaker 3: episodes of this and other shows from Bloomberg. 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