rishaad: declines for asian markets. traded tensions and potential retaliation. investors are looking for the president and whether he will -- president trump -- president trump sees a trade agreement and is optimistic. i am rishaad salamat. haidi: i am haidi lun. kuroda expects to make some kind of decision over the next five

years. is bloomberg markets: asia." rishaad: donald trump pesek lawyer has sent the equities into a tailspin. awry in the last few minutes of trading. what does the asia-pacific hold in store. >> this is any can of recovery we have had over the last few months. is excitedi jinping to come out in the next 15 minutes. he is looking for any hint of retaliation on trade.

we are seeing this kind of reluctance to hold onto gains in asia. >> the overall lay of the land. the futures are easing up somewhat. asian equities are under pressure. korean stocks down 0.9%. bycks in malaysia are off 0.2% ahead of the election commission announcing the polling data. over in taiwan, stocks are off by 0.1%. we did get some data. taiwan will also be wasting inflation data later this afternoon. march sales of this tuesday. in singapore, the sti is lower by one third of a percent.

by retailbe preceded data and first quarter gdp numbers. goldman says that the strong underperformance in philippine stocks over the past six months is the main reason for that neutral upgrade. the stock market is the worst in the world and it is the biggest in asia in 2018. goldman also cutting korean stocks to market rates with all markets except korea seeing an improvement in earnings. this is plunging losing as much as 14%. charge.r is leading the they announced a reverse stock split. this is rising in sydney.

the biggest to tri-day game since 2011, this after the u.s. impose sanctions against russian oligarchs. have the stock easing up in the pressure we saw at the start of the session. --y are urging shareholders rishaad: how important is the yield curve? at least one policymaker attaches a great deal of importance to it. presidentlar's fed says interest rates should be raised because the u.s. is near full employment. he told them there watching the you curb very carefully.

>> i would say that i would guess that both sides might be well served to lower the heat on the rhetoric. it would have to be very fundamental private discussions. not only on reciprocal trade and tariffs but issues like intellectual property. transferring the ability of foreign countries to do business in china. all of that requires direct conversations. >> china is said to be evaluating the potential impact of devaluing the yuan. anior officials are studying two-pronged reaction, one that studies the effect of using the currency as a tool of

negotiation and what could happen if the yuan would upset any impact from tariffs. the offices ofed trump's longtime lawyer michael cohen. michael: has been a key figure -- michael cohen has been a key figure in legal issues including the payment made to stormy daniels for the affair she said she had with trump. pres. trump: it is a real attack on ours an country and what we stand for. when i heard about this, i heard about of the way that you did. that is a new level of unfairness. zuckerberg will tell congress that facebook's

problems are his responsibility. he will say that they didn't do enough to prevent fake news and potential harm to users. zuckerberg will also try to explain how much facebook contributes to the world while accepting that he didn't realize the conflict. news 24 hours a day powered by more than 2700 journalists and analysts in more than 127 countries. rishaad: president xi jinping is set to give a keynote address later this hour. we will bring you that speech live. we go to the chief asian correspondent stephen engle. what is xi jinping expected to say? >> it could be kind of

bifurcated. these banks -- the reforms were announced earlier last year but no details were given. we have been waiting for those details. he could give some details on the opening of the automobile sector. there is white speculation that he could announce that the joint venture requirements could be scrapped. i asked the head of the chairman of beijing auto if this would be happening. xpletive.- insert e you are well informed.

what everyone is waiting for is his tone. grilli named the united states? will he named donald trump as a protectionist? will he say that china will fight back with fists and fury? we don't know yet but we will find out in a few minutes. stephen engle, thank you for that. we're watching very intently what xi jinping said. let's get more from the cro at the global equity group. great to have you joining us. chart to throw up this which illustrates that even though you have analysts and economists saying it is too early to panic when it comes to

these concerns over a trade war, you can see these global stocks companies that have oversight exposure to the chinese economy and chinese demand. see this msci world gauge relative exposure to the world index, it started falling for the end of february and is now trading relative to msci at its lowest since october. try to position yourself in a way that takes advantage of some of the better valuations but stay with from companies that might have negative exposure. >> what we are seeing is a creation of uncertainty. with the outcome of this is but the direction was pretty clear. if you have tariffs in place you look at slower global growth. that seems to be put at risk.

haidi: 2017 was abnormally calm. aroundlook at moves tech, is there a fundamental shift or back toward value? tech are underweight in but we have been selling fairly steadily over the last six months. the valuations are pretty full. area where the expectation is for growth going forward. a lot of the stocks that have done well are not looking cyclical, but at the end of the data have large market shares in the sector that they are in. the valuations really don't reflect that. we are pretty cautious. there are other areas in the

that we are more favorably disposed to. this certainly seems to make a lot of sense to valuations that are quite attractive. that is a little of the shift you are seeing in our portfolio. >> to you think that shift is being replicated elsewhere? >> i think there is definitely a cautiousness centering in the market. some of the different valuations, depends on the investor but a lot of money has been made in technology. there saying i want to make sure that i realize --

rishaad: mentioning market funds as well how much interest are you getting in those who want to get away from the united states -- what is essentially growth. definitely a push for the emerging markets by investors around the world. that has been an area of big interest. market that people are more conscious about. that falls into technology. rishaad: and you are finding -- i'm looking at your research, .alue in unexpected places what other emerging spaces? >> our group runs global

equities. we have emerging market equities within our group but emerging markets is a separate group running just emerging markets money. -- some of ourp -- in technology we still have some technology. those are some of the stocks that we are taking profits on and selling some of those .ositions down haidi: you have had a situation where emerging markets have outperformed. phenomenaen this where emerging markets should not be behaving this calmly. we have the tightening in the pipeline as well as global volatility. have a almost become a haven

given that so much of the volatility comes from the united states? >> we have seen volatility across the board. i think there is a chance to avoid that to some extent. rightly has people nervous on the u.s. side. the emerging markets in general is more attractive valuations. europe is in the same boat. that gives you some comfort that theiris valuation support . >> the other thing you have not seen is the correlation between volatility and equities. --you expect

>> the risk and the equity markets coming from the bond --ket -- as rates came down rates came down as the equity markets froze. you would expect that to some .xtent there is pressure on multiples. that argues that if you have strong growth, that is an upset. been growing in the economies you pressure on equity markets. rishaad: when we saw the u.s. getting of qe, possibly the ecb doing the same thing in the not too distant future, japan with a much longer game. does your experience in form what you will do strategically in europe and japan?

>> we have different exposures in terms of industries that we do in the u.s.. bit of our health care exposure is in the u.s.. that's a more defensive area with cash flows and dividend yields. there is more financial exposure in europe. european rates -- as they rise the financials should do better. that seems logical. energy is a different industry than it has been the last decade . we have seen much better discipline in terms of capital the claimant over the last year. nicentegrated have very cash flow and nice dividend deals. we have somewhat defensive

qualities. have we learned from what has gone on? i'm sure we have. that is driven by the relative evaluation which can be different in different situations. inhaad: thank you very much deed. tradet more on the implications of president she -- .resident xi jinping's speech he speaks about capitalism and privatizing china. this is bloomberg.

rishaad: you are with bloomberg markets. the looming trade war.

with thisgle spoke coo. she said the trade friction between the united states and china won't have much impact when it comes to demand for iron ore. >> we supply roughly 170 million tons per year. china imports of had a billion tons of iron ore. production, only about a million tons of going to the u.s.. hereall of the initiatives -- what we are seeing is that the demand in china is staying very strong. the very small amount that will be exported to the u.s. will not have much effect on our business. >> but the global economy will have some kind of effect. china will be in the crosshairs.

some of the mills are under profitability constraints right now. he says that are trade war is a race to the bottom. >> there is potential for that. the overall potential for profitability is very high at the moment. we have had this production cut over the winter period. steel mills are very profitable. at the moment we are seeing fundamentals as strong. i agree with -- i disagree with malcolm turnbull that trade wars over a long period are conducive to long-term world growth. reporter boy how do you -- reporter: how do you see that demand long-term? as we go down the road are we headed toward a dark winter of protectionism?

>> there is a lot of ongoing dialogue. there was a tweet from president trump saying that china is still a long-term and valued friend and partner. i think we don't want to see a prolonged period of trade wars. i think that there is a broader sin that there should be an --roach want to bringt you up to speed here on the bloomberg terminal. it is tv . can see some of our previous interviews including this one with rubber chaplin. just with robert chaplin.

that is for bloomberg subscribers only at tv . ♪

haidi: let's get you a check of the business flash headlines. there was a frank exchange of views related to a fatal crash in california. musk and the ntsb chairman discussed the fatal crash. it also talk to the hazards engaged with the autopilot system. rishaad: tesla trying to raise on7 billion there to take its rivals in the world leading electric vehicle market. there is a $100 million

cash and stock deal. they have agreed to integrate their right service into the uber at.

rishaad: it is 9:29 a.m. right here in hong kong. we are counting down to the start of the trading day. looking at asia-pacific equities which are part of a mixed bag, but just marginally up. xi is going to beginning his address on it 's lawyer donald trump making statements. tax --cks are just for

perhaps taking their cue as to what happened in america because we still had -- have traded tensions playing out. have xi perhaps addressing some of this tit-for-tat. sydney withck to breaking news possibly. national bank releasing its business conditions. falling from 14 to 21 in the previous month. this is confidence coming in at seven. those numbers are little bit worse than expected. with the hong kong market opening, we are waiting. >> as a way on that speech from xi we are seeing a good start in markets.

now gaining some momentum, adding more than a quarter of a percent there. better that in mind. over in hong kong, we are seeing hung saying opening flat. beingshare index is driven. currency has largely shrugged off expectations so far. the offshore yuan not moving too far this tuesday. i want to say this chart. when you check out the gtb function, options traders are betting that the one will weaken relative to calls having risen to a two-week high. i want to take a longer view. traders in foreign markets are not necessarily seeing a devaluation in their cards.

see,u can -- an ownerlso dragging which is cut to neutral. trading resuming in those stocks this tuesday. trading's of gain is certainly front and center. this is according to bloomberg. let's get to the nitty-gritty as we go over to singapore. what are the two problems of the approach that officials are apparently looking at? added beijing yesterday, they suggested there are two main

scenarios. the first would be if there is a trade to look to the u.s. and china potentially ways on exports, what china could do to mitigate some of the impact. the second, and potentially more troublesome is if china decides to use the yuan as a tool and weapon and its trade negotiations with the u.s.. they are also reportedly looking at what that could potentially look like. devaluation -- tell us a little bit about that. loud andk we saw those clear in august 2015 when china unexpectedly took one off the depreciation of the one. that cost a lot of global market turmoil around the world. we have u.s. stock markets and everybody really responding to such a shock to think most of this will be hoping that we'll get a repeat of that. volatility,e seeing yuan trading has been pretty

steady. is is going to last? yes.cording to analyst, they are expecting a mild beginning of the yuan by the end of the year, about 1%. we are also seeing that in options markets. the consensus at the moment is yes, the obviously china has the capacity to surprise. we will have to see what happens. rishaad: thank you very much for that. perhaps of there is a bit of light at the end of the tunnel for those people that are with thesehe worst attempts between the white house and beijing. presents a trump has hinted that the u.s. and china won't reach a deal that eases its simmering trade tensions. he says a demonstration will probably come to an agreement to result in dispute for the

market. a chief economist says the bank continues to expect the two countries will reach a compromise. reports from china say that alibaba chairman is set to abandon his commitment to help traded jobs in the u.s. if the trade war worsens. he said he made the threat on the sidelines. he met with the president in --uary of last year and said to help create up to one million new jobs. the congressional budget office says the u.s. deficit will top one -- $1 trillion by 2020, two years sooner than previously predicted. the deficit will grow by 1.9 train dollars over 11 years.

the's u.s. interest rates at 2.4% by the fourth quarter peaking at 4% in 2021. the bank of japan says it will consider normalizing policy over the next five years, underlining how targets have slipped. government and boj was aiming to hit inflation. he will consider how to quit the the boj hasn't reached the point to consider exit. it largely depends on economic and financial conditions and consumer price -- prices. >> global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg.

rishaad: as these tensions in trade continue to build, investors watching what president xi has to say very shortly. of this you making whole spat at the moment? has on trump turned up with a gun at a gunfight or a knife at a gunfight? clear yet.sure it is i think he has picked the wrong fight, to be honest. in, we knowt came he is fixated on the deficit number and it is certainly a big number. i don't think a trade war is going to solve any problems. businesses are getting very worried about dealing in china.

a rather blunt of trade pallets is not a particularly good way to go. rishaad: that has echoes quite broadly. the point is, this is probably the wrong way to tackle this. how should he be tackling it? >> that is the wrong way to be tackling it. he is somewhat late to the party. i'm sure that trump and his advisers would later fee very firmly at the door from a previous administrations that for too long american policy has been effectively week on china and has not pushed back enough, they have been too willing to and engaging in china. slowly, they will become like us, as it were in playfair. if this has not materialized.

during the partly by a more reciprocal approach in the sense that chinese companies can come to -- xi startinghave that keynote speech. let's get it over there to the chinese president. >> my new and old friends here. i feel very very honored and happy. of thef all, on behalf chinese government and chinese on behalf of myself, we would like to extend my warmest welcome to all of the guests and congratulations on this annual form. -- forum. since the inception, it is focusing in asia facing globally. focus on consensus in asian economy and also provide beijing

as focus, a shared future for mankind. forward many put and has initiatives made great contributions. a new generation of the council. on behalf of this, i would like thank to the council members who are leaving and for this new council members ending, i want to give you my warmest congratulations. [applause] him --this year's for open our focus has been on

and a prosperous asia. andollow the global chain meet expectations of from all people. attendeesests and will share your insights. .adies and gentlemen, friends always, and a special air, a special time to give you special wisdom, and also to carry on. the year of 2018 is the 40th anniversary of chinese reform. the 30th anniversary for heinen province.

it is important because of the has beeneform and also idolized in chinese reform. since reform, heinen has changed from a vote island to become a china.namic part of economic development has received great success. it often reflects a country, and 40 years of reform in heinen, it has witnessed -- xi1978, when president the symbol, china

started economic reform. from the rural areas to the urban areas. from pilot programs to expansion. to blankomic reform reform for 40 years. we have worked very hard, and for 40 years, we have achieved great success. have returned a glamorous history of our reform for 40 years. chinese people have always worked very hard. and liberated our great labor force.

say that the flowers bloom in spring and harvest and fall. china has adhered to its reform and has been very persistent with our hard work. i'm present the changes in china. china has become the second economy in the world. the number one industrial country and number one trading oneany and the number foreign-exchange reserve country. the comparative averagedina's gdp has

annual growth rate of around 9.5% and comparable prices. trade wasreign averaged 14.5%. --nese people's lives should i stop?

the path of socialism with -- the chinese people have both a key awareness of national realities and its global -- we champion independence and self-reliance while embracing openness and win-win cooperation. socialist while direction ofhe reform to develop the socialist market economy. river, we havehe also strengthened the top-level planning. we have started new circumstances, we have addressed

new problems as they emerge, and we have summed up experience periods of all of that, we have successfully raised a pass of socialism. the successful sections of the chinese people is approved. there is more than one path leading to moderated -- modernization. with unremitting effort, our roads will take us to rome. over the last four decades, the chinese people have been fortunate and demonstrated the strength of the nation through keeping pace. ours is a true nation with an open mind with efforts to open .p our minds

our search for new ideas and -- such as the great strength of a guiding vision. ours is a nation that has traders leaders and self revelation and sharp reform. such is the great strength of institutional -- ours is an enterprising and high nearing nation with unprecedented motivation initiatives and activity. such is the great strength of

the 1.3 billion chinese people driving history forward as masters of their nation and really heroes. over the last four decades, the chinese people have always embraced the world with open arms and actively contributed our share to the world. --ore the chinese people have made opening up a fundamental national. policy they have pursued developments with an open mind and a cop was a great traditions from --lusion to all around in this process, china has lived up to these responsibilities as

a major country from bringing in two going global. to the belt and road initiative. significantde contributions in the asian financial crisis and global financial crisis. over 30% of global growth -- contributing to over 30% of global growth. a key driverome for the world economy. forcee become a positive in the noble cause of peace and development. china's people can say with great pride that we are

opening up china's second revolution has not only profoundly changed in country, but also greatly influenced the world as a whole. classic,t chinese those that embrace the law will prosper. it also meets the global trend for developments in peace. as a such, china's reforms are opening up and can and will be a great success. reform, opening up has given us many valid inspirations. thatost important one is

any country or any nation can achieve rejuvenation, they must follow the logic to understand the times in pursuit of progress and development. friends,d gentlemen, a newrld is undergoing ,ound of major developments great change, and profound readjustment. mankind is still has many instabilities and uncertainties. of technological and industrial revelation brings fresh opportunities and also presents unprecedented challenges. in countries and regions, people

are still living in the shadow of war and conflict. people, including the are still suffering from hunger and poverty. change and major communicable diseases remain formidable challenges. humanity has a major choice to make. in this complex and changing world, where we headed? where is the future of asia?

to answer these fundamental questions, we must not let our vision big lots by crowds. instead, we must dispel the crowds so as to have a keen grasp of the law of history and the trend of the times. we move at a time in an overwhelming trend toward peace in a world aspiring for peace and development. mentality look even more out of place. oneself on a pedestal will try to remove oneself from adverse developments will get you nowhere. only peaceful developments emplacements can truly bring

win-win or all win results. to move at a time with an overwhelming trend toward openness and connectivity. human history shows that openness leads to progress while seclusion leads -- leaves one behind. good you become a global village without interest -- common prosperity and development in a safe world, we have no choice but to achieve greater economic development. we also live at a time with an overwhelming trend toward reform and innovation.

a chinese philosopher recognized over 2500 years ago that one does not have to follow a path if he wishes to benefit a few. one does not have to observe old conventions to get things done. of theand innovation fundamental forces of human progress. them, arereject signed to the dustbin of history. to follow the trends of our time and advance of the well-being of all people, i propose the initiative to build a community with a shared future for mankind. i've been in discussions with various parties. see that this

principle has been endorsed by a growing number of countries and their peoples. it has also been written into important documents. i hope that people around the towardill work together acuity with a shared future for mankind and make asia and the world peaceful, tranquil, prosperous, open and beautiful. with the future in mind, we need to treat each other with respect and as equals. we should uphold the five .rinciples

respect each other's core interests and major concerns. follow a new approach to state to state relations featuring cognitive instead of alliance. refrain -- rejected the gains. politics.ject power we must work together for enduring peace. with the future in mind, way to share responsibilities. ofact on the basis

sustainable security. uphold the international order and the system by the purposes. and aegrated approach quarter nation to being housed , we must ensure that there are security and aisms coordinated couple mentoring manner rather than -- with the future in mind, we need to engage in corporations.

[indiscernible] reinforce corporations. we should promote trade and investments in globalizations. this way, [indiscernible] with the future in mind, when he took hold occlusiveness and seek harmony. we must dispense our financial

growth and education, tourism, health, and other views. when he to promote neutral learning as it will help us build bridges to our social peacess and a safeguard for the region and beyond. the future in mind, we need to treasure our planet trade is important to have a vision of a and alsole development respect, accommodate, and protect nature. exchanges increase corporations share experience and jointly meet challenges.

must improve further progress so that our future generations can enjoy blue skies, clearwater, and lush mountains. ladies and gentlemen, friends, with9 53 ushered socialism chinese tractors digs into a new era. that --elieve [indiscernible]

jeffords -- it efforts to share prosperity with the rest of the world. generation have their own emissions. china has had a -- come a long way. it has to overcome new challenges on its way ahead. era, the chinese nation will continue to improve itself through reform. it will stay committed to developing reform and prevail over whatever challenges that may lag ahead -- like ahead. we will tackle long-standing problems with courage to see the reform through. the chinese people will continue to take both steps in innovation

to boost development. following the people and the new developing addition, we will modernize our economic system, deep in supply and structural implement, at a faster paced, the strategies of innovation driven development, rural revitalization, and coordinated regional development. onwill continue to work targeted poverty initiation. equity andote social justice to get our people a greater sense of the filament, happiness, and security. the chinese people will continue to increase openness and expand the corporation. we will stay committed to the

strategy of opening up for win-win spirit we will pay equal attention's between the yuan and going global and to break new ground in opening china further through links opening eastward and westward across land and overseas. policies tot promote high standard legalization and facilitation of trade and investment and explore the opening of free trade ports with chinese characteristics. people will continue to work together with the rest of the world and to make a greater contribution to humanity. china will stick to the path of peaceful development, actively pursue global partnerships, and takelecular some an active part in reforming the global governance system or if

doing so, we will be able to build a new type of international relations and to promote acuity with a shared future in mankind. matter how much progress china has made in development, china will not threaten anyone else, attempt to overturn the existing international system or seek spheres of influence. china will stay as determined as , to to build a world peace global prosperity and uphold the international order. ladies and gentlemen, friends, a copper heads of study of world development trajectories shows that economic globalization is an irreversible trend of our

times. in line with this conclusion, i to thezed in my report national congress that china will continue to adhere to its fundamental national policy of opening up a pursuit of development with its door wide open. i was to make it clear to you 's door of opening up will not" and only wider. [applause] >> what has happened proved that opening up was key to china's economic growth over the past 40 years and in the same vein, high-quality development of china's economy in the future can only be achieved with greater openness. up is a strategic decision made by china based on

its need for development as well as a concrete action taken by china to move economic globalization forward in a way that benefits people across the world. china will adopt the following major measures to pursue further opening. first, we will significantly broaden market access. measuresof landmark are to the long this year. services, in particular, important announcement was made on measures to raise foreign equity ,aps and the banking securities, and insurance

industries at the end of last year. we will ensure that these measures are materialized. at the same time, we will make more moves toward for their opening including accelerating the opening up of insurance industry easing restrictions on the establishment of foreign financials institutions in china and expanding their business scope. up more areasng of corporation between chinese and the foreign financial markets. we have basically opened up this sector only with a small number of exceptions, automobiles, ships and aircraft. are in austries position to open up. going forward, we will ease as

soon as possible, foreign equity restrictions in these industries, automobiles and particular. second, we will create a more attractive investment environment. investment environment is like air. only fresh air attacks more investment from the outside. china relied mainly on providing policies for foreign investors in the past, but now we will have to rely more on including investment environment erie we house alignments and international and trading wars, transparency, strengthen property rights protection, uphold the rule of law, encourage competition and oppose monopoly.

in march of this year, we established a host of new markets such as regulation as part of a major adjustment of government institutions. the purpose is to remove the , systematic and institutional obstacles that the -- enable thein government to better play its role. in the first six months of this year, we will finish the revision of the negative list of foreign investment. and implement across the board, the management system based on pre-establishment national achievement and list. third, we will strengthen protection of international

property rights. is the centerpiece of the system for improving property rights protection and it will also provide the biggest boost in housing the competitiveness of the chinese economy. is ther ipf protection requirement of a foreign enterprises and even more so of chinese enterprises through this reinstituting the state international property office to strengthen the rates of the officer, step up law enforcement, significantly raise offenders and fully unlock the deterrent effect of relevant laws. normalurage technological exchanges in the corporation between chinese and a foreign enterprises and owned byhe lawful -- foreign enterprises in china.

at the same time, we hope foreign governments will also include reduction of chinese ipf. fourth, we will take the initiative to expand imports. is thec demand fundamental driving force for china's economic development and is an essential requirement for us to meet the people's ever-growing need for a better life. china does not seek trade surplus. we have a general desire to increase imports and achieve greater balance of international payments under the current accounts. significantlywill lower the important tariffs for and also reduce import tariffs for some other products. we will work hard to import more products that are competitive

and needed by our people. we will seek faster progress toward joining the wto government procurement agreement. we hope developed countries well imposingtop restrictions on normal and reasonable trade of high-tech controls on relax such trade with china. this november, we were called to the first china economic export in shanghai. platform andor will be an annual event. it is not just another expo in the ordinary sense, but a major policy initiatives and commitment taken by our honor

court to open up the chinese market. friends of from around the world are welcome to participate in the expo. [applause] i was to emphasize with regard to all of those major initiatives of opening up i have just announced, we have every intention to translate them into reality sooner rather than later. we want the outcomes of our opening up efforts to did -- deliver benefits to all enterprises and people in china and around the world. [applause] i am confident that with these efforts, china's financial sector will be much more competitive. our capital market will continue to enjoy healthy development.

the building of a system or more --ustries will be intellectual property rights will be affected. , china will open up a new phase of opening up. [applause] forwardyears ago, i put the belt and road initiative. since then, more than 80 --ntries and organizational international organizations have signed agreements with china. it may be china's idea, but its opportunities and outcomes will benefit the world. has no geopolitical calculations, seeks no institution very blocks and

imposes no business deals on others. [applause] >> it must be pointed out that as this is a new initiative, it is perfectly natural for there to be different views. as long as the parties embraced the principle of extensive consultation, joint contribution and shared benefits, we can corporation and enhance differences. it can be the broadest of tax forms for international corporation in keeping with the trend of economic globalization and to the greater benefit of all our people's. [applause] ladies and gentlemen,

friends, as a chinese saying goes, a mountain is formed by regulation of earth and a notion -- an ocean is formed by regulation of water. happiness and a bright future will not appear automatically. success only favors those with her jen perseverance erie [applause] -- perseverance. [applause] dedicate ourselves to openness and win-win outcomes, be brave to change and break new ground and keep striving for a community with a shared future for mankind and a better tomorrow for asia and the world. [applause] in closing, i wish this annual conference a complete success, thank you. [applause]

address.his keynote there are lots of places coming through at the moment. he is calling for a building of the committee with a shared future for mankind, quite grandiose pledges taking place as well. he said china will not play political games and they plan to reduce some of the tariffs on countriests of hoping will lower curves on high-tech trade as well. let's get back to the university of hong kong professor with us. what is your take away? >> i think he was addressing the concerns of people like donald trump, but in a very general fashion. i agree with you that he emphasized openness and win-win.

that is to say that both sides should be winning, that everyone should when. he emphasized more market access. themphasized protecting investment environment, opening the investment environment, protecting intellectual property and expanding imports. these are all things that have been demanded by the american side. rishaad: i want to come to that in a second, but of course we are in the midst of these trade tensions. fired ae a few things donald trump and the united states talking about globalization being more open and inclusive. >> absolutely. this was explicitly directed at donald trump and the american bargaining position. ofd war mentality is out place, he talked about china's on logic of development.

he also said putting one's own country on a pedestal and toecting all of the others conform to their system and their needs was not on. were -- saying that china does not seek dominance. these are all counterparts is. >> i think so. i think we have high expectations of for this speech and he delivered on the promises. though on the timeline. i think this is a problem. rishaad: pledges coming through with a lot of criticism, even from business executives in china say they wanted to hear more on what he is planning to do. perhaps something more definitive. this whole idea of pledge fatigue. >> we have heard these pledgers

time and time again. that is absolutely true. this has got to be followed up very quickly with more concrete details. you mentioned already the cutting tariffs on autos. donald trump tweeted about that yesterday. we need to know exactly what is going to happen here very quickly. that kind of thing would build some confidence. we have a lack of trust here on both sides. if this is a game of chicken, a very high-stakes of , itken -- game of chicken would not be terribly difficult if you are in washington to see some of that as being yes, iions eric >> agree. we have already heard that trump and the americans, they don't want an all out trade war. i believe that to be true. we would just have to see how

they look at this. it lacks specifics. without the specifics, it would make it very difficult, in my view, for the americans to see it that way. depends on what the real objective is, though. haidi: it was always difficult to expect specifics retaliatory or negotiating otherwise from xi and this kind of speech on a global platform. if there abounds as far as touring out things that the americans can potentially take away as winds on their part but also very much speaking to that domestic audience? >> yes. i think you did. we have for specific things mentioned here in a little bit of detail. we have a very strong statement about the logic of china's of development, about its own needs and about how serving its needs

will be good for the global economy and this sort of thing. i agree with you. thisnnot expect details of kind -- in this kind of a speech, but the chinese government has got to come very quickly with specifics, otherwise people who have been following this for a long time are just going to say we have heard this all before. he also called on countries to ease limits on high-tech exports from china. do you think this is something of an ideological detail? >> i do. this is what china wants out of this. he did address specific things that the u.s. and other foreign investors want such as protection of intellectual property and expanding imports and this sort of thing and

reducing tariffs. yes, he laid out what china wants and what china expects. this is not new. we knew this already. he said it very firmly. i think the thing here is he said china's logic of development -- i think this is with chinese characteristics. you keep hearing this. this is an open door that allows china to agree to some things and not to others. -- xi is china is also speaking to his own constituency and his constituency cares about -- and this is his first test on a global stage. he has got to appear strong. he has to be protected. john burns of their.

stay with us. let's get a quick reaction on markets with sophie. >> it looks like investors are liking what xi is saying. 1%.es are gaining nearly likelyearnings are weighing in that space. we are seeing a spike in yen and u.s. futures. u.s. futures rising over 1%. oner sure -- offshore you is back below that 630 handle. as a metals climb in shanghai, we are seeing mining stocks higher. seeing higher aluminum prices.

that is a quick look at the market reaction to xi jinping's speech. this is "bloomberg markets: asia." ♪ welcome to the xfinity store.

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haidi: 10:20 nine hong kong, 12:29 in sydney. the offices ofed president trump's longtime lawyer michael cohen, taking documents after robert mueller applied for a search warrant. cullen has been a key figure in a series of legal issues. he paid $130,000 to foreign star stormy daniels over anna faris she says she had with trump. -- he made thebe payment without the president's knowledge. a disgrace, it is an attack on our country and what we all stand for. when i saw this and heard it -- thatrd it like you did --

is really a whole new level of unfairness. --nne: mark zuckerberg well will teleconference later that facebook's problems are his responsibility. he is due to give two days of testimony over the worst crisis in company history and will say they did not do enough to prevent fake news and potential harm to users. he will also try to explain how the facebook contributes to world while also excepting he did not realize the consequences. apple cofounder steve wants the act latest high-profile person to abandon facebook. he said he is not certain the network and fix its privacy issues and expects it will be difference -- will be decades before it changes policy. he calls the failures to look after users information hypocritical knowing zuckerberg bot land around his home to ensure his own privacy. the fed will consider normalizing policy over the next

five years, underlying how far markets have slept since corona took office. speaking in 2013, the boj was aiming to head 2% inflation within two years. now he says the bank hopes to reach that goal around april next year when he will consider the stimulus program. reached the point to consider exit. we can't stop about the exit in advance as it could confuse the market. the market depends on economic and financial conditions and consumer prices. yvonne: global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm yvonne man. this is bloomberg. haidi? haidi: thanks for that. let's get more analysis on xi jinping's speech, the keynote address at the forum. joined by university of hong kong emeritus professor and also the ceo of principle global investors.

jim, let me get your initial reaction. as beinghe address less targeted toward washington. you think more towards a regional audience. >> i think president xi realizes it is too early to expect a real compromise with president trump. there is a lot of things being laid out by the president, but a lot of his rhetoric is driven by the midterms in early november and by getting the base supporting him, which is why he is talking tough on immigration, syria, and curtailing use of chemical weapons, and talking tough on trade. i think there is an election cycle that will last for a while. the idea there is going to be a quick fix is unlikely. asead much of that speech being about cementing china's regional leadership as an open country fostering free trade and

development. in a sense, filling the gap left when the u.s. withdrew from tbp. i think the aim of regional leadership as an agent for free trade is really what was behind two thirds of that speech. haidi: this is davos 2016 redox essentially. >> it is essentially, the speech move to the environment we are now in with somewhat different players. i was impressed he talked specifically about protecting intellectual property and about reducing the tariffs on automobile imports. those are both specific that have already come from the u.s. position on chinese trade. but i think this one has both quite a long way to go, and i would hazard a guess that it will be a few months before they really sit down, whether it is at mar-a-lago or davos in january. at some point, there will be a

it will bether, but negotiating things that are to each side's advantage. haidi: are you seeing positive reaction to that speech? what do you think that will do? do you stay for the investors? do you take more caution as it continues to play out? >> i think it depends which investment sector you are looking at. i think the u.s. private sector is in really good shape. i think maybe the government sector is another matter, but the private sector is in very good shape. u.s. equities, following a few bumps in the last two months, are only 17 times earnings of the s&p, about in line with a long-term averages. we are looking at course -- looking at first quarter earnings most likely very strong. particularly on u.s. equities, they continue to be a buy. i am not sure about some of the other countries, where they are more dependent on monetary

policy. i am thinking of japan and the eurozone. i suspect that in contrast to the u.s., their markets -- japan and continental europe -- have become a cell on strength -- a sell on strength. i am more nuanced than i was, but basically keeping up equities, particularly u.s., remains the right approach. rishaad: i want to bring john in. jim's contention is this is a speech more directed towards asia. that does fit into the other side of this. we have people sitting where you are at the moment, saying this is different from japan at the 1980's, that this is aimed at asia. perhaps he is coalescing asian nations together. what are your views in response to what jim was suggesting? >> of course i think this is quite possible, and if you look at the speech and the audience -- of course, he was talking to

them. he was also talking to the rest of the world. the u.s., europe. specific things that he mentioned at the end, these 4 -- it seems to me do help the americans address the issue that jim raised about the election cycle. i totally agree. on somes some urgency kind of win from the trump perspective. >> this is jim here. this is the piece where i find it hard to see he is going to get results. putting urgency on these trade discussions, sounds to me with so many moving parts and with the electoral cycle in the u.s. being so prolonged, it seems to me that to expect real specifics on trade concessions and trade

agreements is going to take some time. i feel that the trade system , and to limp along hopefully we will not see a real trade war emerging. i do think it might be a matter of months before you really have both presidents trump and xi declaring victory, which i think is where they are both aimed. john: i understand that perspective. actually, jim, i guess my view is there is more urgency here. i think trump needs only one win. some -- something on tariffs for autos, which he specifically talked about -- if he gets something like this, then the rest of it -- which is,

i agree with you, messy and complex -- i don't think there is going to be any comprehensive settlement. i think there is going to be a settlement in which one or two issues are resolved. otherson't think the will stand in the way then. rishaad: jim, question from me. markets, the hang seng for instance, on a tear at the moment. what are the positives they have taken from this, investors, in your view? jim: i think the positive is that he was really stressing china's openness. he was not lashing out in anyway at stress put on china by the rhetoric coming from washington. he was actually taking the high road and doing so with some constructive suggestions. i think the market is right to take a positive view from this. the markets in question are not highly valued, so some

reassuring words from a major protagonist in the whole trade debate. i think manages to soothe the nerves. i think a lot depends in the u.s. on whether the rhetoric , or washington tones down probably more likely whether it ramps up occasionally and causes more bumps in the road. i would tend towards the latter. i think you are going to get more volatility. when a player, whether trump or xi or any of their advisors, says something positive, i think you are going to get a rally like you are getting right now. viewad: rally aside, the that china has of themselves has also changed. they are no longer david to the goliath. that is the message we are getting now. what is your take on that? is this inflection point, that america may realize they are not the only superpower? if not managed correctly, this

oned be the cold war mach with moscow and beijing together? john: i totally agree. you look at this speech and you can see that xi is saying, we are here for the long term, we have our own logic about how to deal with this. thatve all these problems he mentioned at the 19th people's congress. i think absolutely this is what he is saying. i think well, do the americans realize this? rishaad: that's the question, isn't it? i have no -- john: i have no insight into this. trump's advisers are now more hardline than they were before. is cold war mock to possible? --, except look at the issue of the tariff war. he has alienated the american

business community with this. this is another reason why i wins would bewo enough for trump, and he would say ok, the rest we will negotiate, and that could be the end of it. i guess i am more like the markets today and less like jim about how this is going to play out. rishaad: john, thank you for joining us. university of hong kong professor emeritus john burns. jim is the ceo of principle global investors. he is sticking around. you can also have a look on the bloomberg to get more of this team. it is the best place to get commentary and analysis from bloomberg's expert editors. this is bloomberg. ♪

>> i would say that i would guess that both sides might be

well served to lower the heat on the rhetoric, because there have to be very fundamental, private discussions, not only on reciprocal trade and tariffs, but also issues like intellectual property, technology transfer, the ability of foreign companies to do business in china. but all that requires pretty blunt, direct private conversations. haidi: the dallas fed president speaking to us earlier from beijing. let's bring back jim mccaughan, ceo of principle global investors, which manages $.25 trillion in assets, continuing to talk about this wide-ranging but general speech from xi jinping. if you take a look at where we are on the economic cycle, we know that when it comes to the u.s., it is a pretty late cycle.

no one can tell us exactly how late. is there a chance these tariffs and potential trade measures will accelerate us getting to the end of that? only in the sense that tariffs would impair trade and therefore economic growth. a full-blown trade war has the ability to bring forward the recession. absent a policy mistake, the next u.s. recession is probably as much as three years away. two to three years for sure. so the markets remain fine, the economy remains fine. if you have a fully fledged trade war with tit-for-tat increases in tariffs and no real relief, that could bring the recession to next year or even later this year, because things can slow down fast if there are impediments to trade. if you think about what really hit the economy, this may sound like a very tangential comment.

hitate 2008, the thing that the economy was the slowing down of trade finance following the lehman bankruptcy. very specific things on trade. you interfere with trade on your peril, which to me is the made -- main thing that brings forward a recession. haidi: given that we are faced with the ballooning deficit, the u.s. is going to need help the funding. do you think china would use treasuries to try and leverage the burgeoning trade war? jim: i think that is a bit unlikely because it would be damaging themselves. higher interest rates in the u.s. dollar hurt their ability and their trade partner's ability to finance themselves. higher interest rates in the dollar do not help emerging markets and many asia-pacific markets just because of the fact it makes financing the u.s. dollar more expensive. i also think that any moves designed to weekend the dollar

would hurt the market -- any moves designed to weaken the dollar would hurt the chinese market, which they don't want to do unnecessarily. it is unlikely the chinese will get aggressive in terms of dumping u.s. treasury's or going on a buyers spike in the treasury market. if you look around the world, there are a lot of other investors who basically need u.s. treasuries, for example to act as collateral on trade credits and other credit. i am not too worried about that aspect. i don't think that would be the most likely retaliation for the chinese to come up with. rishaad: what do they do, then? go intoare passive and face-saving for local consumption while not doing much for the outward hurting of the united states, what do they actually do here? do we really get a trade war? what is your view on that, fundamentally? jim: i think the trade war is a

very low probability, probably 20% in the next year or so, and it only happens by mistake, because neither side really intend a trade war. that was very clear in president xi's from the comments to washington around intellectual property and taking off automobile tariffs. very plain he does not want to trade war. but it is plain that president trump does not either. he has talked about -- after he announced the aluminum and steel he backed off immediately, said they would not be effective. what he really wants is to get negotiating wins out of a trade terror threat. rishaad: thank you so much for that, jim mccaughan. coming up, going to be heading back to the forum in henan. steve engle will be there. chris marlen.

. this is bloomberg. ♪

rishaad: interest rates may have picked up in the u.s.. let's get straight to steve engle at the boao forum . take it away. guest chris marlen is our

, the international president obviously attracting a lot of chinese or foreign buyers to the u.s. market area thank you -- u.s. market. thank you for joining us. you just heard president xi jinping's speech. anything stick out to you against the backdrop of trade frictions between china and the united states? >> i thought it was a remarkable speech, not only with respect to underlying themes and tones but also the explicit statements that xi made that could only be construed as a direct response to statements made by the u.s. president over the last week or two. steve: he did not mention the united states or trump by name, but he is talking about some of the frictions happening in geopolitics and also the global economy. he also made good on what we thought he was going to do and opened up the market or at least

pledged to open up the market further. there is some promise going on with chinese leaders' promises for reform. do you have that? >> i don't. lennar international has been active in the chinese market from us five years, which makes us the new kids on the block on a relative basis. we have seen incremental forms, incremental openness, incremental transparency. that has done nothing but help our business. steve: how does it affect sales in the united states if there is going to be a clampdown may be on chinese buying in the united states? chinese also have their own restrictions, as evidenced by the larger conglomerate problems at anbang or hna. also they have had restrictions on foreigners and forex transactions to the united states. how are you being impacted? >> not at all. fortunately, the u.s. continues to be the number one for real

estate investment globally. president xi talked about the expansion of property rights in china today. the u.s. has well-established property rights and property law that makes investing in a u.s. home or purchasing a us home or investing in u.s. real estate very predictable, backed by the rule of law. another comment president xi had to say with respect to upholding the rule of law in china. all these things are positive. the fundamentals of this speech were positive with respect to global engagement, global collaboration, opening up, continuing 40 years reforms. that has been great for us the last five or six years. steve: so you don't necessarily feel the wave in china to crack down on a rational investments includes individuals buying homes like yours, sold across the country? >> we just have not seen it. steve: what share of homes and foreigners -- and projects are sold to foreigners, particularly

chinese? >> still a small chair in the united states. property market domestically, so it does not rely on significant foreign involvement like some markets in asia. it does not have a significant impact on the u.s. property market, but it is an incremental benefit to a company like ours that has a focus on international sales. we are the only homebuilder in america that has been focus. it is still single digits in terms of overall impact on our sales, but it is welcome because it helps us expand our reach. anytime you have global expansion and engagement, you find all kinds of other opportunities to enhance your business. steve: in the pre-interview, you told me you have gotten out of programs and purchases by the chinese. green lead ins exchange for $.5 million in investment to create jobs the united states. you are not doing these programs anymore? >> we have been very successful

with job creation programs. we concluded our last program recently. our lending partner made that announcement. extremely successful, just like all our programs. those are utilized by us for every infrastructure style investments that do create substantial jobs. we don't need were really seek that in our ordinary course of business. for us, it was a time of need and we have moved on from that. steve: the u.s. property market still going up. our rates going to go up as well this year? three more hikes? >> strong fundamentals in the u.s. we are happy to be in asia. steve: bubbles in seattle, las vegas, san francisco possibly. another discussion at another time. rish, back to you. more from boao the next couple of days. rishaad: steve engle there with chris marlin, getting his reaction to the xi jinping speech, taking place just a

short while ago. it was curious -- there was something for everybody. your guest was saying that it's real thrust was toward asia. that some was saying was for consumption in the u.s. and some in the asian region haidi: very interesting. we will be watching to see what washington's reaction is, whether donald trump takes this as a bit of a win, taking the bone being thrown to him on auto tariffs, boosting intellectual property protection. is it going to be enough? are we ready on both sides to put an end to the mini trade war? this is bloomberg. ♪

mark: i am mark crumpton in new york. here is a check of first word news. the un security council met today to discuss a weekend chemical weapons attack in syria that left at least 40 people dead. the united states led the condemnation, saying the blame is squarely on syrian president bashar al-assad. >> the monster who was responsible for these attacks has no conscience, not even to be shocked by pictures of dead children. mark: president trump says he will decide on a u.s. response within 24 to 48 hours. the fbi today rated the office of