tv Bloomberg Markets Asia Bloomberg March 6, 2019 10:00pm-11:00pm EST
haslinda: asian stocks, following the second time this week talking some to question whether it is a much-needed correction or the start of the kind of capitulation we saw in 2015. a couple of reasons for the jitters out of there. the growth forecast cut for the g10 economies. also, the beige book downgrading its view. the jobs that out of the u.s., disappointing overnight. losses for the likes of china, japan, hong kong. gains in vietnam and australia. japan can be caught in between when it comes to the slowdown in the u.s. and china, down 1.1%. still the best performing this year, up 20%.
jitters in the market giving a boost to the yen, up .1%. it is a haven play. we are focusing on the aussie dollar, off .1%. the aussie saw a huge slump yesterday. the trend going forward, expected to be on the downside. rishaad: having a look at the indian rupee -- the nifty went 311,000. -- through 11,000. expecting a flat session. dollar strength, not really playing out with the rupee in the ascendancy. the yield on the 10 year sovereign pretty unchanged, up one basis point. action at the price through the course of 2019, we have seems about -- concerns about the upcoming elections, debt worries. causing foreign
investors to not look at india so much as china and we all know it happened there market price. news,g at the first word joined by rosalind chin. >> u.k. government is set to see late sunday as the absolute deadline for talks with the european union. time ismay knows running out of resources in brussels say the eu's pesto mix to come out of breaker. bill faces the commons on tuesday and if it fails, she will not send negotiators to seek more concessions in brussels. the 2020 election battle lines are being laid out with a new route between president trump and his political opponents. the latest spat comes after the democrats decided not to use fox news as a media partner during the campaign, triggering a twitter response from the white house. the president says he may also block what he called the fake news networks. democrats are moving to
restore obama and rehn net neutrality in defiance of republican skepticism. the merger would reinstate rules eliminated by the federal communications commission that barred the limit providers from slowing traffic on their networks. interest groups praised the bill, but critics criticized heavy-handed regulations. sale,is making a big debt offering $12 billion of bonds in a three-partake -- sale. it took advantage of a pause in u.s. interest-rate hikes which saw investors flock to interest rate debt this year. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. 'sshaad: let's get to huawei
hit back at washington's claim it aided china in espionage. the government from borrowing the equipment from certain network, saying it is unconstitutional to punish without a fair trial. unconstitutionally as judge, jury, and executioner. rishaad: tom mackenzie is at huawei headquarters in shenzhen. what is the role of president trump in all of this? tom: i thought it was very interesting because president trump been referred to during this press conference, and also in my institute with the chief legal officer. they referred to trump's tweets in the 5g space, saying u.s. companies needed to step up. he referenced some comments from president trump himself to the
likes of the vice premier when he was in washington suggesting potentially they might get involved, president trump may get involved around huawei if it is to aid a u.s.-china trade deal. trump has muddied the waters on this. many in the administration would have preferred him to stay out of this and argued this is two separate cases. one is the doj's case against huawei, the other is the trade conversation. trump has twice mentioned he would intervene on huawei behalf. -- he said he agreed with trump's comments about not wanting to blocks competition in the u.s. market. that is kiefer huawei -- key for huawei. they want to discuss with the national security establishment and industries in the u.s. to provide a framework where they can operate in the u.s. market. the chief legal
officer had to say to me about the impact on huawei's market and its business in the u.s.. the u.s. market accounts for 20 to 30% of the global market important. we hope we would have a fair chance to compete in its. leaving the u.s. market is only a last resort. to a legal expert who said president trump does have the power to intervene in this case against huawei because there are two criminal cases against huawei, one involving in cfo around bank fraud relation to iran sanctions, the other around intellectual property theft. the president has the power to intervene, but he would pay a high cost, says the analyst. haslinda: part of the broader push back for huawei. what are the chances of succeeding?
you are absolutely right. this is part of a more robust response from huawei in terms of the pushback it has faced from the u.s., not just with those 23 indictments by the department of extradition case for the cfo in canada, but the lobbying campaign from senior trump officials in europe trying to persuade allies to block huawei equipment. they are taking the legal route and the public relations route, as well. in terms of the likelihood of success, this legal expert i spoke to last night said congress has broad stroke when it comes to national security. he says he thinks it is unlikely one way --huawei will succeed in this case. he said it may about more signaling to governments around the world that huawei is prepared to be proactive. haslinda: tom mackenzie, china correspondent. let's get perspective.
our next guest says washington's strategy may not be the best way to deal with huawei. a professor in the practice of public policy at the national university of singapore. this pushback from huawei, obviously not acting like a chinese company. it is more aggressive than what we see from chinese companies. >> you are absolutely right. actingis no one longer what a previous chinese company acted like but it reflects the long-term shift in power between the united states and china. maybe 30 years ago, 20 years ago, even 10 years ago, the united states what act unilaterally and everyone would jump. the power has shifted and today, in purchasing power parity terms, china's economy used to be 10% of the united states in 1980 is larger. nominally, it will be larger in a decade or so.
the united states is acting as it is the number one power and will be the number one power for ever, but everyone in the rest of the world is adjusting to a new geopolitical environment and reflectse over huawei the larger shifts happening in the global geopolitical environment. haslinda: it is a psychological war? it is not just about reining in huawei? this is sad, and i say this as a friend of america, america doesn't seem to have a long-term strategy for managing the rise of china. it has specific actions it takes. it tried to block china from launching the asian infrastructure investment bank and failed. now it is trying to block huawei and it is likely to fail because if you give countries a choice and say you force them, are you going to bet on americorps china? they are not going -- bet on america or are you going to bet
on china? they are not going to bet. chinese -- if you can get countries to come together and say huawei is not playing by the rules and you get eight group of companies -- countries to demonstrate that, you could get china to change. for the u.s. to act unilaterally and get the rest of the world to follow me, those days are gone. it is important for the americans to psychologically accept the fact that they have got to learn to act more multilaterally than unilaterally if they want to change the world. , this iskishore inextricably linked with trade. that is obvious. i want to talk about trade later but i want to talk about huawei. no one has produced evidence of how huawei has been spying, for instance. no one has uncovered this. we know from edward snowden that the nsa certainly has been.
there is a degree of hypocrisy, but how does huawei counter that? kishore: you are absolutely right. isre is no evidence huawei involved in spying, but we do know for a fact -- you've got to be very naive if you don't believe that all the great powers, united states, russia, china, you name it, they are also buying. they have -- spying. they have to. it is part of the great power game. if you are a small country, you accept the fact you will be spied upon and you learn to live with a that. the united states to say watch out, china is spying. excuse me, we know from edward snowden that the u.s. is spying too. if you want to create a set of rules that say china shouldn't spy, the rules would also say united states cannot spy. you have to have one set of rules for all countries and that is the way the world is changing now days.
rishaad: we read a piece by one of the bloomberg opinion columnists and he essentially said this lawsuit undertaken by huawei is like a tiger clawing its own face, cutting its nose to spite its face undertaking this. what is your view? kishore: frankly, i am not an expert on the american legal as you know, the american legal system is one of the most complicated legal systems in the world. season opportunity to make its case through the legal processes, i think the united states should welcome it because at the end of the day, the one big strength of the united states as a country is it is a very strong adherence to the rule of.
if that rule of law. -- rule of law. the united states should say well done. this is exactly what it should do. use american rule of law to make your case. haslinda: kishore mahbubani stays with us to discuss the key sticking points in the trade talks with the u.s. and china and still to come on the show, as taiwan prepares for an election later on, we speak to a man who could be in line to take the top job in government. .atch that exclusive interview ceo of mmg as the he discusses pop up bash possible deals and the outlook for commodities. -- possible deals and outlook for commodities. ♪
markets. time rishaad salamat in hong kong. the trade deal could be signed, but there is a still a chance for either side to walk away. the former chinese finance minister says he doesn't think beijing won't -- will make big concessions, saying u.s. demands are unreasonable. kishore mahbubani, thank you for sticking around with us. what are the red lines in negotiations such as this? kishore: the trade negotiations? well, i would say it is important to understand -- i am writing a book on u.s.-china relations this year, the trade dispute is one slice of a larger geopolitical struggle emerging between the world's number one powers, the united states of america and the world's number one emerging power, china.
this geopolitical struggle will carry on for the next 10 years. it is going to get more difficult, but the trade slice is one small slice in that area and if you want me to make a prediction on the trade front, i'll tell you one thing. what has really surprised me is how pragmatic the chinese have been. they have decided at the end of the day, if they have to make major concessions to try and resolve the issue, they will make major concessions. you will see, for example, agreements on intellectual property, agreements on preventing technological transfer, all kinds of areas the chinese did not concede on before, they will concede on now because at the end of the day, they are focused on the bigger struggle and not just the trade issue. rishaad: i think you hit the nail on the head. fine, they've also made a lot of concessions when they joined the
wto. the thing is, they make those concessions but do they adhere to them? you madewell, i think a very good point. do they adhere to them? i think they will adhere to them if it is in china's national interests to do some. intellectual property is an example. as you know, the united states emergingen it was an great power used to stale -- steal intellectual property from the british. aere comes a point in time in country's development when the united states began to produce and intellectual property the british and said ok, now we have a vested interest in protecting our intellectual property. china today is reaching that tipping point. for china is producing its own intellectual property in many areas and therefore, it is in china's national interest to
protect intellectual property and they will be happy to go to the wto and get stronger rules because they will gain from those rules themselves. driven by their own national interests and not just by extractive man's. -- demands. of national huawei interest to japan -- china? is an indication of a power shift taking place. in the past, there have been other cases where the united states has gone after chinese tried to prevent chinese companies from acquiring american companies and the chinese companies would back off and say we will not get involved in a fight with the united states but what is interesting has shown a remarkable degree of courage and a remarkable degree of backbone. also, perhaps, the chinese are also signaling that you can't
push us around in the way you used to in the past. there are some battles where china will concede, and some battles where china will take a stand. early on huawei -- clearly on huawei, they have taken a stand. isolatingstance of the u.s. has forced neighbors in asia to come together, rely more on each other. the u.s.xtent will play the power as asia becomes more a powerhouse coming forward -- going forward? strategichat is a big decision the united states should make now. what is its future role in the asian pacific? donald trump is sending conflicting signals. when he walked away from the transpacific partnership, he was actually giving china a geopolitical gift because the transpacific partnership was designed to anchor america's
presence in east asia. he gave it up as a geopolitical gift to china but on the other hand, donald trump it has also shown a remarkable degree of that hesm and the fact met the north korean leader a second time and tried to find a solution -- he failed -- it doesn't matter that he failed. what matters is that he continued to talk to the north koreans. neither obama nor george w. bush nor bill clinton would have the courage to meet the north korean leader. donald trump had the courage to do so. those conflicting signals donald trump is sending, it is important to bear in mind the whole picture and not one slice of the action. , very briefly,e by him looking at decisions in a unilateral sense and not going down the multilateralist route, which has been the way people of business has been done, he has
cleared the path for the world to become more china centric. is that your argument? definitely,, because the best way to create a more stable rules-based order that, in a sense, china will have to comply with, the best way to achieve that is for the united states to adopt a multilateral route. the united states must remember the major global multilateral institutions of the world, imf world bank, wto, these were american gifts to the world. these are not chinese multilateral institutions, but western. why isn't the united states using them when they should be? haslinda: the battle for power and influence. kishore mahbubani, national university of singapore. plenty more to come. this is bloomberg. ♪
haslinda: let's do a check of the latest business flash headlines. tesla investors are being warned to temper expectations for china. profit onnley says the mainland is by no means a certainty and is cautious about the role china will play in tesla's long-term strategy. this week's temporary custom block on the model three, saying the issue highlights inherent risks facing u.s. firms doing business in china. rishaad: tesla's rival has had its worst day ever as a listed company, plunge me new york after lowering outlook for deliveries in the first quarter and canceling a production facility in shanghai. shares tumbling on the news after climbing 60% since the listing in september. tesla has lowered prices.
likhas no plans to do ewise. haslinda: february sales fell 24% year on year. total sales volume in the first two months of the year was about 242,000, a decline of 9% from the same period last year with sales in china down 13%. since february's fall is due to the lunar new year holiday. rishaad: let's see what is going on with these chinese markets. the shanghai composite turning positive. further weakness in this. shanghai market, going on its lunch break at the bottom of the hour. to hang seng, coming off the lows of the day. .4% to the downside. it is a day when asian equities are feeling it. have headwinds from wall street, s&p dropping there for a third day.
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haslinda: almost 11:30 a.m.. we're in the middle of the trading day. let's look at where the sei is, the benchmark up .3%. all contributing to gains. most of asia, having a down day today. we are also keeping an eye on the dollar, trading at the upper range with election risk in taiwan, indonesia pushing the dollar is a haven play. let's get the first word headlines with rosalind chin. is hitting back at washington's claims it aided
china in espionage. u.s. government for banning equipment. it is aimed at u.s. statutes that blocked government agencies from using equipment from huawei . it is argues unconstitutional to single out a person or group for penalty without a fair trial. the u.s. market accounts for 20% to 30% of the globalized market, so it is a very important. we hope to have a chance to compete in it. leaving the u.s. market is only a last resort. >> at our interview later with huawei's chief legal officer. by risks are being flagged agencies such as the imf world bank and s&p global ratings says global borrowing will rise to nearly a trillion dollars this year. i have cut their growth outlook again, saying trade tensions and
political uncertainty are weighing on the global economy. the new york fed president john williams says the signs of a slowdown are showing up in actual data. signs slowinge global growth showing up in actual data. the forecast, everyone out there, the ecb, the oecd, everyone has revised downward their forecast for europe -- european growth. a leading member of japan's policy board has broken rakes to sound a warning about the upcoming sales tax hikes. business leaders were told investors around in a the -- underestimating the fallout. raise aboutxpect to $20 billion when it completes its first phase of capital raising for its flagship fund. it has not yet set a limit for the fund's size as it approaches
a record. at the height of the market in 20 -- 2007. after a financial crisis, it took almost 30 years together 16 billion for its next fund. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm rosalind chin. this is bloomberg. constitutional court will determine the future of a political party that seems set to win power in bangkok. ministerd former prime -- its future was put in jeopardy when it tried to install its candidate for the top job. at the law in thailand calls for strict separation of politics from the royal family. let's get to the capital and to our editor. walk us through today's events. >> essentially, we will have the
andtitutional court meeting they will announce their decision on this case at 3:00 in the afternoon local time. they will either dissolve the party or they won't. these are the two possible outcomes and we will have to wait for the decision to find out what it is. it is widely expected that the .arty will be dissolved group anticipated it would use this party to affiliate with another that link the parties to the former majority in the parliament that selected. , we will havended to see what happens to those votes. under the new constitution , itred in by the military favors some political parties.
the parties will have to sign other affiliations. if the party is dissolved, which party emerges as a front-runner? who stands to win here? >> it is very unclear. because the way the constitution has been crafted, it favors smaller parties. smaller parties would have to come together and there are a lot of them. there are about 77 parties out of there. all of them won't get a showing but it is unclear if this -- it is unclear if it goes through how the whole thing would play out. electoralcussion of issues, policies and so forth has been very muted. legalhas been a lot of with people suing each other for
allegedly breaches of the law. debates't seen a lot of and public opinion as to who they would favor in this election. it is still very unclear. margo, joining us from bangkok. our next guest has been discussed as a potential prime minister candidate. the leader of his party and the former president of a large construction firm. good to have you with us. two weeks to go to the elections. how confident is your party? my party is ready and we have been ready for months already. we are looking forward to this.
-- this competition in the next two weeks with pride. haslinda: how many seats do you think you can win in this 500 lower seat election? we have submitted for 24 seats in the house. focusect with the policy on the well-being of the people, do you -- we believe we will gain trust and confidence from the people and have given our all. we haven't missed anything that we would render.
it is the people's decision to pass our future. haslinda: talk to us about your strategy -- go ahead, rishaad. rishaad: what about the election itself? how confident are you it will be free and fair? ultimately, surely the military will still have the nod, as it were. they would still be able to control things. what is your view on that? thein: i don't believe military can control things postelection given the people will turn out to cast their majority. the maximum voices tol have their determine the future of thailand
, so the more people turning out message theythe will give to all concerned parties that what they want thailand to be and who should electionand after the under a democratic system. rishaad: that's just it, isn't it? the think is, how much of a chance is there that bhum jai linkedd other parties could create the biggest coalition? would you possibly enter into a coalition with them? we cannot say at this moment, because we don't know the results yet. election willthe
be the key factor for us to select our path. don't have anywe conflicts with either party or either faction. we will be able to locate the need of the thai people through the number of votes that they whichnd that will give me take and what we can assure to the thai people, and our party's members, we will choose the best solution that benefits most of thailand and its people.
on the ground in venezuela and we also have refineries that process venezuelan oil. we are in a unique position being on both sides of that and with bothk closely governments to understand the laws and we stay on board. our highest priority is the safety of our people and integrity of our operations, which we have maintained and want to be in full compliance with the laws of the united states. it has been a fluid situation. >> global demand is critical for your business. morning,umbers this taking down global growth numbers, particularly china comes down a bit. we had the national people's congress going on. how critical is china's growth to your business? michael: china has been a strong engine in demand for commodities for quite a while, the last couple of decades, so it is important but it is not the only driver of growth. we have seen good growth globally over the last number of
years and this year, we continue to see that. we are watching that carefully because of some of the warning signs emerging in the economy. we haven't seen signs of a dramatic slowdown. we have seen solid growth once again. rishaad: chevron's ceo speaking with david westin. let's have business headlines. forecasts cut 86% after it booked more than $6 million of charges. the ceo says he will forfeit any bonus to take responsibility for the write-down. japanese banks are facing challenges as they look abroad for returns. bank cutting back on bonuses and announces payouts this week. we've been told many employees face big cuts with some receiving nothing at all.
deutsche bank cut its bonus pool by around 10% and is making more selective payouts in an attempt to keep talk earners -- top earners. rishaad: amazon is ending its experiment with pop-up stores, closing 87 outlets in shopping malls. the shutdown is expected to be finished by the end of month -- next month. haslinda: indian markets have just opened. let's get to mumbai where agam can take us with -- what to expect. three days of gains, how is it looking today? absolutely. fourth day now considering gains for the nifty and the sensex advancing nearly .1%. the banking index is showing
more strength in today's trading. the broader market index is where all the action is and has been over the past one week or so are there has been a significant amount of buying coming through. advances are seeing with a lot of institutional interest back into the indian equity markets but it is the broader market indexes which will be in focus again. rishaad: the relatively smaller stocks, mid-caps have seen a sharp move up of late. how are those indices behaving themselves? agam: these indices are outperforming the benchmarks once again. even today, with both mid-cap and small cap advancing a little over a quarter percent. while we have seen that sharp up move, there has been a lot of foreign investors, particularly in some mid-cap names. that strength continues in today's trade, as well.
rishaad: thank you very much. chinese demand for copper and zinc is expected to driven byg as it is rising demand for electric vehicles and the batteries that power them, according to mmg. it is hong kong's listed global resource company which explores, develops, and minds based metals around the world. spoke to the ceo in an exclusive interview. >> we still have very strong copper, our major commodity. yesterday's chinese session, the signal was very positive and even though 6% growth, that is a significant number and the particular change i noticed, consumption upgrade and also the future engine
needs, creating demand for electric vehicles and the battery. all of that means we will have strong demand in particularly copper and zinc. in terms of what we are seeing across the broader mining sector, it seems we are entering a period and cycler dealmaking and investment is starting to pick up with momentum. what does your strategy look like in terms of m&a and the kinds of projects you would look at investing in? geoffrey: yes, we focus on that growth and have demonstrated our commissioning two zinc mines over the past three years with strong support from major shareholders and now, we look at growth in two parts.
growing our existing assets, we believe we have growth potential. the other things we are looking we will make sure it will be the wright state for us. rishaad: mmg ceo geoffrey gao talking to us earlier on. outng up, huawei coming swinging, accusing the u.s. of failing to offer any evidence of spying. we will be live in shenzhen next. this is bloomberg. ♪
government from barring its equipment from networks and hitting back at accusations it helps beijing spy on countries. tom mackenzie is at the huawei headquarters in shenzhen. tell us what about -- about what has been happening today. tom: this is really the fight back now by huawei on a number of fronts. today, the announcement they will be suing the u.s. -- governmenttor over this congressional bill frombans from --huawei operating in the u.s. governments has been sued by the cfo and you have a pr campaign. they have opened up some laboratories on their campus in shenzhen trying to show they are a transparent company, a private company, one with no ties to the chinese government. the u.s. have claimed they pose a national security risk. chief down with huawei's
legal officer for an exclusive interview and i started by asking what he hopes to achieve, what they hope to achieve with this legal action. hope the u.s. courts will declare the section 889 ruling lettingleading -- huawei participate and bring our technology into the u.s.. >> i spoke to a legal expert who said the chances of success for huawei were slim. where do you think the chances of success lie and is this more ?f about messaging for huawei song: i don't think our chances of winning are slim. we think we have ample evidence and i think the chances of success are high. tom: how much has the congressional ban on huawei equipment cost the company? this case has damaged many
aspects of huawei's business. we could lose existing projects and further opportunities. our partners may stop working with us as our reputation is damaged. these are huge office -- losses. tom: isn't there an argument for just cutting your losses and in the u.s. and focusing on other markets? accounts for 20% to 30% of the global communications technology market so it is very important. we look forward to an opportunity to participate fairly in the u.s. this lawsuit is at last resort. we haven't considered fully exiting the u.s. we hope to keep partnerships with clients and take part in market competition. we want to continue bringing value to the u.s. tom: what do you think the u.s. is ultimately trying to achieve with its campaign against huawei ? song: the u.s. has been accusing huawei for many years of
threatening national security, cybersecurity, but huawei has a history of 30 years, serving 300 billion people in 170 countries. we provide services to poor countries and help solve problems and reduce the digital technology gap. in our 30-year history, our security record is clear. there is no evidence to prove huawei poses a threat to other countries. as a business, posing threats to other countries would be like suicide. tom: central to the u.s. argument is the case that chinese law, the national security law compels huawei to cooperate with chinese security services if they request that cooperation. how do you convince your customers and governments around the world you can turn around to beijing and say no, we're not going to work with you? song: huawei is a business. we've never received any request
from any government, including the chinese government to install any backdoors for intelligence. to do that would be committing suicide for a business. in the future, we will also refuse such a request, from the chinese government or any government in the world. tom: to be clear, you would welcome some kind of intervention from president trump if it 80 your case in this respect? -- aided your case in this respect? song: we are willing to bring technology to the u.s., but we don't agree that in administrative power should intervene in the judicial system. we believe in judicial independence. we hope the court hearings the u.s. customers can win the right to choose more advanced technology. tom: from what you are looking at now and where you sit, do you think the cfo has a good chance of avoiding extradition to the u.s.? song: we believe she is innocent. as her colleagues, we hope she can return to us as soon as possible. if we believe this case was launched to serve political purposes.
we believe the evidence for extradition is extremely fragile. are something else huawei pressing over the last day has been that they think the u.s. are trying to undermine the business because of the leader they have in 5g, which is a technology that will involve the internet of things, connecting our devices. it is that concern the u.s. has around the national security issues of that technology but lead onaying yes, we do this. we have a 12 to 18 month lead on our competitors. they pointed to statistics showing the number of base stations built over three years in the u.s. were built in china in just three months. they think this is a concern, a paranoia in the u.s. that china is stealing a leading 5g and it will be to the economic detriment of the u.s.. bey want this law to changed, this congressional bill because they say they can provide benefit to telecom companies in the u.s..
emily: i'm emily chang in san -- in new york and this is "bloomberg technology." coming up the next hour, the social network is about to get a lot less social. facebook ceo mark zuckerberg says he thinks the future is a more private platform. plus, huawei's day in court. the date is set for huawei's cfo's extradition case. we look at how the legal battle between a chinese telecom giant