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tv   Bloomberg Daybreak Asia  Bloomberg  November 15, 2021 6:00pm-8:00pm EST

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>> welcome to daybreak: asia. i am haidi stroud-watts and cindy. >> -- in sydney. >> i am sophie kamaruddin in hong kong. >> i am shery ahn. a growing amount of market watchers say the fed may have to speed up its timeline.
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asian stocks set to follow choppy u.s. trading session. plus president biden and xi jinping begin their virtual summer shortly. -- summit shortly. taiwan is a topic set to dominate. >> asia is seeing a drifting start. a directionless session. tesla is nearing their market territory. that is what to watch when it comes to the supplies here in asia. this is what we are seeing when it comes to the a6. .1% at the last trade. we are seeing new zealand softer by .1%. we are just one hour away from the start of trading. s&p futures are looking pretty flat at the moment. we are watching bond markets
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regionally. all of this amid concerns that we will continue to see inflation move quicker. we have already seen some of those moves in this part of the world. we are getting these minutes. we are speaking a little bit later on. inflation is the trajectory from here. rate policy will be top of mind. >> it is all about those price pressures. we keep hearing about where inflation is headed. the richmond fetid talking about where inflation will peak. that is according to president william dudley.
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>> some of it is just nuance as well. while they are prepared to be patient, they want misty opportunity. a lot of concern about how much of this is transitory as we consider to see -- continue to see the supply pressure -- supply-side filling pressure. certainly runaway inflation is not something we were thinking about a couple of years ago. >> something that has not changed is the u.s. china tensions. we were talking about being on the foothills of a new cold war. this will really be top of the agenda. don't miss the fourth annual
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bloomberg u.s. economy forum happening throughout the week. topics ranging not only from the u.s. and china divide by trade, climate, cities and health as well. for now, let's go to kathleen hays for more. >> we would like to welcome our bloomberg radio listeners. this is the president of the federal reserve bank of minneapolis. he said recently that the fed should react to elevated inflation even if it causes pain for americans. it is going to prove temporary. as my colleagues were just discussing, former fed officials and even current fed officials have been concerned not about overreacting but under reacting to this surge in inflation and the fact that maybe it won't be as temporary as you thought. how do you respond to that?
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>> we are all paying very close attention to the data. the higher prices we are seeing in the economy are real. these are real pain points for families that have to pay them. no one is making light of that at all. my main point is we should not overreact to what will be a temporary factor. if it is the supply-side and supply chains would be affected because of the pandemic, barring some new way for new strain of the virus, those supply chains should work themselves out. on the demand side, many have argued this is about a demand shock, a lot of fiscal stimulus. we know the path of the fiscal stimulus. it provides a one-time boost and then tapers off and becomes a drag on the economy. unless congress passes a massive new spending package, there is nothing i am seeing in these fundamentals that leads me to think this is a long-term change
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in inflation expectations. we are seeing pressures that are real. most of the evidence in my mind seems to be that they will be temporary even though they are real and people are having to pay it. the challenge is if we overreact by saying let's just change the path of monetary policy to deal with a one-time affect, that could lead to a worse long-term outcome for the economy. >> the supply chain shortage, constraints, blockages, they don't seem to be going away. if anything, they seem to be lasting longer. what do you see in the data? many fed officials are saying this inflation surge is a lot about the supply chain but what makes you say in terms of data, not just a forecast that it is going to get better? >> just looking at some examples, it is very sector specific.
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a year ago you could not get for the paper when you go to the grocery store. now they are full of toilet paper. lumber prices skyrocketed and then fell back to earth. i read a report that malaysian ship factories are not coming back online to try to supply auto companies. i recently learned that all of the major auto plants in america have restarted. i am not suggesting we are out of the woods yet at all but many of these sectors are working themselves out. some will take longer than others. >> larry summers, the former treasury secretary, unknown economist has been concerned for some time that the fed is not going to move fast enough and it will let inflation get so high that the fed has to move way too fast to pull it back in. he is talking about things like demand driven inflation, prices rising because of a strong economy. some people going back to work.
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it is not just things like commodity prices, housing prices and things like that although they are contributing to it. what is the risk that this does not go away and it becomes entrenched? >> i read larry summers put out a piece today. it is a one-time boost of demand. it leads to higher prices. it does not lead to higher inflation. that means ongoing year after year after year continuing price increases. i don't understand the mechanism by which larry summers thinks this one time fiscal stimulus needs to a change in the path of inflation unless you say inflation expectations are going to become unanchored, the federal reserve will never allow that to happen. all of my colleagues are paying very close attention to the data and if we thought long-term inflation expectations were
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coming unanchored, we would adjust to make sure that did not happen. if you look at market indicators, they are not looking like they are coming unanchored or very high at all. we are seeing a boost of inflation expectations over the next 3, 4, 5 years. we are paying very close attention to the data. even if you believe it is purely demand driven, explained to me how that leads to long-term inflation. >> fair enough. when you talk about inflation expectations rising, they have risen for things like the new york fed expectation. the longer term measures are rising as well. what about a change in behavior from this? for years, i can't raise prices because someone will have a lower price. that has changed. people would not pay a higher price because they knew they
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could go to a discount store and buy a lower one. if there are risks that the expectations are changing, if the fed has a longer-term inflation problem than they thought, -- >> it is possible. i don't want to rule it out. think about the economy we came out of before the pandemic. we were struggling with low inflation expectations. not just in america but europe, japan and advanced economies all around the world. that was driven by things like demographics, technology development, low productivity, trade. have our demographics changed because of the pandemic? no. they have gotten worse. i don't want to disbelieve that japan's low and fit -- low inflation problem is in the past. i find that hard to believe. we want to not overreact.
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we want to pay attention to the data, look at the evidence and make prudent adjustments. not just overreact because twitter is hyperventilating. >> i would suggest that it is more than just twitter hyperventilating. but there is a problem that people are seeing, a pain that they are feeling across the country. consumer sentiment fell to a 10 year low in early november. the statement he put out is because of the rising prices and the growing belief among consumers that no effective policy has yet been developed to reduce the damage from surging inflation. how do you respond to that russian mark you don't see a problem. >> i do see a problem. the higher prices are real, people are paying them. it is causing pain.
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no question about that. we are seeing higher wage growth. a net of inflation, higher wage growth. we still have four to five alien americans who are out of work that would have been working had there been no pandemic. let's not lose sight of the fact that this pandemic has killed 700,000 americans or more. we still have 45 million americans were out of work who otherwise would be working. there is a lot of pain there as well. to say that we just need to focus on inflation and ignore the labor market, that is only half of our mandate. we need to pay attention to both sides of this. people who are afraid because of covid, they are suffering. we can't lose sight of that. >> let's look at the labor market. i think it is another reason why people think this is an economy that creates inflation that creates more. you mentioned the millions who still don't have work. but there are 11 million jobs
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that are not filled because people don't want to go back to work. a record quit rate. jobless rates are back to nearly pre-pandemic level. there were very low levels before. you see wage pressures. this is another sign that the labor market is healing. it has made a lot of progress. we are seeing pressures there that could persist and entrench expectations in business and consumer behavior. >> i have been at the minneapolis fed year after year. i heard one thing from businesses. historic worker shortage. they found more workers to hire. the unemployment rate fell down even though people said that was impossible. labor force participation continued to climb. the population ratio continued to climb. i don't have a ton of sympathy went businesses say they can't
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find workers. i know we are in a unique situation. we still have 45 million people who i think will be working if we give them the chance but we have to get control of the virus. let's not lose sight of the fact that 700,000 americans are dead. >> there has been more improvement expected despite uncertainty over variant. the president of the new york fed said that by starting to taper so slowly and not being able to finish by june, it puts it in a position where they may have to speed up the taper. >> that is a very slow path given the economic information we are seeing. by locking themselves in this
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way, i think they have doubled down. >> he went on to say the inflation rate may end up a lot higher. he said it may end up at 3%. is that a possibility or risk? >> i can't predict the future any better than bill dudley can. is the federal funds rate going to end up at two or 3%? i don't know. we will have to see how things unfold. one thing about this pandemic. every time it seems like we have clarity, there are new surprises that come. is the next six months going to unfold just like bill dudley things or exactly like i think -- thinks or exactly like i think? i doubt it.
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>> one other quick question. on broad-based employment, that employment goal versus this inflation where everybody has, you said you're watching it very closely. how do you square that equation? how do you view that trade-off? >> we said we are going to take a balanced approach. up until the pandemic hit this current environment, there was no tension. there was still slack in the labor market. we were undershooting our inflation target. there appears to be intention because there are 5 million americans or so out of work. that is why we have to read the data very carefully and not just take a snapshot of where we think it is right now but where the economy is going to be over the next one or two years to try to adjust policy on that arc. >> the bond market is pricing in
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now. the bond markets have been very volatile. the inflation jitters are hitting them. what about the possibility of rate hikes? you said probably not until 2024. >> we will get a lot more data on the labor market and on inflation over the next 1, 2, three quarters. while the taper is ongoing, that will provide us a lot more information about what the underlying dynamics are. >> all right. let me ask you about something in the very near term. racism in the economy, looking at financial services, what is on the table? >> the fed has a maximum employment mandate. we have had this 10 part series
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looking at racism, keeping people out and really achieving maximum employment. there are people who don't have access to banks, who don't have bank accounts, they have to turn to payday lenders. how do we break down these barriers? we have to make the economy unction more equitably and we have to be able to fully contribute to the economy. we are bringing on board experts from the industry to try to shine the light on what needs to change, how we make the financial sector more inclusive. >> when you look back at these past nine conferences, what surprised you most about this all brought issue of racism in the economy? >> how much was there if we were just willing to open our eyes. if things point things out between now -- people point things out to me -- -- -- when
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businesses say there is a worker shortage and then i go to a meeting in a low income community or people don't have jobs, we need to break down those barriers. it will actually be in the business interest and economy interest. it is there for the taking if we are willing to be honest about what we are seeing. >> do you see things -- particularly when it comes to financial services, wealth, jobs that the fed could do, can do to make a difference? >> one example is the community reinvestment act, the fed. they are working with other regulators and how banks apply that into their communities that they serve.
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that is one example. you've ago, the federal reserve adopted a new framework. that give us some misleading signal. there are a lot more workers out there. they want to work. if we understand that better, we are going to do a better job of achieving our dual mandate. >> thank you very much. people can find racism in the economy, looking at financial services, the annapolis fed president, thank you for joining us today. -- minneapolis fed president, thank you for joining us today. >> we will be hearing more from policymakers and other vague was at the u.s. economy form. henry kissinger and the u.s. secretary of commerce, gina raimondo is one of the speakers
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we will hear from. we get a preview of the first official summit between president xi and president biden. coming up next, the chinese property sector with developers, kaiser said to miss interest payments. we get the details next, this is bloomberg. ♪
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>> credit markets focused on training starts across greater china today. bloomberg learned that some of kaiser group creditors have yet to see payment from last week. rachel, what do we know about the latest at kaiser? >> they had about 88 million do
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in payment last week. and some of the dollar bondholders they had not yet seen -- the dollar bond in question trended down. there is growing doubt about the company ability to pay their debts. the developer has 30 days to repay those interests for they go into default. that could be likely to show how their progress has been. -- how slow their progress has been. >> we continue to see that pressure among broader developers. as soon as china fell, property companies seem to be prioritizing debt servicing. >> that is right. we are seeing some state owned
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companies that are trying to test investor appetite for grand bonds. there is demand for those bonds, copies could try to repay their debt that way. the sector could see some easing in their cash crunch. authorities might loosen that role. that could fit the high quality names but the lower rated developers are going to remain squeezed. >> that was rachel butt. plenty of big-name guests at the economy forum.
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>> a quick check of the latest business headlines. giving reported a public bus. sales declined 18%. we were said it is making progress bringing people back into shared office spaces. tesla shares tumbled last week. elon musk is hinting that he could sell more of his stock. shares dropped in new york. the stock is down nearly 18% from the record high on november 4. the u.s. bank of the west is working with jp morgan and
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goldman sachs. early reports value the business at about $15 million. >> we are counting down to the start of trading. the net income forecast raised more than expected. surveys indicated activity in retail and other services could lift out of negative territory. in south korea, monthly public finance data released this morning. the focus will be on the excess tax revenue as they are looking to give out another round of
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cash handouts before the presidential election in march. we will be watching for news out of samsung's annual form. they will reveal more about the
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>> quick this is daybreak: asia. i am vonnie quinn -- >> this is daybreak asia. the president tells bloomberg television it is possible that the fed funds rate will go as high as 4%. bill dudley said markets are underestimating the scope. >> at think they will go until
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june and later. they expected the peak to be around three or four. the crystal ball is cloudy as we get further out. >> andrew daley has hit back at those accusing him -- they turned them into unconditional views of the road. the boe left rates unchanged at .1% at the november 4 meeting. oil reversed losses in new york. this after another day without an announcement from president biden. this as saudi arabia and the united arab emirates continue to
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be cautious in their plans to raise output. jamie dimon is adding to the voices criticizing hong kong's quarantine rules. simon made the comment early on monday while skipping normal procedures. --dimon made the comments early on monday. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. >> joe biden and xi jinping have plenty discuss -- to discuss in their first summit. let's bring out our next guest. wendy cutler is now the vice president at the asian society
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policy institute. always good to have you on daybreak asia. everyone is managing expectations. is the fact that we are seeing this high-level leadership conversation happening good enough for now? this meeting is going to start in about one hour. all eyes are on around the world. even though we are not expecting any breakthroughs or dramatic announcements. the fact that both leaders are setting aside three hours to have frank discussions, it is significant. this is at a time when relations between the two countries are so tense and full of stress. >> what is some of the lower hanging fruit that could be achieved? you kind of referenced what other countries are looking at four.
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australia -- looking out for. countries like australia. >> the world is watching, particularly in asia. a lot of asian countries have been collateral damage in these tensions between the u.s. and china. they feel they have been forced to pick a side. i feel they will welcome this engagement. with respect to some immediate outcomes, we could see the reopening of the two consulates closed during the trump administration. i think we need to keep our expectations in check and just appreciate the fact they are meeting. relationships did not sour overnight. it is going to be a process.
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>> expectations in check. the listing of tariffs is perhaps off the table right now? >> that is right. the president will not be staying tariffs anytime soon. particularly given the pressure in congress for him to look tough on china in the lead up to the november elections. the president will urge china to fully live up to its obligations under the phase one agreement. also to address those other issues of excess capacity, trade distorting subsidies, enterprises creating an unlevel playing field for the u.s. and other companies. i don't expect breakthroughs entree to happen during this meeting. >> as we have continued to see the bind and administration come up with a china policy, how far has beijing expanded influence in the region?
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>> exactly, china is not standing still. president xi is coming out of a meeting where he has cemented his role in the party in the history of the party and is now approaching next november where he is seeking an unprecedented third term. he is coming to this meeting in a position of strength and looking to cement economic and strategic ties all around the region and the world. if anything, he is taking advantage of the vacuum on trade created by the trump and biden administration. >> how much is that position of strength shaken? that ability to influence lost by the covid zero strategy?
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the president has not left china in so long area >> exactly. just because president xi is in a position of strength now. -- so long. >> exactly. just because president xi is in a position of strength now. there is no unexpected development he is accused of not handling well. he is seeking stability in u.s. china relations. you had a look at that u.s. along with hundreds of lawmakers and other stakeholders welcoming the infrastructure built today valued at over a trillion dollars. i think president biden is coming in to this meeting on a real high as well. i think that is positive and that will lead him to be very forceful and frank with respect to his concerns and tensions vis-a-vis china. >> wendy cutler, always good to
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catch up with you. thank you. let's turn to sophie for what to watch and markets. sophie: stocks led lower by 2% in the sydney session. aussie bonds have the yield curve bear steepening. check out the aussie dollar. we have it steady. ahead of the tokyo open, we are seeing nikkei futures move to the downside while the yen is holding steady. pulling up the chart on the terminal right now, asian stocks
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have continued to lag. a jacob or intime are assessing this underperformance from a pack. this points to chronic weakness. the bank is reaffirming its bullish stance on x china equities based on the global growth of cycle. >> we will be asking business leaders about the market outlook as well this week at the bloomberg new economy form. mark joins us along with the heads of the new york and singapore stocked -- stock exchanges. you don't want to miss out on those conversations. this is bloomberg. ♪
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>> we continue to track the fallout from the bloomberg supply chain crunch. there may be some relief in the shipping space. the real container index is in is longest streak since march of 2018.
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france called for a more interventionist approach of overcoming the chip prices. we will also be watching nature of retail earnings ahead of the holiday shopping season. walmart results are due out. courts those earnings are a key barometer for the state of the economy. retailers could be in for a tough quarter. there was a little bit of good news on that front. investors will look for when supply disruptions could and and how the companies are positioned going into the all-important holiday shopping season. bloomberg subscribers can read more about the stories. that is on ni trade nl.
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airbus has secured a deal for 255 narrowbody jets. the deal will be shared with various carriers. airbus told us that this is cause for cautious optimism in the industry. >> we see the traffic rates going up. we are not back to everywhere in 2019 but we are starting to see the light at the end of the tunnel. >> we just saw the reopening in the north atlantic. will we see the transition from this being a narrowbody recovery to a wide bought her -- body recovery question mark >> that
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is a very important question. thank you for asking. -- wide body recovery? >> that is a very important question. thank you for asking. we see the full recovery between 2023 and 2025. when exactly, we don't know. we think that asia will take more time to fully reopen. >> let's talk about the freighter market. it has kept many airlines going during this crisis. i was talking to virgin atlantic about this. they see a big story going forward. when are we going to start
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seeing a big order for that? what are we thinking about the structural change in the market as a result of what freighters are doing right now? >> that is a segment of commercial aviation that has played the usual in the pandemic. we see a shift in value. not necessarily the heavy goods but the ones that have a high value. we believe the cargo market will continue to expand. there are a lot of planes that need to be retired.
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there will be more fuel-efficient and carbon neutral planes. that is a great platform. we see orders coming soon. >> there he was speaking is closely with guy johnson. the french playmaker saying that replacing older, dirtier debts with newer, green amounts will be a big provider of orders. the industry has seen its omissions steadily rise before the pandemic with the climb expected to continue.
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the international air transfer association has said they would be harmonized by 2050. how challenging will this endeavor be? >> very challenging. the fear is likely to increase. we expect the annual omission sector will be nearly doubled from the p -- pre-pandemic level. it will be technically and financially quite challenging area >> what you airlines think we really have to do to achieve that target? >> there are various ways airlines are trying to achieve that goal. one important initiative is to use aviation fuel.
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we have seen two types of initiatives by airlines. one is to secure supply based on long-term agreement with fuel supplies. airlines are also trying to offer their corporate customers to offset their carbon emissions. >> are we seeing the investments needed for these new technologies? >> yes. we have seen these investments. the total investment is worth about 5.4 billion u.s. dollars and then 48% went to the startups.
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these aircraft do not replace the large tubs of aircraft. these could be used for regional flights beyond 2030. these investment are a very small fraction in comparison to the overall sector. coming >> >> up next, japan's figures lender -- >> coming up next, japan's base lender has a record forecast. and we will hear more about the bloomberg account before them -- economy form. plenty more to come on daybreak: asia. this is bloomberg. ♪
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>> a quick check of the latest business flash headlines. the dutch government is making last ditch effort to keep shell in the netherlands by seeking a controversial dividend tax. the local reports said the caretaker of the administration does not have a majority in
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parliament. the tax was reason enough for shell to move its headquarters to the u.k.. this is a tweedy 5% premium. the day before reports on the potential sale were published. the transaction is expected to close in the second quarter of next year. spirit super is trimming its equity portfolio and looking to tap private market assets instead. the fund will reduce its stance on stocks, particularly in the u.s.. the same valuation has become stretched. >> we are looking at sk bioscience.
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the net losses widened. the higher still cost denting when it comes to building ships. they will develop a business for the materials. we are watching chip related names. tourism travel plays are on watch today with the cdc lowering its travel advisory to japan. it is planning a 30% dividend ratio payout. >> we will watch for winter pen
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opens the trading. they have a record $9.2 billion. let's get more from our finance editor. >> the big megabanks were lifting their profit forecast. they came out with these numbers on monday. the market already baked in the idea that they would lift theirs as well. that is down to a couple of things. these bad loan cushions. how bad will the pandemic get? things across the road have been trimming these buffers.
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that is why they have been able to increase their profit forecast. that is not something that has been seen universally across the board. >> what are the indications of the rising global rates environments japanese banks? you do have japanese rates not going anywhere. >> if you listen to the commentary, they are all in agreement in the sense that the profit outlook is improving. quite material to where they were a few months ago. there is still a big caveat about how the pandemic lays out. global interest rates rise.
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the trajectory is to increase. if this happens too quickly, that will be a big shock. that will be quite a worry for banks. >> the finance editor, adam haigh there. with rising inflation, there is growing pressure on other not just regular people by people who are retiring. this is down from about 40,000 just years ago. >> a lot of concern about people retiring the past 15 years. they have had that tailwind, facing headwinds. when it comes to the return,
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investment grade bonds are not looking that great either. lots of concerned if you're out of the workforce. this is bloomberg. ♪
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>> hello and welcome to "daybreak asia". i'm shery ahn in singapore for the bloomberg new economy forum. sophie: i'm sophie kamaruddin in hong kong. hi to: looking at the measurement arc kids in asia. our top stories. a cautious start as inflation worries way. the policymakers should not
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overreact. president biden and xi and begin with trade, taiwan and human rights that the dominate. commodities and climate change. we ask the founder how copper can play a role in clean energy. shery: under pressure in early trading as south korea and japan are open. what are you seeing? sophie: some divergence for japanese benchmarks. the topics are gaining grounds. nikkei 225 is under pressure, off by a 10th of a percent. keeping an ion travel and tourism as they lowered its covert travel advisory to japan for the lowest risk level. we are keeping an eye on mitsubishi ufj after forecasting a record profit of stock gains and lower credit costs. we are seeing that banking cost and japan gain ground. as we anticipate what's going on, you have the yen trading above that 114 handle.
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switching on the board, turning to south korea after a two-day gain for the kospi, we are seeing it move to the downside by a quarter of a percent at the start of cash trade. samsung shares ahead of the annual investors for a meeting later this morning. monthly finance data is due from south korea. the amount of excess revenue will be closely watched, given the prospect of another round of cash handout ahead of the presidential election in south korea. switching out the board to turn to the share market in australia. we are seeing downside being held lower by banks and minors. you have the aussie bond yield curve steepening ahead of the meeting minutes due this tuesday, along with a speech from governor lowe on the inflation outlook. check on what's going on with oil prices. crew trading above 81 bucks a barrel as we see inflation running top of mind. with that, we have seen go trading around june highs.
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we do have hedge funds turning even more bullish. the inflation rose and we have net lawns at a 10 month high for gold. ubs having potential is higher. >> our next guest, inflations are running high. they head of asia investment strategy at j.p. morgan private bank. can we settle the argument of whether this is transitory and is the question really the inflation that does stick around, how elevated is it? how does that impact how you invest? >> i think we can settle the argument. it has been long enough where we have seen higher than it consensus inflation. i don't think transitory is appropriate. i think what we are looking at now is how much inflation or how much of the services and other factors continue to stay higher than expected.
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we have seen goods prices, other goods prices remain above consensus and continue to push up the means from a see kia perspective. but how we see wages and how we see services -- haidi: labor markets are behind all of this. to that end, what companies are you looking at that could potentially whether the shift and still continue to do well? >> from an investment perspective we are looking at companies that have pricing power that can pass on the higher cost. they see hiring costs from both wages and other inputs like energy components. those that have the pricing power, whether it's the market share or the brand that can pass on the cost and protect their margins. that's really where we are becoming more selective from a global perspective. those that can pass on those
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costs and maintain the margins. we have seen margins rise quite a bit. we are seeing healthy margins. but looking at those, it could continue to protect those. shery: we have not seen a strong inflation in asia as we have in the west. how much have they price and price pressures? wax we have seen markets mostly ignore price pressures. markets tend to look at them as if they are transitory, and they continue to. although we see rates markets pricing higher for fat hikes and for other central-bank heights. equity markets really price and the risk of higher inflation. we see quite a bit of trust that the fed and others will move to keep inflation expectations anchored. here in asia, would see the dynamic. we have not seen it in terms of wages and it does look very different around the world. it is very uncertain eyes recovery in unsynchronized
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recovery outlook. >> when it comes to the property sector challenges and china, investors have been honed into that. what are we seeing in terms of spillover, what can we expect across asian markets from what's happening in china, not only the property sector, but the broader slowdown? >> that is the focus. all eyes are on at the moment, just given what we are seeing in terms of slowdown in sales. and you expect the slowdown that will see in property investment in new starts and the other macro factors that are driven off the property sector. we are seeing now priced into commodities and into iron ore. we are seeing at priced into high yield. i think that will come through more broadly. the property sector is the biggest engine of growth in demand in china. and it's through to china that expert commodities and goods into the property sector. so far, we have not seen much spillover, but the longer the
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property sector last, the more likely we could see some spillover, particularly into sectors that could touch the property sector. haidi: i want to bring you to our question of the day, which is looking ahead to u.s. retailers and their earnings expected out. how does that potentially sends signals for broader assets? what are you looking out for in terms of communication on supply chain, on their ability to be able to cope with, just above pre-pandemic levels of consumer spending that still happening? >> the consumer is going to be incredibly important as we get further into the recovery. it really will be driven by the household. there's an expectation that we have seen household rise, and as they worked on the savings back to the trend that we will see sustained above trend consumption. the numbers that we see, whether from walmart or other retailers
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will be important for how much consumer sentiment remained strong, or how strong we see consumer spending and how they work down the savings. additionally, there are a lot of question marks around supply chain and the cost of shipping units that can be answered more at the micro level. report from the companies will be comfortable to see how they might last. shery: always great having you on, j.p. morgan private bank head of investment strategy, thank you. that's gets a vonnie quinn with the first word headlines. vonnie: president biden and chinese leaders xi jinping are scheduled to hold a virtual summit shortly, with little expectations for breakthroughs on major issues. a by an administration official said they had conversations this year. beijing says relations are at a critical crossroads on the white house says a wants to put guardrails on the relationship. president biden has promised
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americans that its new infrastructure role will improve their lives and keep the economy moving forward. the president signed the $550 billion measure at a white house ceremony. he appointed officials led by the council director to guide enactments. they are pessimistic about the state of the u.s. economy, particularly, inflation. president biden: in washington, you've heard from experts. but today, we are finally getting this done. so my message to the american people is this, america is moving again, in your life is going to change for the better. vonnie: bank of england's governor has hit back at critics accusing misleading markets before the rate decision. they told lawmakers on the treasury committee that investors took conditional statements on the direction and turn them into unconditional views of the world.
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the boe left rates unchanged as .1% at its november 4 meeting. the group is said to have missed bond interest payments following the 30 day grace. before the default. -- grace period before the default. $90 million redo last week but sources say investors at the at to receive any funds by the end of monday. the company recently had a dividend and is trying to sell assets to raise cash. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is bloomberg. haidi: oil edging lower. we get the price outlook later. the ceo -- the fed president said the fed should not overreact when it comes to what
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are probably temporary inflation measures. that conversation is just ahead of us. this is bloomberg. ♪
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>> the recovery continues, and it's going to unwind. we can expect the price pressure on the goods and services to normalize actually. as a result, we still see inflation moderating into next year, but it will take longer to decline than we had already expected. >> the interest rate won't supply more gas or it will supply more computer chips. the risk for us is that we also see that, in this recovery, it is approaching being closed and the neighbor market looks tight.
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that is the big issue at the moment. >> i think they have made a mistake in the sense of things have slowed to it's hard to taper. they basically said we won't start to taper until we made progress towards inflation, now the taper will be completed until june of next year on the current trajectory. but is a very slow passive removal -- renewal given the economic information. by locking themselves in this way, i think they have doubled down on being late. shery: policymakers weighing in on inflation. one fed official is pushing back for policy action. minneapolis fed president told us that the central bank shouldn't overreact to inflation pressures. >> no one is making light of that at all. my point is we should not overreact to what is likely
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going to be a temporary factor. let's just take the supply and demand one at a time. if it supply chains i have been disrupted because of the pandemic, barring introduction of some new wave or new strain of the rider -- of a virus, they should work themselves out, some taking longer than ever's. many people have argued it's about a demand shock. a lot of fiscal stimulus. we know the path of the fiscal stimulus. fiscal stimulus provides a one time boost and then it tapers off and becomes a drag in the economy. so unless congress passes a massive new spending package that is not paid for, there is nothing i'm seeing that leads me to think that this is a long-term change in inflation or inflation expectations. we are seeing pressures that are real, but most of the evidence in my mind seems to be that they will be temporary, even though they are real and people will have to pay a. the challenges, if we overreact by saying let's change the fact
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of monetary policy to try to deal with the one term affect, that could lead to a worst outcome for the long-term economy. >> the supply chain shortages constraints, blockages, whatever you want to call them, they don't seem to be going away. if anything, they have broadened. >> i'm not suggesting we are out of the woods, but many of these sectors are working themselves out. some will take longer than others. >> larry summers, former treasury secretary, well-known economist as been concerned for some time that the fed has got to move fast enough and it will let inflation get so high that they would have to move way too fast to pull it back in. he's talking about things like, you have demand driven inflation prices rising because of a stronger economy. some people going back to work, and it's not just things like commodity prices in housing
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prices in a hot market and things like that. although they are contributing to it. what is the risk that this doesn't go away and that it does become entrenched? >> i read larry summers put out a piece earlier today. it goes back to what's the economic theory that a one time boost of fiscal spending, a one time boost of demand leads to higher prices, yes, doesn't lead to higher inflation. which means ongoing year after year continuing price increases. i don't really understand the mechanism by which larry summers thinks that this one term, one time fiscal stimulus leads to a change in the path of inflation. unless you say inflation expectations will become unanchored, the federal reserve will never allow that to happen. all of my colleagues and i are paying close attention to the data. if we thought that long-term inflation expectations are becoming unanchored, we would adjust to make sure that did not happen. catherine: there is a problem, a
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pain that people across the country are feeling. when you look at the consumer sentiment survey from this friday, richard, i'm sure you know of him, has been doing this survey since 1976. it failed to attend 10 year low in early november. this statement he put out is, because of rising prices and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation. again, someone who has watched this for a long time, how do respond to that? you don't see a problem? >> i do see a problem. the higher prices are real, people are paying them, and it's causing pain. we are also seeing higher wage growth, especially for the lowest income americans. that of inflation higher wage growth, we still have four to 5 million americans who are work would have been working had there been no pandemic.
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let's not lose sight of the fact that this pandemic has killed 700,000 americans or more. we still have 45 million americans who are out of work who otherwise would be working. there is a lot of pain there. just to say we need to focus on inflation and ignore the labor market, that is only half of our mandate. so we need to pay attention to both sides of this. people who are out of work that would like to work and they are afraid because of covid, because of deltek, they are suffering. we cannot lose sight of that. haidi: the fed president speaking with kathleen hays. president biden getting set for their virtual summit this hour with contentious topics top being the agenda. we will bring you more analysis as we count down to the meetings. we will discover how singapore is navigating u.s. relations at the bloomberg forum. this is bloomberg. ♪
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haidi: president joe biden and xi jinping have planed to discuss during their first virtual summit due to begin within the next half-hour. but expectations for a meeting are being kept, given the differences of opinion on everything from trade. it's rain our chief north asian correspondent david ingle in hong kong. what could the two men talk about to move the bell in the relationship? it seems optimistic that they have put aside this period >> and several hours they will be speaking, starting about 20 minutes from now. seven: 40 5 p.m., washington, d.c. time. it's expected to last several hours, there won't be a joint statement afterwards, but we will likely get some sort of white house briefing late in the
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evening and washington, d.c. to run through some of the main points. no one is expecting major breakthroughs on these very prickly issues. you mentioned there, from trade to taiwan, to sanctions associated with trade to some of the human rights issues that the united states has brought up. there is a lot of very sensitive subjects, and these two gentlemen have only talked on the phone twice since joe biden became president earlier this year. this would be a virtual meeting where they would actually be able to have face-to-face discussions. but there will be translation, talk, and there will be a lot of protocol involve, but will they be able to really get a personal relationship building that you can move past some of these sensitive issues. i would bring up, trade is a big one, the basic tenants of that temporary or phase i trade deal that the trump administration signed is still in place in the tariffs are still in place. is there wiggle room in
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political appetite for the joe biden administration to relax those? yes, they are inflationary, the tariffs, but there are many in the united states who say being tough on china means keeping the trump trade policies towards china in place. there's lots to work out. u.s. trade representative catherine is in asia this week, along with the commerce secretary. if things go well on the trade front, perhaps there could be a directive to meet with the chinese counterpart in this part of the world. that's highly speculative and probably a best case scenario to get the ball going on discussions on trade. taiwan is the big flashpoint because there is increased rhetoric about the sensitivity in the red lines involving taiwan and whether you'd the united states has so-called strategic ambiguity and its relationship with defending taiwan. shery: we are just weeks away from beijing hosting the winter
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games. could we see some relations around this global event? >> it would be very interesting ended speculated that perhaps xi xiping will extend an invitation to joe biden to intend the winter games. in the outskirts of beijing coming up in february. it will be a symbolic move in a cordial move and not unexpected. however, a very sensitive political gesture for joe biden. there are many in the united states who feel that these games should be boycotted because of what happened in other areas of hong kong and the likes. xi xiping extends at invitation, it would be very interesting to see what biden has to say, whether he accepts or doesn't. shery: our chief north asian correspondent stephen engle there with a preview of the u.s./china discussions. trading markets will be in focus when trading starts after bloomberg learn that some of their creditors have yet to
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receive payments for bond interest. that's get the details from china credit editor. what have we heard? rebecca: they are yet to receive their coupon or payments that came last week. it looks like they are using this 30 day grace period before there is an official default. little as we have seen evergrande do. and more terms, based on financial pressure, likely we see more borrowers using this type of message. there is a $400 million bond that comes through december 7. that's before the end of the grace time. it also depends on that. timing has been key for china because this news has broken amid this border rally in china high-yield credit. the bonds have been gaining along without broader china property bond. so it weathered fairly well. so looking to sell off today,
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but amid these positive signs of easing, it looks like things might still stay relatively robust. haidi: we are seeing state owned developers testing bond issuance. that this be a way out for other developers if this goes well? >> absolutely. it certainly does look like the developers are encouraged to sell more debt on the bond market. this could be a sign of easing that local media reported last week as well. and that has really boosted sentiment. the idea of any time that authorities are making any steps in intervening in intervening and help ease things. i think that the internet bond market has been used for these bigger, more robust stronger developers, particularly state developers. in if we want interesting things to look for is whether or not we see weaker rated developers coming to that market as well. haidi: our china credit editor. we will assess the pace of the
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recovery in china. lenny of big-name guests this week. the ceo and the founding manager . coming up next, we speak that they major commodities moving is a handful. no kidding! fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at
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haidi: let's get you some of these rba meeting minutes just crossing the bloomberg now. this was during the meeting that we saw previously, bowing to market pressure, abandoning that target and signaling the raising of rates earlier with the previous guidance. this is what we are seeing when it comes to the meeting minutes from november, they are committed to keeping monetary conditions to support the broader economy. of course as states make their way out of lockdowns. services sector in particular as
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well as lifting the sentiment for staging the recovery. we had released -- we had seen a move when it comes to bonds coming into this. this was an opportunity for the rba to give some sort of clarification to have the narrative forced into hiking earlier that it's comfortable doing. they won't raise the cash rate until their inflation objective is net. we are also waiting to hear from the government speaking up on inflation later on today. it will be interesting to see how much of that is there, given the earlier move on rates starting to grow. it's really while we see their counterparts in the u.s., new zealand, other parts of the world i am policy starting to talk about tightening policy. the australian yields have been pushed higher and that resulted in killing off the yield targets. the rba saying now that the economy is exist -- is expected to bounce back quickly as restrictions ease, which was the robust recovery we sought out
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out of the previous rounds of lockdown with the rba board being prepared to be patient. what are you seeing? sophie: the aussie dollar has little change when it comes to the share market in sydney. we see most of the downside with the asx 200 moving. you have banks and miners weighing the most on the index. but all sectors are pretty much in the red this tuesday. taking a bigger picture view. the asx 200 has maintained an uptrend that has been in place since the start of october. flipping the board, turning to the broader session here in asia this tuesday, we are seeing the regional index set to halt a three day gain with the kospi. hynix as well as kia and to cow. we are seeing the korean won under pressure back above 1183, potentially, this morning. we see a fluctuation japanese stocks. nikkei 225 down by a third of a percent.
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surging out of the board, i want to highlight stock movers of know in tokyo. toyota hitting a fresh all-time high. we are seeing the manufacturing climb on the back of its sales outlook. check out mitsubishi ufj gaining ground by 10 cents -- 10th of a percent. it raised more than estimated due in part to higher credit costs. shery: seeing record profits of over $85 billion in the third quarter, swinging from loss of $5 million one year ago. let's ring in founder and executive go chairman who joins us here in the singapore studio. your home raise, but it's the first time we are having you here, so we are really glad to be here with you today. let's start which your copper output. that's what was thought to be a risky business. but you went in, you actually increase your output. you are aiming for 92,000 to 100,000 metric tons after phase
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one, and you even talked about -- talked about topping chile. that seems like a tall order. are you on track? >> we are more than on track, we are ahead of schedule. that was for the first six months this year. next year it will be pretty hard guidance in january. it will grow three or four votes. the second will be over 400,000 times a year. the third phase, we have plans to get to be about 800,000 tons for the second largest copper producer in the world. shery: a lot of people have interest in what's happening in the congo. we have heard that it could be buying into your copper product period what can you tell us? >> we don't talk about movements like that. but it's a young population, a very dynamic economy in a big winner. saudi arabia's copper. shery: are you having conversations that you see
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interest around? >> we see anonymous interests. copper is fundamental for the world's economy. shery: tell us a little bit about that because we have seen the pressure in industrial metals, but copper has been resilient, why? >> we only have one periodic table. copper conducts electrical energy better than any other metal except gold and silver, which is too expensive for the purpose. solar power, wind power, nothing can be done without copper, it's actually fundamental to the new economy. haidi: how much do you expect an activity in the months to come? >> could you repeat that? haidi: i wanted to know how much more m&a activity do expect to see? do you expect to see dynamic given the interest that we have seen? >> this is the revenge of the old economy.
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the old economy has been deprived of capital in the last 20 years. not enough money has gone into finding the metals we need for the energy transformation. so we are likely to continue to see m&a activity to bring on production for the metals the world needs in order to electrify the world's economy. the only thing the united states and china agree on, recently, at cop 26, was the requirement for global warming and gas. so we see in a normal scramble for finding the metals. we need in order of magnitude, more production of nickel, copper, cobalt and the metals, even at a hope of achieving a world where we have less than one and a half degrees of global warming. haidi: this is the concern over the pace of the energy transition, whether it could happen quickly enough. is the mining industry
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responding quickly enough? can they be more agile and being able to provide these materials and resources? >> this interview are bloomberg is part of the process. capitalists are suddenly very interested in copper. gorman sachs came out with a report yesterday thinking that we could see $12,000 a ton. inventories of copper right now and shanghai, and in new york, about as low as we have ever seen them. inventories have declined nine weeks in a row. when you look at the volumes of copper, metal and other's needed, there will be in a normal scramble for capital to meet those needs. shery: in place of the u.s. is really hard to open new copper mines. so how do you get the social license in order to open these mines to increase production and to meet demand? >> there is nothing easy about it because the mining industry has a reputation about the way it used to operate. all the characteristics are
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critical. women are in senior management positions. you have to work with minority communities and develop your own credibility with the people around you. so mining itself is an enterprise in the process of being reinvented. shery: or else you find opportunities and riskier jurisdictions. you have any advice and going to places like the congo? >> the congo is no riskier than anywhere else. the highest rate deposits of the least risky deposits. when people went into saudi arabia, and might've been a crazy proposition. but it changed the world. so, the congo has always been the largest producer of copper metal. and i don't think there's anything risky about it. i've been there 27 years and we never had an incident of any kind. we love it there. haidi: one about china.
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i'm wondering if it's still up that half of the story for growth, because we see resilience in the month, even in the face of chinese weakness. >> it's not just china, but we used to go to the walmart store in everything you saw there was made in china. now we have a bit of balkanization of the world economy where each major trade group is worried about their supply chain. setting you are hearing this word or phrase, supply chain. china is concerned about its own supply chain. europe is concerned about its own supply chain. the united states of america is concerned about it supply chain. their koreans on the japanese are similarly concerned. copper and other critical metals have definitely become a national security interest for each national group. so it's not just china, it applies everywhere. haidi: the call to climate action for the corporate sector rang very loudly in glasgow.
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but there has been criticism that the commitments is nothing more than brainwashing. i'm very curious about your thoughts on this. >> there is a lot of greenwashing, there is a lot of noise and misinformation and we are going to have to go into the subject more deeply and subsequent discussions. so a lot of the major miners have sold their oil and gas division, for example, or their gold. they passed those assets onto new owners. we have it an honest amount of work to do to change the face of the mining industry, to change the way it operates and to address all of the characteristics. here in singapore, one of our companies as been working with the government to enable commodities to trade relations there, they are esg characteristics. it is produced with low global warming in cash or trade at a premium. aluminum that is produced should
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trade at a premium. we need to see the market price and carbon generation and producing these metals, and that's part of the enormous disruption and transformation we are living with right now in the mining industry. shery: given the interest, we are seeing more equity capital china target good opportunities. how would they compete? >> there's an ocean of capital interested in the space. it's just not going to happen without these metals. the world has used about 700 million tons of copper since we were cave people. the world was scheduled to use that in the next 20 years without energy transformation. we are looking to produce as much copper in the next 20 years as we did in the last thousand years without electrification of the world economy. so if you believe in solar or wind power, for example, or grid
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scale energy storage, we need a norma's metals are we will have the transition. shery: it scheduled to be completed by the end of the year. what are you looking up as you look at these startups? >> we did go through the new york stock exchange, that was a memorable day in the markets, and we looked at every electrification company involved in the battery space for mobility. the biggest battery markets for cars and takeoff aircraft, and we found ses based in boston has the pick of the litter. that came out of m.i.t.. a has a close relationship with general motors and fcic in china. and it's the partner of volkswagen and general motors. the big largest automakers and respectfully the united states, china and korea and high on day. there will be another automaker
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joining. so i will be joining the board post merger. we are convinced it's the pick of the litter with new world batteries. the battery that comes after lithium-ion. these are batteries with a solid-state lithium metal and out. they have a lot of energy density and they go a lot further in charge a lot quicker. so we will see a revolution in batteries enter the automobile space in 2025. our interest is what metals you need to make those batteries. it will be really hard for the automakers to find enough metals to replace gasoline or hydrocarbon. so ses became our pick of the litter because we mined the nickel in the copper that you need to make those batteries in the first place. we see that as a form of vertical integration and it will be a huge winner. shery: good to have you with us and we appreciate your time. founder and executive cochairmen. the forum is happening
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throughout the course of the week. we will be sharing discussions among world leaders trading from finance to trade to climate for cities and public health. shery: among the high-profile speakers, former u.s. secretary of state henry kissinger u.s. secretary of commerce as well. let's get the vonnie quinn with the first word headlines. vonnie: thank you. president joe biden told americans his new infrastructure bill will improve their lives and keep the economy moving forward. the president signed a $550 billion measure at a white house ceremony. he has appointed an official to guide the action. american still pessimistic about the state of the u.s. economy, particularly inflation. president biden: here in washington we have heard countless promises. but today, we are finally getting it done. so my message to the american people is this, america is
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moving again, in your life is going to change for the better. >> two former fed president say the central bank will probably have to raise the great targets with the 3% to keep inflation in check. jeffrey lacher told bloomberg television it's plausible that the rate will go to the highest 4%. former new york fed chief said markets are underestimating the hikes. >> i think they are probably going to start after june or in little bit later, then they will go faster than what people think, and to ai height -- and to a higher rate. it certainly price into financial markets. >> obviously, the crystal ball is cloudy, but you can get further out. vonnie: jamie dimon added to the voice of criticizing hong kong street quarantine rules, saying restrictions are making it hard. he made the comments monday after arriving to the city and
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skipping normal procedures that should have required him to stay with the designated hotel. a recent survey found almost half international firms are contemplating moving functions out of hong kong. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is bloomberg. shery: coming up next, the italian commodity producers as oil prices may rise to $100 a barrel in the near term. our interview with the ceo is next. global news, 24 hours a day, on air and on bloomberg quicktake, powered by 2700 journalists and analysts in more than 120 countries. -- this is bloomberg. ♪
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haidi: we don't have breaking news. president biden had the virtual summit on u.s. china relations. we are hearing further that president biden has told xi jinping that he is hoping for a candid conversation. earlier we did hear that the conversation will go on for a few hours, accounting for the time it will take for mutual translation of the conversation. we are also just hearing it is going to be a lot on the agenda. everything from china's position on taiwan to human rights. the trade war, the trade agreements, as well as disagreements when it comes to tech, as well as sanctions.
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a lot to be talked about, and now strategists watching this have been saying that expectations should be managed. the white house is saying that these expectations should be managed, but officials have said that they are hoping, if not to resolve issues, they are putting in place guardrails on the relationship. we are hearing president biden is saying next time he is hoping to have this conversation, we know that president xi has not left china as he is managing his own domestic agenda. but it's fascinating to me that the last time the bloomberg economy forum took place in person, we were talking about u.s.-china relations. shery: with henry kissinger talking about being on the foothills of a new cold war, president biden told president xi jinping that he hopes for a candid conversation. he said he is looking forward to candid and forthright discussions. this would be the third engagement between the two sides. the first time that they are actually having a proper summit
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since the last time the u.s. and china had a summit conversation back and 2019 between president trump and president xi jinping. would be really interesting to see what could actually come out of the meeting. as you said, expectations are pretty low, especially given that you have some any contentious points, including what's happening with taiwan, with happening with trade and financial being key topics on the agenda. haidi: we know president biden has managed to secure that recent victory with the passage of the key infrastructure bill, but at the same time he has been dealing with party infighting and rising inflation. xi xiping has been dealing with the property market implosion that we have seen. those risk wealth holders in china, and he is trying to secure another term. his domestic focus -- we will
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see these two leaders coming together to try to set a path forward for the normalization of what has been a very strange relationship. president biden telling president xi jinping that he does not want competition to become conflict. lee setting a tone for the next few hours of conversation. we will give you all the very latest as we get them. one of those issues be the covid zero strategy that we see for hong kong and china. jamie dimon has added his voice to the criticism of hong kong strict quarantine rules, saying the restrictions are making it hard. he made the comments after arriving in the city. he skipped normal procedures that should've required him to stay three weeks in a designated hotel. let's get three weeks from our medical reporter. michelle, what jamie dimon is seeing -- saying is nothing new. a lot of critics say that this is causing a lot of damage to hong kong's position as a global
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and financial hub. >> we have seen a growing amount of tension between hong kong, china and the rest of the world when it comes to these quarantine and covert restrictions. it does make it difficult to get any kind of business done here, in addition to any sort of travel for leisure or businesses in hong kong. we see with jamie dimon being able to skirt quarantine, that it is possible that hong kong has a locked down on allowing people without going through quarantine because it wants to reopen the border with china. china is really committed to the covid zero strategy. hong kong is following along and will do everything it can to make sure none of the virus does managed to get through and folks like jamie dimon are really upset about that. but honestly, at this point, thankfully jp morgan needs china more than china needs banks like jp morgan. shery: what are we seeing in
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terms of giving up the covid zero strategy that has wreaked on the economy and just access for bankers, for business people going into china? >> it is almost impossible to get into hong kong or china, certainly not without going through a quarantine period. even on the ground we are seeing more restrictions. the are seeing entire apartment complex lockdown, testing happening, students being quarantined because their teachers has been was infected or a child was infected. so we are seeing quite a lot of serious curves that are happening. it does make it difficult for businesses to happen. it makes it hard for people like jamie dimon who want to get in and talk to people here to actually do that, that face-to-face communication is vital for business and just isn't happening. what at this point hong kong is saying it wants to reopen china and that's hong kong's priority.
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they need to make sure there are no cases of coronavirus in the city and that's what they are committed to making happen. shery: senior medical reporter michelle cortez. recapping the breaking lines we had about the u.s.-china virtual summit, president biden saying the u.s.-china relationship is profoundly important to the world. that countries have to play by the rules as well. that it's important that no one wonders what the other is thinking. and this is coming at a time when we have seen some easing of tension between the two sides with the september release of the huawei cfo. not to mention, of course, that agreement on cooperation during the u.n. climate talks glasgow. so we will wait to see what the outcome is. but we have seen expectations being title -- dial down for this meeting, especially from president biden's team, that this is really meant to set
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guardrails in the deepening areas of conflict. we continue to see those issues around what's happening with taiwan, china's xi jinping being very assertive on that front. let's discuss all of this with our chief north asia correspondent stephen engle in hong kong. what can we expect today? stephen: it will be several hours of hashing out the issues that have really dodged this relationship to the trump administration -- to the trump administration and now the first year of the biden administration because they have not relax the tariffs that the trump administration put on. there are claims backed up by bloomberg data that china has not necessarily met its obligations in the trade went trade deal that the trump administration reached with china on imports of u.s. made goods. the fact that some of the data that we have is purchased about half of what they promised. but again, china will likely say that they have been in the throes of covid and there has
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been market pressures in china that has prevented them from doing so. but, again, this meeting is critical for these two gentlemen to develop rapport. the expectations are low because the differences are so vast. whether it's taiwan, whether it's trade, whether it's hong kong, the longest goes through and goes on. at least they are talking, and they can at least, over several hours, let's hope it's not eaten up by translation and diplomatic protocol. hopefully, they will be able to talk candidly and president -- as president biden wants to, and there can be some sort of movement on some issues. i just came on bloomberg radio where we talk to a number of guests in one that said they could see the relaxation of some of those tariffs that would ease inflation. shery: our chief north asia correspondent stephen engle. this as we get lines from president xi jinping saying
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china in the u.s. are at critical stages of development. haidi: and looking at competition but not conflict. president xi saying they need to work together for peace to increase cooperation and communication. stay with us. this is bloomberg. ♪
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>> 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." we are counting down to the opening of trade. president biden tells president xi he does not want conflict but countries must play by the rules as the leaders hold their first virtual summit. rising inflation prompts new calls for fed tapering. neel kashkari warns against overreacting. >>


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