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tv   Bloomberg Daybreak Australia  Bloomberg  September 26, 2019 6:00pm-7:00pm EDT

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paul: welcome to "daybreak australia." i'm paul allen in sydney. shery: i'm shery ahn and bloomberg world headquarters in new york. sophie: and i'm sophie kamaruddin in hong kong. we are counting down to asia's major market opens. ♪ paul: here are the top stories we are covering in the next hour says his callrump was wonderful, but the white house is already trying to lock down the record. trying to hit back on u.s. sanctions, beijing demands the lifting of measures on iranian
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oil saying washington tramples on basic norms, and from mining to the oceans. in a billionaire tells us his waste andt plastic see the future. and the global semiconductor market is not in the clear yet. how global trade tensions are impacting micron's future, but first, let's get you started with a quick check of how markets close on this thursday session. we had stocks down, treasuries advancing. we started lower in the session, given that whistleblower complaint at the center of the impeachment drama in washington was released and that was not helped by the fact that we heard from a u.s. official that potentially the u.s. could not be extending that temporary wally -- suppliers to two huawei. the dow lost about two points. the nasdaq also down .6%.
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the energy sector was also the biggest loser, despite the fact that throughout the session, we did see crude gain back some of those earlier losses after we heard that the u.s. could be military equipment to saudi arabia. u.s. futures at the moment not doing much. let's see how things are shaping up for asia. sophie: futures pointing to a mixed session, kiwi stocks , chipmakers 25% very much in focus after micron's disappointing profit the micronnd we have ceo noting the impact of u.s. restrictions that have limited sales two huawei, this amid a renewed crackdown on chinese .irms move withsurprise chinese bonds remaining on the this all ahead of
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china celebrating the 70th anniversary of the founding of the prc. paul: let's check in on the first word news now with jessica summers. jessica: thanks. japanese automakers are calling on the government to do more to support the industry after the limited u.s. trade deal left vehicle tariffs nearly unchanged. president led appeals for extra help amid the worsening business environment. japan and the u.s. reached a basic trade agreement, but autos remained a key issue, and tokyo fears president trump may still raise tariffs. singapore factory output plunged in august by the most in almost four years as the manufacturing downturn worsens. industrial production dropped 8% from a year earlier, the weakest since december 2015 and worse
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than all forecasts in the bloomberg survey. electronics was the biggest culprit, plunging 24.4 percent .ast month from a year ago is the worst reading for the sector since the start of 2012. and hong kong's embattled leader, carrie lam, says it is up to her government to find a solution to the months of unrest in the city. she told a public dialogue event that she expects big -- that she accepted responsibility for the turmoil and people on both sides are hurt and angry. her skeptical audience continually asked why she will not agree to key demands from protesters. they are also calling on her to resign. saudi arabia is changing one of its most fundamental rules. it is dropping the dress code for foreign women. the dramatic move is part of the kingdom's attempts to boost tourism as it tries to diversify the economy away from fossil fuels. although that rule will now change, foreign women will be instructed to wear modest
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clothing. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 100 20 countries. i'm jessica summers. this is bloomberg. we have a first look at the whistleblower complaint that calls out president trump for his controversial phone call with the leader of ukraine. the document alleges surprise and alarm among white house officials. our congressional editor has been covering these extraordinary development over the past 48 hours. callingeaker pelosi what the white house did a cover-up. what do we know? joe: that's right. the whistleblower complaint that was released today paints a little bit of a fuller picture of what went on surrounding that call in june and july with trump's counterpart in ukraine, and what it shows is, as you mentioned, that several officials had been alarmed by
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the turn the call took as president trump began to press the ukrainian president to initiate some investigations against former vice president trump'sn, who is political rival. this created somewhat of a scramble in the whistleblower's account in the white house about what to do with the recordings of that and other documents related to the call. it describes the white house sending this off into a special section of the computer network that is safe for only the most sensitive communications by the president, suggesting that the white house lawyers have looked through this and realize that there was potential for some sort of a violation of the law, shuttling this, what he called a lockout of this
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transcript indicates that they realized the gravity of the went in pursuit of trying to minimize any damage. this morninges were on that congressional hearing by the acting director of national intelligence. where do things stand after his testimony? joe: his testimony did not shed a lot of on the whistleblower's complaint, though he did attest to the credibility and promised that the whistleblower would be protected, but democrats say it has given them a roadmap now for their impeachment inquiries. it draws in the president's personal lawyer, rudy giuliani, as well as attorney general william barr, and they will be looking for several other white house officials who are unnamed in the whistleblower's complaint, who may have raised concerns about the president's actions. they say that will give them a clearer vision of where to go
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with the investigation and additional witnesses that could be called before them as the house proceeds. : a roadmap then for house democrats. what has the president's response been? quick the president has been defiant, suggesting it is again a witchhunt, that democrats are fixated on his impeachment and being sore losers from 2016 he has continued to go through this with his allies, pushing back against them across and any allegation of wrongdoing, saying that there was no quid pro quo offered in the phone call and that the -- trying to denigrate the whistleblower as having sickly secondhand knowledge of what took place. paul: thanks for keeping an ion
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that unfolding story for us. beijing is heading out of washington after the u.s. imposed penalties on a number of chinese tanker firms. they were accused of continuing to carry iranian crew despite sanctions waivers lapsing in may. china correspondent tom mackenzie joins us from beijing. give us some background to this. tom: mike pompeo, the secretary of state in the u.s., said these were some of the toughest sanctions the u.s. has ever imposed, following the decision by washington, by the trump administration to pull out, of course, of the iran nuclear court -- nuclear accord. it targeted a number of chinese shipping companies, including thethat was linked to second largest shipping company in the world, owned by the chinese government, so it has caused major disruption within the shipping industry, and of --rse, it will curtail's curtail china's ability to
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continue to bring in iranian oil. they process hundreds of thousands of tons of crude in august compared to an average of 2.4 million in month last year. from the chinese perspective, they think the iran nuclear deal still stands. they have not pulled out of that and they are angered u.s. administration has and is targeting its own companies. take a listen to a spokesman from the ministry of foreign affairs reacting to this. thehe u.s. disregards legitimate rights and interests of other parties and wields the stick of sanctions at will. it travels on the basic norms governing international relations and goes against the trend. paul: so it is a blow for chinese shipping and china's attempts to import iranian crude because as we said, it effectively cuts off these companies from the global financial system. the broader applications are it
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potentially muddies the waters ahead of these trade talks in washington, penciled in for around october 10. shery: we have more economic data out of china later today. what are we expecting? tom: we are looking ahead to industrial profits out at around 9:30 local time. bloomberg economics thinks it will be a pretty miserable set of data. we have had a broad range and gauge of data over the last few days pointing to a continued slowdown. in terms of industrial profits, we are expecting them to slow in august after a rebound, by the way, in july. they sell growth of about 2.6% in july. the reason is we have seen producer prices, so deflation and china's manufacturing sector, a drop in prices of 0.8% in august. that is going to weigh on profits, is the view from bloomberg economics, and what that means for private investment is that continues to slow as well. that is the assumption going forward. that provides a further drag on
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the economy. that is why we are focused on these industrial profits, again out at around 9:30 local time. joining us. for still to come, as the people's republic of china marks its 70th anniversary, a veteran beijing watcher joins us to discuss how it can navigate the trade war, the slowing economy, and the unrest in hong kong. shery: up next, investors susan through the market turmoil in her market outlook. this is bloomberg. ♪
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paul: counting down to the sydney open on a rather hazy day in the harbor. futures pointing higher as we saw modest declines on u.s. equities markets. i'm paul allen in sydney. shery: i'm shery ahn.
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you are watching daybreak australia. stocks fell away from risk assets amid the political in washington. susan schmidt is head of equities at aviva investors. great to have you with us now. we see so many different political issues out of washington. how different will the markets take this issue as compared to, say, the mueller investigation, which really did not do that much? ms. schmidt: i think that is a great comparison. initially, there is a big spark of attention, the market gets nervous and backs off, but then it drags on and becomes background noise. i think the market will look at this and it will start to fade and become background noise. earnings are about to start. those are tangible, concrete, finite. we have actual numbers to focus on, so i think this becomes that background political backdrop that is rocky and noisy and we just become accustomed to and we
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will focus on the data on the companies. more: could they be felt due to the currency impact because we are seeing haven demand and other central banks easing? will that feed into corporate earnings at some point? ms. schmidt: it should and we are seeing the 10-year rate has come down again. that certainly has helped earnings. i think what corporations have done that has been most impressive is held control on costs and done really well preserving margins. we see lyrical turmoil around the dollar. we have been able to wade through that pretty well the last couple of years. i think politicians are muddying the waters for the market and confusing things with global issues that could really hit the market with the soundbites but have nothing to do with fundamental earnings. paul: in terms of background noise, i want to get your thoughts on the trade dispute because it has a foot in each camp, doesn't it? markets to a degree have become somewhat immune, but trade disputes do have an impact in
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the real world. to what degree is that affecting the action we are seeing on markets? ms. schmidt: i think that will be the primary driver and markets we will hear over the next couple of weeks. we will hear from ceo's who will talk about their earnings and how corporate profits will be affected by these tariffs, and that makes a difference. markets like eta. they like actual facts. we are in a rough period because it is just before earnings starts, so we are in a news void, and when we start hearing from management teams and hearing about companies' actual performances, we will hear about pressures from trade, and i think that will have the market more realistic. i expect ceo's to be very tempered and their comments this quarter, talking about what they see in the economy and the future for the business because there has not been a lot of clarity for them on trade talks over the last couple of quarters. we have not really made a lot of progress. paul: one to jump into the bloomberg for a moment and take a look at this chart. it shows the trading range on
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the s&p 500. it's pretty wide, really. how do you play these sorts of swings? do you just get long? ms. schmidt: our approach has been to get long. i feel like going day today, trying to play the short-term is really hard. you have that fight with trying to predict events that are not necessarily related to the actual business you are invested in but are impacting it from above and taking that long-term approach. predict the isolated events and soundbites that hit out of the news. i can predict the long-term strategy and make a good estimate of what will happen to the company based on comments from management and predicting an earnings stream. let's talk about sectors. energy was the biggest loser today. i wonder if it has a good point to be some sort of insurance, given that they have relatively high dividend yields. ms. schmidt: right, energy does have relatively high dividend
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yields. those stocks do look really cheap. this may or may not be a good time. i think energy is still a risk set. it is going under a lot of we may need to have some passes to the economy for energy to come back. i think there has been a reversal of the highs last week. i think energy is softening. until you get the -- until you see the market get some confidence, we will continue to see energy lag. while it may look attractive, it might be a little early. shery: is that the case for small caps as well? >> i think small caps have an advantage in that they can be insular to the u.s. -- shery: they have been underperforming so much, though. ms. schmidt: i have, except for 10 days in september. micro caps clearly getting hit. terrible performance the last couple of days. i think we are seeing small-cap companies trying to find a way to maneuver around -- tariffs not necessarily an issue for them, so around the different
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playing fields they have. i still like small caps because i think there are some safety plays that people have not found an offer perhaps the best risk/reward, where if they have already discovered them, the ledge cap names people assume there is safety. there's some steady plays in small-cap land we think are with investigating. paul: one thing that has been keeping equity markets boyette has been fed easing and the promise of more fed easing. trickle into that the real world in terms of capex? ms. schmidt: you have not and i think that is the concern where ceo's are still cautious, and the fed is easing, but why? most ceo's look to what they say because third-quarter earnings. most say they are being cautious and they do not like to spend into an unknown outcome, so i cannot blame them for not putting capital to work and saying, "we are going to wait and be prudent," because shareholders are going to be
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first in front of them saying "what did you do with my money," if they deployed it badly when the decision comes out on how tariffs will impact them. ceo's are in a tough spot. i don't think lower interest rates are going to help at this point and most ceo's have already been savvy enough to use that low interest rate and the ability to finance debt at such a low rate to the extent they need it, so they do not need to pull that lever again. tom: thanks so much for joining us. you can get around about the stories you need to know to get your day going in today's edition of "daybreak." bloomberg subscribers can go to dayb on their terminals. it is also available on the bloomberg anywhere app. you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪
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this is "bloomberg
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technology global link." i'm shery ahn in new york alongside paul allen in sydney and "bloomberg technology's" taylor riggs. let's look at the top technology stories of the day. taylor: bicycle starter peloton recording the third worst unicorn debut since 2008. it fell as much as 14% after raising just over $1 billion in its ipo. the listing comes as investors already rattled by the sudden disintegration of we work's plan is theublic, and it latest unprofitable start to fail to win over the market. huawei saying it will license its technology to just one other company, and it would like that company to be american. company founder reiterated his promise to offer the company's full range of five gtech including chip, hardware, and source code to a single rival. he says that should be a u.s.
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company and europe is home to nokia and ericsson and does not need any help. china's online startup will issue a credit card with a bang from indonesia linked to its booking service. it was founded in 2012 and was said to be valued at $2 billion two years ago and has expanded across southeast asia by making it easier to book flights and hotels. tech are a look at the top global stories we are watching. paul? paul: thanks very much, taylor. shares of chipmaker macron came under pressure in late trade after a disappointing profit forecast suggests the industry's slump is not over yet. "bloomberg technology's" ian king covers macron. the stock is down more than 6%. why is that? : exactly right.
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the first factor is obviously a big run in shares this year, which created, i think, expectations a little bit overinflated, but rather than a number, it was more what they said. they pointed again to the huawei situation and said that may impact them going forward if they do not get more licenses to continue supplying the company. they talked about the trade war in general as potentially taking away orders from them in the future. a little bit warning we, they said a little bit of the rebound we have seen was from chinese purchasers concerned about the trade war and stocking up, not really related to demand. taylor: as you and i know, it is all about that forward guidance. what are executives saying about potential demand really going forward? ian: all things being equal, demand is proving that some of the inventory that has been
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dragging things down over the first half of the year, particularly in what is called none flag chips, has improved and gotten better. they say the demand situation will be improving from here on out, but, you know, again, it did not really matter. as soon as people heard trade war, soon as people heard lingering concern, there was not really anything they could do on the call to tamp down any lingering fears, really. paul: all along, there has been this reassurance that this time is different. memory chip earnings will not be wiped out like in the past, but is there a danger that is exactly what will happen? ian: there is always a danger, but it seems like at least for now, they are in a higher level than at least they would have been. shery: "bloomberg technology global link." don't miss "bloomberg
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technology" 5:00 p.m. in new york. andrew forrest made his fortune from mining but is now turning his focus on the environment with an ambitious plan to tackle plastic pollution. this is bloomberg. ♪
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: -- paul: 8:30 am futures pointing higher after we saw u.s. markets close a little bit weaker. i'm paul allen in sydney. shery: i'm shery ahn in new york where to 6:30 p.m. let's get to first word news with jessica summers. jessica: thanks. oil tanker costs are surging after the u.s. slaps sanctions on chinese companies it accuses of shipping oil from iran. rates for vessels capable of carrying 2 million barrel cargoes in crude to asia jumped 19% while shares of tanker operators also rose. the list of sanctions -- set
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sanctioned chinese companies include a unit of the company that operates the second largest tanker fleet. >> the u.s. disregards the rights and interests of other parties and yields the stick of sanctions at will, trampling on the basic norms governing international relations and goes against the trend. in a surprise move that contrasts with the decision earlier this month by j.p. morgan chase. china and malaysia will instead remain on the firm's income watchlist. bloomberg intelligence estimated that inclusion into the w gp in jp morgan indexes could drive 100 $30 billion into china's bond market. and a new report from the world's nuclear watchdog says iran has boosted its atomic capacity still further, installing powerful centrifuges in contravention of the fragile 2015 deal with global powers.
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the international atomic energy agency's report has been seen by bloomberg. it says iran is also preparing additional measures that will allow it to reconstitute stockpiles of enriched uranium. and airbus says it has taken steps to improve its systems against cyberattacks issued via subcontractors' computer systems. at least for suppliers have been targeted in the past year possibly from china. airbus said a breach allowed eackers to access employe information. global news 24 hours a day on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. shery: let's turn to sophie for what to watch in markets later. sophie: checking in on currencies, the aussie dollar
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steady here. second weekly loss for the kiwi dollar, back below 63, giving back some of the overnight gains . the amc index showed consumer confidence in new zealand fell to a low and september with conditions expected to work in -- worsen this year. the key did end the week up against the dollar with the euro and pound lagging most and that space. a break higher for the dollar-you on dashed dollar-you the dollar-you on dashed dollar-yuan. move from these ftse. how will that affect inflows and holdingder implications
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off? >> you are absolutely right, it is a surprise. the vast majority of investors in the market were expecting this september 26 date to be an addition into the world government bond index. folks over at goldman sachs put those influx levels between 6 billion u.s. dollars and $7.5 billion a month in terms of overseas investor inflows, so you are not going to get that. that is the key surprise, but overall, the trend is still what you see on this chart here. it is in your gtb library, and that remains the case. the inference is it will still get done. it might just not get done until the early part of next year or certainly into 20/20, so the long-term trend is still the opening up of chinese capital , notably inluding this case, fixed income markets, but also equities and the liberalization, of course, of the exchange rate. this is a little pause in the overall long-term trend, and, as i said, definitely a surprise
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for people with these chinese securities not being added today, but clearly, the long-term trend remains pretty firmly intact. shery: here in the u.s., the impeachment drama playing out in washington has been the focus of attention in the markets. how will that play out in global markets? adam: of course, it is just one of the many things investors are having to contend with this week and over the coming weeks and months. what it does really is at another level of headline risk, especially when traders and investors have been very accustomed over the last few years to overnight tweets from the president of the united states, and any incremental change in positions, but we should not lose sight of the fact, remember, casting our minds back to the late 1990's, when in the bill clinton saga, you had that big rally from the lows in 1998. of course, it was the late part of the cycle, as many believe it
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is in the u.s. as well with the economy, so it largely depends on how interest rates and the trade war progress, and that is the real kind of thing that investors are still grappling with -- what are the implications here for u.s.-china trade relations? does it lay change the outcome -- does it really change the outcome for if a deal between the u.s. and china will be brought about, and does it change the timeframe for that? we have global growth under pressure and investors feeling nervous. we have continued volatility, especially in the bond market where five or 10 basis point moves onto and 10-year treasury yields are becoming very common at the moment. this adds to another level of risk investors are having to deal with on a daily basis. shery: thank you so much for --t, our bloomberg labonte bloomberg global markets editor. australian mining billionaire
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andrew forrest is turning to the sea. he was determined to rid the oceans of polluting plastic waste. at the united nations general assembly this week, he announced a plan that aims to raise $20 billion annually from the plastics industry to drive a transition to recycling. yorkins us here in new now. thank you so much for coming in. >> great to be with you. thank you. >> you have been for decades in the mining industry, of course. first of all, tell us what sparked this environmental drive in you? >> i have been a commodities guy, as you know, for decades. about four years ago, i started a phd in marine ecology. i just finished it. it taught me way more about marine death than marine life. that's at the hands of plastics. we have about five years to turn this around. otherwise, we will ruin see life in our seas forever. shery: tell me about this initiative. it sounds to me like you are placing value on plastic and
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trying to create a circular plastics economy? is that what we are doing here? >> you've got it exactly. if i did not have a scrap metal business which i had to compete with, then i would have polluted with scrap steel, scrap iron, you would not be able to drive home. this phenomenal market boom. you have got to get in front of the wave of consumer. there is this phenomenal boom coming and recycled plastic. we just raise the value of plastic slightly from fossil fuels. that will make it more competitive. $300 billion, $400 billion of valuable plastic resin which we cannot throw out, once we cracked that, we will recycle all of that. be an enormous income generator across the world, particularly in north america, so i'm really excited about it,
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and of course, all plastic waste would disappear. paul: how great is the disparity between fossil fuel plastic and recycle plastic? how much money will it take to crack through, as they say? >> that's a great question. it is just hovering in between the two. we make fossil fuel plastics a little more expensive than the recycle plastic, and, bang, the world goes to recycle plastic. the technology is there. industry, andnew i think it is a fantastic global investor story as well. if you are chasing value, in two or three years, if we can pull this off, and i've had, like, the biggest companies in the world who have had the hugest oil and gas company, the largest company in the world, saudi aramco, come on with coca-cola and unilever and others say actually it's a really good idea. i have been to the white house,
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to china, india, the middle east, about to go to russia, just explaining we are throwing away a nearly 500 billion dollar industry. let's chase these leaders a little bit. i'm going to put $300 million into it upfront to make it drive, and let's get this huge new industry going. are getting supply from the industrial side of things and speaking to governments as well, but what sort of reception are you getting from governments. here in australia and others, there is no effective policy on plastic pollution right now. >> estrella has decided to ban further experts and plastic waste. i think that is probably logical. china and others stopped taking the world plastic waste. that led to a huge realization globally that we are not doing anything with global waste. we are just shipping it off. now we have a huge global environmental problem which translates to a huge business
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opportunity for investors around the world. the smart money around the world. i know for sure once plastic everys a commodity, even bit of plastic having a tiny value, that will drive less off the streets and drive it in. that's a major commercial opportunity for investors. shery: how much of a shift do we have to see in this culture of waste in our own society? >> i think hoping for people to do the right thing, hoping for companies to be philanthropic, i don't think that will cut it. we need companies to make money. we need consumers to know that this is a really good idea. we are recycling because we do not throw away money. we only throw away waste plastic . once it converts to being a commodity, we will not throw away, either. where it hurts most, where you attack poverty is in southeast asia where most of the rubbish mass chaos. it is destroying sea life. it is destroying human life. every of plastic there can
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become money on that, of course, will impact the lives of hundreds of millions of people. shery: good luck in this initiative. keep us updated. thank you for joining us. >> thanks for having me on. i think this will be a news-rich era on the subject. plenty moreurse, ahead on "daybreak australia." this is bloomberg. ♪
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paul: this is bloomberg daybreak australia. next tuesday, october 1, china will be celebrating 70 years of the people's republic, a period marked by isolation, political turmoil, and a dramatic rise as a global power. this week, we are looking at china's transformation over the last seven decades and the challenges it faces today.
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robert khun joins us now. thanks for being with us today. china faces a number of challenges. let's start with one south of the border. police have given permission for another protest in hong kong. that will be the 17th straight. how does beijing handle the issue? >> it looks at the situation in hong kong very seriously but is consent -- is committed to the one country, two systems policy that they would eventually like to apply in taiwan, and they have been strict about it. there was speculation china would intervene, but they have not been. the media in china has been blaming foreign forces and black hands behind it, but there has been no movement by china to take a more interventionist view. they hope it will continue to .ie down over time
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one has to appreciate how important hong kong is to china. we could talk about five specific areas, two economic, three political. the economics are hong kong used to be the main gateway for china for companies to come in with capital and technology and trade. that is less important today with the rise of shenzhen and shanghai and other cities, but hong kong is a key linchpin in what is called the guangdong greater bay area regional integration plan, which is a major part of china's attempt to transform its economy through regional coordination. they do that in the north through beijing, tengion, economic belt, but in guangdong, gdp per year,on in the top 10 in the world, projected to be $3.5 trillion in 2030.
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hong kong is key to that. politically, it is a symbol of the one country two systems model. resurgencets china's after a century of humiliation, and it is also a signal of how china deals with a sophisticated world. for all those reasons, hong kong is extremely important, but china is being very careful. there are red lines that cannot be crossed. let's not fool ourselves. number one is if hong kong moves toward any sort of independence, because i independence -- quad independence,- china would not settle for that. if hong kong moves to attack the mainland, or three, on any chaos would destroy the economy, but right now, things are in a sort modest holding pattern. everybody is waiting to see, but the big energy today is on the
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october 1 event and the 70-years reflection and looking ahead to the next 30 years, where china will be on its 100th anniversary. shery: really not on a holding pattern when it comes to the situation in washington here in the u.s. we are seeing that impeachment drama being played out. is that going to help or hinder a trade deal between the u.s. and china? >> i don't think it's going to matter much. thea has gotten used to perturbations on a daily twitter basis from washington and has learned not to react to it, not to comment, but i think the interest in both countries, for different reasons, will be towards having some kind of small, short trade deal that will not become for hints of, but it will deal with some agricultural matters and freezing of tariffs or something like that. both presidents need it for different reasons. china's economy is slowing.
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they have other priorities. president xi is focusing on antipollution and completing what is called targeted poverty alleviation to eliminate all extreme poverty in china by 2020, which is the first of this so-called centennial goal of china. that is where the focus is. president xi is worried about financial risks, other risks to the system. midterm, i think we have more serious problems. we have a tech war. we have competition, rivalry in the world. the short term, i think, is reasonably positive. the midterm is fraught with danger. war youn that tech mentioned, washington saying it will probably not renew a temporary waiver for american suppliers who do business with huawei. how is this encouraging china to move ahead with their more ambitious plans on the tech
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sector? >> very good point. i have said in the past that all the things that america wants china to do and the strictures it puts on china will in the long run help china more than it will the u.s. because, certainly in semiconductor manufacturing advanced technologies, china is throwing a huge amount of acclaim,, public lauding scientists who are supporting the motherland and its time of difficulty, to really surge forward. you see in the scientific communities, and i deal with that a lot here, kind of and enthusiasm of really sort of seeing an entrepreneurial spirit to see how china can be innovative and in key technologies, eventually be number one in the world. .nd make note bone about that semiconductors is the linchpin, and china is making a
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significant effort to narrow the ap and eventually to become leader in that area. it's not easy. it's a tougher technology than software and ai and big data, but they are throwing resources at it. paul: another major challenge china will face in the coming years is a demographic one. you will not be able to see this, but viewers will. it is a chart that shows china has got 1.15 billion people above the age of 15 and the birth rate at its lowest on record. forident xi is president life. he will be in his 80's when this problem really starts blowing up. what is the solution? xi isst of all, president not president for life. that is an over supplication. he is a president with term limits having been eliminated. his more important positions are general secretary of the party and chairman of the military, which never had term limits anyway.
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that is a more complicated question to deal with. i just wanted to correct that, verye certainly is in a powerful position, very unassailable position at this point, and the demographic issue is a critical one. one result you see of that is the health care industry is arguably the most important growth industry in china today, and it's very exciting. i think there are opportunities for foreign companies to be involved in that, in geriatric it is a concern for the future. china has changed its one child policy, but even that change has not yet led to the number of pregnancies, as many as they want with changes in people's lifestyles. people are working. demographics are a real issue. paul: welcome to developed world status. we are going to continue our discussion of the 70th
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anniversary of the people's republic speaking with the andder of silicon dragon charles freeman from the u.s. chamber of commerce. this is bloomberg. ♪
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paul: hong kong's chief executive carrie lam has met members of the public trying to find a way out of the sometimes violent protests that have continued into a fourth month. stephen engle has been covering the unrest since the beginning. how did carrie lam's first dialogue go? stephen: well, it was an interesting session. let's put it that way. it was a town hall meeting with about 150 residents that were chosen by lottery, but if you look at the demographics and the types of questions she got peppered with, 30 questions in all, 26 of those members of the public out of the 30 asked questions, urging her to meet the protesters' five demands, which carrie lam has acquiesced
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to the first one, withdraw the bill, but the other ones, committee of inquiry, amnesty, declassify the riots and universal suffrage -- all of them have not been met and some of them are even much longer term in scope, but she did say the entire unrest is caused by the government's work in amending the extradition law, so taking full blame. she says her government is shouldering the biggest response ability to find a way out. shery: is there any indication will give into any of the other demands? >> she said, "we want to make it clear, there is a bottom line. you have to take the consequences after breaking the law. that is why we say we cannot accept some of the demands. of g2r, the founder thousand, and a couple of apparel companies, he is a hong kong lawmaker and hong kong's ourty, he told me in
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upcoming special which will air later today about two weeks ago that he is urging carrie lam and demand to acquiesce on number two, the setting up of a committee of inquiry. here is michael. >> beijing obviously is increasingly skeptical about the reports they get from hong kong, so they are now reassessing everything very, very carefully. the one thing they want to is will this really put this thing to rest? stephen: protesters saying they want a committee of inquiry because they do not trust that the existing police complaint counsel will be impartial. shery: thank you so much. a reminder, our special one-our program errors later today. that's hong kong on edge at 2:00 p.m. sydney time. that is it from "daybreak australia."
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we will get all the action in daybreak asia next. this is bloomberg. ♪
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paul: good morning. i am paul allen in sydney. we are under one hour away from the market open. shery: good evening from bloomberg's global headquarters in new york. i am shery ahn. sophie: i am sophie kamaruddin in hong kong. welcome to "daybreak asia." paul: our top stories this friday -- pres. trump: it's another witchhunt. here we go again. it is a terrible thing our country. paul: president trump decries the ukraine whistleblower, saying his call was


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