with regard to ip protection, we will cultivate an environment that appreciates the value of knowledge, improve the legal framework, step up law enforcement, and enhance protection through both civil and criminal justice systems. fourth, china will continue to deepen multilateral and bilateral cooperation. china is a champion for international cooperation and a supporter of multilateralism. supports necessary reforms -- so that the

organization can play a bigger openness andting development. so that the multilateral trading regime can be more authoritative and effective. later this afternoon, the chain -- the china side will host an informal wto ministerial meeting. we look forward to candid exchanges that will lead to globalctions to improve economic governance.

i am happy to note that yesterday, 15 countries taking part in the original comprehensive economic concludedp or are cep textbased negotiations. i hope the agreement will be into fourthntered added early date. -- at an early date. [no audio] -- applause] >> china will be happy to include free agreements with countries. china r.o.k. fta and a china

cooperation council fta. will stay actively engaged in cooperation within the united and --, the g20, a pick, move economic globalization forward. china will continue the belt and road cooperation. today, with 137 countries and 30 international organizations,

sign a has signed 197 documents on belt and road cooperation. china will follow the principle of joint contribution and shared benefits. follow the philosophy of open, green, and clean cooperation, and a high standard, people centered, and sustainable approach. high-quality belt and road cooperation. ladies and gentlemen, friends, looking forward, china will follow the new development and the strategy of innovation driven development

and redouble our efforts to foster new growth drivers by shifting the growth model, improving the economic structure, and creating new growth momentum. such efforts will not only bring china high-quality development, but also new growth opportunities for the global economy. i have faith in the bright prospect of china's economic development. [applause] development, viewed through the lens of history, makes an integral part of the lofty cause of human progress.

arms will reach out its and offer countries in the world more opportunities of market, investment, and growth. achieve, we can development for all. [applause] gentlemen, friends , the chinese stabilization has always valued peace under heaven and harmony among nations. spiritall work in that and contribute to an open, and to aonomy community with a shared future.

thank you. [applause] >> so, that was president xi jinping finishing his speech at the china international expo. there was nothing major in terms of new announcements from the president. there was a reiteration of some of the initiatives that have already been outlined by china's policymakers, a reemphasis on stances in terms of the need for globalization, the need for countries to work closely together. will run through some of the more important lines that came out of the speech even if there was not anything that really shook things up. he talked about the need to remove barriers around tech exchange. you can see that as a nod towards companies like huawei and other firms in china. he called on countries to deepen their economic cooperation. he said china will focus more on

imports, particularly the imports of quality produce. again, talked about intellectual property protection. that is in focus in these trade negotiations with the united states. saying china will create a better intellectual property environment. he also mentioned the trade deal that has seen some progress in the last 24 hours, saying he wants to hopefully see that signed as early as possible. he is also open to more free trade agreements with countries around the world. this was reiterating that china is a supporter of free trade. it is ready to welcome foreign investment. many will look at this and say, we still need some details to assuage the concerns about market access and other issues. sophie: as you say, no major announcements from xi jinping. --y subdued reactions in

among the better performers on the large cap update. boosting imports and lowering tariffs. foreign buyers have been piling at the chinese equity. chinese cuts. on reverse moves we saw earlier. reversing buses. the 10 year cash shield has come down three basis points. this is the pmc lower the cost of loans for the first time since 2016. cutting the mlf to 3.3%. this is bloomberg. ♪

>> welcome back to bloomberg markets: asia. let's bring in kelsey brodrick,

who believes china hopes to use the expo in shanghai to diversify away from the u.s. she joins us from washington, d.c.. let's start with you were -- with your views and what we have heard from washington, d.c. has anything he said -- >> not really. china is ready to open. china is ready to help other countries. china wants to import a lot of people. sign a to go ahead and special agreement with e.u.. he said a lot of great things. there was nothing that was very concrete. there was nothing that was new to kickoff the import event for china. he talked about the need and the desire to cut tariffs goodsr and import more

from foreign markets. are there beneficiaries that are going to likely be positioned for that? we have seen over the last few years around the edges, tariffs reduced on some products. he you expect that will continue, and are there going to be beneficiaries beyond the u.s.? --likely, that will return that will continue. one of the biggest audiences for him is that you -- is the e.u. particularly, for emmanuel macron, who is currently visiting. that is what he would like to attract. that is the market he wants to engage with more. this is his opportunity to reach out to emmanuel macron, will be increasingly important next year. it is a big deal for china. last year, around 60 billion purchase agreements were signed. the e.u. has said only half of true. china is going to want to show

them they are serious and they are going to make some deals happen. if that is going to be the case, it remains to be seen. that is the message they want to portray. trading negotiation's front, we have the reporting suggesting the u.s. might remove tariffs to get this phase i deal over the line. we think that is being seriously considered now by those in washington? how significant would that be in terms of how china's policymakers would digest that move? >> it certainly would be good for the chinese side. he remains to be seen at that is actually true. what is on the table right now is the october tariff rate and the december tariffs. beyond that, it does not seem to be worked out. a number of comments in a peg -- aussie on talking about how they were -- whether both sides understood what was on the table.

that signals there is perhaps not as much alignment on some of these issues. that is what will have to be worked out before the heads of state meet. he also mentioned a november deal could now be a december deal. if xi is going to come to the u.s., where's it going to be? does that by them more time to work out some of these issues like, what exactly is included? what did we say about phase two? lastly, we have huawei, which is a whole separate issue. whether thatar will be included as part of the phase i deal or if that will be before or after. a lot of details have to be worked out. while we do think a deal is going to be signed either later this month or early next month, there are still -- there is still some negotiating to be done for sure. >> absolutely. out beforebe ironed

you get phase one of the deal. we have been discussing how difficultis becoming or impossible depending on how you look at it. china is concerned about the trustworthiness of president trump in terms of the ability to sign off on a copper hands of deal. there demand that all tariffs are removed. that is something that is a risk on sentiment. the u.s. adding new highs. all of this is part of the mix. >> absolutely. i want to get back to kelsey. his me a sense of what you took away from -- give me a sense of what you took away from him mentioning high-grade tariff agreements. it does seem as though he is trying to create a framework where huawei and other high-tech companies in china have a way of exporting without having to exceed u.s. demands. >> it certainly does seem like

he is trying to reach out to a non-u.s. audience. he mentioned the e.u., he mentioned the gcc. these are places where china has been pushing hard to make sure that huawei is not locked out of 5g build up. that is who he wants to appeal to. he hopes to build a coalition of at least friendly countries are friendly towards china's tech ambition. he also mentioned the wto reform. china will be having a mini ministerial on wto reform with some of the countries present. china wants to form a community where it's views can be thought fieldon an equal playing or with more ways than the u.s. he didhat vein as well, tout the benefits of this agreement. what he did not mention was india's lack of participation in india's pullback.

does this lend more to the torative that he is trying create his own economic ecosystem, which is perhaps free of u.s. influence? >> certainly in asia. been, asia for asians. the u.s. should not have a role in south china sea's. the u.s. should not have a role in setting the internet rules in asia. is a loss not to have india. in some ways, perhaps a sigh of relief. given how much countries were having to accommodate india's interest. china will paint this as a win. ean and the rest of asia that china is there. be seen as something of a win even with indian out there because china did, ahead

of the u.s. in these regional forums this week. >> thank you very much indeed. joining us from washington. going to leave things there for a couple of minutes. we have the french president, emmanuel macron, talking. we are to leave you with these images of shanghai. this is bloomberg. ♪

>> your black -- you are back with bloomberg markets: asia. u.s. and china signaling more progress towards a trade deal. jonathan, we heard changing paying speaking. he did sort of glean the trade

deal a little bit. what is your take on this? the 13th of october, we published a note we pointed out the phase i trade deal was becoming likely. we talked about tactical upside around 5%. as of this morning, we achieved the levels we were looking for, about 27,000. this kind of idea we are going to get a mini trade deal focused on agriculture, some pullback of tariffs perhaps as well, that is in the price. >> where do we go from here? one trade a phase deal look like? nobody quite knows -- is it effectively the status quote? or that it does not get worse. >> it is more that it is not get worse. and that the december tariffs, which would have been quite significant for the global economy, they seem to be off the table. that gives time for policy

stimulus to give traction. we had the third fed rate cut. the market obviously will come back to earnings. with her after two very bad years for emerging markets in asia, whether earnings can actually grow next year. >> that is the thing. what is your take away from the earnings season, which leads you to optimism or otherwise? >> we are watching it very closely. so japan, it is about a 1% far. about 1% net income beat. that is after downward revisions. what is interesting is that the i.t. hard court -- i.t. hardware sector is starting to see some specific beads. ironically in relation to the trade tensions, a lot of that has been around and acceleration of chip sales into china itself, which is the localization of chinese i.t. production. come back to that two years we had of zero earnings growth, the

market consensus bottom up is for a stellar year next year, 14% earnings growth. it is possible we could start to see something like that, particularly if the trade situation starts to heal. there are bays effects. we have never had three years in a row of flat or down earnings in an emerging market. the problem is, valuations. if you look at how the markets move, particularly in the last six to eight weeks, we are trading well above average. much less so for china. particularly a market like taiwan as we rate it. the question is, is going to be 14% are less than that? echo >>r less than the -- then that? >> tom here in shanghai. in terms of what we have seen from the pboc, we have seen the one year mlf cut today.

does that strike you as appropriate or does the central bank need to step up its efforts in terms of supporting this economy? >> this is a much more calibrated policy using cycle then what we are used to in china. in q1, look more like a traditional easing cycle. they have been more cautious about the amount of military stimulus. the fiscal stimulus, the tax bracket adjustment, those are all feeding through. the net and action of credit is less then we have seen in previous cycles. stimulus to the housing sector is less. it is calibrated in relation to trade. the worse the trade situation has gotten, the more china has needed to accelerate easing at home. the better the trade situation has gotten, the more it has doubted back. -- it has doubted back. we had a pretty poor headline

pmi, reflecting the overall economy, recently. there is some sign of life in the private sector and in our own survey of multinationals, which we published under the last couple of days. we can see that multinational sentiment towards china has begun to improve in the last couple of weeks. recount linesto from president macron who is speaking in shanghai. he says he hopes there are agreements that are reached to ease trade tensions. he is saying trade tensions between major nations hurt the global economy. where're looking at asia, is your preference at this point? >> we have had a preference for a-shares over the offshore china industry. kingis h and the hang seng the age share market has performed well. the stimulus has come through.

>> please hold that thought. we have a lot more to discuss. acquainted with what emmanuel macron is saying in shanghai. there going to have more from jonathan on the way. this is bloomberg. ♪

>> you are back with bloomberg markets as we have a look at what is going on market wise. -- we havee a chip to catch up. let's have a look at what else is going on. shanghai weakening a little bit. the hang seng, which is coming off at about two tens of 1%. jonathan is with those from morgan stanley. tell us how you perceive the world now, looking at 2020. it is nearly upon us. talked about earnings growth. what about the sectors and industry groups are going to do better than others. you mentioned i.t.

jonathan: you had all of these many cycles since 2009. we have the -- the euro zone crisis energy doesn't 12. we have had this trade and tariff tensions that have driven the global economy into a bad place as recently as this summer. now, the debate is, do we escape yet again? do we have a synchronized global upturn? or, does the cycle eventually catch up with us? that is where the debate is in the market. as recently as the end of august, u.s. bond yields were setting new all-time lows. the talk was around curve inversion. now, particularly as i -- as we are getting this earnings season come in em, we are getting optimistic. >> if the u.s. ten-year hits 10%, can we think about any furthered rate cuts? on top of that, how come equity markets globally are up about

19% today against this backdrop of all of this terrible noise, instability, the trade work, you name it. there is so much going on. we are still leaking out double-digit gains. jonaan: as global equity index has yet to get above the january 2018 hi. december last year was terrible. the s&p photo 15%. it makes it look much better than actually has been in it has been a difficult couple of years for equities. very consistent with the decline in pmi's we have seen. now, the question is, are we going to breakout to the upside? we have not seen the break yet for the country index. we are closer than we have been at any stage since the 26th of january 2018. >> mx w d. >> do you expect central banks

in that part of the world -- jonathan: sorry, go ahead. >> dear expect the banks in -- do you expect the things in this part of the world to take away the punch bowl or maybe the trade sentiment is starting to improve around the edges. if you get a deal to central banks in asia, press pause on their attempts to cut rates and stimulate. >> i think the most interesting 1 -- is india. had its own problems other than global trade, particularly around shadow banking. we think india will be able to cut interest rates more. there are three big drivers. the ad states, china, and india. they dominate the global growth story. it has had a bad couple of years. prescriptions put

in place by the indian government enough to get the government back on track and deal with some of those issues? jonathan: i think after mr. modi's new election and that finance minister, -- and the five minutes minister, we have had an adjustment on corporate tax rates. there coming down by 10 percentage points. we are getting a recap program. the r.b.i. has the facility to make it easier to support the shadow banking sector, which has been in trouble and has affected auto purchase, finance, real estate. after a poor time were policy lagged, we are getting to a better place. this is all part of the debate around, is the policy cycle enough? >> what is going wrong with the indian economy? jonathan: that is the thing.

the problem is credit. at their peak, the shadow banks were extending credit and accounting as much as 40% of new credit growth. the reason the expanded is that state owned banks not have enough capital. were not able to support credit demand in the economy. the credit-dependent sectors, real estate, and autos really suffered. persistent double-digit declines in auto sales. truck sales have been exceptionally week. the -- exceptionally weak. trying toagain about get the credit system aligned with the real economy, which is the debate in china and the u.s. >> last time, you said -- you are bullish on india. is that your position now? have you become polish given that things have come to rock-bottom -- have you become bullish given that things have

come to rock-bottom? jonathan: it has had a choppy year. it has recently begun to outperform again. i think the argument around valley asian is that valuations are broadly neutral if not somewhat attractive to emerging-market peers. we have other countries where we have structurally underway position on. malaysia, we also have an underweight on hong kong for example. >> method -- jonathan, thank you. always good to get your analysis. let's get the first word news with su keenan in new york. >> we are going to start with carrie lam in hong kong. beijing says hong kong's embattled leader retains the confidence of the chinese government. that is despite five months of popular unrest. president xi jinping has told carrie lam he trusts her and

approves of the way he has handled the -- he has handled the crisis. says -- meanwhile, antigovernment protests are continuing in the chilean capital, santiago, with police using water cannons and tear gas to disperse large crowds. at least 20 people have died in the protests, which started last month. this after the government announced a hike in subway fairies. the movement quickly expanded to protest frustration over education, house services, and growing economic inequality. hasran, the country increased the number of iranian -- uranium subterfuges it is -- also -- it has also added 30 upgraded machines that can

enrich fuel 10 times more faster -- 10 times faster than existing models. resident ronnie is expected to announce more moves this week. the islamic republic marks the 40th anniversary of the u.s. embassy siege in tehran. the boeing, the chipmaker has tested its new space capsule, lunging more than a mile into the sky before parachuting back to earth. the star liner carried no human crew, just a dummy for the 92nd launch. on laid out -- for the 92nd launch -- 90 second launch. planned for next month without a human crew. global news, 24 hours a day, on air and on tic-toc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. coming up, we consider

environmental risk factors for investors and asia. we are going to be joined by robert rubenstein. this is bloomberg. ♪

>> can be resolved by a single country alone. goodst all put the common of humanity first rather than plays one's own interest above the common interest of all. xi jinping talking a short while ago, setting his stool out. someone was the vanguard of globalization here. asking people to come to china and have a look around. described the middle classes as

having presented an opportunity which was, quote, unquote, infinite. we have been flirting with the game line and the faang. you can also see what happened with the pboc with a surprise in lowering the mlf midterm financing rate by five basis points. it has given equities a bit of a boost. probably not a stunning rally as we get a bit more liquidity in the system. do not get a cut in the official policy rate. pboc comfortable with its approach. holding back any bazooka it may have. we have -- if the economy does we can more quickly than expected in the 2020. now, a focus on environment, social, and government data has been one of the biggest challenges in measuring the impact for investors. the company- as

seeks true value, they will have to work harder in using it as a dashboard rather than a method to inform stakeholders. turning us from singapore is robert rubenstein. robert, thank you very much for joining eyes. on investingimpact it is first of all. to achieveis trying a market rate return as well as a measurable, social and environmental you. -- environmental value. >> we just changed things in satiety -- in society here as well. how much evidence is that you get more bank for your buck? we have been doing -- educating have been about investing for 25 years. over those 25 years, there has been literally thousands of worse, showing that at

there is no underperformance. at this, there is an and -- and outer performance. it is not about proof. it is about belief. if people believe it is not going to work, they will believe that. that has been more the education side. the proof is clearly there. if you do not want to believe it, it is not going to happen. robert, tom here in shanghai. tools like ai, do they help to move some way in terms of support and belief amongst investors helping to get that believe in some of these investment opportunities? ai is starting to show them that est investing can have an impact on their portfolios. xi there ar robert: are some companies using ai to get deeper into the organization. it is a vast improvement from

i used tostem, which call the o.j. simpson method. if we do not have a video of you marrying your wife, -- is there a press release about the company's problems? we have dramatically improved. the quality has improved. unfortunately, the methodology until now has -- is more about the company's report rather than what they do or the products they make. if you look at companies that are carbon intensive like the energy sector, scored very high on the dow jones sustainability index. panisse had improved -- had produced products that are unhealthy, they also score high. there are some issues. ai can get much deeper and find out much more information about the organization. we know about five are 10 that are quite advanced. i think this will help significantly. what will really move from proof

to believe is money flows. if investors see money flows going this direction and see the and theyce as good, can de-carbon as their portfolio, they will do that. seeing the are you money flowing at this point? where do you see the opportunities in this space? feel free energy or what you would call renewable energy is off the charts. look at your own nef reports. public transport infrastructure is probably one of the best ways of d carbon eyes and portfolios. it is a 20 $300 billion investment worldwide. is steady cash flow and no volatility. it is low carbon, aa rated. green buildings or retrofitting buildings or making new buildings that are low to zero carbon is not really a big

technology risk. plant-based food. there is no shortage of deals. there is just not an effective infrastructure to find what you are looking for, which helps us a lot because most of our business comes from that. holdes me, where are the in the infrastructure? let's take a look at water. it is something that is touted as a scarcity in many parts of the world, which could lead to war even. it is something that needs to be addressed. robert: absolutely. until now, most people in power do not want to price water what it should be priced. 70% of water is used for agriculture. most of the farmers do not pay for it. i know the politics of charging water for the farmers. i see that. as long as you are giving something away for free or

relatively low cost, people will run the taps, people will waste water. farmers will not look for effective ways of using less water and developing new crops. pricing is very important. few peoplely, very in power who have influence are willing to address that. until you address the pricing issue, we will have continuous water scarcity as people move from one meal a day to two meals andy and them hillcrest -- the middle class grows, massive consumption of water. you have to charge what you should charge. i do not know what price that is at the moment. york waspetite in new to cleanl when he had up a water system because of the pressure from the epa in washington. pricing is key. it is a political issue. everyone knows there should be a price on carbon.

who is doing that? who is really embracing 40 to 120 euros a ton for co2? it may be just the swedes? -- the swedes. hugeicing water would have political ramifications. try to introduce pricing to people using water -- that is one of the things you have to balance. there are different ones like this out there. how politics feeds in to this whole economic imperative. politics feed in -- basically, you also have the financial sector is guilty of this because you have hedge funds in new york funding of the condo and almond growth -- funding avocado and almond growers. if the pricing was there, you

would have a redirection of investors. we would have much more innovation in using less water. it is not that automatically, everything would go up. it is a question of focusing on, how can we reduce this very small amount of fresh water is in the world. the same amount we had millions of years ago. we have 7, 8, 10 billion people coming along. in,ss you put the pricing you will have continuous problems. i know this is a problem most politicians do not want to touch. the same reason why they do not want to put a sales tax on airline tickets. if you buy a bicycle in europe, it is 21, 25% vat. if you buy an airline ticket, there is no vat. explain that to me. pricing is important. you need leadership. ati would argue if you look

when you fly into heathrow, take a look at the amount of active charges on your ticket. thank you for joining us. here onre on the way bloomberg television. --ing a look at what also hearing from the chief executive this is bloomberg. ♪

>> welcome back. a quick check of the latest headlines. generale is considering a fully owned brokerage in china as beijing considers the restrictions in the financial sector. $150 include investing million to obtain 51% of a local brokerage. the tender is becoming more ambitious as it seeks growth abroad amid a sluggers european market. fell aster profits debts overshadowed gain. that income slid 6% from a year earlier to eight hundred 60 million u.s. dollars in line with estimates. it is not the only singaporean bank to be relying on management to offset debt problems.

you are be reported the same conditions last week. marriott international third quarter profits missed estimates and is lower and is lower in full-year productions as demand slows. adjusted earnings per share came in at a dollar 47. slightly below the average forecast of a dollar 49. rose one and room a quarter. marriott is ever a forecast for 2020, rejecting revenue will be flat or only slightly higher. afterlumped in late trade posting a third-quarter loss per share and gross bookings missed expectations. the shortfall is better in the forecast, easing concerns that ride-hailing growth is coming to a halt. dollars compared to 485 a million -- a year ago. that is still better than the average estimate of $808 million. itsy davidson -- after

first eurobond after it seeks to boost bike sales in europe. the company is planning a five-year benchmark note via a finance arm. harley is switching strategy to sell thailand made motorcycles in europe after the e.u. imposed tariffs on u.s.-made bikes after a trade spat with washington. >> volkswagen has begun production on the id3 car with a lunch ceremony attended by angela merkel. -- a launch ceremony attended by angela merkel. she says charging infrastructure is still the biggest hurdle to become a world leader in electric vehicles. >> charging infrastructure is probably the biggest open point to overcome. we are investing heavily in a consortium together with bmw.

building up fast charging infrastructure in europe, which is well on the way. we will cover the whole of europe with a fast charging network every 120 kilometers. you will find a charging pole. i think we still have to reinforce later to this afternoon, we have a meeting in berlin talking with the government about future changes for building up charging networks. the situation is different. in countries are quite developed. norway, for sure. also highland, we see a fast build up. bit behind. little after the latest decisions in government, it will be a fast build up in changing equipment. volkswagen chief executive.

a quick look at a bit of bad news coming up for hong kong. this is a position we find ourselves in. we have been seeing retail sales fall of a cliff. pmi services, likewise. manufacturing has been in contraction territory marked by the red line. we have plummeted to the lowest level in terms of contraction since november of 2008. the business outlook for the territory is now at lowe's we have not seen since 2008. the protest down the street since the beginning of june have had an effect on manufacturing and every other factor, it seems.

rishaad: almost 11:00 in hong kong, nearly 2:00 p.m. in sydney. i'm rishaad salamat. [indiscernible] u.s. futures on the up on reports that washington may remove some tariffs on china and a trade deal seems closer. and the reserve bank of australia decision day. bloomberg survey isn't certain that the governor will keep interest rates on hold. this is bloomberg markets. ♪

rishaad: the glass is half-full. we've got gains. let's get to the action. a lot of optimism on trade. there is generally a feeling perhaps that we can go up from here given the record highs on u.s. equities. >> global stocks at overbought levels. themsci asia pacific at most overbought in months. that is continuing on, forming a golden cross today. japanese stocks leading the pack. the nikkei adding 1.5% after japanese markets returned from the three-day weekend. space, tracking that drop that we saw in treasuries. the yields climbing two to four basis points across the curve. we are seeing the aussie yield curve steepening ahead of the

rba decision to hold its key rate. that is what is expected. i also want to highlight chinese benchmark deals. that is the biggest drop since august. this after the pboc surprised when they cut the mls rate for the first time since 2016. [indiscernible] the yuan is also on the front foot. the hang seng has been fluctuating. 0.3% even as we got a reading showing the business outlook continues to deteriorate. philippine stocks breaching 8100 points as inflation slows. the peso is holding near a january 2018 high. [indiscernible] quick look at how we are shaping

up for the market open in mumbai. the nifty did close at a july 4 high on monday. futures are pointing to losses heading lower. rupee,g in on the trading around 70.70 six against the dollar. indian bonds very much in focus after we saw the 10 year yield rise on monday. this spread is widening for india amid growth concerns for the economy. starts: that market trading in about 43 minutes. su keenan is here with the first word news. su: we start with the ecb. christine lagarde has launched her reign at the european central bank steering clear of policy statements. she called on the euro zone to be strong and resolute in the

face of a deepening slowdown. the new president takes control at a key moment as the euro zone economy continues to weaken and the ecb urging national governments to step up fiscal measures as well as structural reforms. u.k. lawmakers have erected a new referee to keep the parliamentary debating game in order. lindsay hoyle is to be the new speaker of the house of commons and is promising to take a more neutral approach than his predecessor, who stepped down after 10 years on the job. he has never revealed his views on brexit. southeast asian leaders snubbed a meeting with the u.s. after president trump skipped the event for a second year. vietnam weres, and the only countries to meet

national security advisor o'brien in bangkok. that is the smallest delegation since 2011. washington is said to have complained about an intentional effort to embarrass president trump. and to hong kong now. beijing says hong kong's embattled leader, carrie lam, retained the confidence of the chinese government. the news says president xi jinping approves of the way she has handled the long-running crisis. xinhua reports that lam has led hong kong's efforts to stabilize the situation. global news, 24 hours a day, on-air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. president xi jinping

has reaffirmed that china will open itself up further to trade as part of the international import expo in shanghai. >> in order to boost growth at home and create more room for china will give greater importance to import. we will continue to lower tariffs and institutional transaction costs. rishaad: let's get straight to bloomberg china correspondent tom mackenzie. repeat of hisa mantra of china essentially being the vanguard of globalization, wasn't it? it was. there were no major policy announcements. positionsterating that have already been articulated.

this was the second year they held this event. the focus is on imports and showing off the strength of china's consumer and trying to show that china and president xi and his team are upholding the rules-based system. it is an opportunity for them to push back on the critics of some of china's policies. in terms of the details of the saying heesident xi wants to see all countries working together in terms of advancing globalization. a soft nod to the america first policies of donald trump. also talking about the need and the desire to lower tariffs on a number of different goods. he said broadly tariffs will be reduced. they will focus more squarely on imports as well. calling for reduced barriers around technology. maybe a nod to the restrictions the u.s. has put in place in

terms of huawei and surveillance companies. this was a broad speech. waiting to see if any administration officials will enact in more detail some of the announcements or policies that he has reiterated here in shanghai. again, trying to stand on the stage and show china being open even as many say there remains fatigue around issues like intellectual property, that weren't addressed in great detail in this speech by the chinese leader. rishaad: what did he have to say agreement?trade there was more traction on the regional free trade agreement, which, if i remember correctly, did not mention india. tom: absolutely right.

he didn't address the ongoing u.s.-china talks. we've heard that may be u.s. is considering removing tariffs to get that phase one over the line. the chinese side are looking at potentially allowing president xi to fly to the u.s. at some point. he didn't address that specifically, but momentum has been moving forward. he did sayht to say china is open to more fda's. were getting closer to that bilateral investment treaty. he did talk about the regional comprehensive economic program or policy partnership, saying that would -- that he is hoping it would be signed off fairly soon. he didn't talk about india. really trying to say, china is here and has a massive consumer market, and it is ready to do

more free trade agreements, and is strengthening its trade relations in this region, even as pressure from the u.s. is maintained. rishaad: tom, thanks. tom mackenzie in shanghai joining us here. [indiscernible] away fromour take this speech? there were no big surprises, as tom was saying, but the same mantra, is it not? >> definitely manifesting that china is a global player. the growth itself is not export driven, but is still a very important sector. wants to expand its asian footprint. indonesia,d a lot in philippines, malaysia. they are now the number one investor. they definitely want to expand. rishaad: also this is an

international import expo. i think what they are trying to do is show how this economy is veering towards consumption. , see what you can sell, and effect. absolutely. [indiscernible] has become a very important market. look at the german car manufacturer. we should not forget, back in the 90's, the tariffs for imports into china was about 30% before the trade war happened the average tariff was around 4.8%, so it was already starting to open up. i would say the trade war also had its positive side. we have seen unprecedented momentum in opening up the

economy, allowing global players to take majority stakes in companies, including our company. we have seen that rating agencies can start their own subsidiaries in china. there is a a lot of positive momentum and i think china is opening up and it has to open up to sort of get out of this middle income trap. [indiscernible] bute see that happening, the other corollary of this trade war has been supply chain movement. what evidence are you seeing of that? that probably was going to happen anyway. >> absolutely. lost its competitive advantage of cheap labor, overcapacity of labor, and we have seen that wages have

surpassed the one from indonesia, even malaysia. this movement out of china into cheaper countries, definitely the last 18 months it has been accelerating. that is definitely a result of the trade war. what we also consider in terms of growth, if you look at manufacturing investment or fixed asset investment, slow. infrastructure started to pick up. are actually investing in china. we oversee that property investments are still on relatively lofty levels. it is the private sector that is holding back investments. rishaad: and what do they need to hear to start investing again? i think it is a global

phenomenon. it is difficult for a ceo to make an assessment where he should build his next factory, where he should expand. a good wayare on having a phase one deal. everybody talks about a skinny deal. we get more information that the skinny deal could be fatter than people are expecting. that could be getting rid of the tariffs in december, which is one key aspect of our still cautious outlook for next year. that could actually drive growth and it could shore up confidence for ceo's to bring back investments. rishaad: hold that thought. lots more coming. still ahead, the latest rate decision from the reserve bank of australia. that should be coming along in under 20 minutes now.

refrainkers expected to from another move after october's rate cut. we will also have reaction as well. bloomberg. ♪

both expected to keep their policy powder dry, at least for now. let's find out what it means. kathleen hays has a preview. no rate cut expected from the rba. retail sales look pretty dismal. the governor saying there is a gentle turning point in the economy? kathleen: i think the concern is that the turning point was so gentle, maybe it is not turning at all, at least where the

consumer is concerned. the retail sales report showed the worst performance since the last recession in 1990. october rose much less than forecast. now with the latest numbers, we can see the sales averaged just 0.2%. very alarming to economists. the volume of sales fell as well. this wasn't just prices. the worst result since the last recession. the australian government had a big tax cut in april. 7.2 billion dollars of tax refund. the reserve bank of australia has cut its key rate three times now. why isn't the consumer spending the money? some people think they are paying down the mortgage instead. let's look at the irony of the impact of these three rate cuts.

the yellow line is the rba key rate. look what has happened to consumer and business sentiment. apparently people are concerned .f the rba is cutting that much they are concerned about where the economy is heading. there are pluses. another reason for the rba to say we can wait now. healthy commodity prices, particularly iron ore. home prices have started to rise. and the currency, because the rate cut is competitive now. those are the pluses. the bank in malaysia expected to also keep its rate study. we've had a terrible time with exports. perhaps if we got a cut, we could see depreciation of the currency. malaysia is the

world's 18th largest exporter. gdp depends on exports. exports were down year-over-year in september. agriculturalcs, goods, looking week. let's look into the bloomberg sorry,ook at what is -- i think we've got the wrong chart. let's move on from that. the point is simple. gdp slowed down in 2018. now in 2019 it has come back a bit. they have taken a hit. even so, the ringgit was recently added to the u.s. currency watchlist. even though they think it might not hurt to get a little bit of help from the currency, they are probably going to figure keeping that rate at 3% is a good idea.

here's the chart. look at the bars coming in from the right hand side. gdp came down in 2018. china's economy is slowing down. this is what they have to deal with. for now, that is what they are expected to do. holding your key rate study is one thing. what we want to here is what is indicated about what they are watching, how they are looking at the economy, and hopefully gauge what it would take for them to move in the future. rishaad: thank you, kathleen hays. let's bring back adrian. with the rba coming out, people thinking no change, but some predicting another cut in december. why not get it over with now? >> they already cut three times since june. let's try to let the monetary

policy work a bit. we also get some news on the trade war side. so we think they will wait for now. as you also mentioned before, a lot of tax incentives have been used to pay back debt, which doesn't have to be a negative moving forward. the unemployment market is still solid, more driven by the public sector, less by the private sector. that could trigger another rate cut. but it is definitely possible they do it today. they don't have to wait, but we think they are more cautious. rishaad: how about malaysia? they seem to be caught in a bind. >> i've just come back from malaysia. i think it is moving in the right direction. have seen what would indicate

a bit more spending. i think that is what the bank wants to see. we think they will be holding back. keep some of the ammunition. banksly all the central want to know what is happening with the trade situation first. rishaad: that is the problem, because everybody is waiting. >> not everybody is waiting. global central banks are active, including the fed, the ecb, and we expect the balance sheet to extend. rishaad: thank you very much indeed. we do have that rate decision coming up at the bottom of the hour. plenty more on the way. to companiesg at that both used to make cameras, but don't anymore. this is bloomberg. ♪

rishaad: you are back with

bloomberg markets. trade,umping in late posting a third-quarter loss. the shortfall was better than forecast. it does ease some concerns that this company's growth is coming to a halt. the adjusted net loss in the september period, $585 million compared to $485 million a year ago, but still better than the average estimate. [indiscernible] net income sliding 6% from a year earlier to $860 million. pretty much in line. it is not the only bank relying on wealth management. that after a smaller competitor reported similar conditions last week.

let's have a look at the stock of the hour. let's have a look at what has been going on with this. it is having a rough go of it. that is what overall markets are doing. cutting its profit and sales forecast. the company seeing a fallback in its share price. it is a victim of the u.s. tariffs on chinese goods in september. apparently they are affecting its business as well because of a strong yen impact on the sales front. you can see what has been going on. in 2003.together they don't actually build cameras anymore. what they do is essentially make office electronics, including some image business as well. optical lenses and measuring instruments. or on thebiggest fall

msci asia-pacific index, falling back 11%. volumes in excess of 800% more than usual. ♪

rishaad: that is a beautiful view as we await from the reserve bank and australia for the cash target rate. we have had cuts, three cuts in a row. aspects, notrious least retail sales which have been falling back, that is causing consternation. we are also grappling with the harnessing -- the housing market . if we lower rates on one hand, we could see impetus for making housing prices unaffordable.

perhaps to revive the economy cuts are needed again. it is a rock and a hard place. some suggestions we will not get anything in an interest rate cut today. some are suggesting we could see a rate cut in december. we have a target rate unchanged, we rba doing what economists surveyed suggested they would do. they are prepared to ease monetary policy further. that is the message out of the and how low, the outlook little changed from three months ago. this is what we have, some of the forecasts, inflation grows 0-2021, also2

suggesting supporting income growth as well. that is the reserve bank of australia. cash target rates unchanged at 0.75%. perhaps we could be seeing a december cut. what is your take? >> we definitely could see the cut postponed to 2020. we definitely can save the environment is weak and australia, and needs longer to recover. it retail sales numbers -- rishaad: then you have house prices going up again. >> that is what we see globally. we usually see the consumption side is on the weak side.

lower in just rates is one of the headwinds we could see. main domestic uncertainty remains consumption, that is the case. growth is seen picking up around 3% in 2021, is that ambitious? adrian: that sounds optimistic. next year does not look exciting either. a moreee if we get global recovery in 2021, which we do not forecast. that could help australia. we think the dollar is not attractive at this level. korean is a much better play. bad, talkings not about inflation.

up. should gradually pick adrian: inflation, it has not fallen off the cliff. and australia we see the headline inflation does not look too week at this point. it is the core inflation that is weak, and we do not see spending speaking up or picking up. that is one of the drivers we would like to see. most inflation is weak, and that is a concern. it could lead to more growth constraint going forward. perhaps even more under pressure if consumption remains the problem with inventory overhangs. that is trading more deflationary environment. how do you play that in

the markets? probably would need a weaker u.s. dollar to kickstart exports again. that will increase inflation if the dollar is weaker. that may be something essential blank would like to see -- the central bank would like to see. it is a small stake in our global portfolio. ,e often play the currency side it is negligible. rishaad: where are you favoring? what do you have the greatest optimism in? adrian: we upgraded two weeks ago, we think the next couple of months there is more upside. we see central banks, usually we

have seen once they start to worry, equity markets stop worrying. peak in thed to a u.s. dollar given at the fed is still cutting interest rates in expanding their balance sheets. that is usually interesting to the asian equity markets. then we see thailand and korea starting to outperform the market. these are cyclical tech jevon carter's, and that is a good tech-- these are cyclical driven markets, and that is a good sign. rishaad: i wonder if the u.s. yield goes up to 2%, what is the take away in this part of the world? adrian: i would argue for that a small move, rishaad: it is a psychological level. adrian: there is probably a

concern, some of the numbers are very weak. the tenure treasuries have a massive rally. the flight into safe haven assets has german some into a panic zone. getting out of that and seeing higher interest rate should be something positive in the region which has underperformed. , thank: adrian zuercher you so much for joining us. head of asia asset allocation, ubs. what we have coming up on first word news, su keenan has the latest. has increased the centrifuges it is operating in a further violation of the fragile

2015 nuclear deal with other world powers. 30 upgraded machines that can and richfield 10 times faster than original models. the islamic republic marks the 40th anniversary of the u.s. embassy siege in tehran. president trump has begun the process of withdrawing the u.s. from the paris climate accord. .t will take a year to complete the administration has submitted its formal withdrawal. they will continue to work on the issue. about 200 other nations remain in the agreement. india has dropped out of the china backed trade deal as 15 other nations prepare to sign it next year. prime minister modi is concerned

about the adverse impact the deal could have on indian workers and consumers. it covers about a third of the global economy and as a part of the transpacific partnership that includes japan and australia but has been ignored by the u.s. ile antigovernment protests are continuing in santiago, police using water cannons and tear gas to disperse large crowds. 20 people have died in the protests so far. they started last month when the government announced a hike in subway fare. overpanded to protests education, health services, and growing economic inequality. global news, 24 hours a day on air and at tic-toc on twitter, powered by 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. rishaad: we are going to get a

check on markets. .hina going to lunch break we are positivity, japan playing catch-up. >> asian stocks continue to climb. a golden cross indicates it could go higher, but the index is at the most overbought level in 21 months. we are seeing asian stocks on a front foot with a risk on mood. indices you want to track so far, we had chinese markets closed for the lunch break. we have the offshore on the firmer footing, up 0.1%. the 10 year yield has climbed -- is under pressure actually. after the rate was cut for the first time since 2016.

it suggests the lpr could fall this month. the aussie sharemarket gaining ground. the aussie dollar, little change, reversing course a below $.69 right now. aussie 10 year yield moving up about two basis points. checking in on mumbai markets, stocks could come under pressure at the start of cash trade. a record high on monday on better than forecasted earnings. the indian rupee may slip from a five-week high. we will keep an i on indian bonds to see if they move lower

after the r.b.i. moved liquidity risk. rishaad: we have years of waiting for this, four years of delay, saudi arabia announcing it sure sales of aramco. they conceded the company is not worth the $2 trillion valuation allocated. , t's bring in adrian zuercher --let's bring in dr. neil beveridge, senior research analyst, sanford c. berstein. this has been a long time in the works. this is part of their economic reform plan. ipo that will bring in investors, there are a lot clearly worried about the future of the oil industry given

climate change. this is the world's largest oil company coming to the market. what saudi is doing is testing the market with local investors before they embark internationally. what does a lower valuation signal for the oil price it self? adrian: for the oil price itself, i do not think the valuation matters much. for saudi, the question is are they willing to accept this lower valuation? in dollars that would put it in the range we think is comparable with most western oil companies. a $2 trillion valuation at a significant premium to other companies. i do not think premium is warranted. rishaad: there are questions of

the value of the company. float talking about a 5% here. dr. beveridge: 2% initially. rishaad: that does not really move the dial. dr. beveridge: it is still a big number, $1.5 trillion valuation, in terms of being the world's largest ipo. $30 billion, or 2% free flow 5% of the msci emerging market index, but it is still 12% of the free flow of all global emerging market. it is still a significant number. rishaad: it is one of the world's most profitable companies. dr. beveridge: the profitability ofaramco is double that apple. it is the largest and most profitable oil company in the world.

the management they are committing to is $75 billion annual dividend payments, which is a number that is bigger than the market cap of many companies. to deliver that, aramco needs an oil price at $60 per barrel. regardless of what their free , there is a commitment regardless of oil price. it will be defensive in the market. rishaad: it is also a political play. dr. beveridge: there will be investors who do not want to invest in saudi arabia. there is considerable risk in saudi. risk given the high government ownership. it is not a stock that will appeal to everyone. but it is an amazingly cash

generous company and the dividend yield will attract shareholders. how can individual investors take part in this ipo? listing it makes it difficult for the average international investor. for big institutional investors, they will participate. sovereignit will be wealth funds that will be interested in this idea of domestic market investors in saudi arabia. and cornerstone investors. we could see national oil companies participate such as largest oil refiner. you could see a strategic deal between china and saudi arabia as part of this listing. rishaad: thank you so much, dr. neil beveridge, senior research analyst, sanford c. berstein.

dr. beveridge: we are in the $60 to $70 range in september. up, the indian markets are up and running. it has been a good run for mumbai stocks. this is bloomberg. ♪

rishaad: this is "bloomberg markets: asia." having a look at the sessions so seen a higher levels like yesterday, what does it look like at the moment? that will continue today as well. we had a positive opening. now levels indicating there is

some profit at high levels especially for the nifty. , sitting flat and the opening trade for the broader markets in positive territory. the markets have been moving higher and improving, and this rally has been coupled with gains for the broader market. rishaad: tell us about them. >> a lot of stocks to focus on. the qip is coming in at 25,000

rupees. the final issue price will be discussed on november 7. the stock has reacted positively. it is trading near its 52 week high levels. we are seeing some recovery. titan gets a percent of its bottom line from the jewelry business and have given an update that performance will be muted. thank you so much. let's look at what is going on in shanghai. xi jinping and president marcon,

the highest ranking global leader to attend that as they discussed trade. speeching giving a discussing china's openness. this is bloomberg. ♪

onhaad: let's have a check the latest headlines. federal officials investigating the accounting practices for two years, it lowered its forecast. it is cooperating with the ftc and justice apartment -- department and insists it did nothing wrong. steve easterbrook was released

relationship with an employee. the former ceo will pocket 26 weeks paid the forfeit millions in on invested stock options as part of his severance. about to be a cheaper best friend. slashing prices to improve profits. customers are waiting on profit margins due to low prices. companies around the world hit by protests in hong kong. has looked at calls for extra pressure. how does this work? did, we took

thousands of transcripts from companies doing quarterly updates, and we searched through hong kong,terms like protests, social unrest, disturbances. with the help of our newsroom and reporters and editors, we trained this ai to look for similar phrases. if you listen to conference calls, company management can come up with interesting euphemisms. rishaad: obfuscation. >> one of the more curious ones we have talked about. we would look at these different examples and figure out over time as more companies reported, we could see examples of companies being affected. these were from different

industries, not just the financial sector or luxury retailers that we were expecting to see the impact on. it was industries as adverse as agriculture, tissue paper, also took companies that were affected. what was great about this approach, it allowed us to broaden the scope of our search. it is a great example. rishaad: tell us about the executives, what is the readthrough? >> there are a couple of , basically nobody is benefiting. but the degree of impact depends on the business. for multinationals, hong kong will be a small portion of their revenue. that is not the case for everyone. for companies geared to the chinese consumer, hong kong has been important for the past couple decades.

some of these luxury retailers were ahead of this and moved sales into the mainland, and were finding prospects in other markets around asia, they just were not doing much business in hong kong. there is also an aspect to this company companies do not have the ability to change where business is done. hotel operators is a great example of that. they have fixed assets that they cannot move to the mainland. they tend to be more affected. rishaad: thank you very much. looking at the markets, to the us trillion dollar, after the

rba decided not to do anything with interest rates, at the moment trading slightly to the upside. this is bloomberg. ♪

taylor: i'm taylor riggs in san francisco, and for emily chang, and this is "bloomberg technology." coming up in the next hour, uber disappoints. third quarter estimates missed. we break down the numbers. mcdonald's ceo out over an improper relationship. how does it affect the company's strategy of investing in tech?