carol: welcome to "bloomberg businessweek." i'm carol massar. taylor: and i'm taylor riggs. we are here inside the magazine's headquarters. carol: coming up in this week's issue, the french president, what he has been up to, and his influence on president trump. taylor: and a tech firm that may be knows too much about who you are. carol: also, colors are taken for granted, but there is so much science and chance behind them. taylor: all of this ahead on "businessweek." ♪

carol: we are here with the editor-in-chief of "bloomberg businessweek," joel webber. let's start with politics. it is actually the european cover story this week. you take a look at the french president emmanuel macron. he is trying to energize europe. joel: he has had a to do list. it is probably never ending but we tried to whittle it down. the big one, he has had a lot of checkmarks he has put next to his resume already, and this next one, what he was elected to do was fix france. this is a big test that is coming up for him, and it is being viewed somewhat as a make or break moment. because if he can get around this, boy, the sky is the limit and he could save all of europe. if he can't, let's see what happens. taylor: i love the beginning of the story when you compare him to donald trump, and some other similarities, and the relationship he has with the u.s., but also the relationship france has with the rest of europe.

how have those relationships changed? joel: complicated. [laughter] joel: one thing he has done reasonably well is complement angela merkel in germany. because that is a really important part of this dynamic, right? u.k., germany, france -- these are the biggest economies in europe. and france is actually -- the biggest thing he is facing here is this union conversation. the french union worker can retire at 52. carol: nice. joel: so that is pretty great, right? not a great thing for your economy overall when someone is clocking out at 52. you have to pay them, right? that's one of the things he is wrestling with. but this dynamic in europe, he has put france on the world stage in a way it has not been for a while. carol: what is interesting, let's go back to that relationship with president trump.

you said the similarities between those two. they have become a kind of buddies. the first official visit, state visit will be emmanuel macron to the white house. joel: that was the peg on why we chose to do on the cover now, he it is him rising to the global stage. they have just that this military action on syria together, right? so, and, it is this interesting

thing where merkel and trump have had loggerheads, and here we have macron, who can speak to trump in a different way. so there is this little allegiance he has managed to have with washington. the only other one close to that is britain. carol: but that gives them power with the eu, correct? joel: yes, it does because he's flexing his muscle. all of this is for naught if he can't fix france. that's why these contests with the unions that are on the horizon, this will be the sort of make or break thing, because he has to get his citizens behind him. taylor: you talk about the union. we also know there is very high employment. the situation he is facing over there is different from maybe what we face may be in the u.s. what other problems is he facing? joel: that is an economic problem. how do you supercharge an economy where there is an entitlement to cashing out at 52, right? in the case of the union workers? how do you flip that on its head? he has been huge on science, artificial intelligence. so, he is capable of actually taking this economy to a sort of a warp speed area. again, that is a problem because they are not there yet, but that is obviously where he is going. taylor: the other big story in the u.s. and asia cover is data mining companies. carol: great story. love it. taylor: walk us through this tangled web that is coming back into the news now. joel: palantir is a fascinating company, founded by peter thiel. and it really came about post-9/11 as a way that u.s. intelligence was able to have a new tool on the battlefield, which was data mining. and they used it as a way of fighting terrorism. and it was incredibly capable. the only problem was palantir had to get to a new moment in time to find an opportunity for growth, because the war on terror worked pretty well. so what is the next chapter in palantir's strategy?

that became, maybe we can cater the corporations, and that is where it got spooky. carol: stop right there. great tease. [laughter] carol: we have more on the rise of palantir from reporter peter waldman. peter: jpmorgan engaged palantir back in 2009, and they became fast friends. here you had, at that point, the foremost miner of big data, the analytical engine being developed in silicon valley that had proved itself at war literally, and this global financial institution with, you know, millions and millions of credit card users and borrowers, and all of the rest. well, they got together, and a guy, who was at that point, one of the chief operating, sorry, excuse me, the chief information officer at jpmorgan. really became its patron and supporter. and jpmorgan made an equity investment in palantir, and became the kind of testing ground for its application in counter fraud, insider threat purposes within financial institutions. and at one point, there were as

many as 100 or 120 forward, deployed engineers from palantir at jpmorgan, which was something of a culture clash because these kind of brogrammer types from california, you know, would show up to work on skateboards and in t-shirts, and so forth. but anyway, they got used to each other. carol: peter, peter, let me jump in for a second. what is interesting in your story is you talk about jpmorgan making the equity investment in palantir, but they also, you point out jpmorgan executives would talk about how great this group is, and i think they inducted them into jpmorgan's hall of innovation. so they were kind of all in, in terms of what palantir was doing, but then things started to go amiss.

talk to us about that. peter: yeah, yeah, i will. because it is very much illustrative of the fears people now have of palantir and the business direction it went in. so, from credit card fraud and other things, it got used in the insider threat group, which was essentially a special ops unit that looked at insiders, traders, bankers, other employees of jpmorgan for signs of internal fraud, of people abusing corporate assets. remember the london whale escapade in london, which cost

jpmorgan billions in trading losses. well, they certainly did not want to see something like that happen again, and they used palantir essentially as a tool ultimately to spy on their own employees. and let's face it, all of us who sign up with big companies, who work for big companies, we generally sign away our right to privacy in terms of using corporate devices. so, our cell phones are provided by the company, our desktop computers, our laptops, those are all searchable. we understand that. they don't belong to us and we have to be aware and understand the corporations can access that stuff. and the financial and information-intensive companies do. they don't want their employees misusing corporate assets or information. so, jpmorgan, like other institutions, had an insider threat group, led by a former secret service person.

the story recounts how he became something of a rogue in terms of his use of palantir. he had an office several floors above the other security people in jersey city, across the hudson river in new jersey. and was surrounded by palantir-forward deployed engineers, essentially computer consultants supplied by palantir. and together, they developed a comprehensive system that really allowed him to follow employees from their phone records to their computer usage, to just things as simple as what they were printing out on the computer printer, and their gps movements on their cell phones. so, it became something of an internal espionage thing that other people in the jpm security detail found excessive. carol: our design director put

palantir on the cover of bloomberg "businessweek." >> we wanted to get at the alarming aspects of the story, and really bring to the reader, you know, that you should be scared of this. we wanted an image that pulled you in and spoke directly to the reader. we came up with the idea of this staring eye. carol: it is creepy. taylor: whose eye was it more importantly? >> we started with a larger photo of peter thiel on the cover and playing with that, and the more we zoomed in, the better it got. so we ended up with this. taylor: up next, we will introduce you to the number two at amazon. carol: and the production hell facing elon musk again. taylor: this is "bloomberg businessweek." ♪

♪ carol: welcome back to "bloomberg businessweek." i'm carol massar. taylor: and i'm taylor riggs. and you can find us online at businessweek.com. carol: and on our mobile app. in the technology section this week, we got an interview with jeff wilke. taylor: he is a deputy, right-hand man, and he has been there for 18 years. carol: and lucky for him, he is on the front line as president trump criticizes the company. taylor: we got the scoop from editor brad stone. brad: amazon actually has two ceos aside from joe réseau's, jeff bezos, who is the ceo of the entire company. andy is the ceo of the cloud business, and in this story we focus on the other ceo, jeff wilke, who is the ceo of consumer business. which is basically, let's color classic amazon. it is the retail business. it is the business that sells you things online, or on your phone, and then figures out how to get it to your house most efficiently. and he is someone who has worked at amazon now for 18 years. he started out basically solving the kind of mystery of amazon's fulfillment centers, which were sort of ruinously unprofitable and inefficient. and he brought some real science

to the problem of basically organizing a warehouse to ship individual units to people's homes, instead of pallets to stores. and he has basically risen through the ranks of amazon ever since. taylor: it's interesting, he is the guy who came up with amazon prime, some really key programs at amazon, right? brad: well, he made amazon prime work. that was a project that was it first directed by jeff bezos. and i think, you know, as the rise of amazon prime under his watch as he has taken over more and more of the retail business has been pretty much parallel to his rise within the organization. carol: why are you writing about jeff wilke right now? brad: one reason why he is taking on more of a public role because of his evangelism on the topic of artificial intelligence.

this is a topic all of the tech companies are suddenly eager and willing to talk about. for probably one big reason to one minor reason. the big reason is they are in a foot race to hire the best ai talent, to remake themselves as ai companies from the perspective of consumers and investors, but really to get the best people on board. so, you know, wilke has been out there talking to people before us and now we have gotten some time with him about amazon as an ai company. carol: i am always curious, and i have had conversations with folks, brad, about what they have done at their fulfillment centers and the use of robots and whether they could apply that to something like the u.s. postal service, which they also use a lot of. brad: they do. and that really brings us to what, of course, has been a hot topic this month. and we did as jeff wilke about that, which is president trump's tweets criticizing amazon for its relationship with the post office. amazon has been pretty fiercely unresponsive to the president's criticism. i don't think they want to engage in hand-to-hand combat. but since we had the opportunity to talk to wilke, we asked him about that. and he said, look, this relationship is profitable. he said that, you know, it has

been good for both parties. but he also made the point that amazon has other options to get packages to people's homes. they have got good relationships with fedex, ups, and a small universe of shippers that they partner with. sometimes with trucks that say amazon on the side. and you know, trump ordered a review of the post office finances. if rates go up, i think the message amazon would send it is they do have other options. taylor: in the business section, we take a look at the production problems facing tesla's model 3. carol: there has been a lot of them, and we take a look at what it might mean for the future of the company. here is reporter liam denning. liam: the bears look at the balance sheet. the revenue line is impressive, but further down, it is not so impressive. where we are with tesla is this. they began the year with $5.4 billion in liquidity. that is cash and $2 billion of available credit.

analysts expect them to burn through something like $2.8 billion this year. i think that maybe on the low side because we need to factor in a lot of these delays that have occurred since with the model 3, and the extra spending they are taking on. plus, they have got about $1.2 billion of convertible debt that is going to fall due sometime in the next 12 months. on paper, that doesn't leave a lot of wiggle room for the unexpected, or if those analysts' forecasts turn out to be kind of optimistic, which looking back over history, they have tended to be. carol: that the big part of the tesla story, right? elon musk lays out a projection, a forecast in terms of production and does not meet it. we have heard that many times and it has been a little bit comical.

but investors have been along for the ride because shares have been bid up big time. but it starts to feel like more recently, something is coming undone. liam: tesla's great strength has always been this cultlike aspect to the stock. people have incredible faith in elon musk, and there have been some real achievements. the model s was universally lauded as a great car. and in some ways, tesla has achieved one of the things it wanted to achieve, which was to push the rest of the auto industry towards electrification, which it has achieved quite a lot of that. i think the problem is, when you depend upon a cultish aspect to a stock, it is really a belief, and belief can turn quite quickly, as we know from previous market crashes, from previous stock flameouts. ♪ carol: up next, what does the price of bitcoin have in common with a bottle of red wine? taylor: and the scientist on a quest to turn blue into red. carol: this is "bloomberg businessweek." ♪

♪ taylor: welcome back to "bloomberg businessweek." i'm taylor riggs. carol: and i'm carol massar. you can also listen to us on the radio on sirius xm and on a.m. 1130 in new york, 99.1 in d.c., and a.m. 960 in the bay area. taylor: and in london and asia on the bloomberg radio plus app. in the finance section, a lot has been written about how much the value of bitcoin is worth. carol: so this week, we set out to figure out how much it is valued. it depends on who you talk to. we got more from our reporter. >> these are two economists who meet in london on a regular

basis, and the conversation over bitcoin got heated, and over everybody's favorite. they decided to work out on a napkin how to apply this theory to bitcoin. and that is where they came up with initially, $200, and realized they were a decimal place out, and it actually was $20. the basic theory is that bitcoin's fair value is $20, which is way, way, way below where it is today. but obviously, you have to make a lot of assumptions and a lot of other people who are very bullish on bitcoin will say, hold on, i think the future use of bitcoin will skyrocket. i think the economy could be as big as all of the money laundering in the world, or all of africa as it tries to get onto the banking system. carol: that's a big part of it, the assumptions that you say. whether it is just a certain segment of the currency market,

whether it goes into the black market, illegal usage, emerging markets. that's a big part of whether or not you come up with $20 or several thousands of >> bitcoin dollars. is only now really entering the financial market space, as in where you can trade it, trade derivatives on it, where people people actually have hedge funds invested in it. there is a lot of money riding on putting a number on it, but the problem is that it is a very venture capitalists type bet. a lot of the evangelists for bitcoin say we are at the beginning of the adoption cycle. so, a lot of people have to price in this idea that there is going to be either a huge amount of growth in the next five or 10 years, or that the best, frankly, is behind us, and it is time to go the other direction. carol: is current economic theory kind of sufficient enough to explain the value of bitcoin? >> some people say it will just take time to come up with new ways, new models to value something that could be seen as a new asset class. i think the one cautionary note

is that we have also seen, in recent history, plenty of attempts to sell new asset classes to investors, whether it is dot-com startups sold on eyeballs and clicks, or modern art, which is being sold as a sort of trophy asset, or wines. there is plenty of evidence to suggest it is actually helpful for people to try and act like there is analysis, or a theory to validate bitcoin because people, there are vested interests in trying to get this stuff in pension funds and portfolios. there is always this warning sign in the background when it comes to trying to analyze the value of bitcoin. carol: i love this story. in the features section this week, it is a profile about one man. taylor: he created the first new blue pigment in years. carol: right, and now, he's turned his attention to creating

a billion dollar red. >> the character behind this is this very humble chemist at oregon state university. a few years ago in 2009, in fact, he stumbled upon a new pigment, the color was blue. it was completely accidental. he was in the process of mixing various metals together to try to come up with a new electronic material. and these materials, the metals he was mixing, were gray and black and plain, boring colors. and one night, he puts it in the oven, and he arrived the next morning, and out popped this vibrant, beautiful, blue from the material. so this kind of started him on a journey to figure out what exactly, what else could he create from mixing various metals together? he had never done pigment research before. and so, what he found is that by doing more and more of this research, he found that while

blue was a rare, what is more rare, the holy grail of pigments is red. taylor: how far is he in the process? he is in the discovery phase. i didn't realize there were so many steps before you see a red car, for example. there is a lot to get there. where is he in the process? [laughter] >> it is a good question. i think he would say he has no idea. the thing about pigment research that is really fascinating to me is even though -- he is a chemist. he has been doing this is entire life. he knows what he is doing. but when you mix chemicals, when you mix metals together, you don't necessarily know what is going to pop out of the oven until you open the oven doors. and so, this is what happened with the blue that he created in 2009. again, he was mixing various metals that were gray, and black, and so on, and he opened the oven, and out came blue. and so now, he is trying to use some of those same materials in different ways, and he is hoping that what he is mixing together is going to produce the same vibrant color red, but he does not really know until the oven opens. carol: you talk about some numbers in your story. and this really struck me, you

said a new pigment could generate hundreds of millions of dollars, affecting every product category, whether it is plastics, cosmetics, automotive, or construction. and you talk about one single pigment today. talk about that one and how much money it is kind of worth. i think it is titanium dioxide. >> yes. titanium dioxide is white. it is what we commonly think of as coloring whatever we see as white, whether it is powdered doughnuts, or chalk, or street lines on the road. and so it is, there is a huge market for that. the reason it is so popular is that again, it is one of these pigments that is safe, it is durable, and it is stable. and so, trying to, so white has kind of been settled. and you can see the market. carol: the holy grail of white

has been found. [laughter] >> the holy grail of white has been found, and obviously, it is very popular. they are trying to do the same thing with a different color. carol: up next, the exodus of high skilled workers from silicon valley to canada. taylor: plus, dating apps for the rich, educated, and coastal. carol: this is "bloomberg businessweek." ♪

>> welcome back. >> still ahead, china's deregulating mission. >> canada is trying to take high-tech workers from the u.s. >> and dating apps threaten more income inequality. >> all of this ahead on "bloomberg businessweek." >> we are back with editor in chief joel webber. over in the economic section, we are actually looking at dating apps. >> not just any dating apps.

tinder changed the game because they made it so easy, swipe left or right. you end up basically having the most easy way of interacting with a dating thing. that really changed the game. what is happening now is that they are bringing the same sort of simplicity, only the user group is a little bit more curated. i will call it elite. there are some new startups to come out. the league has been one of them. it is a big character in the story. what it has done, basically the league caters to educated ivy leaguers. what we are seeing, and this is where it gets complicated, the ivies only hang out with each other. we think this could lead to inequality issues. because we are only having really educated, hyper-affluent people interacting with each other.

technology is helping them do that. there is less interaction between socioeconomic groups. >> the counter argument is don't we kind of do that anyway? >> maybe. but you could always meet someone through your brother-in-law or sister-in-law or on a random date through a colleague, a friend, or whatever. as technology has disrupted dating, maybe you are a little less likely to have that chance encounter that leads somewhere. >> what do the dating apps from their perspective say? that they are aware of the risk and capitalizing on it? >> giving people what they want. i want to marry someone who is educated, or maybe more similar to me or shares interests. so they create a bubble and why would you get out of it? >> what is interesting, too, is this league app has a waiting list. >> it is around the idea of exclusivity. once you have the waiting list, you want to be on it.

>> you talk about gender i wonder if there is a little bit of a geographic thing because we talk about the coastal cities and of course, if you are in new york and educated, you are meeting other educated people in new york. is there a geographic shift we are noticing as well? >> definitely, because we are seeing more and more affluence is concentrated in cities and that is where the youngs are. you get affluent youngs in cities, and not having that interaction between urban and rural areas. all of that becomes this thing -- we don't know what the outcome of any of this is, we're just saying if you look at these ingredients, this could really accelerate inequality really quickly. not over a decade, i mean we will see this generation start to have children soon, and then where does it go? >> you cut yourself off. you stay in one vertical. let's go to a feature story, we have heard the expression "go west, young men." this is more about going north, young man or woman. and by north we mean canada from

the united states. a great story. >> this is one we had been watching a while. we thought it was a fascinating story. it is about h-1b visas. it had been newsworthy since president trump came into office. because we have started to change some of our immigration policies and maybe limit the number of people getting h-1b visas, which are basically the most skilled tech workers in the country sometimes. a lot of them have come from india. and what we are seeing is there is a flight north to canada to get out of the u.s. almost preemptively and they are going in large part to toronto. >> we got the scoop on toronto and in the north from our own karen weiss. >> it was started by a man, and it is essentially a chronicle of his journey as someone who worked in silicon valley who worked at linkedin and was sick of waiting for a green card and moved with his family north to toronto.

he eventually wrote down -- he was getting questions from friends about how he did it, and he started writing down his experience. he started just by writing down his experience. the blog went viral among folks in the u.s. on h-1b visas and he started developing the site more and it has become a quiet destination for people who are considering the move from the u.s. to canada basically, sick of the difficulty of getting permanency as a high skilled worker. >> that is what it speaks to the varying immigration policies we are seeing between the united states and canada when it comes to workers, particularly in the tech industry. >> folks who are on the h-1b visa, it is a temporary visa, it is not a permanent residency. they separately have to apply for a green card. that backlog has grown and grown and grown for countries like india and china, which send a lot of engineers to the u.s. as that has gotten harder and the trump administration has come in and threatened to cut back on immigration and the

process of letting people in, canada has done the opposite. canada has thrown open its doors and gone on this really aggressive recruiting effort to lure engineers from all over the world. they have made it much easier to hire engineers and senior tech talent in particular. you can get a temporary visa to convert to a long-term visa in as little as two weeks. if you have a job offer. >> is it just engineers? is it just the tech sector? or is canada thinking about other areas as well to hire talent? >> they recruit across a bunch of different skills and skill types. but they made a particular focus, particularly with the new global skills strategy visa, the really fast one. that is really for senior engineers and senior management talent. what happens in canada, you haven't seen what they call the

flywheel in silicon valley, where people start their own startup, they scale it, they ipo, they sell, they know the experience of building something and growing it to a certain scale, and they just have not seen that as much in canada. they are lacking not in the core, basic programming talent but in the really experience, senior talent. i heard it over and over again when i was reporting there. it is that a person who can scale something from a $10 million company to a half billion dollar company. they don't have that skill set in the country already. canada has also made an effort in the last several decades, they realized they needed to bring in more people to grow economically. it has an extremely large foreign-born population. particularly in big cities, where most people live. >> there is something to be said about if you build it they will,. you are also seeing some of the well-known tech companies building setups there, developing areas, offices and so

on and outposts. that is helping attract workers in. >> uber, amazon, and google all have large engineering output. largely in toronto but also montreal and vancouver. they are obviously not the mothership office, but they are significant engineering presences with hundreds if not thousands of employees depending on the company. >> up next, behind china's never changing gdp figure. >> plus, the so-called big bang which could propel china's economy to even bigger milestones. >> this is "bloomberg businessweek." ♪

♪ >> welcome back to "bloomberg businessweek." i'm taylor riggs. >> and i'm carol massar. you can also find us online at businessweek.com. >> and on our mobile app. in the economic section, china's economy continues to grow at a very consistent pace, maybe too consistent, year after year. >> after year after year. that has led some in the international investor community to look for other ways to track chinese growth. >> here is our editor, christina lindblad. >> first quarter, 6.8, pretty much like the quarter before and the quarter before that. [laughter] we have been looking at the amazing lack of variability in this data set. since 2015, it varies by less than 0.1%. in the u.s. you can get a full

percentage point between quarters. >> you sound suspect. >> i don't know. it has been a long time and people have suspected that china fudges its numbers. they thought it was overestimating because you had these amazing sometimes double-digit growth figures. now i think people suspect there has been a smoothing of the numbers that it is designed to create comfort. there is no volatility. we delved into that. we talked to a lot of people who need to use this data for their business. it was interesting, it was kind of like -- the evolution in the thinking of what the data means and how useful it is. >> i wonder how important is this to investors? because clearly we need to be in china. we need to be investing in china, that is what investors say. they cannot trust the numbers, what do they do? >> there are two camps on this.

people who have been working and operating in china for a while, we encounter people who said don't worry about it, don't look at the gdp data set, because there is a huge variety of other data that has higher frequency and easier to confirm. for example, everything from volume of rail traffic to movie ticket sales. there is a satellite image that shows what is going on in factories. are inventories piling up, is product going out the door? people say that stuff is easier to confirm because you can actually talk to the companies and see it. but then we talked to another set of people who say you cannot totally ignore the numbers either. >> the numbers from the government. >> yeah. because if you delve into them, they do tell important stories. you might not want to pin your business forecast to the actual figure but they tell you about the evolution of the chinese

economy. one of the things we saw in the latest quarter is that consumption -- consumers accounted for something like 78% of the growth in gdp. economy. so that is an important development. it is something we know has been happening. china has moved in this trend where first it was exports that powered the economy and in recent years it was government investment. to see that the consumer is picking up as an engine of growth is a good thing. >> staying on china for a moment, opening the magazine in remarks, our editor-in-chief john micklethwait writes about china's reaction to trade tensions with president trump. >> he says the threat of a trade war may accelerate china's financial sophistication. >> we got more from john micklethwait. >> the new guy in charge of the pboc, almost unnoticed last week at the forum where xi jinping went and made this general speech about economic reform.

the governor went there and suddenly put through the main reforms in slightly more detail. he said by the end of june, we will allow foreigners to have majority stakes in the joint ventures and in three years, any limitations on ownership will go completely. i use the words big bang with him. you can watch on television and he reacted with horror partly because the word explosion is never great to have in the context of finance. and secondly because they want to see these things as gradual. and these things will take time, and if you talk to financers, they will say it is difficult to move into chinese domestic equities. nobody's going to make money there initially, just like americans lost money in the city of london. but things change. foreign capital will come in. some chinese capital will go out of china. the cumulative effect of this will be massive. >> once the ball starts rolling,

it is hard to change. >> salary is a good example. the head of the main, biggest chinese bank gets paid $100,000 per year. we worked out that is roughly the same that jamie dimon gets paid every several hours. it is also the world's most profitable bank, i should add. that gap is going to narrow and it is unlikely that jamie dimon is going to be the one to take their salary down to accommodate the chinese. that will cause a huge amount of social change in its path. >> it is really interesting, not only the financial sector, which they have worked to open up, but other sectors, maybe the auto sector. in your visits there, what have you learned about other sectors? they also do want to open up to foreign investment? >> yes, the auto sector, all the attention at the moment will be on the things like the auto sector because donald trump, and even people who don't like donald trump might excuse

him this, donald trump is more likely to go on about the fact that isn't it great that companies like tesla and other foreign car companies can own the whole thing in china and really take off. he will talk about that and it will resonate in the midwest, i think. he is unlikely to go and say that goldman sachs can now move in, because that's not going to win him any votes. but the second thing will have a very big effect. all these other different things that you asked me about, i think you see a group of reformers, technocrat reformers, who under the person who is the main economic minister there, have gained a degree of power. xi jinping is normally something of control freak. but in terms of the economy, he is giving considerable freedom . .

i think that is making a difference. this group of technocrats, all of them have been educated in the west, harvard, oxford, indiana in the case of the new governor of the central bank. at the least, i think they are using the crisis. there is this trade war or the possibility of a trade war with america and what they have decided to do is push ahead with reforms, which they will always claim they were going to do anyway. but i think fundamentally, that is a big deal and china is opening up more. and there will be short-term kerfuffles and there will be problems in getting licenses and all of those things, but once you start this thing, it is very difficult to stop. >> you mentioned president xi, what happens if it goes too fast? if there are problems. he could slow down at any point. >> i think he will always have the get out. there is this group of technocrats doing this and i had no idea they were going to do this much. like many other monarchies, they could end up paying a high price is it doesn't work out well and there are problems for them. one problem is the fact that

this is kind of a wild east, chinese securities is not a place for fainthearted people, they could lose a lot of money. once you start introducing things like derivatives and things like that, there are worries there. another huge worry for them, they are trying to do two things which are not wholly contradictory but caused a little bit of difficulty. one, they want to open up chinese finance and they want to prepare investment. let in foreigners, allow more capital to go overseas. prepare the way so that the chinese middle class who has done so well can retire with savings. that is one thing. the other thing, the more immediate and pressing one, is to clear up china's bad debt problem. the two are not wholly contradictory because some of that foreign money could be used to buy chinese debt and some of it will have an impact on the way local banks run, but there is a tension between the two and china has built up the most huge amount of debt and they need to focus on that. if they don't deal with that,

they could be in trouble. >> up next, sri lanka finds itself on the luxury travel map. >> and robert de niro on this year's tribeca film festival. >> this is "bloomberg businessweek."

♪ >> welcome back to "bloomberg businessweek." i'm carol massar. >> and i'm taylor riggs. you can listen to us on the radio on sirius xm and on a.m. 1130 in new york, 106.1 in boston, and a.m. 960 in the bay area. >> and in london and asia on the bloomberg radio app. the tribeca film festival happening right now in new york. >> i got to sit down with the founders. jane rosenthal and robert deniro. >> we are always influenced by the world around us. the festival was started because of 9/11.

we have always had an activist spirit about what you can do with film in a sociopolitical, you know, point of view. and that is what we do. so this year was no different. >> do you hope to advance some of the conversations -- you both have been pretty vocal about women helping women. about the administration. do you hope in some way it advances? as a journalist it has been very difficult to report on facts and have it be respected. i'm curious about the role of the festival in this. >> we have a movie about "the new york times" on a day-to-day basis, journalists working, it is just about trump and his fake news they have to counter and set straight. it is the easiest thing in the world, and makes you realize

when someone like him lies and distorts, people can buy it so simply, certain people in the country will just say they believe him. >> in the pursuit section, we travel over to sri lanka, where a scene of renaissance for luxury travelers. >> he is one of a few hoteliers who are building resort complexes to bring more people into sri lanka. he actually started his resort during the sri lankan civil war, during a cease-fire. in 2004, he bought his first bungalow and started renovating it. then the cease-fire ended. the civil war continued. malik fernando was a small business owner, who was able to hang on. because he had his family's tea company behind him, which was a huge company that allowed him to continue his business. the actually employ about 25,000

people. when the war ended, he continued to grow the resort more. >> you talk about the economy of sri lanka, tea was important but now tourism is important. >> for a long time tea has represented 2% of the national economy. tourism is now 5% and is growing. for a long time, tourism was backpackers and in recent years, china has invested a lot in sri lanka, so there was chinese tourism and now the rest of the world is catching on. now there is more luxury tourism, so that means luxury dollars. >> how much is it costing me? >> the resort he runs could be $700 a night, which is expensive. especially for sri lanka. >> it is your typical luxury resort. >> oh yes. if you are an international traveler, this is not necessarily breaking the bank. there is wild coast lodge on the southern coast where you can not

only state on the beach but you can go into the jungle and see rare leopards. our writer saw incredible stuff, buffaloes fighting leopards, totally crazy and incredibly beautiful. african type stuff. >> is it really lux? >> yes, the architecture is very interesting, a mix of thatched architecture and gorgeous pools over the ocean. the rooms on the central coast are incredible, wavy, almost look like space pods. it feels like you are in the jungle. >> the locals also can have employment opportunities. he talk about hotel owners working to actively train and employ locals on the ground, they are benefiting from a revival. >> not only does his family's tea company employ people, but they actually run a foundation. 10% of the profits from the resorts actually go toward a family foundation that does

everything from employ people to teach people about sustainable jobs, teach people skills unrelated to what they do. they also do wildlife conservation. it is a great organization. >> "bloomberg businessweek" is available on newsstands now. >> and online at businessweek.com. and on our mobile app. >> what was your favorite story? >> i really liked the cover story about palantir. maybe a company you have not heard about it but it came up in the testimony when mark zuckerberg was at capitol hill recently. it is a company that has incredible data collecting and connecting capabilities. some of it can be a good but some of it can be for questionable acts. it is a must read. >> a real tangled web of people and companies. >> your favorite? >> tesla. it is hard to root against a man who has sent a rocket to space, but that model three, lots of production problems. seems like the clock might be ticking. >> i love reading everything about tesla. >> more of bloomberg television starts now. ♪

♪ nejra: europe's next big deadline, the general data protection regulation goes into effect next month. how significant will it be for business? mifid ii back in focus, how compliance has been since the law went live. the dodd-frank debate begins again. how many changes will be made in congress? we get the latest from washington. welcome to "bloomberg markets: