tv Counting the Cost Al Jazeera January 12, 2021 8:30am-9:01am +03
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reported get out a virus case they are growing fears that this place would see the amount of space for victims of go with. government officials have confirmed they are down to the last dedicated area for those killed by covert at 2 of the biggest grave sites but they say they are prepared for any eventuality is part of our if it's in the 1st wave a number of loss images were identified we if needs be mysterious should be able to be accommodated it is important to me to add that mysterious is not an option we would like to make use of it's a tough situation and while some are able to give their loved ones a dignified sendoff others are left to wait and wonder if they'll be able to do the same items al-jazeera kept on. top a quick check of the headlines here on al-jazeera malaysia's king has declared
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a state of emergency with the coronavirus pandemic at the request of the country's embattled prime minister located in yasin says additional powers are needed to stop a surge in covert 19 cases critics though say it's an attempt by an unstable government to cling to power outages here as far as mary has more now from the capital kuala lumpur and we hadn't governed by a very very thin majority in parliament so there will be some up and there will be some politicians who see this request for a state of emergency to be declared and this has now been given that the king has now given consent to this request by the prime minister as an attempt by the prime minister to thwart a leadership challenge and i think you'll also find that civil society organizations and activists will be even more alarmed at the fact that parliament and state legislative assemblies will not be sitting during this time. u.s. house democrats introduced a resolution jump each president donald trump for inciting violence on capitol hill
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last week they're also urging the vice president mike pence to invoke the 25th amendment declaring trump unfit to hold office an f.b.i. memo leaked to the media is warning of a protest in washington d.c. in all 50 states in the days leading up to biden's inauguration president trump has approved an emergency declaration for the capital until jan of the 2024th security is being stepped up a week earlier than planned the national guard is deploying around 15000 troops trump administration has read designated cuba a state sponsor of terrorism a statement from the secretary of state mike on peo said cuba had repeatedly harbored terrorists. and the u.s. is also moving to designate yemen's who the rebels as a foreign terror group the u.n. has warned the decision to blacklist the iranian backed group could undermine peace efforts and make it harder to get humanitarian supplies to yemenis so those were the headlines the news continues here on al-jazeera after counting the cost of that
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so watching live from. the state sponsored spyware. and the discovery by al jazeera journalists in syria technology and small. system. is this the new frontier. think about the sophistication of exports to breaking the phone this is as good as it gets. the spy in your own interest there. hello i'm sam is a than this is counting the cost of al-jazeera your look at the world of business and economics this week 2020 a year to forget can the world bounce back from the worst economic contraction since world war 2. this rich countries corner of the vaccine market what kind of
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global recovery will there be without the world's poorest. and 1st into lockdown and 1st out china sets of course to become the biggest economy in this decade. 2020 not a year that many would like to look back and remember with any fondness shall we say hundreds of millions lost their jobs many millions succumbed to poverty and more than 1800000 people died from the pandemic the global economy contracted more than at any time since world war 2 with vaccines being rolled out in many rich nations there's a real sense of hope that they'll be a strong recovery this year well just to keep economies on an even keel governments and central banks spend a staggering 12 trillion dollars as countries stumble from one lock down to another global debt has soared though to $277.00 trillion dollars more than 3 and
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a half times the size of the global economy governments that aren't able to turn to international markets for money have turned to the international monetary fund and world bank the i.m.f. has provided about 100 $1000000000.00 to more than 80 countries and development banks led by the world bank have issued $75000000000.00. hope of a fast vaccine rollout could see a sharp bounce back to the global economy after a 4.4 percent contraction the i.m.f. is predicting growth of 5.2 percent this year one of the best performing economies was china it's already begun setting its sights on becoming the world's biggest economy this decade as china becomes more self resilient in the face of a u.s. trade war a new biden presidency is unlikely to relent on tariffs so walk away expect from 2021 well let's bring our guests into the show they've got decades of experience in
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guiding their clients through the economic and political landscape we have joining us from london macro hive chief executive bilal have fees also from hong kong catherine young investment director for fidelity international and from wilcher in the u.k. paul donovan chief economist of u.b.s. global wealth management good to have you with us everyone let's start with catherine in hong kong and so why is china done better than the rest of the world it's one of the few economies that is that's the mated to have grown actually in 2020 when we have been looking at markets especially last year and even this year there are 3 key drivers it's been focusing on so the flattening of the code because of the pace in sustainability of an economic recovery and finally policy response implementation and really china has got a tick in all 3 areas so in terms of the at reckitt really has been contained even though we do see the occasional flare ups albeit the board is still generally
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closed economic recovery wise to see a pick up manufacturing even in the retail sector the services sector exports have done well and then policy wise the pv i.o.c. really has bucked the trend this is not a central bankers so they've taken a very disciplined less aggressive approach in terms of supportive easing measures and it's likely that should we do. not since 121 they still have that skill set to support the economy should they need to or interesting so controlling your borders controlling your manufacturing base controlling the finances poor always saying that control the north or a tarion governments are sometimes better than liberal democracies in managing an economic crisis like this. but i think it depends on the nature of the crisis and of course we've seen liberal democracies handle this crisis extremely well if we look at new zealand for example you know i don't think you would even begin to
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describe the government of new zealanders authoritarian and they have managed the situation very well and their economy is showing the consequences of science so i think it's more about the prepare the preparation for the crisis the speed of the response and of course a part of the compliance of the local population that's also a key factor whether you can get your citizens to agree to restrictions and abide by them or not some of the city united states has had some problems in that regard interesting bailout we've questioned chinese data before are we doing that right now. well i think there's always a big question over the chinese data that said though when you do look at the countries dates in relation to china so for example if you look at a country's exports to china so you use other countries dates in relation to china you do generally see. in a proven in the economic picture as are the coded numbers you know that as you know
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that the way the carbon numbers are reported in china does bring some questions as to how they are reported nevertheless if you do look at the 11th activity in the economy level movement of people across the economy it does suggest that at least the overall the high level picture of the cape situation in china is accurate ok catherine talking about china and economic activity there aiming to double the size of the economy by 2035 that's a big goal is it possible catherine so she can bring analysis at the end of nasiriyah and his 5 year plan on the government so achieving that kind of growth we would have to see china grow roughly 4.7 percent per annum which is probably somewhat achievable to get the structural story behind china remains very much intact and by that i mean high incomes household wealth this is the shift urbanize
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a shift in the rise of the chinese consumer and this is why there's such a focus from a government level in terms of ensuring that growth is really underpinned on the domestic side of things and this is why we call it the jewel secular nation policy so really ensuring that there's a healthy employment market that we can see you see the 7 eyes ation and that we alleviate poverty as best we can in china what would happen what would the price of that be will we be looking at that level of something like $90.00 trillion or something you have to do to get in terms of the debt level no still an outstanding debt situation in china that hasn't gone away over the past 2 years even that markets of remain very very buoyant. but a lot of the deaths in some of the depots we're already seeing which again we should be surprise that have been very much managed by the central governments so in terms of how we're going to that she that growth over the next 10 years 5 years we're going to see some tax the forms being introduced and really again this focus on this domestic across economic growth coming so interestingly though you know we
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look at the savings rate in in china households and right that is it's gone from at 30 percent which is the harboring of the pos in the 5 years so 37 percent so we're not seeing household debt we increase that we are seen as the nation's poor few doubt that china is on its way to being the world's biggest economy soon will it happen this decade according to the traditional g.d.p. measure well i think the bond of china's challenges and one of the reasons i touched a little bit skeptical about sort of narrative is china structurally is very well positioned for the 3rd industrial revolution in the way its economy is is positioned it's going to face all challenges in the 4th industrial revolution because effectively it's got to say well yes this is work very well for the last quarter century but it's not going to work at all in the next quarter century dealing with a world which is small localized. where you take knowledge actually isn't what's
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important it's the implementation of technology which is very much about human capital and labor flexibility and so on and so forth so i think china has got some challenges ahead in adapting its economy accepting that the model that has worked extraordinarily well over the last quarter century now has to be entirely thrown away but certainly dramatically revised if it's going to deal with some of the very very significant structural shifts which lie ahead revised how paul. well i think. we need to see a focus on higher education in particular china has benefited over the last few years by having a relatively high proportion of students who studied overseas returning bring their knowledge and expertise but china that may be more problematic in the future we have we're seeing already restrictions on student visas for example the focus on exports is clearly got to shift i think that localized sation is not going to
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happen overnight i mean the evidence suggests that something which gradually occurs over sort of a 4 or 5 year period but we are clearly going to be moving towards localization because it just makes economic sense to do that and with that again china has got to start focusing on producing for its domestic economy and perhaps less about producing for international economists interesting that bring this kind of back to the point catherine was mentioning and catherine i'm wondering do you think talking about restrictions on china and focusing on the domestic market you think a biden presidency is going to remove some of those tariffs i guess of you know sony could be pushing china further in that direction of being in with looking right now the status quo is probably not going to shift dramatically in and really when we look at most economies around the world a lot of them are recalibrating or reassessing their trade agreements with each other forgetting that tickles point about the focus that the chinese government has in terms of the structural growth story this is why the government thinks in such
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an end it's on innovation and it's not just in the tech sector there are consumer related names across all segments materials industrials and energy etc they know that they have to really increase that r. and d. from the educations poor so really climb up that band and continue manufacturing enough higher end names all right let's broaden the out to other trade issues not just between china and the u.s. what can do you think bill our we can expect from a biden presidency on trade issues with others the you and so on trump has left biden with a lot of leverage you could say. yeah yeah i mean it's there of the trumps have disrupted some your relationships you know and instead moved away from multilateral arrangement with allies and much more towards bilateral arrangement and then the tag mystic relationship with allies think biden you know at least from what he says you know we'll try to go back to what we had during the a bomb a error in the sense that there will be or not just the obama era the earlier us
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position which is to support allies so that's the e.u. japan countries like that and try to engage with them to can you know contain more adversarial relationship such as with china so i do think there will be more multilateral approach you know and which will mean a reversion to what we saw before before president trump but the difference this time is i think the antagonism towards china will continue although the form in which that's expressed will be somewhat different to the way president trumping gage with that so i think the key thing for biden will be to try to engage europe to have a united front in relation to china and pull building that united front with europe will the price of that be dropping some of the disputes the tower of switch the u.s. has slapped on european on the european union over things like aircraft subsidies well i think there's an instinct point here of course because the treasury
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secretary nominee yellen is of course a highly competent economist. and we haven't had a highly competent to call of us just treasury secretary for a while now the whole question of tariffs i think it's very difficult to see. intellectually as it were supporting terrorists i think she knows they don't work i mean trade taxes just don't book and so i think that there may be some shift out how the part the ministration tries to apply trade policy we know that that trade tax is going to stay for the time being but i think with yellen in charge of the treasury there may be a shift of emphasis on. yes perhaps work in a multilateral way we know for example on digital taxes the bike demonstration is quite likely to reopen the o.e.c.d. move here and try and come to some kind of multilateral agreement which is not the way that the trumpet ministration has been working and so weak we could see some progress there as well i think all right we're kind of looking at things though
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from the perspective of the u.s. policy towards the e.u. and mending its relationship with the e.u. catherine does the you want to how far does the e.u. i guess want to look towards faith in washington given what we've seen going on in the china investment deal what does that tell us i think that that deal was was really telling and that they beneficial for a lot of the european economies so you know again i mention my earlier point to barracks and lot of economies are reassessing next revelation ships is another that is that is probably going to be a key thing that 2021 in this regard right bill our looking at biden's new economic team he's got more women people of color minorities does that do you think indicate in terms of the biden economic policy more of a prioritize ation of some of the economic challenges and issues which for want of
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a better word we could say the minorities face yes i do think that is the case and you know it's perhaps not just about minorities is probably more related to a larger issue of inequality you know which has been the challenge plaguing many many economies and each political parties try to address in different ways a president trump you know followed a very you know anti immigrations of stance you know towards that to try to address this and and so by ministration i think will try to tackle this inequality issue in multiple different ways you know one for example will be through you know various government broke programs increase fiscal spending you know the. these checks that we talk about during the pandemic you know $600.00 to $2000.00 those sorts of things there's questions around or whether student debts will be forgiven or not so that's another thing that's been quite onerous is health care reform which is you know a big impediment for for people at the lower rungs of society and then there's kind of a larger issue around climate change as well so while this is not directly related
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to inequality it does kind of go to a broader issue on the left side of what politics trying to address climate change as well or i pull bring this all together then foreswore we've been saying so far in the show an attempt or an effort maybe to address inequality global trading powers trying to make up to a certain extent multilateralism coming somewhat back on track does this mean we're looking at a bounce back for global economic growth or do you think unemployment is still going to be a challenge so i think we are going to see a bounce back and on employment is going to be a challenge to typical economics also your on hand and on the other you get a bounce back because last year was an aberration. as we move out of the period of restrictions in europe for example in the probably early 2nd quarter we start to see those restrictions softening as consumer confidence comes back you will see i
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think a far more bracket acceleration of growth than that i believe it around back though to precursor economic levels paul well that's so that's where the unemployment problem comes in because all this happened with the pandemic is in mind you this is accel orating structural change in the economy structural change is going to happen anyway the 4th industrial revolution was already underway but it's being accelerated by the pandemic now the issues there is that industries that were a gradual decline are now in rapid decline and you're creating unemployment and so forth and spare capacity so i think it is unlikely that we are. to be getting back to 2019 levels of economic activity until probably 2022. and for me the bigger issue it's not really the cyclical recovery because the parts of the economy that are able to recover i think are going to recover just fine the problem for policymakers now is that is how do you deal with the structural
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challenges of employment in dying industries for example how do you go about retraining how do you go about getting your economy to make the most of the way the world is going to work the way the world has been working i'm curious to know bill out with this kind of structural shift accelerating that we're talking about does that mean for the green economy does it mean we accelerate quicker to a greener economy than pre covert expectations and if so why yes i think it does you know this is probably the one area in which you know if we honor our image of structural change this is the one area in which the government can step in and try to support and grow the segment of the economy related to the green sector and so this could be you know one of the ways where as paul was mentioning there will be people who lose their jobs in this 4th industrial pollution and those people could be retrained into the green energy sector i mean at the very basic level you know
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while we kind of think about technology and green renewables and so on there will be a an infrastructure bill that's required you know to build a green energy system and that will require construction that required building that require that will require manual labor as well so i think this will be a big push by you know government sat at all all levels to try to encourage this this part because we need something of a reality check here a lot of countries have borrowed a lot of money during this crisis housing can be paid back is austerity going to cover the bill. that's the biggest question and probably the uncertainty which the markets especially last year were probably not really factoring in given the heart of many equity markets were posting i mean inflation is also going to come back on the table so whilst oil did have a for the 1st time the corsair last year it did rebound and in fact saw commodities so showing some good price movements in terms of strength so i think definitely
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inflation is something that hasn't been discussed that will come back on the table and as you rightly pointed at rest gins insulations about all this outstanding debt and who would have a game where it needs to be addressed paul how do we ensure that the poorest nations don't miss out on growth when the reality is it's the richest nations which of kind of cornered the vaccine market right now haven't they. that's certainly true. it's a complicated issue because of course the virus itself doesn't actually do the damage to it to grow fits fear of the virus that is is doing the damage so if you create an environment where your fear is all contained. you potentially your growth comes back if you can see this for example in the united states which has far fewer restrictions and therefore has stronger economic activity i mean the case numbers the whole time what she writes in the united states is just as if not worse than europe but because the fear level is different
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you end up with a different economic response so i think when we're talking about the vaccines that reduce fear in europe and allow mobilization but it may well be that in emerging markets we still continue with the regrettably high caseload but people adapt and get on with their lives regardless in which case the same with the united states you would get stronger economic activity coming through catherine do expect central banks then to continue to provide huge amounts of liquidity and if so for how long. probably especially if we didn't see a pickup in an economic recovery from a global perspective but as a set of inflation comes back then we would have to stop thinking about monetary policy names and this is all really xstrata by the way so as we highlighted earlier in the show if we are to see improving g.d.p. growth in china i would have a level it will probably mock the point where you start seeing the pv i see move
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towards more of a tightening stunts whether it's about the liquidity situation because again i was there have is that some debts to ration that we need to resolve in china but there is a different point as most of the central bank is now i mentioned that we do believe that the p.b.'s c. has the necessary tools that this play in monetary should we do see some downside in terms of economic level growth but in general we're probably going to see in the foreseeable future central banks around the real x. trying to continue the path that they have been on all right and bill our we've seen in china stocks adding almost 5 trillion u.s. dollars that's about the size of the japanese economy is now finishing the year on record highs we've seen that you know with markets around the world is this reality or are they detached from reality yeah i guess that's that's the big question i mean my my my kind of sense at the moment is that it's a bit of both my bias is to you know say that it is not entirely detached from
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reality in the sense that the structure of the stock market is different from the structure of the economy number one so what the stock market represents isn't a direct reflection of the real economy and if you look at the components a b. looks like the u.s. or even china big tech is a big component of these indices and big tech in many ways is kind of capturing all the the positive gains and structural changes that we're seeing in economy you know there's a greater adoption of technology there's a greater requirement for so big data networks and those sorts of things and these big companies all come. capturing those sorts of things so in that sense it's not detached from reality moreover we have kind of the fundamental issue of as you said you know in traits are incredibly low so as results kind of the value of those stocks you know starts to go up you know those dividends that companies can give you you know look more attractive with interest rates so low there's a basic issue of asset allocation investors are trying to you know capture some
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kind of return and if bonds are community of rights as they are many cases then then your alternative really is equities or i is sad that point now in the show we've got a minute left so i'm going to ask everybody to get out there crystal ball let's start with paul and asked everyone to give us a prediction of what we think the economic landscape is going to look like for 2021 you've got your crystal ball ready paul so i think it's going to be a soft. as we still to deal with the virus the rollout of the vaccines probably a stronger bounce back in the 2nd half people always underestimate the ability of humans to adapt in the face of adversity and i think that that will give us a stronger bounce back ok a positive note there is that shared by you catherine in hong kong it is indeed in and just from a market perspective i think that china's going to outperform those in an absolute silence in a relative sense or b. i do think we're going to start moving away from this very crowded trade the it's
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not just in china but around the world like for example and the internet the big tech names a tesla etc and you will start seeing diversification into the unlocked sectors into names that are still delivering on the earnings but have been ignored because of the crowded trade mentality oh i interesting what is your 2021 vision look like then be allowed yeah that i'm going have to be somewhat boring and agree with paul and catherine that i think in the end will have quite a positive you know your speciality go towards 2nd half i suppose the one kind of contrary view i do have is i don't really think inflation will be much when. to the sea i think inflation world remain quite low over the course of this year mainly because unemployment's going to be very high but also because one of the largest drives in the service sector you know doesn't really have much pricing power especially in kind of a post by demick world let's thank our panel then from london macro hive chief executive bill i'll have fees from hong kong we have katherine young and of course
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from will too in the u.k. paul donovan thank you all and that's our show for this week there's more for you online that al-jazeera dot com slash c.t.c. that'll take you straight to our page which has entire episodes for you to catch up on. that's it for this edition of candy were cast i'm sam is a than from the whole team here thanks for joining us the news on al-jazeera is next. frank assessments you got colleagues on the ground in the canaries what is the situation there's only one doctor and one nurse for 2200 people and in-depth analysis of the date global headlines. inside story on al-jazeera. as the sun goes down sally bercow is a very challenging place to work from i think you're always thinking. part of the plan from moscow we can't really love we are grappling the extra mile where are the
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media the only goal we go the. invitation to bear witness to that life office the hugs the lives the unseen movements and every day miracles witness on al-jazeera. hello i'm down in jordan and with the top stories on al-jazeera malaysia's king has declared a state of emergency over the coronavirus pandemic at the request of the country's embattled prime minister macedonia since says additional powers are needed to stop a surge in coronavirus cases there as foreign snow is in the capital kuala lumpur she says the prime minister's opponents see the move as an attempt to silence calls for a stop election
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