Daybreak Weekend: Nvidia Earnings, G20 Summit, U.S-China Relations

Bloomberg Audio Studios, Podcasts, radio News. 0:00:10.440 --> 0:00:12.840 This is Bloomberg day Break Weekend, our global look at 0:00:12.840 --> 0:00:14.920 the top stories in the coming week from our day 0:00:14.920 --> 0:00:17.320 Break anchors all around the world. And straight ahead on 0:00:17.360 --> 0:00:20.320 the program, we'll look ahead to some key inflation data 0:00:20.360 --> 0:00:23.840 in the US how that may impact FED policy moving forward. 0:00:24.040 --> 0:00:25.919 I'm Tom Busby in New York. 0:00:26.400 --> 0:00:29.120 I'm Caroline Headker in London, where we're looking ahead to 0:00:29.160 --> 0:00:31.920 a G twenty meeting without the United States. 0:00:32.159 --> 0:00:37.000 I'm Doug Chrisner looking at the evolving relationship between Presidents Trump. 0:00:36.760 --> 0:00:41.280 And she That's all straight ahead on Bloomberg Daybreak Weekend 0:00:41.720 --> 0:00:44.760 on Bloomberg eleven to three, Yeero, New York, Bloomberg ninety 0:00:44.840 --> 0:00:48.519 nine to one, Washington, DC, Bloomberg ninety two to nine, Boston, 0:00:49.040 --> 0:00:53.479 DAB Digital Radio, London, Sirius XM one twenty one, and 0:00:53.600 --> 0:00:56.440 around the world on Bloomberg Radio, dot Com and the 0:00:56.480 --> 0:00:57.760 Bloomberg Business App. 0:01:02.640 --> 0:01:04.480 Good day to you. I'm Tom Busby, and we begin 0:01:04.520 --> 0:01:07.360 today's program. But we'll look at some key economic data 0:01:07.400 --> 0:01:11.479 here in the US. PCEE read on inflation as well 0:01:11.520 --> 0:01:14.760 as personal spending and personal income data all for the 0:01:14.760 --> 0:01:18.040 month of January that is out on Friday for more 0:01:18.120 --> 0:01:20.360 on what it all means and how this may impact 0:01:20.400 --> 0:01:23.720 Fed policy. We're joined by Stuart Paul, us economists with 0:01:23.760 --> 0:01:28.440 Bloomberg Economics. Stuart, a lot of uncertainty out there, possible 0:01:28.480 --> 0:01:31.600 impact of threatened US tariffs. We've got federal job losses, 0:01:31.640 --> 0:01:35.920 We've got even Walmart this past week seeing sales growth slow. 0:01:36.760 --> 0:01:40.679 One constant is stubbornly high inflation. What's behind it? What 0:01:40.720 --> 0:01:43.120 do you expect to see in the January PCE report 0:01:43.160 --> 0:01:45.080 the Fed's preferred measure of inflation. 0:01:45.680 --> 0:01:48.800 As you mentioned, the core PCE price Index is the 0:01:48.880 --> 0:01:53.600 Fed's preferred measure, and we estimate that monthly core PCEE 0:01:53.640 --> 0:01:56.560 inflation is going to register zero point three percent. That's 0:01:56.720 --> 0:02:01.240 faster than the zero point one percent measured and reported 0:02:01.480 --> 0:02:05.280 in December. So, as you mentioned, stubbornly high inflation, we 0:02:05.360 --> 0:02:09.200 can estimate PCE with a pretty good deal of precision 0:02:09.360 --> 0:02:12.919 because most of its components come from the CPI and 0:02:13.000 --> 0:02:16.639 from the Producer Price Index. So seeing those items earlier 0:02:16.680 --> 0:02:20.440 this month allows us to estimate the PCE index with 0:02:20.480 --> 0:02:23.760 a bit more precision, and from the CPI we're able 0:02:23.800 --> 0:02:28.000 to identify that it's really the price of some discretionary 0:02:28.040 --> 0:02:32.400 services categories, things like accommodations, recreation services that are going 0:02:32.440 --> 0:02:36.640 to be buoying the core PCE measure. From the PPI report, 0:02:36.680 --> 0:02:39.720 we get things like hospital services, and again that's going 0:02:39.760 --> 0:02:43.440 to be boosting the core PCE measure as well. So 0:02:43.840 --> 0:02:46.920 the thing that we now need to consider is whether 0:02:47.040 --> 0:02:51.920 this January increase is really something that's indicative of persistent 0:02:51.960 --> 0:02:56.000 price pressures. We see persistent price pressures, for example, in shelter, 0:02:56.280 --> 0:03:00.000 in auto insurance, some of the some of the category 0:03:00.200 --> 0:03:02.760 is that take a long time to sort of catch 0:03:02.840 --> 0:03:05.919 up to pass price hikes. For example, if it costs 0:03:05.919 --> 0:03:08.280 more to replace your car, it's going to cost more 0:03:08.280 --> 0:03:10.760 to ensure that car as well. So we're still seeing 0:03:10.760 --> 0:03:13.480 some persistent price pressures there. But I do think that 0:03:13.520 --> 0:03:17.200 the January report is going to show some residual seasonality, 0:03:17.280 --> 0:03:21.760 that's to say, annual price increases that aren't fully accounted 0:03:21.800 --> 0:03:24.400 for by the Bureau of Labor Statistics and the Bureau 0:03:24.440 --> 0:03:26.960 of Economic Analysis. I think that we are going to 0:03:26.960 --> 0:03:29.920 see some of that residual seasonality in the January report. 0:03:30.560 --> 0:03:34.520 What about food and energy, you can't ignore those. Everybody 0:03:34.560 --> 0:03:38.080 has to, you know, eat everybody has to heat their home, 0:03:38.240 --> 0:03:41.400 put gas in the car, a real driver for CPI 0:03:41.400 --> 0:03:44.320 and PPI in January, and there's not a whole lot 0:03:44.360 --> 0:03:46.880 of seasonality about it. I mean, except for heating your home, 0:03:47.360 --> 0:03:49.880 that's right. But in the summer you're cooling your homes. 0:03:49.720 --> 0:03:52.000 That's right. So for some energy goods and for some 0:03:52.160 --> 0:03:56.000 energy services, you do have some seasonality. So for example, 0:03:56.040 --> 0:04:00.520 there's summer driving season that boost gasoline prices. Sometimes that's 0:04:00.560 --> 0:04:03.320 more accounted for than at other times in the seasonal 0:04:03.320 --> 0:04:06.320 adjustment factors. What we did see with energy prices, So 0:04:06.360 --> 0:04:08.040 you bring up a really good point about this, is 0:04:08.040 --> 0:04:12.040 that in January it was so incredibly cold that demand 0:04:12.120 --> 0:04:17.040 for power and other utilities was exceptional, and that is 0:04:17.680 --> 0:04:21.320 that is continuing to contribute to headline inflation measures. That's 0:04:21.360 --> 0:04:24.719 why we saw, for example, the major upside surprise in 0:04:24.800 --> 0:04:27.560 headline CPI during the month. It was in large part 0:04:27.600 --> 0:04:31.320 because of energy goods and services. And so that is 0:04:31.320 --> 0:04:34.320 something that consumers are feeling. It is hitting their pocketbooks 0:04:34.520 --> 0:04:36.599 and it is causing them to rain and spending in 0:04:36.640 --> 0:04:37.640 some other categories. 0:04:37.760 --> 0:04:40.120 Well, let's talk about some other data coming out I 0:04:40.120 --> 0:04:43.240 think will tell us a lot personal spending and personal 0:04:43.279 --> 0:04:46.640 incomes for January, the latest monthly jobs report showed that 0:04:47.000 --> 0:04:51.200 wages still increasing. That's not good for inflation. Holiday retail 0:04:51.240 --> 0:04:54.320 spending was strong slowed a little bit just in January. 0:04:54.440 --> 0:04:58.480 But what do you expect to see in those reports? 0:04:58.560 --> 0:05:01.160 It's interesting. I think that the January report is going 0:05:01.200 --> 0:05:07.120 to show a pretty clunky transmission between incomes and spending. 0:05:07.600 --> 0:05:09.680 I think that based on what we saw in the 0:05:09.720 --> 0:05:13.400 jobs report, wages were accelerating during the month, hiring slowed, 0:05:13.640 --> 0:05:16.760 so that tempered personal income growth a little bit, and 0:05:16.839 --> 0:05:20.200 labor intensity, the average number of hours worked per week 0:05:20.279 --> 0:05:23.400 actually declined, so that tempered personal income just a little bit. 0:05:23.800 --> 0:05:26.440 But in January we also get cost of living adjustments 0:05:26.440 --> 0:05:28.520 two and a half percent cost of living adjustments for 0:05:28.600 --> 0:05:31.719 Social Security recipients. We're going to see a higher Medicare 0:05:31.720 --> 0:05:35.320 and Medicaid receipts in a personal income report, and we're 0:05:35.440 --> 0:05:39.920 estimating nearly one percent interest income growth for those who 0:05:39.960 --> 0:05:43.640 are holding financial instruments. So if you factor all of 0:05:43.640 --> 0:05:47.520 those together, we're estimating nearly zero point four percent month 0:05:47.560 --> 0:05:50.479 on month personal income growth. We're a bit higher than consensus, 0:05:50.600 --> 0:05:53.960 and that's a pretty strong personal income growth reading for 0:05:54.040 --> 0:05:56.960 the month of January. On the spending side, though, things 0:05:57.000 --> 0:05:59.839 looked pretty terrible. So nominal spending. 0:06:00.080 --> 0:06:00.960 Don't sugarcoat it. 0:06:01.240 --> 0:06:03.120 No, I'm not going to sugarcoat it. You know that. 0:06:03.120 --> 0:06:05.039 I'll always you know, shoot straight with you here. So 0:06:05.640 --> 0:06:09.240 we estimate that personal income growth declined zero point one 0:06:09.279 --> 0:06:12.320 percent during the month. That's a major retreat from the 0:06:12.480 --> 0:06:16.240 zero point seven percent growth that we saw in December. 0:06:16.520 --> 0:06:19.200 And a big part of that is autos, right, vehicles. 0:06:19.560 --> 0:06:23.839 People purchased vehicles at a way slower pace during the 0:06:23.880 --> 0:06:27.000 month of January, an annualized pace of about fifteen point 0:06:27.080 --> 0:06:30.599 six million units, down from I think nearly sixteen point 0:06:30.640 --> 0:06:34.120 eight million units in December. As I mentioned, weather was 0:06:34.160 --> 0:06:37.400 so terrible you don't want to be out walking on 0:06:37.440 --> 0:06:40.440 an auto dealer's lot in the month of January, especially 0:06:40.440 --> 0:06:43.159 when there was a polar vortex. But beyond that, it 0:06:43.200 --> 0:06:46.400 does look like consumers rained in spending on some of 0:06:46.400 --> 0:06:50.839 the key discretionary goods and services categories, things like furniture, clothing, 0:06:51.560 --> 0:06:54.080 all of those items during the month, even online spending. 0:06:54.120 --> 0:06:56.880 It looks like they really reined it in in January. 0:06:57.279 --> 0:07:00.480 Now here's the thing. Consumers aren't exactly both. During their 0:07:00.640 --> 0:07:05.679 balance sheets, we saw that income growth is pretty high 0:07:05.680 --> 0:07:08.479 and steady. People are raining in their spending, but we 0:07:08.600 --> 0:07:10.840 still think that they're going to have a personal saving 0:07:10.920 --> 0:07:13.640 rate of just about four point three percent during the month. 0:07:13.640 --> 0:07:17.000 That's still exceptionally low. Personal savings is about six and 0:07:17.040 --> 0:07:20.720 a half percent pre COVID, So even as consumers reined 0:07:20.720 --> 0:07:23.880 it in in January, it's still just a lot of 0:07:23.880 --> 0:07:25.680 spending going on on a monthly basis. 0:07:25.840 --> 0:07:30.320 January's Personal Consumption Expenditures Price Index out this Friday, our 0:07:30.360 --> 0:07:34.680 thanks to Stuart paul, Us, economist with Bloomberg Economics. We 0:07:34.720 --> 0:07:37.480 move next to fourth quarter earnings from the artificial intelligence 0:07:37.560 --> 0:07:40.880 chip Giant and Video that is out this Wednesday after 0:07:40.920 --> 0:07:43.200 the close. Now for more on what to expect, we're 0:07:43.280 --> 0:07:48.200 joined by Mandeep Singh, Bloomberg Intelligence Senior tech industry analyst, 0:07:48.840 --> 0:07:53.120 man deep an almost insatiable demand for AI cloud computing, 0:07:53.320 --> 0:07:56.720 data center infrastructure. Are there any headwinds for in Video 0:07:56.840 --> 0:07:58.160 or is it go go go? 0:07:58.880 --> 0:08:01.720 I mean, I would say they're still in their hyper 0:08:01.720 --> 0:08:05.320 growth phase, so that you know, triple digit growth will 0:08:05.360 --> 0:08:09.240 decelerate to maybe you know, fifty percent plus growth this 0:08:09.360 --> 0:08:12.600 quarter is still very impressive and it's still all about 0:08:12.680 --> 0:08:16.119 data centers when it comes to this company. So look, 0:08:16.640 --> 0:08:19.800 there were a few things that happened during the quarter, 0:08:20.360 --> 0:08:25.040 notably the Blackwell shipments. I mean, Jensen said last quarter 0:08:25.120 --> 0:08:29.720 that Blackwell will be a multi billion contributor to this 0:08:29.920 --> 0:08:34.319 quarter's revenue. And then obviously the deep Seek development was 0:08:34.400 --> 0:08:39.400 quite interesting because Nvidia clearly believes that the scaling laws 0:08:39.400 --> 0:08:42.000 are intact when it comes to the scaling of these 0:08:42.040 --> 0:08:45.880 foundational models, and that is the biggest driver of why 0:08:46.160 --> 0:08:50.000 companies are building, you know, massive clusters when it comes 0:08:50.000 --> 0:08:55.480 to two hundred kgpus to one billion GPUs in a cluster. 0:08:55.640 --> 0:08:58.400 So that is supposed to be one of the biggest 0:08:58.480 --> 0:09:01.840 drivers of Nvidia's chip demand, and it would be interesting 0:09:01.880 --> 0:09:06.880 to see if those kind of drivers have changed because 0:09:06.920 --> 0:09:07.760 of Deep Seek. 0:09:08.400 --> 0:09:12.160 Now, Deep Seek, when that bombshell hit Wall Street, they 0:09:12.280 --> 0:09:15.040 say it was using in Vidia chips which they got 0:09:15.160 --> 0:09:19.120 kind of backdoor from Singapore. But let's talk about the 0:09:19.200 --> 0:09:22.920 losses to Nvidia when that happened. Almost six hundred billion 0:09:23.000 --> 0:09:24.120 dollars in market share. 0:09:24.720 --> 0:09:27.120 Yeah, I mean, look, they've recovered a lot of that 0:09:27.200 --> 0:09:30.760 market cap, so it's not as if the losses were permanent. 0:09:30.800 --> 0:09:32.960 I mean, the stock is pretty much back to where 0:09:33.440 --> 0:09:36.920 it was rating prior to Deep Seek. And I think 0:09:37.000 --> 0:09:39.800 in the end it comes down to training versus inferencing. 0:09:39.880 --> 0:09:43.360 These are the two things that everyone is sort of 0:09:43.679 --> 0:09:47.200 focused on when it comes to Invidia's opportunity because a 0:09:47.200 --> 0:09:50.880 lot of these hyperscalers are developing their own chips, and 0:09:51.000 --> 0:09:55.360 hyperscalers make up forty five percent of Nvidia's data center revenue. 0:09:55.640 --> 0:09:58.959 And that's Meta and Amazon, Microsoft. 0:10:00.160 --> 0:10:00.719 Alphabet. 0:10:00.840 --> 0:10:01.080 Yes. 0:10:01.600 --> 0:10:05.480 So, and when you think about Nvidia's data center revenue, 0:10:05.480 --> 0:10:07.960 that's a one hundred and twenty five billion dollar rund 0:10:08.040 --> 0:10:13.000 rate every hyperscaler this quarter guided to CAPEX going up 0:10:13.240 --> 0:10:16.320 and CAPEX going up almost forty to fifty percent for 0:10:16.400 --> 0:10:20.520 twenty twenty five. So if you extrapolate that guide to 0:10:20.600 --> 0:10:24.800 Invidia's numbers, you know, forty five percent revenue exposure, that means, 0:10:24.840 --> 0:10:27.319 you know, Nvidia could very well be doing two hundred 0:10:27.360 --> 0:10:30.240 billion dollars in data center revenue for twenty twenty five 0:10:30.679 --> 0:10:33.360 at you know, and then you layer in the project's 0:10:33.440 --> 0:10:38.400 target announcement, the EU announcement to you know, invest in chips. 0:10:38.640 --> 0:10:42.480 That's incremental revenue from sovereigns, which is a load double 0:10:42.520 --> 0:10:47.160 digit revenue contributor to Nvidia right now. So when you 0:10:47.200 --> 0:10:50.320 put all these things together, the drivers are there for 0:10:50.440 --> 0:10:52.920 Nvidia to do maybe two hundred billion dollars in data 0:10:52.960 --> 0:10:54.120 center revenue this year. 0:10:54.320 --> 0:10:56.920 And some of those hyperscalers are doing their own in 0:10:57.400 --> 0:11:00.240 house GPUs and are they is in Vidio five finding 0:11:00.280 --> 0:11:04.440 new clients new revenue sources besides them. 0:11:04.679 --> 0:11:08.920 Yeah, So that's an interesting point because hyperscalers do have 0:11:09.000 --> 0:11:12.520 their ambitions to use their own chips. I think Google 0:11:12.640 --> 0:11:15.520 is the furthest along in terms of using their own 0:11:15.640 --> 0:11:20.720 TPUs for training and inferencing. Other hyperscalers plan to do that. 0:11:21.120 --> 0:11:23.840 But whether it's going to impact in Video's revenue this 0:11:24.000 --> 0:11:26.959 year or is it more for you know, three four 0:11:27.040 --> 0:11:29.920 years out. I'm more in the camp that this is 0:11:29.960 --> 0:11:32.920 not going to have a big impact this year. But 0:11:33.040 --> 0:11:35.120 clearly that's a big threat. When you have, you know, 0:11:35.440 --> 0:11:37.920 a forty five to fifty percent exposure to four or 0:11:37.920 --> 0:11:41.560 five customers, there is always that concentration risk. 0:11:42.120 --> 0:11:45.560 Well, and that leads to what's next for in video 0:11:45.640 --> 0:11:48.160 this year? Because I know that Blackwell line they've got 0:11:48.200 --> 0:11:50.880 some new products coming out. What are you expecting to see. 0:11:51.000 --> 0:11:54.200 I mean, to me, the key KPI is gross margin 0:11:54.280 --> 0:11:57.760 because last quarter, even though they talked about Blackwell, they 0:11:57.760 --> 0:12:02.080 said gross margins would sort of get compressed a little 0:12:02.120 --> 0:12:04.360 bit in the near term because of the Blackwell ramp 0:12:04.360 --> 0:12:06.800 and they will go back to mid seventy percent once 0:12:07.080 --> 0:12:11.120 Blackwell is fully ramped up. That to me determines the 0:12:11.160 --> 0:12:15.000 supply demand imbalance. The demand commentary is there because there 0:12:15.040 --> 0:12:18.000 is still more demand, but supply seems to be catching 0:12:18.040 --> 0:12:21.720 up when it comes to you know, TSMC adding capacity 0:12:21.800 --> 0:12:26.199 for manufacturing more GPUs. So gross margins is how you 0:12:26.360 --> 0:12:28.720 determined what kind of imbalance we still have. 0:12:29.320 --> 0:12:32.719 Well Nvidia QBOUR earnings out after Wall Street's closing bell 0:12:32.840 --> 0:12:36.679 this coming Wednesday, Our thanks to Mandeep Sing, Bloomberg Intelligence 0:12:36.720 --> 0:12:40.400 senior tech industry analyst. Coming up on Bloomberg day Break weekend, 0:12:40.480 --> 0:12:43.200 we look ahead to a G twenty meeting without the 0:12:43.320 --> 0:12:57.880 United States. I'm Tom Busby, and this is Bloomberg. This 0:12:57.960 --> 0:13:00.520 is Bloomberg Day Break Weekend, our global load at the 0:13:00.520 --> 0:13:03.440 top stories for investors in the coming week. I'm Tom 0:13:03.480 --> 0:13:06.160 Busby in New York. Up later in our program, we'll 0:13:06.200 --> 0:13:09.520 look at the evolving relationship between Washington and Beijing. But 0:13:09.640 --> 0:13:13.680 first global finance ministers will descend on South Africa for 0:13:13.720 --> 0:13:16.960 a G twenty summit this week, following a G twenty 0:13:17.000 --> 0:13:20.199 Foreign ministers meeting just a few days ago. This time, though, 0:13:20.240 --> 0:13:24.040 it's without US Treasury Secretary Scott Besson attending. Can the 0:13:24.080 --> 0:13:27.560 talks be productive without such an important global player choosing 0:13:27.600 --> 0:13:30.200 to be absent? For more, Let's go to London and 0:13:30.240 --> 0:13:33.439 bring in Bloomberg day Break europe Banker Caroline hepgar. 0:13:33.559 --> 0:13:36.839 Tom This year's G twenty gatherings are significant for a 0:13:36.920 --> 0:13:39.800 number of reasons. For one, they're the first meetings to 0:13:39.840 --> 0:13:42.800 take place under the helm of South Africa. They're also 0:13:42.840 --> 0:13:45.960 the first multilateral forums of their kind to be held 0:13:46.000 --> 0:13:49.000 during the new Trump administration, a government that has so 0:13:49.160 --> 0:13:53.480 far made clear its intention to do things differently. In 0:13:53.559 --> 0:13:56.240 terms of the Finance Minister's meeting due to take place 0:13:56.280 --> 0:13:59.120 in the coming days, there couldn't be more on the agenda. 0:14:00.080 --> 0:14:05.040 Trump's paradigm shifting taris will surely likely feature, as will 0:14:05.080 --> 0:14:08.600 growing pressures to ramp up defense spending in the EU 0:14:08.720 --> 0:14:12.680 but perhaps elsewhere. But one leader who won't be participating 0:14:12.760 --> 0:14:17.520 in discussions is US Treasury Secretary Scott Bessent. His decision 0:14:17.600 --> 0:14:21.080 to skip the event comes as Secretary of State Marco 0:14:21.200 --> 0:14:26.480 Rubio also foregoes attending the G twenty Foreign Ministers meeting. Now. 0:14:26.560 --> 0:14:29.480 Rubio said that he was not taking part in those 0:14:29.520 --> 0:14:33.680 discussions because he did not want to quote, waste taxpayer 0:14:33.840 --> 0:14:39.520 money or coddle anti Americanism. Rubio's comments echo President Donald 0:14:39.600 --> 0:14:44.560 Trump's criticism of South Africa's land policy and a threat 0:14:44.680 --> 0:14:49.360 to cut off future funding to the country. In response, 0:14:49.400 --> 0:14:53.480 South Africa's Foreign Ministry reiterated that no land has been 0:14:53.560 --> 0:14:58.960 confiscated and that the expropriation legislation announced by South African 0:14:58.960 --> 0:15:03.240 Presidency Rampa Hoser last month is similar to eminent domain 0:15:03.400 --> 0:15:07.200 laws elsewhere in the world. It also stressed the South 0:15:07.200 --> 0:15:12.040 African government's commitment to addressing global inequality. Now it's unusual 0:15:12.080 --> 0:15:15.320 for a Secretary of State to skip a G twenty summit, 0:15:15.640 --> 0:15:19.520 and Rubio's absence carries perhaps some risks that the US 0:15:19.840 --> 0:15:22.360 is left out of deliberations by some of the world's 0:15:22.520 --> 0:15:26.000 wealthiest countries, and the same is true for Scott Bessent. 0:15:26.800 --> 0:15:30.160 So can a G twenty meeting be effective without the 0:15:30.280 --> 0:15:33.880 United States and what are the implications of this edition 0:15:34.200 --> 0:15:37.600 of the Global leaders gathering for South Africa and for 0:15:37.640 --> 0:15:40.120 the rest of the world. It's something that I've been 0:15:40.120 --> 0:15:44.600 discussing with Bloomberg's Chief Africa correspondent, Jennifer Sabasaja. 0:15:45.200 --> 0:15:48.240 It's important in the sense that this is the first 0:15:48.320 --> 0:15:53.240 convening of the G twenty members as part of South 0:15:53.240 --> 0:15:57.640 Africa's presidency hosting right, and especially if you consider that 0:15:57.680 --> 0:16:01.400 we've seen a changing administration in the US, we're seeing 0:16:02.040 --> 0:16:05.640 changing ties geopolitically with the number of the nations that 0:16:05.680 --> 0:16:10.800 actually make up the G twenty, it is important and 0:16:10.880 --> 0:16:13.960 no doubt it will also carry over into the Finance 0:16:14.000 --> 0:16:16.680 Minister's meeting next week. Now, as you were just mentioning, 0:16:17.320 --> 0:16:20.640 Marco Rubio has said Secretary of Saint Marco Rubio, of 0:16:20.640 --> 0:16:22.960 course from the US, has said he is not attending 0:16:23.600 --> 0:16:27.880 over what he says, our focuses on climate change and 0:16:27.920 --> 0:16:32.680 also DEI we also got word that Finance Treasury Secretary 0:16:32.680 --> 0:16:34.800 excuse me, in the US, Scott Bessett, will also not 0:16:34.960 --> 0:16:39.040 be attending next week, and so you have to wonder, 0:16:39.080 --> 0:16:41.920 really what does the US, how does the US see 0:16:41.920 --> 0:16:45.280 their role within the G twenty moving forward. There are 0:16:45.320 --> 0:16:48.080 still representatives from the US that are going to be here. 0:16:48.640 --> 0:16:51.800 But still South African leaders and officials are planning to 0:16:51.840 --> 0:16:55.920 continue on with this theme of solidarity, equality and sustainability 0:16:55.960 --> 0:16:58.600 and continue to or at least try to strengthen some 0:16:58.680 --> 0:17:02.280 of the relationships of the member nations that are attending. 0:17:02.680 --> 0:17:05.719 And there is a big question about whether discussions can 0:17:05.760 --> 0:17:09.320 be productive without the United States, whether the G twenty 0:17:09.359 --> 0:17:12.119 is still relevant. I mean, these are slightly perennial questions, 0:17:12.119 --> 0:17:15.359 aren't they about G twenty versus G seven or other 0:17:15.520 --> 0:17:20.520 sorts of gatherings, But it's particularly acute now with the US. 0:17:20.880 --> 0:17:24.920 You know, you do bring up a really interesting point, 0:17:25.000 --> 0:17:27.800 especially when you look at the first few weeks of 0:17:27.960 --> 0:17:32.920 the US administration and President Trump choosing to pull from 0:17:32.960 --> 0:17:37.199 a number of multilateral institutions. What we've heard from at 0:17:37.280 --> 0:17:40.760 least South African President Zerial Ramaposa is that he is 0:17:40.840 --> 0:17:43.280 at least trying to get a lot of these more 0:17:43.320 --> 0:17:46.800 developed countries to the table to try and reform some 0:17:46.920 --> 0:17:50.320 of these institutions. And so if we see at least 0:17:50.680 --> 0:17:54.000 a pulling back of the US on the multilateral front, 0:17:54.840 --> 0:17:58.080 what does that mean for a lot of these reforms 0:17:58.080 --> 0:17:59.440 that we are going to see. 0:18:00.040 --> 0:18:02.840 Still, President Ramaposa does believe that he can get a 0:18:02.880 --> 0:18:03.280 lot done. 0:18:03.320 --> 0:18:08.200 There's a number of other issues on his agenda, including 0:18:08.240 --> 0:18:12.320 many things that he has talked about before, including talking 0:18:12.359 --> 0:18:15.600 about debt relief or a number of the nations, a 0:18:15.680 --> 0:18:18.560 number of the Global South as he calls it, and 0:18:18.640 --> 0:18:21.439 also a lot of that being climate finance. Right, we 0:18:21.520 --> 0:18:25.560 talk a lot about how a number of emerging economies 0:18:25.760 --> 0:18:28.280 are the hardest hit when it comes to climate change, 0:18:28.280 --> 0:18:30.600 but of course it's a lot of the developed economies 0:18:30.600 --> 0:18:34.040 that were the actual contributors to that going forward, and 0:18:34.080 --> 0:18:36.680 so there can be some movement on some of these 0:18:37.080 --> 0:18:42.480 to top line priorities, but getting the US to buy 0:18:42.560 --> 0:18:45.360 into some of them is going to be the challenge 0:18:45.920 --> 0:18:49.840 for President Ramoposa, South Africa and the G twenty moving forward. 0:18:50.760 --> 0:18:54.840 Yeah, and how important is it for South Africa that 0:18:54.880 --> 0:18:57.560 these meetings actually go well? I mean they are surely 0:18:57.600 --> 0:18:59.520 banking on this, as you say, to sort of boost 0:19:00.119 --> 0:19:05.320 soft power, but also you know, real things including aid 0:19:05.480 --> 0:19:11.120 for example. Maybe how important is it that these talks 0:19:11.200 --> 0:19:14.000 go well? And we know that South Africa has got 0:19:14.200 --> 0:19:18.199 very high unemployment, there was a dissipation of the support 0:19:18.240 --> 0:19:21.520 for Rama Posa's party at the last election. He's in 0:19:21.560 --> 0:19:24.440 a kind of coalition government. How important is this forum 0:19:24.480 --> 0:19:27.720 then for a proposer and for the future of South Africa. 0:19:28.920 --> 0:19:33.720 Well, the timing of this is pretty unique, especially you 0:19:33.920 --> 0:19:37.440 just talked about how the ruling party or the previously 0:19:37.560 --> 0:19:41.640 ruling party, the ANC, is now in a coalition government 0:19:41.720 --> 0:19:45.560 and so really for the first time we're seeing South 0:19:45.600 --> 0:19:50.240 Africa take the helm as this multi party government on 0:19:50.600 --> 0:19:53.840 the world stage. One person described it to me as 0:19:53.880 --> 0:19:57.879 potentially this is showcasing that democracy is working, at least 0:19:58.280 --> 0:20:01.960 in South Africa. But you know, President Ramaposa is really 0:20:02.000 --> 0:20:06.080 taking this on to progress on a lot of the 0:20:06.119 --> 0:20:09.600 issues that he believes not just South Africa, but a 0:20:09.640 --> 0:20:11.520 lot of African nations the global self. 0:20:11.560 --> 0:20:12.800 As I was mentioning. 0:20:12.480 --> 0:20:16.440 Before, they can put forward a lot of the challenges 0:20:16.480 --> 0:20:19.760 that they've not necessarily been able to because they haven't 0:20:19.760 --> 0:20:22.080 been at the table before. Now they can do that, 0:20:22.160 --> 0:20:25.080 and as the first African nation to hold this G 0:20:25.240 --> 0:20:28.760 twenty presidency, potentially that's an opportunity. 0:20:29.200 --> 0:20:30.080 And it's not just that. 0:20:30.200 --> 0:20:31.760 I mean you take a look at a lot of 0:20:31.840 --> 0:20:35.880 the partnerships here. The EU is a major investor in 0:20:36.240 --> 0:20:41.600 South Africa. China is one of the biggest trade partners 0:20:41.600 --> 0:20:44.639 here with South Africa as well, and so there is 0:20:44.720 --> 0:20:48.199 incentive for a lot of the other member countries to 0:20:48.359 --> 0:20:52.159 also get on board with this. And so yeah, you know, 0:20:52.240 --> 0:20:56.320 I think a good outcome is beneficial for most of 0:20:56.359 --> 0:20:57.840 the members. But you just take a look at the 0:20:57.880 --> 0:21:00.560 geopolitical divisions that we're seeing in the world right now, 0:21:00.920 --> 0:21:02.480 and it's surely going to be a bumpy road. 0:21:03.480 --> 0:21:05.800 Yeah, And with the absence of Marca Rubio and Scott 0:21:05.800 --> 0:21:07.960 Best said, do you think I think that that signals 0:21:07.960 --> 0:21:11.280 that the Trump administration is actually serious about this row? 0:21:12.480 --> 0:21:16.240 You know that their accusations against the South African government 0:21:16.560 --> 0:21:20.080 in terms of the legislation in South Africa, do you 0:21:20.119 --> 0:21:22.159 think that they are going to make good then on 0:21:22.240 --> 0:21:24.240 the threats, for example, to hold AID. 0:21:26.080 --> 0:21:30.640 That's that's the concern here, really, Caroline, because. 0:21:30.600 --> 0:21:35.080 We have seen the back and forth really ramping up. Right. 0:21:35.320 --> 0:21:38.720 It started, as you were mentioning just a few weeks ago, 0:21:38.760 --> 0:21:43.760 when when Trump was criticizing that land Exproporation build that 0:21:43.920 --> 0:21:47.120 you were referencing there, that's a remopos that President Ramoposa 0:21:47.200 --> 0:21:47.840 signed earlier. 0:21:47.880 --> 0:21:48.320 This year. 0:21:49.280 --> 0:21:51.439 But then, of course we've seen in the US the 0:21:51.520 --> 0:21:56.359 retreat from from DEI h and many people would describe 0:21:56.920 --> 0:22:00.480 South Africa at least in its state right now, as 0:22:00.560 --> 0:22:04.160 you know, an example of DEI and so you have 0:22:04.240 --> 0:22:07.240 to wonder what else potentially could the. 0:22:07.320 --> 0:22:10.680 US administration target. It's not just that. 0:22:10.760 --> 0:22:14.359 There's also climate financing, which has been very important for 0:22:15.119 --> 0:22:16.560 South Africa to get on board. 0:22:16.600 --> 0:22:19.160 We know that we've seen the US administration rolling that. 0:22:19.240 --> 0:22:23.359 Back, and also South Africa taking Israel to the ICJ 0:22:24.160 --> 0:22:29.239 over what they see as war crimes, right which we 0:22:29.320 --> 0:22:32.800 know President Trump has a cordial relationship let's call it, 0:22:32.840 --> 0:22:36.280 with Benjamin Netan Yahoo, and so the concern is what 0:22:37.000 --> 0:22:39.800 does this relationship look like. But over the past few 0:22:39.800 --> 0:22:42.600 weeks I've been speaking to a number of South African 0:22:42.600 --> 0:22:46.000 officials about this, and some of them say, on the 0:22:46.040 --> 0:22:48.680 one hand, of course it's a setback if you take 0:22:48.680 --> 0:22:51.399 a look at something like USAID, which has provided a 0:22:51.480 --> 0:22:56.000 number of benefits health benefits for South Africa that could 0:22:56.000 --> 0:23:00.520 be detrimental to this country and to the Africa continent 0:23:00.600 --> 0:23:05.280 more broadly, but it also potentially creates an opportunity for 0:23:05.359 --> 0:23:08.280 other partners. We take a look at bricks, which is 0:23:08.359 --> 0:23:13.800 this block of Brazil, Russia, India, China and South Africa. 0:23:14.920 --> 0:23:18.240 Potentially we see them stepping in. We've seen that over 0:23:18.280 --> 0:23:22.040 the past few years, them trying to make inroads. And 0:23:22.119 --> 0:23:25.520 if we continue to see this retreat, that opens the 0:23:25.560 --> 0:23:28.600 door to some of these other countries to them potentially. 0:23:28.119 --> 0:23:28.640 Fill the gap. 0:23:28.880 --> 0:23:31.760 For what it's worth, before I wrap up, we have 0:23:31.920 --> 0:23:35.400 seen a country like China continue to reiterate its support 0:23:35.520 --> 0:23:40.000 for South Africa, and so you have to wonder whether 0:23:40.080 --> 0:23:42.600 or not this is a gamble the US actually wants 0:23:42.680 --> 0:23:47.000 to take, especially because South Africa is the US's biggest 0:23:47.080 --> 0:23:49.960 trading partner on the African continent. 0:23:50.520 --> 0:23:53.119 Yeah, and I suppose. Finally, then, do you think that 0:23:53.200 --> 0:23:55.960 there is any possibility that South African can try to 0:23:56.000 --> 0:23:59.159 mend its relationships with the Trump White House. 0:24:00.960 --> 0:24:05.800 We've heard President Ramoposa say he is up for negotiation, 0:24:06.520 --> 0:24:08.440 and I think that is key. 0:24:09.480 --> 0:24:12.080 We You know, the expectation was that. 0:24:12.240 --> 0:24:16.760 We were going to see Scott Best and Treasury Secretary 0:24:16.800 --> 0:24:20.040 next week attending the Finance Minister summit. But then also 0:24:20.160 --> 0:24:23.439 later this year, the expectation was that President Trump was 0:24:23.520 --> 0:24:26.800 also going to be here. We don't know yet, what 0:24:27.280 --> 0:24:31.040 this relationship looks like, whether he is physically in attendance 0:24:31.119 --> 0:24:33.359 or not. Though South Africa needs to pass off the 0:24:33.400 --> 0:24:37.320 G twenty presidency to the US for next year, and 0:24:37.400 --> 0:24:41.000 so there needs to be discussions of some sort if 0:24:41.000 --> 0:24:46.320 the US is to remain in the G twenty. But yes, 0:24:46.400 --> 0:24:49.040 you know, we've heard from President Ramoposa saying he wants 0:24:49.080 --> 0:24:53.200 to discuss and to talk about some of the critiques 0:24:53.320 --> 0:24:57.280 that we've heard from the US administration. Many people have 0:24:57.440 --> 0:25:00.320 criticized what we have heard from President Trump about his 0:25:00.440 --> 0:25:04.040 disputes over the land expropriation law, saying it is similar 0:25:04.040 --> 0:25:07.440 to what we see in other countries, and so you know, 0:25:08.280 --> 0:25:11.120 it's going to take quite a bit of mending on 0:25:11.200 --> 0:25:13.680 both parts. And of course we have to note that 0:25:13.960 --> 0:25:16.720 President Trump's very close ally Elon Musk, was born in 0:25:16.720 --> 0:25:19.600 Pretoria here in South Africa, so and he has some 0:25:19.640 --> 0:25:21.520 other advisors that are also from South Africa. 0:25:21.640 --> 0:25:25.960 So definitely one to watch for the next few months. 0:25:26.040 --> 0:25:29.240 Well, my thanks to Bloomberg's Jennifer Zabasaje for speaking to me. 0:25:29.359 --> 0:25:32.640 We'll have full coverage of the upcoming G twenty Finance 0:25:32.720 --> 0:25:36.440 Minister's meeting here on Bloomberg. I'm Caroline Hepka. You can 0:25:36.480 --> 0:25:40.040 catch us every weekday morning for Bloomberg Daybreak Europe, beginning 0:25:40.040 --> 0:25:43.000 at six am in London. That's one am on Wall Street. 0:25:43.080 --> 0:25:43.399 Tom. 0:25:43.760 --> 0:25:46.639 Thank you, Caroline. And coming up on Bloomberg day Break Weekend, 0:25:46.720 --> 0:25:50.120 we'll look at the status of US China relations. I'm 0:25:50.160 --> 0:26:03.719 Tom Busby and this is Bloomberg. This is Bloomberg day 0:26:03.720 --> 0:26:05.919 Break Weekend, our global look ahead of the top stories 0:26:05.920 --> 0:26:08.520 for investors in the coming week. I'm Tom Busby in 0:26:08.600 --> 0:26:11.320 New York. With the threat of even more US tariffs 0:26:11.359 --> 0:26:13.280 looming over China, this may be a good time to 0:26:13.280 --> 0:26:17.160 get a temperature check on relations between Washington and Beijing. 0:26:17.600 --> 0:26:20.080 For more, let's get to the host of the Daybreak 0:26:20.080 --> 0:26:22.400 Asia podcast, Doug Prisner. 0:26:22.400 --> 0:26:25.760 Tom and the week ahead. We'll get China's official PMI figures. 0:26:26.080 --> 0:26:26.280 Now. 0:26:26.280 --> 0:26:29.760 The pmis are a great way to understand sentiment in 0:26:29.960 --> 0:26:34.879 manufacturing and the service's economy. Bloomberg Intelligence says early indicators 0:26:34.920 --> 0:26:38.440 point to weak momentum in both. Now the headwinds for 0:26:38.480 --> 0:26:42.600 the Chinese economy have intensified since President Trump took office. 0:26:42.720 --> 0:26:45.480 For a closer look, let's bring in Jenny Marsh team 0:26:45.560 --> 0:26:49.000 leader for Greater China ECO GOV. She joins us from 0:26:49.040 --> 0:26:51.800 the Bloomberg Studios in Hong Kong. Jenny, thank you for 0:26:51.840 --> 0:26:53.639 making time to chat with us. I think we have 0:26:53.720 --> 0:26:55.679 to begin with the tariff story as a way of 0:26:55.800 --> 0:26:59.639 understanding where US China relations are at the moment. Is 0:26:59.640 --> 0:27:00.000 that fair? 0:27:00.600 --> 0:27:03.680 Absolutely, it's probably you know, the biggest sort of unknown 0:27:03.720 --> 0:27:06.360 factor right that's sort of hanging over the economy this year. 0:27:06.560 --> 0:27:08.680 We know that the US did hike tariffs by ten 0:27:08.720 --> 0:27:11.879 percent on all Chinese imports in early February. Is it 0:27:11.920 --> 0:27:14.200 fair to say that that came a little bit before 0:27:14.359 --> 0:27:16.680 Beijing was prepared for tariffs. 0:27:17.160 --> 0:27:19.800 I would imagine Beijing was prepared for tariffs on day one. 0:27:20.080 --> 0:27:23.080 You know, I remember that first day Trump took office 0:27:23.080 --> 0:27:26.080 and sort of actually the surprise was nothing on China 0:27:26.119 --> 0:27:28.439 on day one. Then of course on day two he 0:27:28.480 --> 0:27:32.240 started talking about tariffs. But you know, I think despite 0:27:32.280 --> 0:27:34.200 all of the sort of claims he's made about sort 0:27:34.200 --> 0:27:37.359 of tariffs on chips and steel and the threats with 0:27:37.400 --> 0:27:40.280 Canada and Mexico, China is the only country right now 0:27:40.600 --> 0:27:43.439 that Trump was actually enacted at tariff on since he 0:27:43.480 --> 0:27:46.080 came into office. And so while it's only ten percent 0:27:46.160 --> 0:27:49.040 right now. They are sort of actually the first in 0:27:49.119 --> 0:27:52.320 the firing line, and there's plenty more reason to think 0:27:52.320 --> 0:27:54.520 that more is to come with that April one deadline 0:27:54.520 --> 0:27:57.480 hanging over them for reviewing the first trade deal that 0:27:57.480 --> 0:27:58.200 Trump has ordered. 0:27:58.320 --> 0:28:01.040 Before we address kind of the US and A relationship, 0:28:01.080 --> 0:28:05.000 how is the impact of these US tariffs impacting sentiment 0:28:05.080 --> 0:28:05.919 right now in China. 0:28:06.520 --> 0:28:09.480 It's actually kind of interesting because you know, the trade 0:28:09.560 --> 0:28:11.080 has been there for a long time, but when you 0:28:11.080 --> 0:28:14.639 speak to economists and sort of people on shore in China, 0:28:15.080 --> 0:28:17.280 what they're actually talking about right now is Deep Seek. 0:28:17.760 --> 0:28:20.640 And so this sort of surprise AI breakthrough from deep Seek, 0:28:20.680 --> 0:28:23.560 which was the consumer platform, was unveiled the day Trump 0:28:23.640 --> 0:28:27.080 came into office. That has sort of given this massive 0:28:27.119 --> 0:28:30.200 sort of boost to animal spirits. So it sparked I 0:28:30.200 --> 0:28:32.840 think it was a one point three trillion rally in 0:28:32.960 --> 0:28:35.480 China stocks. And then she is trying to sort of 0:28:35.480 --> 0:28:39.000 capitalize on that momentum by meeting Jack mar for the 0:28:39.040 --> 0:28:42.800 first time since the crackdown on his company back in 0:28:42.840 --> 0:28:45.480 twenty twenty, and a whole other sort of range of 0:28:45.480 --> 0:28:48.760 sort of tech luminaries earlier this week. So I think people. 0:28:49.240 --> 0:28:52.640 The sort of the negativity from the prospect of tariffs 0:28:53.080 --> 0:28:55.080 is built in, and people have been very prepared for 0:28:55.120 --> 0:28:57.560 that for a while, and really they were facing a 0:28:57.560 --> 0:29:01.960 lot of sort of pressures under Biden too, So in 0:29:02.040 --> 0:29:05.440 terms of sentiment, it isn't this sort of gloomy, worried 0:29:05.680 --> 0:29:09.440 sentiment permeating China necessarily. What actually is capturing the mood 0:29:09.480 --> 0:29:11.480 right now is the AI breakthrough in this sort of 0:29:11.480 --> 0:29:14.520 momentum behind tech and finally some hopes that the private 0:29:14.560 --> 0:29:16.640 sector might be getting back into swing. 0:29:17.040 --> 0:29:19.520 So I'm understanding that as a way to say that 0:29:19.560 --> 0:29:23.080 she is capturing this moment to maybe make the case 0:29:23.120 --> 0:29:26.440 that China can be less reliant on its export economy 0:29:26.480 --> 0:29:29.280 and become a little bit more domestically driven on the 0:29:29.320 --> 0:29:32.080 demand side, which is something that he has been after 0:29:32.160 --> 0:29:33.880 for quite some time exactly. 0:29:33.960 --> 0:29:36.320 And the meeting earlier this week, you know, he had 0:29:36.600 --> 0:29:41.160 the bosses from buid Chow, me Deep Seek, you know, 0:29:41.360 --> 0:29:43.760 Jack Maler was there. It was really a display of 0:29:43.800 --> 0:29:46.960 like these all of our national champions which are rolling 0:29:47.000 --> 0:29:50.720 out well beating innovations. There's plenty of reason to believe 0:29:50.720 --> 0:29:53.479 in this economy. And they have said that boosting domestic 0:29:53.520 --> 0:29:56.000 demand is the number one priority this year, you know, 0:29:56.040 --> 0:29:58.479 and that is the best way they can insulate themselves 0:29:58.520 --> 0:30:01.000 from these tarves that are coming by really sort of 0:30:01.920 --> 0:30:03.240 reving up demand at home. 0:30:03.640 --> 0:30:07.520 So how would you describe the current relationship between Beijing 0:30:07.600 --> 0:30:08.800 and Washington right now? 0:30:09.320 --> 0:30:11.680 I think it's sort of in this holding pattern of 0:30:11.720 --> 0:30:14.520 wait and see. But on the surface of things, you know, 0:30:14.600 --> 0:30:17.880 you've got a US president who is very happy to 0:30:17.920 --> 0:30:20.240 be very sort of dubvish on Sijin paying in public, 0:30:20.600 --> 0:30:22.320 he calls him a great guy. He said that he 0:30:22.360 --> 0:30:25.800 thinks he's brilliant. So in that side of things, I think, 0:30:25.840 --> 0:30:29.520 you know, things are actually warmer than during the Biden administration. 0:30:30.200 --> 0:30:32.680 But obviously, you know, they have this trade war that 0:30:32.800 --> 0:30:35.960 is now underway, and I think for China they're really 0:30:36.000 --> 0:30:38.720 just sort of waiting to see exactly what it is 0:30:38.760 --> 0:30:41.400 that Trump wants. There are all kinds of reports out 0:30:41.440 --> 0:30:44.960 there sort of citing people who are advising Trump saying 0:30:44.960 --> 0:30:47.240 that he now is sort of thinking about this as 0:30:47.280 --> 0:30:49.800 a grand deal that he could strike with Beijing that 0:30:49.840 --> 0:30:52.440 would go beyond trade, So looking at all kinds of 0:30:52.480 --> 0:30:56.520 things like nuclear sort of weapons, rolling back those programs. 0:30:56.640 --> 0:30:59.960 So I think the silence from Beijing during this first 0:31:00.120 --> 0:31:02.920 month of the Trump administration has been extremely telling. They're 0:31:02.960 --> 0:31:05.600 kind of just sitting back and really waiting to see 0:31:05.800 --> 0:31:08.280 what Trump does, sort of what his biggest sort of 0:31:08.320 --> 0:31:10.479 demands are going to be from China, I think, and 0:31:10.560 --> 0:31:13.800 being very very careful not to provoke anything, you know. 0:31:14.640 --> 0:31:16.640 I think it was jd Vance who said overnight sort 0:31:16.680 --> 0:31:20.120 of criticizing Trump is one of the worst negotiating tactics 0:31:20.160 --> 0:31:23.040 that you could ever possibly try to do, and I 0:31:23.040 --> 0:31:25.400 think basically understands that, and you can see from state 0:31:25.440 --> 0:31:28.280 media they're being very very careful not to take any 0:31:28.280 --> 0:31:30.920 swipes or do anything which could sort of hurt themselves. 0:31:31.240 --> 0:31:33.240 One of the things that we've heard from the president 0:31:33.720 --> 0:31:36.720 is his intention on ending war in Ukraine. Can you 0:31:36.800 --> 0:31:40.600 imagine a world where China is a part of this conversation? 0:31:41.120 --> 0:31:45.080 Absolutely. I mean, it's really interesting because a lot of 0:31:45.080 --> 0:31:47.360 what Trump is actually in our sort of saying and 0:31:47.400 --> 0:31:50.080 agreeing to is kind of what China had put forward 0:31:50.080 --> 0:31:52.800 in this peace plan years ago that we was sort 0:31:52.800 --> 0:31:55.520 of derided in the West, but they basically sort of 0:31:55.520 --> 0:31:59.160 advocated for a frozen conflict, a ceasefire that obviously wasn't 0:31:59.200 --> 0:32:02.560 acceptable to UK because it would have involved seeding territory. 0:32:02.560 --> 0:32:05.440 But China's priority is always sort of just to try 0:32:05.520 --> 0:32:09.400 and stop the conflict, and so the deal that Trump 0:32:09.440 --> 0:32:13.320 is trying to strike with Putin is exactly that. And 0:32:13.560 --> 0:32:15.480 Trump himself has sort of talked about having a three 0:32:15.480 --> 0:32:18.840 way meeting with she, Putin and himself. So I can 0:32:18.920 --> 0:32:22.000 see China coming to the table. What China would offer 0:32:22.400 --> 0:32:24.680 in terms of a peace deal, I think is much trickier. 0:32:25.040 --> 0:32:27.160 You know, there have been reports that perhaps China could 0:32:27.200 --> 0:32:30.200 be involved in peacekeeping operations. I think you know, it 0:32:30.240 --> 0:32:31.920 does that in other parts of the world as part 0:32:31.960 --> 0:32:35.480 of the UN framework. I don't see any benefit to 0:32:35.560 --> 0:32:39.080 China for directly sending in troops, particularly with the risk 0:32:39.160 --> 0:32:42.240 looming that you know, this isn't Putin's sort of last 0:32:42.320 --> 0:32:45.240 rodeo in Ukraine. He came for Crimea in twenty fourteen, 0:32:45.800 --> 0:32:48.760 then he went back in in twenty twenty two. You know, 0:32:48.800 --> 0:32:51.360 if you've got Chinese peacekeeping troops on the ground and 0:32:51.360 --> 0:32:53.360 Putin makes another strike in sort of four or five 0:32:53.400 --> 0:32:56.320 years time, that would put China in a very different, 0:32:56.480 --> 0:33:00.440 different and difficult position with Moscow. So I think, you know, 0:33:00.600 --> 0:33:03.720 what China can actually offer really remains to be seen. 0:33:04.200 --> 0:33:07.960 I'm wondering if you look at the Trump administration's approach 0:33:08.040 --> 0:33:11.760 to Ukraine and you maybe draw a conclusion on how 0:33:12.000 --> 0:33:15.400 the Trump administration would deal with China visa VI Taiwan, 0:33:15.600 --> 0:33:16.560 is that a fair statement. 0:33:16.960 --> 0:33:19.320 I think that is one of the big questions, you know. 0:33:20.240 --> 0:33:24.840 I mean, China sees the Ukraine and Taiwan sort of differently. 0:33:25.040 --> 0:33:27.960 But essentially, if the message that putin that Trump gives 0:33:28.000 --> 0:33:30.640 to putin is you have a you know, there was 0:33:30.640 --> 0:33:33.440 a free pass to make this invasion. He blamed. He 0:33:33.560 --> 0:33:37.040 blamed the war on Zelenski, right, So if you're if 0:33:37.080 --> 0:33:39.560 you're cheating paying you know, how do you read that 0:33:39.560 --> 0:33:42.120 in the Taiwan context? You probably think, Okay, you're not 0:33:42.120 --> 0:33:45.160 going to get so much pushback. But I would say 0:33:45.600 --> 0:33:48.120 there's a lot more holding back the Chinese government from 0:33:48.160 --> 0:33:50.600 evade in Taiwan than just US pressure. You know, when 0:33:50.640 --> 0:33:53.000 you go to China and you speak to people there 0:33:53.000 --> 0:33:55.320 who sort of inform the foreign ministry and are in 0:33:55.360 --> 0:33:59.280 policy circles, I've never met anybody who thinks that China 0:33:59.480 --> 0:34:01.840 is on the very of invading Taiwan. You know, they 0:34:01.960 --> 0:34:04.840 much prefer this idea of a peaceful reunification and the 0:34:04.840 --> 0:34:07.080 way that the government is composed right now in Taipei, 0:34:07.160 --> 0:34:09.200 you know the KMT, which is more pro China is 0:34:09.520 --> 0:34:12.279 very very powerful. So it isn't to say that this 0:34:12.320 --> 0:34:14.920 is going to give shooting Pinks for a free pass 0:34:14.920 --> 0:34:17.879 to invade Taiwan, but it certainly gives them a lot 0:34:17.880 --> 0:34:19.080 more space to be bolder. 0:34:19.480 --> 0:34:22.920 So next month in China will have the annual Plannary Sessions. 0:34:22.960 --> 0:34:27.400 That's when the National People's Congress and the Chinese People's 0:34:27.520 --> 0:34:31.399 Political Consultative Conference hold their annual meetings. This is known 0:34:31.400 --> 0:34:34.839 as the two Sessions. Is it likely that the relationship 0:34:34.960 --> 0:34:37.719 between the US and China comes up for discussion during 0:34:37.760 --> 0:34:38.640 this period. 0:34:38.560 --> 0:34:41.480 Well, Foreign Minister Wan Yi will have his annual briefing, 0:34:42.239 --> 0:34:44.520 and that's actually one of the only times in China 0:34:44.560 --> 0:34:48.839 that any sort of senior official takes questions from foreign journalists. 0:34:49.200 --> 0:34:52.040 Obviously it's all very scripted and the questions are submitted 0:34:52.040 --> 0:34:54.560 in advance, But for sure the trade war will come 0:34:54.640 --> 0:34:57.440 up during that session. I imagine Wang Yi, who is 0:34:57.480 --> 0:35:01.080 a very very sort of seasoned top diplomat, he'll be 0:35:01.160 --> 0:35:04.279 very very cautious and how he responds, but it's going 0:35:04.320 --> 0:35:06.120 to be one of the top talking points I imagine 0:35:06.160 --> 0:35:07.399 behind closed doors as well. 0:35:07.680 --> 0:35:10.600 I remember when President She met with President Biden and 0:35:10.680 --> 0:35:13.360 San Francisco a while back, and one of the things 0:35:13.440 --> 0:35:16.760 that she aimed to do was try to increase foreign 0:35:16.760 --> 0:35:20.080 direct investment into China, and some of the latest figures 0:35:20.080 --> 0:35:23.719 that we have seen on inbound investment in China, I 0:35:23.719 --> 0:35:25.480 think it's the weakest start that we have seen in 0:35:25.480 --> 0:35:27.680 about four years. Right now, What do you think that 0:35:27.800 --> 0:35:31.279 China can do that will allow capital if this is 0:35:31.360 --> 0:35:35.239 even a possibility to allow capital from the US to 0:35:35.280 --> 0:35:36.560 flow into China. 0:35:37.120 --> 0:35:40.600 I think if they want to win back sort of 0:35:40.640 --> 0:35:44.480 the confidence of American investors, they have to stabilize the 0:35:44.520 --> 0:35:48.080 business environment. And you know, I think foreign companies, for 0:35:48.120 --> 0:35:49.880 a start, have been asking for a long time for 0:35:49.920 --> 0:35:53.040 a level playing field for their companies, so you know, 0:35:53.120 --> 0:35:55.640 the same access to sort of procurement and bidding on 0:35:55.719 --> 0:35:59.920 deals that state owned companies get, the same sort of preferences. 0:36:00.120 --> 0:36:04.320 So just stability, and that was really the big signal 0:36:04.360 --> 0:36:07.279 from she meeting Jack Marer earlier this week. Jack mar 0:36:07.320 --> 0:36:08.719 was sort of the face, if you like, of the 0:36:08.760 --> 0:36:12.520 regulatory crackdowns because he was the biggest target. I mean 0:36:12.560 --> 0:36:14.560 that meeting was sort of taken by economists to sort 0:36:14.560 --> 0:36:19.000 of signal that era of crackdowns is truly over and 0:36:19.160 --> 0:36:21.719 there's a stable business environment here. The government that's going 0:36:21.760 --> 0:36:25.399 to give private enterprises a free hand, take his full 0:36:25.400 --> 0:36:28.600 off the pedal and sort of really let enterprise flourish 0:36:28.680 --> 0:36:31.280 and you don't have to worry about raids on foreign 0:36:31.320 --> 0:36:33.719 consultancies or the rug being pulled under an industry you 0:36:33.840 --> 0:36:36.839 just invested in. With also the specter of a trade 0:36:36.880 --> 0:36:39.960 war hanging over by the actual ties, you know, it 0:36:40.080 --> 0:36:42.600 is a hard job that she has to convince American 0:36:42.640 --> 0:36:45.960 investors in particular and American companies they're welcome. I mean, 0:36:46.000 --> 0:36:49.880 particularly when the retaliation that China took towards Trump's initial 0:36:49.880 --> 0:36:53.719 tariffs included an antitrust probe into Google, and that was 0:36:53.840 --> 0:36:56.480 mostly symbolic because Google doesn't do much business in China 0:36:56.560 --> 0:36:59.560 right now, but it was a signal to other American companies. 0:37:00.000 --> 0:37:02.879 But if this continues, then you know their fair game 0:37:02.920 --> 0:37:04.719 in the tit for tat responses. 0:37:04.360 --> 0:37:06.640 Jenny, Before I let you go, I have to ask 0:37:06.719 --> 0:37:10.640 you about President Trump's advisor, Elon Musk. We know that Tesla, 0:37:10.719 --> 0:37:14.200 his electric vehicle company, has a big presence in Shanghai. 0:37:14.719 --> 0:37:19.360 What is Musk's relationship with Trump and Musk's relationship with Beijing. 0:37:19.880 --> 0:37:22.600 How does that kind of come together in understanding the 0:37:22.680 --> 0:37:25.080 dynamics that may end up playing out as we look 0:37:25.120 --> 0:37:25.720 to the future. 0:37:26.480 --> 0:37:29.080 Now. I think Musk is probably one of the most 0:37:29.120 --> 0:37:33.400 sort of dubvish on China voices in Trump's ear. And 0:37:33.440 --> 0:37:36.360 it's really notable actually that since Trump came to office, 0:37:36.440 --> 0:37:40.200 Musk has said nothing about China. In the interview bis 0:37:40.200 --> 0:37:42.600 Sean Hannity, there was one question that was put to 0:37:42.840 --> 0:37:46.080 Musk that was framed in China context, and he didn't answer. 0:37:46.120 --> 0:37:49.239 He mentioned the Taliban, I think in response. Instead, he 0:37:50.000 --> 0:37:53.279 has huge business interests in China, very very good ties 0:37:53.320 --> 0:37:56.040 of the Chinese government. When he visits Beijing, they roll 0:37:56.080 --> 0:37:59.080 out the red carpet. He gets meetings with Premier Li Chang, 0:37:59.640 --> 0:38:01.600 you know, and I think the Chinese government see him 0:38:01.640 --> 0:38:04.840 is a very very useful person in this administration because 0:38:04.880 --> 0:38:08.239 they have an interlocutor who is directly into Trump's air, 0:38:08.760 --> 0:38:12.000 who is a business person with huge interest in China. 0:38:12.120 --> 0:38:15.520 So someone who has a vested interest in maintaining business 0:38:15.560 --> 0:38:19.360 ties and who actually is aligned with President cheated and 0:38:19.360 --> 0:38:22.319 paying on many many sort of policy points, including their 0:38:22.320 --> 0:38:25.440 position on Taiwan. So I think for Beijing, Mosk is 0:38:25.480 --> 0:38:27.600 a very useful person and it'll be interesting to see 0:38:27.600 --> 0:38:28.600 how that sort of plays out. 0:38:28.680 --> 0:38:30.919 Oh, no doubt about that, Jenny. Thank you so much, 0:38:31.040 --> 0:38:34.320 Jenny Marsh, their team leader for Greater China ECO GOV. 0:38:34.440 --> 0:38:37.640 Joining from our studios in Hong Kong, and I'm Doug Prisner. 0:38:37.680 --> 0:38:40.719 You can catch us weekdays for the Daybreak Asia podcast. 0:38:41.120 --> 0:38:43.560 It's available wherever you get your podcast. 0:38:43.880 --> 0:38:46.520 Tom, Thank you, Doug. And that does it for this 0:38:46.680 --> 0:38:49.400 edition of Bloomberg day Break Weekend. Join us again Monday 0:38:49.400 --> 0:38:51.600 morning at five am Wall Street Time for the latest 0:38:51.640 --> 0:38:54.000 on markets overseas and the news you need to start 0:38:54.040 --> 0:38:57.440 your day. I'm Tom Buzby. Stay with us. Top stories 0:38:57.440 --> 0:38:59.959 and global business headlines are coming up right now.