♪ >> begging for war. the u.s. says the strongest possible sanctions on north korea are appropriate to end its nuclear ambitions. >> the yen and gold rising further on food -- renewed tensions. pyongyang may be preparing another icbm launch. struggling.still >> bitcoin tumbling after china declares initial coin offerings illegal.

>> hello from sydney where it is just past 8:00 a.m. betty: it is just after 6:00 p.m. on this labor day holiday in new york. the top story today, the tensions that continue to rise after north korea's nuclear test over the weekend. the u.s. calling for the strongest possible sanctions on pyongyang, saying kim jong-un's regime is begging for war. that is from nikki haley, u.s. ambassador to the u.n. this is expected to be a holiday weekend. it has been anything but for the president and his aides. spoke to trump' his south korean counterpart hours after the test by north korea. what came out of that conversation?

>> they made a couple of agreements. the president agreed to support south korea putting larger warheads on its ballistic missiles. what thegreed to allow white house said would be of news of dollars worth military quitman to south korea. they agreed in principle to stand united against the north korean threat. hear howm curious to that conversation is being played in south korea. it certainly sounds like the president here giving his go-ahead of seeing more of a shift in military strategy from south korea. is that what we are seeing in south korea? >> if you look at the local media here, the defense ministry did speak out about this. the president has been facing a lot of pressure even in his own government to try to change the strategy towards north korea. a lot has changed since that sunday nuclear test, potentially

changing the game for soul in general. we have heard from the president saying he is in favor of cutting crude supplies to north korea. that, aalked about contentious issue for the president. he was against the program during his presidential run saying he was fearful this could .nger china yesterday that the u.s. and south korea are discussing sending a carrier group and strategic bombers to the region shortly after we learned the south korean intelligence officials predicted another ballistic missile launch could be happening sometime in the next couple of days possibly. we know that north korea likes to pick pivotal days and

milestone days, september 9, the founding day for north korea, that is one to watch as well. as many as four of those thaad defense systems could be deployed soon after south korea conditionally approved the environmental impact report, also a key administrative hurdle cleared now as well. not exactly a restful labor day weekend for those in d.c. what sort of announcements should we be waiting for? >> the president's options are almost uniformly terrible. conductot -- he cannot a military attack on north korea without the approval of south korea because it is within range of north korean artillery. sanctions don't seem to be getting him far. diplomacy does not seem to be getting him far. he cannot start doing things

like sanctioning chinese companies without risking a trade war with our largest trading partner. there is nothing on the table that is a great tool to leverage north korea into better behavior. nikki haley, the u.s. ambassador to the, she was saying north korea is begging for war and they will be putting together a draft sanctions voted on by september 11. to bring up the tweet she sent out afterwards, she said -- 24 years of failed talks is enough. that is a tweet she sent out just hours ago. what further action might we expect that will be voted on, on september 11? can don't think the u.s.

practically expect much to come out of the security council. i don't think they will get very far if they try to coax china, which is north korea's biggest business partner, into voting for sanctions against chinese companies. that is just not going to happen. the u.s. would have to do that unilaterally. i would not expect much more from the security council than stronger condemnations of north korea's behavior. maybe some tightening sanctions at the margins but limited just to north korea, not to other countries. saying we aree expecting the deployment of the thaad missile defense systems with military reinforcements coming from the u.s. as well. is there a sense of heightened concern where you are on the street? becausesiness as usual this is the kind of clout they are used to living under?

on the surface, you kind of feel things are back to normal on this tuesday morning. you talk to people in the streets and get the feeling something feels a little different this time around. the fact we are talking about oil sanctions, the fact this is the sixth nuclear test, the most powerful coming out of pyongyang on sunday. i alluded to it before. it seems like the south korean president is swaying more toward military measures now over the dialogue he had stressed he wanted to maintain with pyongyang. if you read between the lines, the rhetoric he continues to push forward when he speaks to media or the government is we will continue to ratchet pressure on north korea. we will continue to work with japan on doing so, a whole new level as they say, until north korea agrees to talks.

there is still a little hope for some time of useful negotiations as well. betty: before we go, we had those reports and then confirmed it looks like north korea is making preparations for another icbm launch. we don't know when that might be. do we expect any different kind of response if that happens? >> we have already seen some show of force from south korea. yesterday, the live fire exercises from the air to the ground. we have seen a show of force coming from seoul in particular. right now, i think it is more of a wait and see approach. we have not heard a lot coming from the north as well as from the south korean intelligence officials. they have not put a time frame on when that date will be. the key september 9, this saturday. it is the founder stay in north korea.

also, october 10 is another key date intelligence officials are watching for. that is the ruling party's establishment day as well. betty: thank you so much, yvonne seoul. and alex joining us as well. equity futures are up and running now in the first few moments of trading. very thin volume. down about .3%. building on the declines we saw yesterday after the north korean headlines. you can see the safety trade well in place. the yen strengthening against the dollar. end goal futures continue to move higher, they are up over .5% to 1330. haidi: absolutely. it has been quite orderly so far.

we will see what the session for asia has in store. lower off bypening about .1%. australia, going into the rba meeting where traders are not expecting them to move on interest rates but passing the statement on when tightening may begin. futures looking to open higher by about .2%. the aussie dollar fell the most. as betty mentioned, it was the yen and swiss franc that outperformed the others. let's get you caught up to date with news headlines from singapore. >> bitcoin tumbled the most into a half years after china's bank said initial coin offerings were

illegal. they ordered all fundraising activity to be halted immediately and said there will be harsh punishment for any offerings in the future as well as for those already completed. bitcoin fell by more than 14% on monday, most since january 2015, before recovering in early trade tuesday. the u.s. house will vote wednesday on a hurricane harvey relief bill that will not attain language aimed government debt. republican leaders are bowing to the demands of the most conservative members and will not combine legislation which would raise the debt ceiling. the harveyville would provide -- the harvey bill would provide from west $8 billion in aid. a senior lawmaker has hinted september 21 may be the day theresa may gives a much anticipated brexit speech. a u.k. official has told bloomberg the date given by the european parliament coordinator is wrong.

ma isy due to give a follow-up on brexit.ary speech bloomberg has been told the hong kong monetary authority has asked banks in the city on details for a loan. sources say the lenders were asked to report on total credit extended and outstanding loans to two companies. chinese regulators have been stepping up scrutiny of the companies behind last year's unprecedented foreign takeover spree. global news 24 hours a day. 's is bloomberg. -- this is bloomberg. haidi: thank you for that report. we are looking at the rba meetings. >> that is right. no change expected. all 27 economists surveyed say so. there have been encouraging

signs recently. we have data suggesting forecast business is up. we've seen that strength in the jobs market. most of the jobs added are full-time. encouraging trends. where is the wages growth? that is weighing on consumer sentiment. household debt at 190% of income. it is unlikely the rba would want to cut further in this environment, would not want to encourage more borrowing under these circumstances. no move expected from the rba. it is in a bind. you cannot really go in any direction. we are on language watch, looking at language around what is happening with the local economy, global economy, and remarks on jobs and wages growth. traders not pricing in any movement until 2018. haidi: the rba stuck between a rock and a hard place. the head of the largest online travel agency tells us about the

plans for global expansion and how chinese tourists are changing the industry. betty: south korea's former ambassador to the yuan giving us his take on escalating tensions with the north as the u.s. calls for the strongest sanctions possible. this is bloomberg. ♪

♪ betty: good morning. i am betty liu in new york. haidi: and i'm haidi lun in sydney. you are watching "daybreak: australia." nikki haley spoke to an emergency security council meeting called after north korea tested its most powerful nuclear device. she says the time for half measures is over. is ang us from seoul university professor and former south korean ambassador to the u.n. a pleasure to have you with us.

time and time again, we have seen pyongyang across so-called redlines with impunity. what makes it different this time? how does the international community react? >> i think by now, redlines don't matter much anymore. i think with the international community should be considering is whether or not [indiscernible] haidi: professor, what do you think is the best course to deal with this? there has been a lot of analysis over the last few days saying the u.s. has no good options. china really has no good options. what is the best way to deal with this? should china impose tougher sanctions? >> the security council just met. i think probably they will come

up with further strengthened sanctions. all the countries concerned should do our best to implement these sanctions so that north , when it tries to turn around, they will find they economic for development without giving up [indiscernible] sanctions should be effective enough. betty: i want to pull the chart for our viewers. i am sure it is when you are familiar with. it basically tallies up on my terminal. i know you cannot see it. it shows in red bars how many missile tests have been launched by north korea. you can see since december -- since 2015, the number has risen

and gone astronomical within the last 12 months or so. what do you think kim jong-un on really wants? you know this country and south korea so well. what do you think kim jong-un really wants? >> kim jong-un, i think he wants to have full nuclear capabilities. fact that there are tests for bombs or missiles, the tests are increasing. that means they are very close to getting what he wants or they already have it. he wants thatdor, nuclear capability. that is frustrating and completely unacceptable to the u.s. and other allies. i want to play for you what nikki haley said about

exhausting diplomatic channels to deal with kim. >> the time has come to exhaust all diplomatic means to end this crisis. that means quickly enacting the strong as possible measures here in the u.n. security council. only the strongest sanctions will enable us to resolve this problem through diplomacy. we have kicked the can down the road long enough. there is no more road left. betty: i get confused by those comments, ambassador. on one hand, you hear the diplomat saying we had exhausted all channels and enough is enough. but then they say we have to continue to find the mac ways to deal with north korea -- diplomatic ways to deal with north korea. which is it? have you exhausted all channels or are there more to go? we have to keep strong

sanctions in place right now. still, there are things we can embargo -- oilll embargo. what nikki haley any south korean ambassador said, we should make the sanctions really biting so north korea will have to make a choice. ambassador, thank you so much for joining us. university professor and former south korean ambassador to the u.n. we will have much more analysis on the tensions on the korean peninsula. we will be joined by the former u.s. ambassador to china. max baucus is joining us in about an hour. this is bloomberg. ♪

♪ betty: good morning. i am betty liu in new york. haidi: and i am haidi lun in

sydney. you are watching "daybreak: australia." we have been talking about the continued rise of the coin -- bitcoin. that is helped along by the idea of it becoming an actual haven. we have seen it touch as high as $5,000 this year. china saying initial coin offerings illegal and asking for all activity to be halted. it is a strong challenge to the rise of bitcoin. we spoke with mark mobius. he said given bitcoin has the appeal for disreputable types to do business, he is not surprised regulators are going to come down hard. take a listen to what he said. >> with u.s. treasury trying to shut down terrorist financing and access to the dollars in banking, the terrorists, drug lords, and others are moving in

other directions to have some liquidity and ways of moving money around. these cryptocurrencies are ideal for that purpose because there is no traceability. i believe governments will definitely crackdown on these. haidi: perfect timing. and perhaps not surprising it is china that had to do it because it has such a big market and wildly speculative market. betty: absolutely. china is such a big player in these cryptocurrencies. in the u.s., the sec is looking closely at the home market, in particular the ipo's, sort of like ipo's for bitcoin, which as you mentioned is susceptible to all sorts of the various things -- nefarious things, including money laundering and other scams of that sort. as you mentioned, that has not stopped lots of people from going into these cryptocurrencies. and even during the geopolitical tensions, going into them even

more. i want to pull up a chart which shows you bitcoin compared to traditional safe havens like , bitcoin inyen purple has become this safe haven of choice, which i don't really get because if you are trying to keep your money safe, we should be putting it under a mattress and not into another riskier asset. i don't get this. haidi: i know. if you look at the chart that compares the bitcoin bubble against other bubbles in the past 20 years, it goes straight up. nothing compares to what we have seen. it is interesting. there is increasingly more people saying keep your money in cash and put it under the mattress. someone said he is holding 30% in cash at the moment. betty: that is right.

make that work for you. make cash work for you. hobson has some investments. about 7% of the money in her portfolio in cash. this is the time for those willing to take the risk to take the opportunity in these markets. it depends on how much risk you are willing to take in these times. haidi: absolutely. now more than ever, active investment has a crucial role to play. taking a look at how we will set up for the asian open this tuesday, there is a lot of waiting and seeing as things with north korea develop. on the to see intelligence from seoul saying they are preparing another icbm test potentially over the next few days.

we will be watching that story, our top story. next, we look at the rba decision today. my aussie households are still struggling even though businesses and the job market are getting their mojo back. this is bloomberg. ♪

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it is 8:30 amn sydney, where markets open in 19 minutes time to read a little bit of positivity. up by .2%, going into the reserve bank of australia meeting later on today. i am haidi lun in sydney. to take bige wants positions right now. i am betty liu in new york, where it is 6:30 p.m. you are watching "daybreak australia." haslinda: the u.s. ambassador says north korea is begging -- the latest nuclear tests. nikki haley called for the strongest sanctions on kim jong-un's regime. the white house says president

trump spoke by phone with the south korean counterpart, moon jae-in, trying to pressure the north koreans with all means at their disposal. >> the stakes could not be higher. the urgency is now. measures andalf failed talks is enough. haslinda: the chinese and mexican presidents have placed to defend multilateral free trade come up on the sidelines of the summit. and make it pena nieto told xi jinping -- themberg has been told latest round of talks is nearing conclusion without any major breakthroughs or new agreements. the person who was seen as president's policy architect says he is stepping down to prepare for the polls. they set this nation for a

broader reshuffle. the successor is expected to be city mayor. they will provide emergency funds to lenders following the bailout of one of the country's biggest private banks. lenders with liquidity problems can turn to the new facility. of russia's biggest private banks, which had to be rescued after a credit rating cut triggered a run joy global news, 24 hours a day, powered by more than 2700 journalists and an hundred more than 20 countries. i am haslinda amin. this is bloomberg. thanks so much for that. of course, day two, and getting this report through saying japan is planning for the possible mass evacuation of almost 60,000 of its citizens,

japanese citizens, living in or visiting korea at the moment. that would be in the situation the u.s. decided on a military strike against north korea. japan would move towards an regulation. that is according to the nikkei news. contingency planning. these reports late yesterday out from seoul intelligence showing north korea may be planning another icbm test, so we are waiting for more details on that. take a look at how we are setting up in the asian session. new zealand opening lower and continuing to build on those losses. we are up .1% at the moment. the kiwi dollar at 7162. we do see your classic asian players. the yen jumping the most in three weeks. futures in australia ahead of the rj decision. we are not expecting a move from the central bank, but certainly parsing that language. any commentariat -- commentary.

sydney futures looking to open up by 11 points, and that is how the aussie kiwi hurray is sitting at the moment. a bit more broadly, strengthening in the yen. we have been around that high 109 handle all morning. the u.s. 10 year yield unchanged . we had that labor day holiday, but as an have been showing declines. let us get more on what we should be watching up a start of trading asia. we have bloomberg's james thornhill with us. it is decision based on the rba. what are you watching for? james: that is where they have been since august 2016. if we look at the terminal on the chart, g #btv 4491, illustrator nicely the dilemma the rba is facing. it is caught between a pickup in business spending and sentiment and on the other, consumers struggling with stagnant wage growth and record levels of household debt.

theas been accelerating for last couple of years, so the bank is going to be waiting for signs of a pickup in that consumer spending before they pull the trigger on higher rates. the market does not see that happening until at least the second half of next year. as we mentioned earlier, another thing to look out for is anything on the aussie dollar. you rememberif last time, they warned that an appreciating -- if you consider from the last meeting in august, the aussie has not done a hell of a lot. it has held relatively steady. we are likely to get a repeat of that this time. betty: certainly the conundrum for the strengthening and the function ofr, the the declines we have seen in the u.s. dollar as well. james, how our markets shaping up overall at the open after falling pretty much across the board on these north korean pensions? -- tensions? james: we will get a first look

respond how they to this test in korea. my sense earlier this morning is that we are still in a flight risk off mode. heidi was mentioning that the reports on nikkei about the japanese plans will not help sentiment either. i think we are in a little bit of a wait and see mode. clearly, kim's move at the weekend was very provocative in terms of china with the meeting taking place. it will be interesting to see if china comes up with any more commentary or statements in the next day or so. be waiting to see their response clearer. i think, if things do start to therewn in the next day, will be scope for some buying opportunities down there. i mean, one illustration of the risk aversion we have seen his gold prices hitting 11 month high overnight. stock valuations already pretty high anyway. take much to put it

back in cash. we will probably see a slight continuation of this risk off sentiment in asia today. anchor: today, but as you say, maybe wait a few days and there may be risk takers out there. james thornhill in sydney. we have plenty more to come on "daybreak australia." this is bloomberg. ♪

haidi: i am haidi lun in sydney. betty: i am betty liu in new york. you are watching "daybreak australia." volkswagen is reportedly halting efforts to sell its to cut a motorcycle unit in the face of trade union resistance and internal strategy dispute. vw has received five bids as 1.8 ducati at as much

billion dollars. vw purchased the italian brand for over $1 billion. see it chrysler's ceo says the company will push ahead for the separation of its unit after it failed to secure a tie up deal with another carmaker they told bloomberg some aspects of the component business do not belong under the group and must be purified from the assets. he is leaving the company in 2019. betty: boeing has won the backing in the long-running trade dispute. overruled an earlier finding that a $.7 billion in tax incentives awarded by washington late broke subsidy restrictions. the e.u., which back airbus, has been claiming unfair competition . two other cases are still pending. back on the markets, of course, we are waiting when the major market open in a little under

1.5 hours, whether we will see the widespread selling we saw yesterday. let us pull up where the yen's trading, which of course is in the favored currency as a safe haven trade. it has beenan see, strengthening all year long, and of course, also saw that did to the news of the north korean nuclear test over the weekend and continues to see a bid today. let us get more on the currency market with steven dennis, the currency trader and analyst joining us from singapore. great to have you back on again. have seen this safe haven trade. we have seen investors going through gold and particularly into the yen and the swiss franc. yesterday, you had quite a few market participants saying this is going to be a transitory move still. do you get that feeling that safe haven trade is going to be transitory? guest: it is interesting. there is never --

these headline risks are continuing to come out. i think this is what the analysts are looking at as we go through this. traders are adopting this also "this will pass" attitude. device isnuclear raising major issues globally right now. i think these headlines are going to stay a little bit longer than most will believe and we could be in for a little bit more downside than upside in whatear term, so this is we are planning for going forward over the next couple of weeks. betty: you're starting to see some of that play out here in the yen in terms of the shorts against the yen, stephen. g #btv 8080. the net short positions have been astronomical over the last several months. you can see hedge funds are

starting to pull back their shorts right around here in august, given these geopolitical tensions ratcheting up of rathere are really statements between the u.s. and north korea, but even so, i am surprised at how much shorts there are against the yen. you expect there is one to be any kind of pullback by any means in the near future? stephen: i think what it all boils down to is the fact that traders continue to trip over themselves, trying to get short dollar-yen, login during long yen during headline risks. what the bigger fronts are banking on, that there is going to be a reluctance of these funds to come back in because we had been down this road before, and anticipate the headline risks to abate and risk sentiment to

return, and that should play favorably in the dollar-yen trade. the short yen trade position would actually benefit from that scenario, so i think that is the current mean from the hedge fund group. betty: what about in terms of playing the euro? we have the ecb meeting. there is going to be a lot of you listening on what we are going to hear about the euro. i am curious if you think we have talked out with the euro strength. always getu know, we these unnamed sources that come out and quash any type of aggressive lien from the ecb. this is telling me one thing directly, that they are rapidned about the acceleration of the euro. i think that has caught them quite off guard. theink this goes back to other equation, the federal reserve board. i think the ecb really needs the fed to step up, raise interest rates, and that will give them more room to move. i think right now, we're having quite a dialogue between the does and hawks at the ecb, and

it seems at this point that the big stumbling block right now is this rapid appreciation of the euro. i do not think the ecb have got the appetite right now to move along with the balance sheet reduction or even move towards increasing interest rates. i think this has to get ironed out and the heavy lifting has to fall back to the federal reserve board before we see any move from the ecb. haidi: is that always the case when it comes to the rba meeting? do they have any appetites to move? movee not expecting a today, but over the course of the rest of the year, they are kind of stuck, aren't they? that mean for the aussie dollar? stephen: they are stuck between a rock and a hard place. dollar he is still remaining relatively supportive here. i think there is a couple of things playing out here. global had this frothy

market that has continued to .urn and turn productivity worldwide seems pretty good. we look at the state of china. i think that the structure spending is lending itself to upbeat economic data. all of the spoils back down to australia as a major player in the global supply chain, especially with the commodity exports. i think this is under pinning the aussie right now. retail sales looks quite good. unemployment looks quite good. fundamental, the rba has a problem. this asset bubble that continues to develop in australia is really one of the causes for concern. as far as what i expected today, i do not think we will have any rate hike, and i do not expect any shift in the rhetoric, but one thing they will be on guard ford is if the governor start to lean against the aussie dollar again. sort of induce some

thought that they are going to remain lower for longer as far as interest rate go because they do not want to upset the apple cart and send the aussie dollar rocketing above the 80 towards 82.5 or 85 level before year-end. what you say for the aussie and how much of eastern three have seen over the past, you know, little while has been the green backstory? it really isink the weaker u.s. dollar narrative that is actually supporting currencies around the globe, and i think, because we are seeing this uptick in global demand for commodities, i think currencies in the commodity bought currencies are actually benefiting quite well out of this. this is completely unexpected. we did not expect the aussie dollar to be trading anywhere near the levels at this time. we thought we would be trading closer to the $.70 level your this shows how dominant a force the federal reserve board and in thaterest rates play currency decision, and i think

this is going to play out over the course of the year. raise in just not rates, i think they will start to see these currencies, especially commodity bloc currency, depreciate, and we could possibly see the are the tip for the $.85 level by year-end. betty: just talking about the fed and when they will raise rates, i want to pull up our trusting wirp function in our bloomberg. and it has risen, interestingly enough, despite softer than expected jobs report on friday. by december, there is a 33% chance -- 34% chance, really, -- of another rate hike by the end of this year. it had been down into the 20's just about one week ago. even if we get that rate hike, is that priced in? how much is that priced in to the exchange market? i think the u.s. dollar benefits if the fed funds rates

expectations get back up towards the 70% level. we have to look at this powerful trio that are the focal point of the fed. we have got dudley, fish, and yellen. i think there are cleared paths determined to get interest rates they are called this might be dovish outlook. the u.s. economy continues to turn along, and eventually, there is going to be some passed through inflation. we have to look at the concerns echoed by those members about the runaway asset prices happening in the u.s.. systemichere is a destabilization in the financial system, and i think this is one of the things that the feds are looking at, and even if inflation does not come through, there is a strong possibility the fed may raise interest rates regardless in december, and this could add some under pending to the rest -- underpinning to the u.s. dollar in 2018. haidi: before you go, pboc and

the yuan, has that really been the policy of the success story of the year? stephen: yeah. it is wild. again, there are expectations which are completely wrong on this one. what we have seen is a move by the pboc to encourage foreign investment into the country. seen the mscie inclusion, the success for the bond connect. i think the appetite for a stable to stronger rmb complex is in the cards for the pboc. i am seeing elements that the yuan is being considered a safe haven of all things these days. it is picking up a little bit of safe haven appeal because every day, it seems to be accelerating. it is accelerating beyond what differentialsate are dictating and what the risk differentials are dictating, so that basically tells me that perhaps regional investors are putting money towards china as a

safe haven proxy in the region. we will wait and see what happens after the policy called. thank you so much. stephen innes. inted technology said to be -- announce theaid to deal as early as today. we are looking at united text, such to pay $140 per share. a bit of background. it is a designer, producer, and i guess a marketer of electronics to medications across idiotic's and in-flight entertainment systems used by military, and government customers from around the world. we will get you more details on that breaking at the moment. betty. betty: indeed. looks like we will wake up with another big m&a piece of news on this monday.

out ourorget to check interactive tv function as well. you can find it at tv . you will not only be able to dive into any but of the securities and bloomberg functions we talk about. you can be part of the conversation by sending the shows. check it out at tv . ♪

haidi: business leaders joining the heads of state of the group summit in china. among them is the head of the world's second-largest online travel agency. the ceo spoke to our china correspondent, tom mackenzie, about the opportunities across the nation. brics represents the largest growing gdp growth around the world. the the buying power for the

countries are very significant. for example, this year, and send 1.5e million people there. in south africa, the rising number, the carry-ons that he -- the curiosity is increasing. hostedil, because they the olympic games, a lot of people are going there as well. and for india, obviously, it represents the second-largest population. all these countries represent a very attractive travel destination for chinese tourists. tom: domestically, i know you strategy.d on the the online bookings only make up 10% of all travel bookings here in china. where do you see that growth and at what pace? >> it started in shanghai. concertedve put efforts in penetrating into the second year and -- second tier and third tier cities p for summit increase advertisements.

second, we are targeting the 6500 off-line sources to couple with our online efforts. thirdly, we developed probably have the product to serve the customers in these areas, such as not only hotels and tickets, trains, buses, ferries, etc. theything, we offer to customers. with that strategy, i hope we can boost the volume from the second tier and third tier cities. tom: is it becoming a more competitive space? >> as long as you keep up with your focus on customer and make the right investment in ai, big data, cloud computing, you are extending your leadership in this area. tom: you are keen to make further acquisitions? >> we hold three criteria. the first is that it has to be closely related to our core

business, which is travel. the second is the verticals. we always invested in -- we try not to invest in number three and number four. the third criteria is that valuation needs to be reasonable. tom: you are looking for future deals if they look back right -- if they fit that criteria? >> yes. and that was the brics summit. know, it kind of puts into perspective the opportunities, but also the challenges, when it comes to trade, globals, trade. it is really these aspects that investors are looking at to see in terms of whether this can be a threat for geopolitics. betty: trade is something that our guest in the next hour knows quite a lot about. he is the former senator and former u.s. ambassador to china

up until this year. he is going to weigh in on u.s. -asia relations. that is it from "daybreak australia." this is bloomberg. ♪

haidi: it is 8:00 a.m. in seoul. i am yvonne man. welcome to "daybreak in show -- "daybreak asia." that is the message coming out from the u.s. ambassador to the u.n. the u.s. saying the strongest possible sanctions on korea can and it's -- these renewed tensions. pyongyang may be preparing another icbm launch.