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tv   Bloomberg Daybreak Asia  Bloomberg  November 18, 2021 6:00pm-8:00pm EST

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>> hello and welcome to "daybreak: asia." i'm paul allen in sydney. sophie: we are counting down to ages market open. shery: it's day three of the bloomberg new economy forum. our top stories this hour, big tech drives the s&p 500 to a new record as traders see more
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volatility ahead of friday's options expiration. alibaba ways on sentiment, smashing its 20 -- 2020 consumer outlook as consumer spending dwindles. and, inflation and cryptocurrencies. paul: the mortgages open for trade this friday in australia. let's get over to sophie in hong kong. sophie: starting with the staggered open in sydney, we could see a drop on the asx 200, heading lower with cash trades. take a look at what's going on with miners, iron ore on watch. rio tinto off, shares down 15% year to date.
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the aussie dollar outlook, coal prices, key exports, australia has been bearish on the aussie dollar climb to a record this year. rick keep an eye on the banking space -- we are keeping an eye on the banking space and commonwealth bank shares as well. the unit is holding at a low -- yen is holding at a low and this morning we got korean ppi which bolstered the case for a rate hike next week as inflation rose to a 13 year high with elevated energy prices. oil under pressure, crude gaining this morning. it could be set for a fourth weekly decline. westpac said the central bank will most likely hike as
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inflation expectations surge. saying it will be closer to 3% than 2%. staying pretty much range bound since october. shery: it's a final day of the fourth annual bloomberg new economy forum in our chief international correspondent for southeast asia joins me. it's going to be over, but i'm excited about the conversations we've been having. haslinda: everyone has weighed in. we heard from tony blair.
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he hailed the meeting between xi jinping and joe biden as a step in the right direction. he says it sets the right posture for the u.s. to adopt when it comes to u.s.-china. it comes to taiwan, though, the world has a different view of taiwan than it does of hong kong. there is great anxiety. the potential of a clash between the two is real as far as he is concerned. so we will have to watch what they do. shery: it was one virtual summit that really doesn't change the long-term picture. you need to have a better strategy for both sides to come together. this coming at a time when we continue to have all of these other issues in the background as well as supply chain disruptions and inflationary pressures as well. haslinda: communications need to be kept open. they talked about how they want
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janet yellen to keep talking, communication has to be open. today there will be a discussion on emerging power. we have a minister of india who will be weighing in on the issue, coming as the backdrop of tensions between india and china as a border going on, and the clashes remained. shery: what to expect the rest of the day as we are wrapping up the final day of the bloomberg new economy forum, but we still have plenty more t paul: just getting some breaking news here in austria, receiving an acquisition proposal from blackstone, speculation has been circulating for some time that it might get quiet but crown saying it will assist the proposal in regard to value and terms.
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the proposal pricing crown at about $2 billion, and as i say, the bond market forming a view on that. currently flat in trading. president joe biden signature tax and spending bill could go for a house vote as soon as thursday after the nonpartisan congressional budget office -- let's get details from laura. what do we know? laura: we know the bill will add a little bit to the deficit, about 367 billion dollars over the next decade. preparing the broader public for this, in recent days. it will give the irs more money to go after tax cheats. they say we have estimates from academics and outside groups
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that would easily be able to take up about 400 billion more, even if the congressional budget office doesn't technically say that. shery: what does it mean for the rest of the timeline when it comes to the spending package and the votes that we need? >> we know the house is going to go ahead and vote tonight. they have a series of votes coming up in the next couple of hours. it looks like barring some unforeseen thing, it leaves it over for the senate to address in december. there will be several changes on controversial issues, dealing with paid leave, they will have to negotiate that in the senate. theoretically sometime before christmas. shery: laura davis in there with
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the latest from congress. alibaba share sinking more than 11% overnight in new york after the company missed second-quarter earnings and slashed its fiscal 2022 outlook amid a snow -- slowing economy and regulatory crackdown. let's get more from stephen engle in hong kong. what is going on with alibaba and what is happening with its e-commerce rival,, as well? stephen: the results from alibaba reflect how it is being walloped on that macroeconomic front with the outbreak of covid, power problems and the like. the regulatory environment which is not been clarified as far as how much further it will go. and the competitive environment, polar opposites and the results. which is smaller
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competitor to alibaba had better than expected revenue growth whereas alibaba missed on just about every division except cloud. cloud was a standout. just about everything else was down. net income plummeting 81%, worse than expected. it had just to 29% rise in revenue. that missed estimates. it slashed its outlook for fiscal year 2022 two just about 23% revenue growth. it had an earlier forecast of just about 30%. the consensus from analyst has been notched down to 27. it blew past that to the downside. that's why the stock sold off significantly down as much as 12%. we will be watching that closely. it is dually listed also here in hong kong.
6:10 pm, opposite story. it had a bead on revenue. it has diversified into other areas of the rural areas of china that alibaba is vulnerable. by annual active users, another has more users and alibaba does. so they are being faced with all those pressures and what investors didn't get necessarily is more clarity on how far the regulatory environment was going to go, how deep it's going to go from beijing. all in all disappointing results from alibaba and jd, not bad. paul: stephen engle there in hong kong. he mentioned chinese adrs extending losses overnight after disappointing earnings. let's get more from our bloomberg markets reporter.
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a fairly predictable response from u.s. markets? >> yes, as her colleagues mentioned, 80 slumping 11% while jd increased 6%. it underscores even the bear market for chinese stocks overseas. you still have some opportunity to short opportunities so this is a stock pickers market. shery: how are investors factoring in the fact that we continue to see credit stress in the property markets in china? >> this is an ongoing story but we do see some policymakers fine-tuning policy. we see the mortgage lending start to increase and policymakers have made positive
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comments to shore up investors confidence. what we do have a lot of debt payment coming in the next couple of months. according to nomura we see the debt payment numbers doubling in the next quarter. so we will see some week companies continue to struggle while we have some positive news for the more healthy companies to have a better outlook. shery: let's get over to su keenan with the first word headlines. su: president biden says he is considering a diplomatic boycott for the winter olympics in beijing. he said he was weighing the boycott in response to a question during the meeting with canada's justin trudeau. some lawmakers have urged a diplomatic boycott of her china's recent economic and military actions an alleged human rights abuses. to japan, the japanese prime
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minister is set to unveil a bigger than expected stimulus package friday as he moves to shore up the economy. according to a document seen by bloomberg, he will announce measures with an overall scale of around 690 billion, with support that will amount to more than 10% of gdp in the form of spending, investment, and loans. u.s. tax authorities say they expect to see billions of dollars of cryptocurrency in the coming year. the irs seized 3.5 billion worth of crypto during the 2021 fiscal year. accounting for more than 90% of all assets confiscated. president biden's infrastructure real granted it greater oversight over its trading.
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more on the banks view on crypto. >> we don't have a view on the asset price itself. it's a volatile and speculative asset, but we also don't think the sector and the technology is going away anytime soon. we see risk in participating but we see bigger risks in not participating. >> global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. paul: coming up next, a financial ceo says the prospect of the fed raising rates sooner rather than later has been
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adjusting exposure to growth stocks. more on that just ahead. don't miss our first interview of the day from the bloomberg new economy forum. the china facebook ceo joins us later. this is bloomberg. ♪
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>> we forecast this contraction multiple. >> this is going to sound ridiculous. >> definitely pockets of greed. >> don't take money off the table. >> maybe we are going to start tapering, please don't be scared. >> monetary policy is still
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extremely loose. >> stay invested. >> i look around and i don't think there is anything coming off right now. paul: a divide between bulls and bears. joining us now is the ceo of wealth wise financial. where you stand on the spectrum, are you a bull or bear when it comes to equities? or do you fall into that middle ground of there is no alternative at the moment? >> we do see the market continuing to rally, and there are many reasons for that. we just had an infrastructure package, that will put quite a bit of money into the economy, another trillion dollars over the next five years. you can't really fight that. that's one of the reasons we
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continue to see the markets rally. paul: you can't really fight the fed, either. some guess pointing out that monetary policy remains extremely easy even though there is talk of eventual tightening. where do you put things in terms of policy arrogance? >> in our estimate that is the biggest risk, is that the fed takes a misstep and either raises rates to quickly or waits too long, one of the two. right now we do think the fed is actually going to raise rates faster than the public is expecting, and what that means for us and what we are looking at is lowering duration on fixed income by using things like floating rates as well. and on the equity side, looking at markets heavily impacted by rising rates. so the large-cap growth
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technology area has been dependent on a low interest rate environment. shery: take a look at this chart because it shows the s&p 500 performance and the four different tiers of the -- chairs of the federal reserve. what are your expectations here? >> our expectation is status quo that powell remains in charge, i think he has proven himself and that the markets would be positive about that, even though he has started to turn hawkish somewhat. but he is a moderate in that sense and i think he's going to watch that very carefully. talking about tapering and then talking about raising rates. ultimately the fed knows that have to start reacting to the inflation we are seeing and the economy continuing red hot. shery: that probably means the
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u.s. dollar will get stronger, what that means to emerging markets, given that we could see capital outflows there. >> we've already seen dollar strengthening year to date. that would mean a continued strengthening. we are saying we favor develop markets internationally more than emerging markets. emerging markets are also hit by higher energy costs that continue to run higher. so i would say between the two of developed and emerging markets, we are now favoring developed markets. that has been a shift for us. paul: i just want to get your views on the future of leadership at the fed. i know you see jay powell being reappointed. what are the implications for markets as you see it? >> the implications would be quite a bit of oversight to banks and probably a tough hand
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there. i think when it comes to the large banks, they may not be so enthusiastic about that, it may mean more regulations, continued reserve requirements that have been somewhat hampering the financial services sector, but certainly they've been able to work around it so far. the fact that that may happen and she may end up being the vice chair of supervision. that would be a good balance to powell in that chair. paul: lorraine gilbert, thanks so much for joining us. still to come, china and its global capital markets and a panel at the new economy forum which features the head of the new york stock exchange. plenty more to come on "daybreak: asia." this is bloomberg. ♪
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paul: a quick check of the latest business flash headlines. alibaba with an outlook for sales, china's top -- short of the 27% analysts were expecting. alibaba says it will continue building features to retain customers. sales missed estimates for second straight quarter and drops more than 80%. sales beat estimates, revenue climbed to 34 billion, slightly higher than expected. reports net losses of about 400 million, falling short of expectations of a small profit.
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they have increased to diversify beyond its additional strength in consumer electronics. india's largest digital payments provider lost more than a quarter of its value, heading for one of the worst ever debuts by major tech company. a 26% plunge surprised even some skeptics who question the company's valuation. the offer was india's biggest ever ipo. cvc capital partners, valued at around $5 billion, marking one of the biggest carveouts by european companies. demand for tea has suffered in recent years due to a growing preference for several alternatives. sophie: we're counting down to the start of trade in tokyo and seoul.
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denying a report that the ceo will step down, nomura plants to start in investment banking business in china. the japanese prime minister expects to unveil a bigger than expected stimulus package with an overall scale of around $690 billion. u.s. trade representative will attend a free-trade agreement committee meeting and there will be a make -- weekly meeting on inflation after that jump in october. and hyundai motors will buy back 2 million shares. paul: we will hear from world leaders including the singapore minister for trade and industry as well as the former australian prime minister, kevin rudd. we will continue to focus on untangling the supply chains. we will hear from companies including microsoft in a panel.
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next we will discuss what alibaba results reveal. do stay with us. every day in business brings something new. so get the flexibility of the new mobile service designed for your small business. introducing comcast business mobile. you get the most reliable network with nationwide 5g included. and you can get unlimited data for just $30 per line per month when you get four lines or mix and match data options. available now for comcast business internet customers with no line-activation fees or term contract required. see if you can save by switching today. comcast business. powering possibilities.
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shery: it's 7:30 a.m. here in singapore where the last day of the bloomberg new economy form is set to start in about an hour. from the chinese vice president saying the country can develop in isolation to singapore's prime minister warning about beijing and washington's miscalculation over taiwan. we also have commentary on the hsbc ceo on hong kong's
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reopening plan, and bill gates on a potential drop in covid deaths next year. paul: bill gates made some interesting observations, saying that by may 2022, covid could be like a seasonal flu. and a surveillance system to detect these pandemics before they get out of control in the future. and some encouraging news in australia, the canberra capital with 99.9% with the first dose. shery: of course global health care systems have been really hit during the pandemic and we've been hearing at the forum people trying to address what the private sector can do to be prepared for the next pandemic. the soccer little bit about china because that has been a
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key topic here, especially the chinese economy. we have seen the top e-commerce firm cutting its results. our next guest examine chinese economic activity by surveying thousands of executives in the company -- in the country. the china beige book international ceo joins me here in singapore. great to see you. i'm telling my guess all the time, it so good to have you guys face-to-face. let's talk about china, we continue to see this conflicting messages coming from beijing. what do you think is the reality, the economic reality in china right now? >> the third quarter is particularly brutal, but the reason to invest or not invest in companies like alibaba is the
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third quarter story. whether a particular company like alibaba can defy the fact that the economy will be slowing down quite dramatically. retail sales were probably not look good going forward but alibaba is a pretty impressive company. if you got this long-term slow down, it is not yet baked in by most analysts. it's going to be more precipitous than people think. can alibaba define -- defy the odds? shery: given the regulatory crackdown alibaba is facing, i know we will have this conversation later on in our panel but how will this affect the long-term vision of where china goes from here, especially if you're really hampering these big tech giants, is it going to have an impact on innovation and entrepreneurship? >> if they destroy the tech giants, it will hurt innovation.
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if you open up the ecosystems like they are doing with alibaba and tencent, there are some positives that can come out of this. the most important thing is that this hasn't ended. a lot of people think it may have been the 2021 story but this is all in the run-up to the party congress next fall. the idea that alibaba got punished, here is the new reality and things won't get worse going forward, i think that is a bold statement to make. shery: especially given that the property curves continue. >> this is not the normal chinese downturn. we are seeing a paradigm shift that we haven't seen in 10-20 years. there is enormous de-risking going on in the financial and the property sector which is becoming evident to everyone because of the evergrande crisis. it's not something where they're going to register a little bit
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of downturn and then zipped things back up with stimulus. we will be looking at much lower growth going forward and that is because the party is ok with that. shery: how comfortable is beijing with this, because they can do so much more on the stimulus side of things. >> this has frustrated wall street for the last few years. when the bounceback didn't happen, everyone is saying we are expecting a big stimulus. there was no big stimulus and no broad policy easing. the leadership has decided there's only so much more road that they can push and it is more advantageous to get ahead of this, to work toward slower, healthier growth of the chinese economy rather than dealing with the progress of just pushing this forward. shery:? ?
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what happens to local governments there is so much hidden debt there. >> when property is falling as a growth driver, what is the replacement growth? driver structurally, nothing is being done to empower consumption. investment is falling but consumption is not being empowered right now. retail has been weak and continues to be weak, but structurally, what is the government doing to empower consumers that it wasn't before. it's not increasing purchasing power by ramping up the value of the yuan. >> they are not transferring state assets to household sectors. nothing big is being done. if you don't have consumption rise to pick up the slack, where are you going to get the growth from? the idea is you have all these companies making money, you
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start with dividends to find the social agenda and that's where it gets dicey when you look to investing in these companies. shery: the big wall street banks rushing into china. >> it's one of the sectors where beijing is saying come in, let's make some money. i don't blame any of my friends here, there are many at the conference saying the same thing. let's invest in china, it's a beautiful time to do it. if you are outside the financial sector, opportunities are very limited. shery: when we see this decoupling, more regulatory measures coming, not only from the u.s. pressuring china, but also from within china. >> the pressures are everywhere. the chinese model, they want capital flows but they also want
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expertise. when they figure it out themselves, the firms will be pushed aside. you have to go in with very open eyes. the government would prefer domestic firms, you have to watch it. the short-term gains are not worth doing long-term stupid things. shery:? how are? they doing with evergrande >> fine. it is a property sector distress story. the chinese government has all the tools in the world. you're not going to have financial contagion spill out outside the property sector if you don't want it because you can tell buyers to buy and borrowers to borrow. you don't have the freezing of the counterparties the way you did earlier.
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the chinese government is trying to teach people a lesson in terms of investing in property and i think they are doing so. shery: it's always great having you on an i will continue the conversation with you. the china beige book ceo. don't miss the rest of the fourth annual u.s. economy forum. i will speak to leland miller more when it comes to china and the global capital markets and the financial decoupling we are seeing between the u.s. and china. other topics, trade, climate, cities, and health. let's get over to su keenan the first word headlines. su: saying -- accusing china becoming more and more a single party state. at a brussels business on nash summit on wednesday, new tariffs
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imposed while trying to renew out trilateral alliance with the u.s. and china. >> it appears we have been quite naive with respect to china. i'm happy that today, it has been moving toward our standards but the country has become more and more a single party system. su: china central bank says it will focus on keeping monetary policy stable targeting small business and environmentally friendly projects. saying some pandemic support measures will be gradually phased out as china continues with covid-19 and economic activity resumes. the turkish lira tumbled to a record low after the central
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bank cut borrowing costs for a third straight month. cutting the rate by 100 basis points and considering ending the easing cycle next month. president -- pressure for president art again, lowering interest rates since september -- four president erdogan. indonesia and the philippines borrowing costs and change, the philippine central bank held its rate steady thursday. indonesia cap its benchmark rate unchanged at 3.5 percent. policy makers in both countries have pledged to keep accommodations to support demand as economies reopen. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. paul: goldman is anticipating
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china's monitor -- tighter monetary policy next year. sophie, what is the rationale there? sophie: they expect reopening boost and rising core inflation to prompt banks to dollar back tightening through next year. the philippines and thailand wrap it all up in late 2022 with the region forecast for growth of 5.3% next year. policy decisions do from the rbnz and the boj next week, both expected to hike. tightening driven by inflation pressure as is the case in south korea. bank of america expects a 25 basis point increase next week. australian markets, switching the board. a gap between rba and market pricing. aussie dollar set for a third weekly decline.
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it has been a choppy week for stocks. little change for the asx 200. health care up more than 2%. ahead of the tokyo open were seeing state futures in singapore edge slightly higher. as we digest october inflation data, elevated energy costs pose a challenge to businesses that are grappling with price -- pricier fuel bills, something the stimulus package may seek to address. shery: japan's prime minister has unveiled a bigger than -- set to unveil a bigger than expected stimulus package on friday. what do we know so far about the stimulus package the prime minister has been promising for weeks? >> what we've managed to get ahead of time is the bare-bones
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outline of what these figures are going to mean. it is a record in terms of fiscal stimulus. were talking about 55 trillion yen, which is 10% of gdp. you have to bear in mind that not all of the spending may be, some may be rolled over from previous packages that went unused and some may refer to loans and things that may not end up being fully taken up in the long run. we have some idea of what it will be spent on from figures from other media. for example, spending on dealing with coronavirus will be about 22 trillion yen and the other item is spending on new projects which is something he's been touting since before he came
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into office. things like cash handouts for families with children and pay rises for people like nurses and those caring for the elderly and people on low salaries in the public sector at the moment are supposed to get more money. paul: you've indicated a few details that so far, what has the reaction been to this? >> the sheer scale of the package made a good impression in the stock market when it came out yesterday. we did see stocks go up yesterday and bonds go down, presumably in the expectation that we will see more bond issuance to cover the spending in this package. there is a broader question, if you look at japan right now, although we had an unexpected report over the summer in terms of the economy because of the bad covert situation, we are not having a really good respite from covid in japan at the moment.
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case numbers have been small, down to zero in some cases. some are questioning whether we need such an enormous spending package given that we can probably expect the economies to recover to some extent on its own. if you look at public opinion polls, some are against having these cash handouts, given that japan is one of the most industrious countries in the whole world. paul: isabel reynolds there in tokyo. still to come, the commonwealth ceo about the big divide between orchids and central banks when it comes to inflation. this is bloomberg. ♪
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paul: this is "daybreak: asia." we are tracking the fallout of the global supply chain crunch. these are the headlines of the day. this week rates to move goods and planes to either hong kong or north america rose to fresh records. the you -- you in his estimated that rising ocean shipping costs could translate into 1.5 percentage point in global consumer prices by 2023 with smaller countries potentially
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suffering the most. shipping rates have increased more than fourfold over the past decade. the coming holiday season could only worsen the situation. fedex forecasting a 10% increase in shipping over the peak season 2020. that means 100 million more packages compared to pre-pandemic levels of 2019, which comes as more consumers turn to internet shopping. shery: chipmakers fell in after-hours trading, the u.s. the biggest maker of machinery used to manufacture semiconductors. applied materials ever weaker than expected forecast siding production and shipments -- snacks making a hard to capitalize on the surging demand. the ceo says the supply chain cannot keep up and sees the issue persisting in the near term. bloomberg terminal users can read more about the stories in
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our newsletter. paul: forecasting inflation, how high it's going to go and for how long, has become the holy grail to market watchers. in our exclusive interview, how there is a major discrepancy in assumptions. >> there's a big divide between what the market is expecting and how that translates into wages and strong demand for labor next year versus what the central bank is currently forecasting. our view is is going to be strong economic growth in 2022 and a low unemployment rate. some of the supply chain issues will persist and we will see higher inflation than we have seen for many years. shery: we will have more from our exclusive conversation with the commonwealth bank of australia ceo ahead. we have plenty more to come on "daybreak: asia." this is bloomberg.
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shery: here's a quick headlines. apple shares rose after bloomberg reported it is accelerating development of its electric car and refocusing the project around full self driving
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capabilities. sources saying the project new leader is pushing the debut to as early as 2025, faster than the previous expected timeline of 5-7 years. we've also been told that apple is focusing on a fully autonomous car which doesn't require any human intervention. nike is opening its own world in the metaverse, with a virtual world. the company recently filed seven patent request. unilever is selling some of the worlds best t brands such as lipton through a buyout from capital partners. the deal values the t business goals at around $5 billion, marking one of the year's biggest carveouts by european
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company. demand for tea has suffered in recent years due to the growing preference for herbal alternatives and artisan coffee. paul: crown resort says it is testing an unsolicited by a purple from -- proposal from blackstone. what do we know so far? >> we know that they have made a new offer, a 20 6% premium to where the shares traded on thursday. they're obviously pretty keen on the asset, which is interesting, given all the issues that crown has had. and the report that recently came back which had them basically having government oversight for the next two years so they can clean up their act. but i guess blackstone is looking to the longer term and really wants fixed assets. shery: what do we know about
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what regulators will say? >> this will have to go through the regulators and will get a lot of scrutiny, given the ringer that crown has been through. we haven't heard whether -- we haven't heard from crown as yet as to whether they are interested in this, or whether they will wait. paul: given the difficulties crown has been experiencing recently, this is not a huge surprise, is it? >> know, and as i said, i think bidders are looking for the long-term with crown, looking beyond this two years of very intense oversight so that they have to go through. a very scathing inquiry came back with a report on money laundering and all the other issues that crown has had. they are looking to the future and still say that this asset
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will have good returns is the bet they are making here. paul: just taking a look at crown shares, currently off about .2%. shery: coming up, we do have plenty more here at the bloomberg new economy forum. it's the fourth annual one and the final, day three. we still have plenty of good conversations coming up. we had discussed plenty about u.s.-china ties with former u.k. prime minister tony blair and at the same time were expecting to hear more about the supply chain disruptions. a founder and ceo will talk about what that means for the global fashion industry.
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this is a business marketplace for buyers and sellers in the fashion world and will discuss what that means for the broader outlook as well. and we'll hear from former australian prime minister kevin rudd, discussing ongoing tensions with beijing. the market open in seoul and tokyo is next. this is bloomberg. ♪
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shery: welcome to "daybreak: asia." it's day three of the bloomberg new economy forum. sophie: i'm sophie kamaruddin in hong kong. paul: i'm paul allen in sydney, looking at the major markets opening in asia. chinese stocks face headwinds after alibaba cuts its full-year outlook on consumer spending.
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a ceo joins us along with panama's commerce minister privette and we will talk climate action and china tensions with former australian prime minister kevin rudd. now, let's get a check on the markets with tokyo and seoul opening for trade. sophie is in hong kong keeping and i on things. sophie: we are seeing some little moves in tokyo, downside for the nikkei to 25. range bound as we wait on cabinet approval of the stimulus package at a time when businesses are dealing with price your energy bills reflected in numbers for japan. factory inflation south korea jumped to a two-year high. the korean won up above the
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greenback while the kospi is gaining ground about .3%. keep an eye own chip stock after materials disappointed on the outlook because of supply chain constraints. as we check in on sydney this morning, we are seeing banks rebound while miners are falling . blackstone boosted its takeover bid for the can see no operator -- casino operator. after the steep drop we saw in treasury yields, we're seeing cash you'll stay below that level. over at goldman they see a benchmark treasury at 2% next year on the backdrop of rome inflation and policy normalization. it will eventually weigh on the renminbi but for now we're
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seeing it retain its resilience. will be watching results from the pboc. shery: sophie just mentioned the yuan i we've seen incredible strength, close to levels we saw during the 2015 valuation. what does this mean for beijing? >> it means that have to think about how they will stop the appreciation happening at such a fast pace. the domestic economy is pretty weak and therefore we think it would be helpful to stimulate export profitability. it is important to realize they are unlikely to repeat the debacle of 2015 when you had the devaluation which really didn't benefit them because it was relatively rapid and therefore
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there was a knock on effect, so they didn't gain much from that depreciation. paul: what about the other side of the space, dollar strength? >> it seemed to lose a little bit of momentum overnight. it was particularly interesting when john williams from the fed spoke. he is usually quite dovish and centrist. he came across pretty confident about the u.s. economy. of course warning about higher inflation risk as well, which is somewhat surprising to me. also surprising is that the u.s. rates market nor did the dollar react. that may suggest that the strong dollar trend is losing a little bit of force. paul: emerging market strategist simon flynt there. alibaba shares sank more than 11% in new york after the company missed second-quarter
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earnings and slashed its fiscal 2022 outlook on a slowing economy and ongoing regulatory crackdown. let's get more from stephen engle in hong kong. what is going on with alibaba and stephen: for alibaba is a convergence of stresses and headwinds. had better results overnight as well. you have a competitive environment and a regulatory environment with no clear outcome or how long it's going to go just yet. and a tougher macroeconomic environment that has been hurt by power outages, supply chain problems, various outbreaks of covid-19. so there have been some stresses and they all culminate in the second quarter for alibaba. we knew it was bad but we just
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did not know how bad it would be. investors piled into the stock price helping the worst was over. they were hoping it would be in line but most of the metrics did not come in line, they missed. net income, they took a hit there plummeting 81%, largely on markdowns on equity investment. also revenue did not rise as much as expected, up 29%. most importantly it slashed its fiscal year 2022 revenue outlook to just 20%-23 percent growth for the fiscal year 2022, down from an earlier forecast of 30% and from a consensus estimate from analysts of 27%, so quite significant. that's telling us these headwinds are likely to persist into the next fiscal year. in 2021, one company surpassed
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alibaba in active shoppers. that is a blow. was up 5% where alibaba was down 7%. beat estimates on revenue. they're moving into the rural areas with e-commerce and areas they can find weakness in the user base of alibaba. overall good for they have some problems with the macroeconomic situation as well, but bad for alibaba. the one bright spot is the cloud division. revenue is the second biggest contributor of sales, up 33% as they continue to invest there as well. paul: stephen engle in hong kong. checking on crown, it has been on and off again trade. currently up about 30% after receiving this bid from
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blackstone value and crown at $12 per share. crown rising sharply but still below the offer. crown suffering many difficulties, a number of investigations underway and is unable to open its casino here in sydney with its license suspended. an investigation underway in perth as well. but receiving this proposal from blackstone at $12.50 per share, rising 13% in trading. shery: it is day three here at the bloomberg new economy forum and we have a full lineup, we will hear from world leaders including the singapore minister for trade and industry as well as the former australian prime minister. we will also assess the outlook for china at the forum. i will speak with the head of
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the hong kong stock exchange. i will address weathered supply chain pain is easing in the panama canal. here with me is bloomberg's chief economist, the conversations here ranging from everything from climate to trade to finance. really what took the spotlight seems to be the u.s.-china tensions. >> i think that is right, the huge focus on u.s.-china tensions. everyone from china's vice president to the prime minister of singapore and the prime minister -- former prime minister of england tony blair focusing on that critical relationship. taiwan is really top of mind to the global leader speaking this day. the prime minister of singapore put it eloquently, the chance of a misstep or miscalculation triggering a conflict are high,
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-- are not high, but we can't rule it out. taiwan a potential flashpoint for the global economy going forward. shery: it seems the conversation continues to be around the u.s.-china relationship. now after the pandemic, it is also focus perhaps on the rebound were seeing in the chinese economy. you had a new report out about the global economy in china. tell us about that. >> china was first out of the covert shock. if we were having this conversation a year ago we would be talking about the v-shaped recovery for china and the success story. as we head toward the end of 2021, story has changed. the covid zero policy that beijing is pursuing means continued lot downs in energy shortages. and evergrande has highlighted the risk in china's property
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sector. it hasn't changed from a v2 a w but the v is looking a bit less spectacular. shery: leland miller were saying the economy doesn't look great but chinese authorities are comfortable with it so we may not see any policy action any policy action anytime soon. what do you think? >> the reason for confidence as were on the brink of collapse is that the slowdown reflects policy decisions by beijing. they're trying to scare investors into recognizing risk in the real estate sector. they can remove those controls as well. but are we going to see an abrupt reversal, a big stimulus to drive growth strongly higher? i don't think so. shery: is china comfortable with
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the ongoing u.s.-china tensions especially when you're seeing more pressure from the u.s. on chinese companies listing in the u.s. and a little bit vice versa, where beijing is pressuring its own companies to come back home? >> no one has a spy hole into those conversations with china's leadership compound. but i think if you could you would see some relief that things have stopped deteriorating. the biden administration with its more procedurally thorough, more predictably transparent approach to policymaking i'm sure is a relief after the unpredictability and volatility of the trump administration. at the same time i think no one in beijing is under any illusion that this is a relationship that's going to start improving again. they will hope that things don't start deteriorating. shery: you can't forget
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secretary paulson's comment that let's not kid ourselves, it was just one virtual summit. shery: let's get over to su keenan for the first word headlines. su: we start with the japanese prime minister, set to unveil a bigger than expected stimulus package friday. according to documents seen by bloomberg, he will announce measures with an overall scale of around 690 billion and will amount for more than 10% of gdp for in the form a spending investment and loans. america's number two diplomat hosting a solo news conference in washington after three-way talks. the deputy secretary of state face the cameras all by herself. she described the session as very constructive.
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president biden says he is considering a diplomatic boycott of the winter olympics in beijing which means the u.s. would decline to send a delegation of government officials. he is weighing the boycott in response to a meeting with canada's justin trudeau urging the boycott over china's recent economic and military actions. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. paul: still to come, a rare and exclusive interview with the head of commonwealth bank of australia on cryptocurrency. plus more from the bloomberg new economy forum. we speak to former austrian
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prime minister kevin rudd. this is bloomberg. ♪
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paul: australia's largest bank says the biggest risk of crypto is missing out. commonwealth bank has announced a small stake in crypto exchange gemini. >> we are seeing it come through in a number of different areas, talking to our customers, particularly in supply chains and technology. with reliance on inbound and outbound shipping routes, we think there will be inflationary pressure going through into next year. forecasting cash rate increase
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at the end of 22. there is a big divide between what the market is expecting and how it translates into wages and strong demand for labor next year versus what the central bank is currently forecasting. our view is it will be strong economic growth in 2022 and low unemployment rate, some of the supply chain issues will persist and higher inflation them we've seen for many years. >> you mentioned the labor market tight nurse and we've been talking about the great resignation across the globe as well. what have you been seeing in her business and how reliant is that part of the market on australia opening its borders to international migration and tourist once again? >> just about every business i've spoken to his focused on retaining and access to labor. and the borders opening during the course of next year and getting access to highly skilled
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but international students that you mentioned, that is certainly a big positive. we're not seeing some of the forces you're seeing in markets like the u.s. with significant increases in turnover, but we are focused on making sure we are retaining our best people. i'm sure all businesses are. it's definitely a good time to be in certain industries. there's a lot of competition and demand and employers rightfully are focused on keeping their best people. that will certainly continue into next year. >> let's turn to crypto, you have been more bullish on that asset class than many other global bankers. you're now in a partnership with gemini so your customers can buy, sell, and hold crypto assets. why are you more bullish on that asset class? >> we don't have a view on the asset price itself.
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it's a very volatile and speculative asset. we also don't think the sector and the technology is going away anytime soon. so we want to understand and provide a competitive offering to customers with the right disclosure around risks. we want to build capability in and around blockchain technology . i think there will be lots of different variations of forms. we are seeing a lot of interest from customers but over the medium term, a lot of potential applicability. we see risks in participating, but we see bigger risks in not participating. >> winter crypto investment lease -- be something on your list, whether gemini or another crypto business? >> we are not looking for an investment in a crypto company, but one of the models has worked well and successfully for us is for people we're partnering
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with, and you mentioned gemini. we ventured into what we hope will be a long-term partnership. we been embraced -- we've been impressed with their capabilities. a small minority interest shows commitment from our perspective and drives alignment. we're very open to doing that. >> australia as a country has been a little behind on crypto and regulation around crypto and whether there is a centralized currency or not. what are your views on what australia needs to do on that front? >> it is an important topic on the future of money. there are interesting and fundamental policy implications. recently there was a payments review. the sector in crypto is being looked at closely.
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there is real ambiguity and uncertainty about the best way for innovation but making sure there are appropriate regulations and safeguards for customers. we see it as an important part of our role to work closely with policymakers and government to strike the right balance. we are committed to doing that. internationally it's an area where there is a lot of innovation and growth. it has grown enormously, particularly the last two years. part of that policy, many central banks are looking to the central currency, what that would look like, the benefits of that. that something we would like to participate in. it is important that australia is building capability in piloting different versions of the future. we are hopeful we can play a role in that. >> your love of tech does not
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extend to big tech. you spoken out against apple, describing them as a threat to the financial system in payments. can you detail what the risks are and do you think, do we really want overregulation? >> no one wants overregulation, and trying to strike that right balance. i think for many large players, just looking at the way they can use and exert their market power , and apple is no different and certainly not exempt from that. we have a particular issue with restrictions around the antenna on an apple device. australia has a strong market share of the handset in terms of electronic payment. particularly at point-of-sale. that has increased rapidly during covid. there is a competition element
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of making sure there is a fair and level playing field across all players. we suggest all players should and can have access securely in protecting customer privacy. you seen that play out in other landmark cases around the world where a number of different players are looking at the role of big tech and how they conduct themselves in their businesses in the appropriate level of protection and level playing field for all. >> finally on china, how do you see australia's relationship with china at the moment and what are the risks of not improving that? >> they are very important trading partner. everyone realizes that. it's also a complex situation. i don't want to step into how to
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best manage that relationship. i think for many customers, where there have been restrictions on access to it -- international markets, many australian companies have been able to diverse away -- diversify away from central markets. it has been challenging but we have to look at the broader implications of the relationship over the long term. of course everyone would like there to be great alignment and mutually beneficial but there are also important issues at play which need to be managed appropriately by the government. ♪
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♪ paul: up next, former australian prime minister kevin rudd will
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discuss canberra's ongoing tensions with beijing and climate commitments made at cop 26. do stay with us. this is bloomberg. ♪ 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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♪ >> [indiscernible] and i don't see that changing, but there are ways in a ir, sustainability, i think opportunities for us to work together. >> for us things to do differently certainly is a possibility, but we think of a 10, 20, 30-your perspective, not a couple years perspective. we are long-term committed. >> they need to take more time
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to understand each other. there is a disconnect. i think biden is trying to engage, but there is still disconnects. >> we acknowledge there are differences, and it is great that the china and u.s. are talking. i don't think the world can decouple from one of the biggest manufacturing nations, and to be one of the world. i really hope it doesn't decouple. caroline: -- shery: bloomberg voices on china, efforts to combat climate change and questions front and center here at the bloomberg economic forum. we discussed these issues with kevin rudd, former australian prime minister and president and ceo now of the asia society. great to have you with us. kevin: great to be with you, and unusual to be face-to-face. shery call let's talk about
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china and the u.s.. the relationship with china is on ice. is this the new normal? kevin: the partial stabilization of u.s.-china relations coming after the summit between xi jinping and president biden is on balance good news for the wider region because it takes the geopolitical temperature down. that creates political space for other bilateral relationships either with japan and china, republic of korea and china, australia and china, to a dry would hope into a less fractious period. but strategically, whatever the tactical clause may be, whatever the tactical stabilization may become a very rough period. shery: is that because of the nature of beijing under president xi jinping, or is some
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of the relationship -- blame on the relationship falling on the australian government? >> there is a factor here, number one, china's rise. it has adjusted the regional balance of power as a consequence between china and the u.s. and china, the u.s. and its allies. that is a big, underpinning dynamic -- military power, trade power, investment power, technology power, you name it. the second thing is, a xi jinping's strategy has changed from that of his predecessors. now, xi jinping has a different approach, a much more assertive chinese foreign policy and strategic policy per it but the bottom line is, the australian government in my judgment has not played this particularly well. sometimes when china has been assertive, the australian government often responds rhetorically as opposed to
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pursuing what i would describe as a rational, long-term, mandarin. from conversations you are having with chinese policymakers, what feeling are you getting about what their intentions are? especially when they look at their role in the world in the next five to 10 years? kevin: i am handicapped because i haven't been to china for 18 months. i have been on zoom, and a small number outside the country, and i think it is along these lines. for the 12 months in the lead up to the 20th party congress next year, which will concern xi jinping as china' is paramount leader for the long-term future through 2035. but for 12 months leading up to that, it is in beijing's
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interests to bring the strategic temperature down, hence china's interest in having this i l summit with president biden. china's long-term strategy has not changed. it wants to regain taiwan. it wants to push the u.s. back strategically from east asia and the west pacific. and once to be the dominant economic footprint across the hemisphere. shery: do they prefer the status quote? kevin: china definitely wants to regain taiwan. if you look at the internal chinese discourse, which people like myself are engaged to do, xi jinping says we cannot achieve the great renaissance of the chinese people by 2049 without taiwan. it is what he decides in chinese is an inevitable requirement. therefore we are on a 30-your timetable in the mind of chinese
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policy, and one thing that would deter china for taking military action for -- military action would be for the u.s. to maintain effective military deterrence with the taiwanese. shery: how much would it help other multilateral groupings such as the quad or the five eyes, because australia seems to be emphasizing these groupings? i went how this is being taken by other of australia's neighbors, because if the point is to lower the temperature, wouldn't these groupings provoke more of beijing's iron? -- ire? >> at one point, friends will express misgivings about geopolitical relationships including the quad slinks japan, india, the u.s., but at a private level when you have
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discussions with many of these governments, they are pleased the quad arrived because it provides further geopolitical counterbalancing against china, which provides them with more foreign policy space and economy to work in their own dealings with the chinese, including on the south china sea. so, we need to always differentiate between public position and substantive operational positions on the part of governments. shery: we know xi wasn't pleased with the august meetings because of the submarine contract. is there a riskier -- is there a risk here? kevin: france is never good country to have alienated completely. i think the australian government under mr. morrison mishandled the arrangement by keeping the french in the dark. my recommendation has been, if the technical specifications for
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australia's submarine fleet is changed from conventional boats to nuclear powered boats, let's assume that technical advice is correct. but what the australian government should have done was reopened tender between the french and americans for a new 90-billion-dollar project rather than just rule the french out. my experience with french diplomacy around the world is that they can be problematic. shery: climate policy is another area where he has taken a lot of heat. kevin: i would do something as opposed to nothing about climate policy, which is currently the australian government's position. he "found religion" together with the murdoch media empire on the question of carbon neutrality by 2050.
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but that means nothing unless you have got a robust target for carbon reduction by 2030. because you have got to have a credible stepping up point, not her trajectory between 2030-2050, which is unrealistic. interestingly in glasgow, the parties said we are not giving you five years off, you have got to come back next year. this countries including us tell you, who have not committed to a 2013 target. so the emphasis will be on australia. shery: great to see you in person. thanks for joining us at the new economy form, kevin rudd, asia society president and ceo and former australian prime minister. we discussed the new competition between the superpowers next. paul: trading now for about 40
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minutes in tokyo and so -- seo ul. sophie: asian stocks led higher by south korea, up .3% as the be ok plans to hike rates and week on inflation pressures -- the be ok -- bok plans to hike rates next week on inflation pressures. wti now below $79 a barrel, crude set for a weekly decline. in australia, a gain for the aussie shares by .2% with ground shares jumping as much as 16.6% to a high on the blackstone offered being sweetened. markets are waiting on japan's stimulus package from the government. we are seeing gains for the nikkei to 25. switching out the board for advancers in tokyo, chip stocks, among the gainers despite
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disappointing outlook we got. tokyo electron heading to a fresh record close while softbank is heading lower after a week view for pdn, india's largest digital payment provider back by softbank. there will be relief today from investors. sophie kamaruddin signing off. shery: the bloomberg new economy form is underway parade let's listen as stephanie flanders talks to u.s. special presidential envoy for climate john kerry. >> i think everybody here knows that he has just been terrific in helping galvanize people around the world. i am very happy to be part of one of his important forms around the world. stephanie, the china agreement
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is significant. i am not saying that because i helped negotiate it with a longtime associate and friend. he and i know each other quite well, over 20 years, and we have worked at this institution. the agreement is five pages that layout our cooperative effort, not just on methane and co2, but also in deforestation, and the creation of a working group between our countries, which we are immediately going to begin to activate. and it is that working group, with the health of experts who are going to come to the table from china and the united states and conceivably elsewhere who will help, hopefully, to change the capacity for dissent or
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debate with respect to the choices we need to make. and i hope that our working together will increase the sharing of data, increase the sharing of options, and begin to engage us in a very important dialogue with the top leadership of both our countries. and that is our hope, but importantly, the agreement is quite specific in addressing methane, with a specific date for action. we agreed to work together in the effort to share information and work on creating a national action plan. we have accepted the notion president biden put forward in glasgow together with president van derlyen of the u.n.,
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meaning we will reduce methane 30% on a global basis, which means with contributed global aggregation, we will get 30% reduction on a global basis. and china agreed to work with us to lay out an ambitious, these are the words, ambitious national action plan, which china must submit and begin action gone by cop27, a year from now in sharm el-sheikh. the second thing he did was set forth a russian offer the workgroup and joint agreement, which is the acceleration of the reduction of admission -- reduction of emissions, which china agreeing that that could lead to specific targets, specific programs, specific policies, a specific agreement on goals. shery: we are going to leave that there, but bloomberg
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subscribers can continue watching at live,go. the fallout of the global supply crunch is a key theme at the bloomberg forum. our next guest runs fashion technology platform, evolving into business-to-business marketplace for wholesale buyers and sellers in the fashion industry. joining us now is the cofounder and ceo. great to see you in person. thanks for joining us prayed let's talk about supply chain issues because you have a great overview. where are the worst bottlenecks? >> at this point, there are two sets of issues. one is, right now, there seems to be nothing available, everything is expensive, people are not making it for their christmas presents and so on. that is because right now, there is a global shortage of not enough goods to meet the surge in demand. not enough ports containers and
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so forth. pandemic and everything that happened exposed fault lines in the industry in general like supply chain's. we have not always known where our products are in the movement of goods and so on, and it has given us impetus to transform the industry in terms of what is required in the future. shery: what has changed and what will last post-pandemic? ankiti called gentlei -- understands -- everybody understands digitalization. how do we get it done? shery: is there a risk when it comes to digitization and security risks? ankiti: everything good and bad that comes with optimization comes with this.
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security risks, but those are the lesser problem. like any other district, as automation happens, there are going to be problems around the world but companies like ours solve exactly those kinds of problems. shery: your company had to cut jobs during the pandemic. are you back now? and are you planning to rehire? ankiti: we are back to scale, 40% higher than our peak because of the momentum of digitization. we have a lot of jobs back in key markets and we continue to see a lot of momentum because things are moving from the old economy to the new economy, keeping with the theme of this event. shery: in june, you told us you were considering options including taking zilingo
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public to raise capital. >> we are looking at market opportunities in asia and are bullish about our future. shery: when can we expect an update? >> hopefully in the next few months, three to six months. shery: we know that the textile and fashion industry is a big polluter. what is zilingo doing to mitigate that? >> the first step is transparency and tracking the data. we can save water. we can highlight manufacturers that are treating water, treating waste, making sure environmental laws are followed. providing that tracking of data, and letting customers making informed decisions is step one. and that is where we come in. shery: tell us about the role customers play, not only in the sustainability narrative, but also the supply chain narrative?
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ankiti: customers are the most important people. the more there is demand for sustainable options for reusing products, the more brands will be forced to do so, and supply chains and suppliers will be forced to do the right thing, making sure materials are sourced responsibility, our organic, and so on. ankiti bows, co- -- bose, cofounder and ceo of zilingo. later, perspectives from mastercard. also, the panama minister of trade and industry joins us
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next. this is bloomberg. ♪ s next. this is bloomberg. ♪
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♪ paul: breaking news, billy billy suspending trading. we don't have a reason, although fourth-quarter earnings did disappoint. billy billy suspended in hong kong right now. shery. shery: paul, we are here at the bloomberg new economy form and continue to discuss supply chain
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disruptions. panama canal seeing a jump in cargo, opening the market for grain, pork and lng. let's bring in panama minister of trade and industry ramon martinez de la guardia. on the panama canal, we hear that lng ships are piling up at the canal. our authorities doing anything to speed up the vessels' passage? ramon: they are managing the panama come now the same way they have been doing it for the past went to two years, since the canal was passed to the panama government. yeah, we need to connect with what is happening in the supply chain, and supply chain disruptions. shery: anything that that --
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that can be done in the process at this point? ramon: it seems we'll manage. i am sure they are doing the best. shery: you said you had no plans to raise panama canal tells but we are seeing egypt raising fees for most of the vessels at the suez canal. are you reconsidering this? ramon: the venmo canal -- the panama canal, they manage themselves outside the government. it is a separate entity owned by the government, but yes. shery: what is the government doing in terms of the pandemic? this led to supply chain disruptions and we know you started your vaccination tourism campaign. it was about a month ago. how is that going? ramon: october. it is doing fine, fantastic. it is a great opportunity for people from latin america to get the shots of the vaccine and
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also take advantage of tourism in fenimore -- tourism in panama, the beaches, the cities, the mountains. shery: does that help panama law's hotel business, restaurants, given they were badly had the pandemic? ramon: it is one of the actions helping the economy to recover. we saw 10% growth the first semester of 2021 and we expect to grow i 12% by the end of the year. shery: here at the bloomberg new economy forum, we are excited for the announcement of the new economy gateway that will get started next year in panama city. what are you expecting? how exciting can we expect the lineup of guests to be? ramon: it is an honor to be hosting the event. it is a new series of events at the gateway to latin america, panama. like we have seen here, many leaders from business and governments tackling some of the
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issues that are important right now, like supply chain's, climate action, sustainability and investments, so those are things we are looking forward to convening in panama and taking action. shery: it makes sense, because you have the panama canal and are connecting so many different parts of the world as well. ramon: yes, we have been a gateway to the americas since the beginning of our republic, and it just makes sense to have panama as the spotlight for latin america and to bring this amazing event to latin america. shery: minister, great talking to you, thank you, ramon martinez de la guardia, panama's economy and industry minister. we continue to hear from the u.s. special envoy for climate john kerry, speaking right now at the bloomberg new economy forum. paul, this is coming at a time
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when climate is such an important issue we continue to hear about. we have heard from big banks talking about needing more public funds in order to combat climate. john kerry, saying more funds should go to climate adaptation and resilience and is also talking about the biden administration working to increase climate funding at the fourth annual new economy forum. this is the final day, paul. but we have more conversations coming up, not only on climate, but also on supply chain issues, not to mention this intense focus we have had during the entirety of this forum on ties between the united states and china. we heard from tony blair as welcome a warning of risks of a u.s.-china conflict over taiwan. paul: the u.s.-china relationship has been a topic of intense conversation at the forum. we heard from hank paulson warning about the risks of
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decoupling. we have also been hearing a lot about the future of supply chains. crypto is one of the disruptors to the economy and is on the docket on the final day of the new economy forum. that is it from "daybreak asia." coverage continues on bloomberg markets "china open. this is bloomberg. ♪
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♪ yvonne: it is 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i'm haslinda amin coming to live from the bloomberg new economy forum, where world leaders in business and politics gathered to discuss trade, climate and health as the economy emerges from the pandemic. david: lots


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