yvonne: it is 7:00 a.m. here in hong kong. welcome to "day break asia." asia pacific markets headed for declines after wall street gains fizzled out. investors remain worried about tariffs. the dollar pulls back after the pboc repeats the pledge not to use the yen as a weapon in a trade war with with the u.s. ramy: and from bloomberg's global headquarters, i'm ramy in new york where it's just past 7:00 p.m. lawmakers weigh the seven-year ban. malaysia's missing money.

an arrest over the one mdb scandal and he could be charged later today. good morning, evn. good morning to our asia pacific viewers. taking a look at where we ended the u.s. markets here. what goes up yesterday in terms tech did go down today. the trade fog of war, for example, what's happening with z.t.e. being allowed to do some business in the united states. we have a lot of negativity weighing on the china side of the trade, tit for tat with china. yvonne: u.s. stocks closed a little too early to react to news on zte. perhaps asia can get a boost and at least the company can resume business operations for a movant

or. we'll see if traders can continue to listen to what the pboc governor has to say. ramy: the yuan strengthening a little bit. we'll analyze that late they are hour. let's get a quick reminder where we end the u.s. market. it was red along our major market bus the s&p 500, half of the sectors still in the green. we tend to discount that. ut the s&p 500 down .5%. it did start the cascade from micron and ended up with bank stocks. again, up down. and who knows where we'll go next tomorrow. but off to our next board here. it really was a safety play. the bloomberg dollar spot fell in u.s. trade down by about a third of a percent or. so gold futures second session

up. old futures up by about .1%, 1254. it had been up about .9% in u.s. session. we can see the lisk of flying into the yield curve, four basis points down for the 10-year, two basis points down for the two-year, yvonne. yvonne: the carry through not exactly positive, we'll see how things go throughout the asian session. wellington shares down about .25%. equity futures mixed right now. nikkei futures pretty much flat and cost pee futures heading low -- and kospi futures heading lower. we'll get more on that later on. looking at currencies as well. dollar softening, ramy, we are seing a dollar-yen hovering around 1052. aussie unchanged. we are seing a boost here overnight.

we have seen a bit of consolidation and that's made a lift to most of the emfx currency space, we did see a boost of the em currency index by about 1%. let's get the news, jessica joins us from new york. jessica: china bankers pledge to yen stable, he says the curbcy will be at a reasonable and balanced level. he said china would not make the y aumbings n a tool to cope with trade conflicts. two months after a shock malaysian feat for president -- former malaysian president is under arrest, he could be charged on wednesday. president he's being questioned over the disappearance of billions in a

fund set up under his administration. hundreds of millions ended up in a bank account leaked to him but he denies wrongdoing. failure to reach a brexit deal would be disastrous for british industry, especially for mpanies that relie on that u.k. businesses have the right to voice concerns. airbus and b.m.w. warned they might pull investment from britain if brexit means barriers to trade with the e.u. england will face sweden in the world cup quarterfinals after eliminating colombia on penalties. the match finished 1-1 after extra time before the goal keeper became the shootout hero. it's england's first knockout win at a world cup for 12 years. the swedes advanced by beating their opponent 1-0. global news on air and on

twitter on tictoc. i'm jessica summer, this is bloomberg. yvonne: thank you. some news on trade the last couple of hours. the trump administration allowing z.t.e. to resume some business in the u.s. my con's chip temporarily banned n china. we have bloom everything intelligence analyst matt on micron, let's start with joe. this seems to be the first step of bringing z.t.e. into the good graces of the united states. what next? >> they'll be able to service contracts they signed on or before april 15, that's when the u.s. slapped a ban on z.t.e. from doing business in the u.s. the next steps will be the z.t.e. still is due to pay $400

million in an escrow account, part of the demands last week they ousted the board and appointed a new chairman. so they are moving toward august 1 when presumably the trump administration will decide yay or nay that z.t.e. can continue to do business with u.s. companies. that will be a very important for them as they go along. right now any attempts in congress to thwart that pretty much have been blunted. >> it seems like there's an expiration date on this kind of flee pass for z.t.e. still not exactly out of the woods yet. >> there's still attempts in congress to restrict them or reimpose the banful they may still face restrictions with doing business with the u.s. defense department or u.s. government agencies but if they can leer that it would be a victory for both the trump administration and z.t.e. which would be able to then do

business with other companies an buying products, components and other things like that. ramy: as the door opened, seemingly, for z.t.e. it is closing when it comes to micron in china. really, what's the status here in terms of this? and how unusual is this for a chinese court to do? matt: we're shifting away from the administrative and federal government agencies to the courts. z.t.e. -- i'm sorry, u.m.c. and micron were involved in a big intellectual property value. there was a patent suit in china u.m.c. filed against micron. they got an injunction. s that big deal about half of micron's sales come from china. it's yet to be seen what's going to come out of that order but some subseth of those are banned from sales in mainland china for the foreseeable future.

micron will likely launch some kind of appeal and protest and try to work around this ban or potentially set they will dispute with u.m.c. a little bit of turbulent in the -- turbulence in the short-term to figure out what the scope of the injunction is. ramy: let's say it does go ahead, what's at stake through the investor lens? >> you're concerned about sales, about the existing inventories, whether those will be confiscate, down the role china could impose mandatory licensing, compulsory licensing terms. so there's a lot on the table. anything from a -- from an outright ban on all sales of certain products in china to hefty fees. i think investors are probably hoping for is some kind of settlement where the parties can, you know, exchange some cash and put their differences behind them and move forward with business as usual but you

know in the interim, it's not exactly clear chast going -- what's going on here. chinese courts provide a little less transparency than courts in the u.s. or europe. so you know a lot of questions and we'll see how it plays out over the next couple of days. >> it's difficult to parse through whether this is a patent infringement case or are we going to see more escalating tensions on the trade front. joe, last question to you, we've heard rumors or talk about the spring takeover through t-mobile. now under a bit of scrutiny due to china ties. what's the connection there? >> there's a group of lawmakers in congress who are critical of this deal. they're looking at sprint owner softbank which has some ties to the chinese telecommunications company that has been deemed to be a potential security risk for the u.s. so they're asking for much greater scrutiny of this deal as it gos along by the -- what's

known as the cfius process. which reviews foreign deals in the u.s. that might have national security implications. they've asked the treasury sec retare to give what they say is close scrutiny. the committee then will be making recommendations to president trump as to whether or not he should approve this deal he can either take their recommendation, whatever it is, or reject it. but it is clear that there's me additional going on and additional pressure on deals involving chinese companies. ramy: we'll leave it there. lots to parse through here in the tit for tat in the u.s. and china. we'll take a closer look at the escalating trade spat, trade war work gordon chang, right now, author of "the coming collapse of china," as well as "nuclear

showdown: north korea takes on the world." thank you for joining us here. we heard a lot of different threads going back and forth between the u.s. as well as china. z.t.e., micron, sprint, tmobile. as we head toward friday, the $34 billion in tariffs, what are we holding in our hand. i imagine this snowball we're trying to bring things together. what are we holding here to make heads or tales of what's happening? zsh heads or tails of what's happening? >> this is an escalating dispute. you have $34 billion of tariffs slated to go into effect july 6. a lot of people say we don't like tariffs no one likes tariffs. but we have to remember that tariffs are being imposed under this eauthority of section 301 of the trade act of 1974. this is for china's theft of u.s. intellectual property. and the u.s. has not ever been able to really come to terms tooze how to deal with this but we know the commentions -- dimensions are somewhere in the hundreds of billions of dollars a year. something has to be done.

tariffs may not be the right way. no one has been able to figure out anything better. we've had decades of discussions with beijing about this. we don't seem to get anywhere. so we do have to impose some costs. it's going to hurt us. nonetheless i think that what we're doing is absolutely necessary. >> businesses, the politicians, as well as voters, they're all say, you know, this is going to hurt. we don't want this to hurt. so let's agree, will there be pain and can we get through it after this $34 billion? >> there's going to be pain. you can't have decades of misguided u.s. trade policies and to think we can get out of it without having some sort of did riment if ourselves. -- of detriment to ourselves. we hold the cards. we are the trade deficit country. $375.2 billion of trade deficit with china. trade deficit countries win trade wars. more importantly, last year, 88.8% of china's merchandise surplus related to sales to the

u.s. we're the much bigger economy. we're an economy which is in reality growing faster than china. you put all that together, it says that president trump has the high cards. the only question is do we have political will. now, thing president trump, by talking about an additional $200, actually $400 billion is demonstrating political will. he should be able to win this one. yvonne: gordon, it's yvonne in hong kong, great to talk to you again. is there a limit to that? the fact that china retaliated on imports like soybeans? they're targeting trump states. is he going to -- is the president going to hit a limit here and get closer to the mid terms? >> of course this is something where china has been very careful in trying to figure out how to go after trump voters. we also got to remember that we've only got like 105 or so billion dollars in exports to china. i forget the exact number. but the point is, china is going to run out of bullets pretty soon.

i think that essentially trump supporters are probably strong enough and will stay with him. of course there's going to be problems. with all of this but we've got to remember that china is in a very difficult position as well he's responsible for this trade issue. from the chinese point of view which means that he's also got political will issues on his side. yvonne: all right gordon, we're ing to talk more in the next block and ask whether china is weaponizing the yuan. ramy: and who will be the real winners an losers in u.s. business schools? alex joins us later. this is bloomberg.

ramy: this isn't -- >> this isn't a simple task for

china's administration. they are looking at domestic licy support as pat of the tit-tat reaction, not just a threat to tariff bus also exchange rate which would be welcome in washington. but that doesn't come without costs. costs in terms of the debt side of the ledger for china's corporate sector. there is a bliss point. >> i don't think it's a tool they're very inclined to use. we would agree it's largely a response to very broad-based strengthening of the dollar against developed and emerging currencies. we really think it's being drin by two things, by the fact that u.s. growth has surged in the first half while we've had disappointments pretty much elsewhere. and number two, a little bit of risk aversion and response to some of the continued trade uncertainty as well. >> i don't see it as a weapon the chinese want to use, it's a

weapon that could badly backfire. the difficulty is they're trying to do two things at the same time. one is send a message to the market that in fact they are moving toward a more market determined exchange rate where the level of intervention is are lower but at the same time they're trying to prevent the market from getting ahead of itself. the statement by the pboc is meant to attain both of those objectives. >> a lot of voices there rea ks from market voices around the world on the pboc's pledge to in use the yuan ssa as tool the ongoing trade spat with the u.s. with us is gordon chang author of "the coming collapse of china," let's move to the yuan. i want everyone to take a look at what's happening with the yuan. this is in your gtv lie prayer. the yuan strengthened by about .3% after hitting an 11-month high in the green circle against the u.s. dollar.

they're saying they won't be using it as a weapon. you're smiling, you're laughing. have at it. >> i mean the reason is that the risk for china is that the currency drops fast and therefore you see the currency outflow that was in 2015, 2016. 2015, bloomberg showed net currency outflow from china was $1.07 trillion. 2016 was even worse. clearly they're not going to let their currency weaken because that for them is something that they remember. >> do you think it's something they want to avoid? 6.17 a threshold to what all people are say, we got to that and pulled back. >> both the offshore and on understandsnk china it would be nice to help exporters but they are not in a position to do that. you've got a stock market which is falling, off lack of confidence, you have economic indicators that are either hitting or brushing historic

lows. so the last thing you want to do is let your curn sigh fall. i think they're really concerned about the way things are going with the dollar and with the basket. yvonne: it's interesting too, gordon, it doesn't seem like the response we've seen from policymakers has been as aggressive and swift as we saw back in 2015 and 2016. it's almost like a hands off approach. is this just kind of a new opening salvo? are we likely to see more interventions once things get worse? >> i think they're trying to let the market work but oklahoma he's in a position to have that happen. eventually they're going to have to go to some firm. you have to -- you have an issue with confidence. with president trump attacking, essentially attacking the chinese economy with tariffs and all sorts of other things, people i think are going to get nervous and especially, this comes at a bad time for china where the economy is maybe growing at 3% in reality, where

their debt that they're increasing is really far in excess of their g.d.p. i actually think that this is really a bad time for china. so they're not going to -- i think they're going to have to o back to more intervention. yvonne: 3%, that's what it comes to chinese growth. we've talked about how they can keep 6.5%, what do you think is wrong with the picture still? >> if you go to 2016 when they claimed 6.7% growth, a bar chart showed their growth in reality was 1.2%. that was consistent with the single most reliable indicator of chinese economic activity, total primary energy consumption from the official point of view the energy consumption in 2016 increased 1.4%. so we're talking an economy now that's doing a little bit better than it was in 2016 but not much better. so you know york call that what

2.5%, maybe 2.9% growth now? the u.s. economy is growing much better than that. i think china is not really in a osition to take the u.s. on. ramy: there's some speculation that pboc did intervene today. looking ahead, how long can they do this? >> they can do this a long time, they have the ability to control the marks. but eventually they'll run out of ammunition. the interveengs today was striking. when you had the currency down something like .8% and it finishes down only .3% because you had a lot of banks coming. n pboc orchestrated dollar transactions. i think that this is going to be an issue of confidence. it's all going to get back to that. i don't think that the central bank can do this much longer. they've been doing it for decades and essentially the economy is tired right now. >> plenty more to talk about

because these are just opening shots here. gordon, thank you so much for coming on to share here. remember, bloomberg users can interact with the charts shown using gtv go. use the charts you just saw just now for key analysis. save those charts for future reference. this is bloomberg. ♪

-- e started the week ramy: welcome back, this is "day break asia." yvonne: a quick check of the latest business headlines. tesla fell the most since march due to questions about the temporary halt in production line. it dropped tesla behind general motors once again. they've suspended production of the model 3 and orders for the car are also slightly down.

ramy: shares in the big three u.s. airlines fell after they were cut from hold to buy. american split as much as 4.2% before pearing some of those losses. it cited geopolitical risk in the downgrade. yvonne: barnes and noble fire thared c.e.o. for violations of company policy and says he will leave without a severance package. bookstore declines to say exactly why he's been dismiss bud affirmed it's nothing to do with the company's financial reporting or any potential fraud. he became c.e.o. in april of last year. the stock has fallen more than 30% in that time. ramy: coming up, are their winners in a trade war or are there just bigger losers? we will assess where all the players stand next.

this is bloomberg. ♪

yvonne: 7:30 a.m. wednesday, a pretty dreary day. we are away from asia's major market open. hong kong stocks fell close to 1.5%. ramy: 7:30 p.m. on tuesday in new york. very hot. the markets closed in the red. s&p 500 down 0.5%. tech shares were the biggest weight. they were the biggest lift yesterday, but what a difference a day makes. yvonne: you are watching "daybreak: asia." let's get to first word news.

>> zte is being allowed to resume business in the u.s., at least temporarily. it can operate until the beginning of august. that is until washington drops a seven-year ban imposed on national conservancy -- national security concerns. zte enjoying its biggest jump in a year. shares in hong kong also jumped. micron technology says it won't comment on a chinese court ruling that temporarily bans sales. the taiwanese rival says it won a patent ruling, cutting the u.s. company off from the biggest semiconductor market. sharesshares -- micron plunged. claiming last year, stolen trade secrets.

told judgesbank bitcoin and other cryptos cannot be treated as currency under india's existing law. oft is coins has to be made existing metal and stamped by the government. crowded leg cabins are being 40 to fight regulators in the - by regulators in the u.s. fatter seats and passengers prompted an organization to sue. global news 24 hours a day on air and on tictoc on twitter, powered by over 2700 journalists and analysts in over 120 countries. this is bloomberg. yvonne: we are counting down to some of the major market opens in the asia-pacific. for more, let's go to sophie kamaruddin. let's look at the latest u.s.

auto sales. there is the threat of tariffs from president trump, but it seems at this point buyers aren't too worried. hie: resilience in sales coming from the united states. we saw local and foreign carmakers enjoyed a boost. rate ofhe annualized sales coming in at the fastest pace since march. looking how japanese carmakers fared, even nissan would be surprising beat, reporting a 1.2% on year growth after a projected drop. this momentum could be compromised by tariffs. rise. would there is a question of how automakers would approach the manufacturing strategy. nissan uses the u.s. for half of its vehicles sold stateside. for now, nissan says it is business as usual until it is clear what changes are made.

ramy: definitely a fog. trade woes casting a shadow on an otherwise resulting picture. for the immediate future, china's ban on micron sales tensions there. sophie: tuesday we saw micron's 8%.e price fall as much as these taiwanese and korean players will very much be in focus. also weighing on the industry, china's tariffs that could not only target u.s. chipmakers, but korea. more than a quarter of korean goods shipped to china are semiconductors. waiting to see what will happen on the china front, if the pboc the yuan.ize

heads up from australia, we are waiting on trade data. ramy: the bleed goes into asia. investors in the meantime are increasingly nervous about the looming trade war, with just days to go until president trump imposes tariffs on global exports. our editor kathleen hays has been running through the scenarios with our bloomberg economics team. there are four scenarios. are any of them good? kathleen: none of them are good, but some could be not so bad. none will push the world over a cliff. bloomberg economics looked at the impact of tariffs through their shock on import costs, and also the shock on equity markets. we will run through all four of them. first would be $50 billion. that is all that happens. china retaliates. markets shudder a little bit,

but bullsights hold their fire. 0.2%se gdp could be cut by in 2019. even if there was a broadening to $250 billion of tariffs, only i had of 0.5%. now let's get to scenario two -- now stocks really get hit. financial conditions tighten. fearing even worse, both sides say, let's stop. 0.4%se gdp would be cut by in 2019. they consider the chinese economy insulated from stock gyrations. this third scenario is one u.s. puts tariffs on everyone's imports. the whole world retaliates. u.s. gdp could be cut by 0.4%.

chinese gdp, still not a vaca buttill not a bit g hit, 0.4% by 2020. the fourth scenario is the worst. u.s. gdp could be cut by 0.8%. global growth could lose 0.4%. even so, china is not hit so hard because they don't get hit by the stock market. let's look at this chart that our bloomberg economics team put together. these bars show the impact between trade war and equity prices. the orange part is the equity impact. the yellow is the trade war impact. equity market impact worse for the u.s. if you look at china on the far side of this screen, not so much of the market problem, it is just that little by little there is more of a hit.

basically bloomberg economics oncludes the hit will be worse on the u.s. economy, the global economy, but not so much china. china buys a lot of inputs into the goods it exports into the united states. many of them are asian neighbors. that is why we will see losers outside of china. let's take another look at this chart with that kind of logic, showing you who will get hit the worst if china cuts imports by 10%. malaysia, a hit to gdp just under 2.5%. singapore takes a hit, thailand, vietnam, cambodia -- all trading partners of china. interesting to see chile, which

started concentrating on exports a couple decades ago, is another one hit hard by this. bloomberg economics reckoned some of their most vulnerable industries are leisure, home and office products, renewable energy, and electronics. a very insightful and deep look. i highly recommend it to someone, either on the terminal or on bloomberg.com. yvonne: great analysis to the countdown to july 6. let's cross over to singapore and bring you nus business school senior fellow alexander capri. kathleen laid out pretty extensively the different scenarios. of course there is an economic impact, a market impact, but political will involved as well. who is likely to see this trade tension through, the u.s. or

china? alex: it is hard to say. i think this round -- it is less based on bluster and negotiation tactics, and i think we will see more tit for tat retaliatory tariffs. based on the three scenarios your correspondent outlined, i think we could see the whole world retaliating, or just china and the u.s. i think there is a much bigger narrative being missed, and that is about non-tariff barriers, particular regarding this u.s.- china rivalry. those barriers will be focused on tech, right? we are really heading into, as part of the broader narrative, a much more pervasive long-term tech war between the united states, some would call it a hybrid cold war. what we will see as a result of that is increased tariffs,

increased exports controls, increased licensing block acquisitions. these will have a more profound effect on global value chains. yvonne: we certainly saw that with micron overnight, with reports saying they have been banned in china on this patent case. doesn't that stand to hurt more for china, given that these semiconductor companies rely on this market, and the technology in some -- the technology inside china itself, they can't do it independently? alex: that is right. if we look back on this zte dependente see how a premier chinese tech company is on western patents. we will see much more of that. i think the u.s. president has asked for an extension, or an

enlarged list of strategic trade goods, which means more export licensing, which means very onerous supply chain traceability activity. it means certain suppliers will be cut off because they don't qualify or have to be as records records, andbious will be excluded from supply chains. ramy: we have talked about how this gets to the china 2025 initiative in beijing, and the u.s. trying to stop this. where is equilibrium? we just had gordon chang on, saying this is trying to rectify something that has been going on for a long time. alex: that is the million-dollar question. that is a difficult one. if you look at china's economic

nationalism, and how beijing essentially has a very state centric approach to capitalism, -- all of those activities are very structural, they are core to the nature of that model, which is subsidies, technology transfer particular. i don't see china backing away from that. when you look at this 2025 -- a aeronautics, all of the high-tech sectors that are so critical now, i don't see the beijing government backing of subsidies -- backing off subsidies. the world will have to get used to more sanctions against individuals, companies, and even entire sectors, in a growing list of licensing requirements. ramy: in terms of positioning,

what might you hear to get around the shifting global supply chains we are only starting to see change right now? alex: there has been a great deal of disruption to global supply or value chains. if you look at it, digital disruption -- technology has been the prime driver here. when you look at what the platform economy is doing to evolve, very specialized, localized markets. if you look at what things 3-d printing will do to localized production, we see supply chains and companies moving to a more localized model anyway. now you have all these inward looking regulations. what about data localization regulations that will be increasing? this whole geopolitical rivalry

between china and the u.s. -- these are just added motivations for these companies to rethink their extended supply chains and value add operations. you add this all together, and we will see a real sea change in production, extended supply and value chains. ramy: when you say ring fencing, that brings to my mind protectionism. many folks will say that is the last thing we want in this current world order, unless of course if you want to turn it upside down. alex: by ring fencing, going back to the zte example -- if you have a company with a supply chain that depends on suppliers all around the world, and suddenly you have a new list

announced overnight of either sanctions or new licensing requirements for certain subcomponents, now you have a major disruption to a supply chain. companies will want to look at how they can avoid that congress disruption, which means -- that kind of disruption, which means vetting their suppliers and bringing them into a cluster where they can control or mitigate risk from those kinds of scenarios. ramy: i imagine executives at the c suite level are trying to figure that that. schoolpri, nus business visiting senior fellow. thanks very much. the missing millions -- arrested over 1mdb, and could be charged later. this is bloomberg. ♪

ramy: this is "daybreak: asia."

malaysian prime minister najib razak expected to be charged soon in connection with the 1mdb investigation. you are taking a look at live pictures now of malaysia. this is the malaysian commissionion headquarters. authorities earlier banned najib razak from leaving the country. arme news saying najib is bar arrest - is under arrest, facing more than 10 counts of breach and from entrust. tell us the latest. >> 40 minutes from now we will figure out what he is actually charged with, what kind of punishment those charges entail. we are expecting a pretty long, drawnout legal battle here.

najib has apologized to the nation. he released a video on his twitter account saying he is sorry, but not all allegations against him are true. he invoked the afterlife, saying everyone will be judged eventually, even the current government. basically saying, don't spread too many lies about me, just give me my day in court. this will be the first step in the process. yvonne: this will be a pretty big test for dr. mahathir mohamad. it's not just that he has to prove he is guilty, he has to prove this is not politically charged, these accusations. >> it has been two months after najib lost power. mahathir -- it could look like political retribution if it is not done right. he wants to make sure this process is credible, and the allegations against him are

legit. se,saw raids on najib's hou where they took designer handbags and sunglasses and all this cash. in the eye of the public, they were outraged by this all and got mahathir in any way. there is enough smoke there. has pledged to weed out corruption. what does this mean for others in his crosshairs? >> he has been adamant since he took office he won't stand for corruption. list,hwas first on the but there are many government officials he has put on notice. ,e is cleaning the government he likes to say, and he is trying to get malaysia on track. this scandal has tainted the

country's image, and he is doing everything he come to assert the rule of law. there is a risk that could go too far and look like political retribution. that will be something to watch in the days ahead. yvonne: for investors, this will continue to cloud the uncertainty when it comes to reforms.government, they want this to go as speedy as possible and close the chapter in the nation. najib will be looking to draw it out. his strategy -- he's got a great legal team in place. he's throwing the book. he won't go quietly. he won't fade into the background. yvonne: it seems like everything is on the line, his credibility and his previous government as well. dan: he is the son of the former

prime minister. he has been in politics since his early 20's. he has a huge reputation with the country. he is still loved by many of the malay population. the government needs to tread carefully when they deal with him. those same time, mahathir need to show he is restoring business confidence and moving on a number of fronts to make sure malaysia's growth is on track. to say, look, this is all according to the rule of law here, najib committed these crimes, here is evidence of it, and he deserves to be punished. ramy: bloomberg's managing editor dan ten kate in hong kong. we want to take you back to malaysia, as we await najib razak to leave court. you can see these people, including supporters, who are

holding papers with the words "respect civil rights," as well for najib razak ." we are awaiting to see what happens to date. we expect in about 35, 40 minutes time, najib razak will be charged. we will leave you with these pictures, waiting for najib razak to leave court and for his charges to be decided. -- arrived in court. this is bloomberg. ♪

ramy: england has won its first world cup knockout match ever since 2006, sending back colomb ia into a penalty shootout. don't forget, terminal subscribers can keep up-to-date .go,ll the action on wcup you can also see how your picks

r's. against our ancho we are going to live picture of najib razak, as we await his arrival to court. we are just awaiting his arrival , especially as he is looking to be sentenced sometime later this morning in malaysia. we are expecting that to comment about8:30 -- to come out 8:30 p.m. new york time. just a few minutes before that is set to happen. yvonne: japan, south korea, and australia with less than three minutes to go. it is a holiday, counting down to the july 4 solution. we could see a shortened session. nikkei futures down 1/5 of 1%. we saw the pboc come to the rescue.

can it do enough to halt the slide in the currency? we will talk more about auto tariffs. what will that mean for the industry? automobilityom joins us in the next half hour. this is bloomberg. ♪

yvonne: 8:00 a.m. in hong kong. we are live from bloomberg's asian headquarters. welcome to "daybreak: asia." asia-pacific markets face declines at the open after wall street gains fizzled out. investors are worried about tariffs. the dollar pulls back as the -- as as to not use weapon in its trade war with the u.s. ramy: just passed 8:00 p.m. on a tuesday zte wins a lifeline, the filmmaker can resume u.s. operations until august as lawmakers weigh the seven-year

ban. malaysia's missing millions --najib razak is arrested over the 1mdb scandal, and he could be charged with it at this hour. yvonne: we will bring you those from malaysia any minute. we've been watching this topsy-turvy session in the u.s. does not bode well for asia. this good news about zte being able to resume business could provide a boost for stocks. saw strength and after hitting an 11 month high against usd. back to the tit-for-tat against the u.s. and china, it is interesting because all the names we have talking about are centering around tech.

this gets to the china 2025 initiative. we will talk about this and much more. yvonne: it is going to a more cold tech war, so to speak. we will talk about micron, will talk about zte as well. sophie: we are seeing declines in tokyo and seoul. chipmakers very much in focus for the tech heavy kospi, which is seeing little change. losses for wellington, whlie u.s. futures are -- while u.s. futures are pointing higher. we are waiting to see what the pboc may due to stabilize the yuan, as the government talked about on tuesday, especially given how stocks in shanghai have fared. keeping a close eye on the political front, on malaysian

the ringgit still holding against the u.s. dollar. let's look at korean players , gaining ground on the news that micron is temporarily banned from sales in china. let's switch the board to check in on auto heavyweights in tokyo and seoul after carmakers crushed estimates for june sales. even nissan with an increase. the global truck industry is on the edge, with trump possibly imposing tariffs on auto exports . we are seeing a decline for those automakers in tokyo and seoul. ramy: let's get the first word news with jessica summers. jessica: just two months after

an election defeat, former malaysian prime minister najib razak is under arrest, and could be charged on wednesday. he being charged with the disappearance of up to $70 billion from the state investment fund, 1mdb, which was set up under his administration. hundreds of millions of dollars landed in a bank account linked to najib, but he denies any wrongdoing. china's central bank has pledged to keep the yuan stable and not deployed as a weapon in the trade war with the u.s. the head of the central bank's financial research institute told bloomberg china would not make the yuan a tool to cope with trade conflicts. the u.k. business administer says failure to reach a brexit deal would be disastrous for british industry, especially companies that rely on "just-in-time supply chains." richard harrington says no deal

would be a disaster, and you can businesses have their right -- and u.k. businesses have their right to voice concerns. more legroom and crowded planes are beginning thwarted by regulators in u.s. the faa says there is no evidence that lack of space is a safety issue. thinner seats and fatter passengers prompted a passenger rights organization to sue. global news 24 hours a day on air and on tictoc on twitter, powered by over 2700 journalists and analysts in over 120 countries. this is bloomberg. yvonne: jessica, thank you. chinese smartphone maker zte is being allowed to resume operations in the u.s., at least temporarily, while congress weighs on a five-year ban on

chinese tech. chipss that some of its micron's blocked -- of chips have been blocked in china. talk a little bit more about the micron dispute. it seems like it is about patents, but seems to lead more to the broader friction between u.s.-china trade issues. amidst thees escalating tension on trade as the semiconductor market in china and taiwan escalate as well. it is hard to ignore this comes at an interesting time. set today, the u.s. is impose $34 billion of tariffs on chinese goods, and at some point

could come up with another 16 billion. if threatened, china says it will retaliate dollar for dollar. that is coming this week. we have also seen movement on cte. -- on zte. we have seen the u.s. say china mobile should be blocked from the market. we see one thing have been in one country, another thing have been in another country. yvonne: how unusual is it for a chinese court to block product sales from a company like micron? >> it's not totally unheard of, but it is certainly rare. this court dispute, as jodi was pointing out, was over patents and technology ip theft. the court ruled there will be a temporary injunction on micron

selling into the chinese market, about 26 different products. micron shares were down at one point about 8%. they get more than 50% of their sales from the chinese market. it isn't all of their product portfolio, but it is about 26 different items. injunction,mporary so we will have to see if this becomes more permanent. this is illustrative of the two sided pain points in this trade dispute. you have micron selling its kit into the chinese market, and zte impacted on the bans on its technology business. that has to eased -- has eased up for the time being on zte. ramy: what does the future look like for micron through the investor lens? >> just that it gets such a

significant chunk of its sales through the chinese market. it is not all of its products it is selling to the chinese market that are suffering from this court decision, but it is a fair number. they are in korean with korean and taiwanese -- are in competition with korean and taiwanese semiconductor makers. we have seen this with smartphone technology and wireless devices across the board. chinese courts are not independent -- they are linked to the chinese communist party, so you can join the dots and make some assumptions as to whether or not this has some political mess nations -- political machinations behind this decision itself. ramy: we have seen tension rising, but if there is some inief, it has to be with zte

the past few hours getting some of its businesses back online in the united states. jodi: the trump administration has allowed it to temporarily start some business while they decide on the larger picture of what will happen with zte. the trump administration made an about-face in the past few months, saying they will allow zte to do business with american companies after they had them,ially banned saying this was a favor from the american president to the chinese president. this is not favorable on capitol hill. this may be a bargaining chip, allowing zte -- again, this is all happening this week, timing is not quintessential -- getting zte back into business, this could be a way to avert some of the tariffs from going into

effect. yvonne: they are winning a little bit when it comes to the u.s. side, but when it comes to this latest development, there is an expiration date until august. what happens then? does congress have a way to step in? jodi: it is unlikely congress will step in. they have been unsuccessful in doing that. this is an election year. it seems they have given up in the meantime. at this point it is really in the trump administration's hands whether they will allow them to do this, and how they want to use this as a bargaining chip in the potentially widening trade dispute with china. yvonne: following chinese itpany to chinese company, seems there's a push back on pressure from the u.s. >> that is right. we have been talking about zte, the number two telecoms, player,

but the number one player will falloutted from this and increased focus from democrats and republicans on national security. what we have earned is a proposal that a subsidy on the table u.s. telecom makers is not to be used when it comes to the equipment.of huawei huawei pushed back, saying the rural communities of the u.s. would be hurt most, because huawei is able to produce at a lower cost than its competitors. they are pushing back against this proposal from the fcc. it underlines the concerns from chinese tech companies and their market share in the u.s.. ramy: when you hear the name huawei, critics will point out

there is a closeness to the chinese government, and some might go so far to say espionage. the company says it is private and independent. to what degree is that true? value,he surface face that is true, it is a private company. it operates in a private capacity. this is china. these companies, whether it is huawei or alibaba or tencent, or not free from pressure of the chinese government. it does happen in various ways. huawei set up by a former people's liberation army general. say, we are a long way from that. they would say they are a private enterprise, purely

focused on market strategy and the most competitive products. ramy: thank you very much. just ahead on "daybreak: asia," automakers focus doom and gloom if the trump administration spots tariffs on vehicle exports. yvonne: later this hour, pboc's latest hong kong and china ipo outlook. this is bloomberg. ♪

ramy: this is "daybreak: asia." close are gathering over u.s. automakers as the trump administration debates tariffs on imported vehicles. however sales remain strong. us this editor joining morning. tell us more about how the market all of these -- sees all

of these tariffs. ,or the u.s. picture in june the auto market seems to be strong. >> the market has been really resilient. it is really holding close to those levels. ehese trump tariffs ar potentially ill-timed, could kill a strong market. that is at least the fear from auto companies like g.m., toyota, bmw, and physically across the globe. , or concerns i should stay, were in stark relief after analyst sales calls. toyota reminded analysts that the rav4 is made entirely outside the u.s., its

best-selling vehicle. 50% of its june sales were imported. ramy: what about the whiplash caused by china's retaliatory tariffs on u.s. vehicles? kevin: so the trump administration will be debating these potential tariffs on national security grounds later this month, the 19th and 20th of july. ahead of that this friday, we are due to see tariffs on chinese goods. we will see retaliatory tariffs if those go into effect from china immediately, on autos. it is bad for a u.s. company like tesla, which does not have any manufacturing locally, but a lot of other u.s. carmakers have been localizing production in china. that has been the trend for most

car companies. thosed daimler, mercedes, will be hit harder by tariffs on u.s. made vehicles. they make some other best-selling suvs in the u.s. and sell them to china. the whiplash you are seeing -- just last week china opened up its industry and reduced a 25% y.port lev bmw and mercedes are among the best selling cars in the country. for companies like tesla, for example -- they just recently reduced their prices in line with the tax, but maybe they will have to eat this new tariff. ramy: these car companies are

trying to make heads and tails of these tariffs.let's bring in founderso automobility and ceo joining us from shanghai. listening to our correspondent there, there is a lot of back and forth. there are really no issues of good or positivity in that. where do you see this from your perspective in shanghai? bill: the global automotive industry, both in terms of demand and supply. when you increase trade barriers, you decrease competitiveness to everybody. impact toan equal both sides. abouts. exports to china 280,000 cars out of a 28.8

million unit market, so less than 1% of the total. lincoln, tesla, and the german manufacturers will feel an impact. they will probably be less likely to manufacture products in the u.s. they will be more likely to localize those products in china. the other part not be highlighted as much is the u.s. imports more than $16 billion worth of components from china for assembly and products in the united states. all of that cost will end up in the system and eventually erode the competitiveness of the appeasement fracturing in the u.s. companies manufacturing in the u.s. ramy: what could be the solution to this, or are they just holding out until these tariffs go into effect and the hunt?

bill: i think we are at a point of brinksmanship. both sides will ratchet up until there is a de-escalation or some kind of win that can be claimed by either side. what we are likely to see now and until the end of the week is more rhetoric. because these economies are so interdependent on each other, it does neither side to continue on the path that it is on. yvonne: bill, the president is saying this is not going to raise prices for consumers, because this will shift automakers to produce in the u.s. he talked about a 2.5% tariff on auto imports in the u.s. is there something to what the president is saying? is there an imbalance others have not touched upon? bill: sure there is a balance, alance, bute is imb

you produce in markets where you have the largest demand. right now that is china. largestr in a way the carmaker in the world. you outsource to where you have the largest demand. china produces a large amount of commodity components that go into cars -- tires, glass, batteries for electric vehicles. that is the reality of today's industry. if you force tariffs into the mix, the reduce the profitability of manufacturers, which means less ability to manufacture vehicles, which means loss of jobs. yvonne: european policy makers and automakers -- talk about what if it was a free-trade zone, 0% tariffs. would that be a more fair playing field for everybody?

you producebecause components where it is most economical to do that. from a consumer point of view, that is the best thing to do. for manufacturers, it means more jobs. it also means we can give consumers the benefit of a lower cost structure. ramy: what would it take for the white house to turn around? bloomberg news has a story saying general motors employs 10,000 people in the u.s.. daimler 24,000 people. jobs here with the elections coming in, isn't that enough to make mr. trump turnaround? bill: i think it is both jobs, but that is a delayed impact. companies will first try to cope with the additional cost structure by initially adding additional price to vehicles in the marketplace. they will not successfully able

to do that, because you have to compete with global competitors. price is not some venue independently control. consumers will get a higher price tag for the vehicles they purchase because of these tariff s. the fact they don't buy as many cars means any fractures have to reduce -- means manufacturers have to reduce production volumes, which means less jobs. yvonne: ramy: plenty more to come on "daybreak: asia." this is bloomberg. ♪

yvonne: a look at some of the stories trending across the bloomberg universe. everyone is reading what michael cohen's next move might be. the favorite story is how walmart is drawing fire for the impeach 45 t-shirt. this is my favorite story on tic toc. seven drinking six to cups of coffee a day could help you live longer.

checking those stories on bloomberg live and the terminal. ramy: up next, there is no currency war here, at least according to the pboc. he says to pledge to keep the yuan stable and not use it in a trade war. this is bloomberg. ♪

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yvonne: 8:30 in singapore. we are a half-hour away from opening of trade in the city. ramy: you are watching "daybreak: asia." let's get the first word news with jessica summers. jessica: zte has been handed a lifeline. it is being allowed to resume business in the u.s., at least temporarily. we are being told it can operate now into the beginning of august. that as washington weighs in on dropping a seven-year ban on chinese tech companies. shares in hong kong also jumped. micron technology says it won't

comment on a chinese court ruling that are rarely bans -- that temporarily bans sales. patent, cutting the u.s. off from the biggest semiconductor market. and its tradec partner, claiming they stole trade secrets. india refuses to overturn the rbi -- judges crypto could not be treated as currency under current law, and says coins must be made of metal in an existing physical form and be stamped by the government. england will face sweden in the world cup finals after eliminating colombia in penalties. it's england's first knockout

win in a world cup for 20 years. the swedes advance by beating switzerland 1-0, making it the best world cup since 1994. global news 24 hours a day on air and on tictoc on twitter, powered by over 2700 journalists and analysts in over 120 countries. this is bloomberg. yvonne: jessica summers, thank you out of new york. china's central bank has vowed to keep the yuan stable, saying it will not be used as a weapon in the escalating trade war with the u.s. we have heard from three different pboc policymakers who spoke yesterday about the yuan. usnow it is rare, but tell the message that came across. >> there haven't been any

statements from policymakers in the pboc since mid-june, when the yuan really started dropping. they have had three different policymakers come out in the same day --that was quite surprising. there was movement earlier in the currency markets, where it looks like state owned were selling dollars and buying yuan to try to prop up the value of the currency. there is a lot of action happening in currency markets in china. obviously the government and the central bank is trying to send a think the where they level of the currency should be. ramy: was the aim yesterday to prop up the yuan, to 6.7 to the dollar? james: obviously that is not what policymakers said, they did

not give a level. after the currency went through that level, they came out and said, we want the yuan to be stable. we are continuing policies to keep it at a stable level. you have a third policymaker fears, sayingy that china is not trying to weaponize its currency in a trade speak with -- in a trade dispute with the u.s. while they are not saying they are comfortable at this point, it is important that they have not said anything until this point. this is when they decided to step up. yvonne: the pboc seems to have their hands full right now, in terms of balancing the currency in keeping liquidity managed and

stable, enough liquidity out there. are they keeping control over things right now, do you think? james: they have a lot on their plate. after the financial crisis, there are a lot of central maybe central banks are trying to do too much. you can see that with china now. the pboc is trying to cut down on debt, but also keep the economy growing at the pace that they want. trying to keep the currency stable, trying to keep the stock market from collapsing. so far the results have been mixed. debt relenting is happening, but is having an effect on growth. we have heard comments from the council how there should not be a one-size-fits-all leveraging.

it remains to seen whether they are successful or not. with tariffs being imposed this friday, there is a lot of uncertainty. you are looking at a slowdown in china's economy. it is a bit too early to tell right now. yvonne: july 6 maybe the true test for whether this has been priced in already. coming up, pboc says hong kong is on track to be the world's biggest ipo market this year, while debuts on the mainland dropped. guest joins us next to talk more about the outlook. this is bloomberg. ♪

>> prime minister, thank you for talking to bloomberg. you concluded the bailout for the eurozone ramy: this is "daybreak: asia." about -- weing more have heard from the pboc about

what is at stake. they are saying this is not potentially a trade weapon, but reflecting on the external conditions, given that the dollar has strengthened. we have a chart that highlights that. perhaps these statements have some truth behind it, because we have seen the yuan slide aligning with the dollar strength we have seen. joining us to talk more about oon goh -- this strength not being used as a trade weapon. in termsshould we put of face value on these comments? khoon: let's not forget we are facing the imposition of tariffs this friday. the trade spat between the u.s. and china is being reflected in

the currency markets. the move in the yuan occurred in mid-june, where it was clear these tariffs, were going to escalate. s- it was clear these tariff were going to escalate. the market has largely taken a back seat role and allowed the market to make this adjustment. yvonne: do you think it is going to work? they are taking a bit of a hands off approach. do you think the market will finally listen after a couple comments from the pboc? khoon: i think the statements from the pboc are one the market should pay attention to. the wording that has been used has been used many times in the past. it is a sure sign that the weakness of the yuan has perhaps going to a stage where the

chinese authorities are starting to get uncomfortable. the pboc has continued to refrain from direct intervention. their fixing is him is largely working -- fixing mechanism is largely working in line with what it is expected to do. yesterday the pboc decided to step in with a bit of verbal intervention by trying to slow down or even engineer a consolidation of the kind of moves we have had in the last three weeks. ramy: intervention in terms of making the yuan weaker, but in terms of making stronger, we saw a sharp move today. it was up 0.3% against the u.s. dollar. even in our reporting, there is speculation that dollars were sold to try to make this happen. khoon: the dollar selling has

been circling about in the markets, coming from state banks. whether or not this affects intervention, we won't really know until the fx reserves numbers come up. the pboc has not been actively utilizing their reserves in the market for quite some time. the verbal intervention yesterday, the commons from the pboc governor make it quite clear the yuan weakness is getting to a level where they are getting uncomfortable. the big moves we have had in yuan weakness, let's not forget overall the policy for the chinese authorities is to internationalization. having a weaker yuan goes against the entire internationalization path. yvonne: where do we go from

here? i have a chart that shows the onshore, offshore spread. we are seeing it stabilize around 200 pips. do you expect it to widen furthermore, and that -- and dos that mean weakness going forward? khoon: we could see consolidation at the current levels. a lot will depend on the trade tensions. this friday the initial round of tariffs will be implemented. there are signs that escalation may not continue too far beyond that, we may see retracement. i am looking for a bit of a 6.55%d in the yuan toward by the end of this year. that actually will depend on trade tensions starting to perhaps ease back a little bit

toward the end of the year. yvonne: what is the transmission effect to the equity market? we have another chart showing the valuations on the shanghai composite. it seems like we have had the bottom of valuations compared to what we saw in march of 2016. can this recent selloff support these exporters and help the stock market find a bit of a floor? yuan weakness does not help emerging markets too much. what drove yuan weakness in the first place is not good for the equity market. in the ratcheting up of trade tensions, we have seen a much weaker equity market in china growthncerns of chinese has escalated. the recent pmi readings have

shown a decline in u.s. exporters. we are seeing early signs of these trade tensions filter into the economic data. that is what equity markets are reacting to. for the equity market, any sustained recovery will hinge not only on how the yuan does, but also how the u.s.-china trade tensions can take a step back from the current escalation it has gotten to. ramy: that is the big question. a lot of bloomberg analysts don't expect that to happen this week. thank you very much. time to see how the asian markets are shaping up so far this morning. sophie kamaruddin on those. ramy: sophie: asian markets are mixed, while the yen gaining ground. support perhaps coming through as korean bonds have seen

increased expectations. lone bright spot. korean chipmakers being led higher by samsung, even as the china targeted tariffs are likely to hit korea's export engine hard, given how heavily weighted it is toward semi-conductors. analysts looking through the anticipated weakness. preliminary results are due july 6. we want to highlight korean automakers hyundai motors on the back foot. the auto industry is on edge, given the potential of u.s. auto tariffs. at what is going on in tokyo, i want to highlight this -- japanese chipmakers are

among the biggest laggers. nikkei 225 in a third day of declines. over the course of the year, it is under pressure. stocks down 35% after hitting a peak in january. a negative for japan's semi conductor industry. is filtering into the overall sentiment for the japanese market. you can take a look at this chart on your terminal, signaling oversold levels for the benchmark. yvonne: let's take a look at the hong kong ipo market, on track for a smashing new year. that is the view from pwc. they see about 220 new listings this year, raising up to $32 billion. there is a different story in

china, which may see only 100 to 120 ipo's. joining us is leader at pwc. great to see you again. now you have names like xiaomi listing next week. it seems that the stars are aligning. do you think hong kong can claim the number one ipo market this year? >> certainly we hope to see that . we have a very strong pipeline now. at the end of june, there were over 200 ipo applications. just yesterday in the second half, there were 15 ipo submissions to the hong kong authority. in markets, there are rumors that they will be coming over. we predict three of them will be listing in hong kong in the second half. in terms of numbers, we have a very strong pipeline there.

what we predict for the entire 2018, we will be able to get a total fundraising of $26 billion to $32 billion. yvonne: xiaomi is a big one to look out for. --ers trying to renaissance the list goes on, really. i think of a day like tuesday, then think about what has been going on for the past six months in the hong kong market, it has gone from a soft darling to just clean ugly. -- plain ugly. there is a lot of fed tightening as well. is there a risk to this type of environment? benson: for an ipo operation, it does not happen yesterday. it takes a lot of time to get one prepared and up to status. during the past three weeks, this timing for sure is not a

good timing. it can affect the valuation for some companies. we want to see market certainties in particularly, that this trade war will come to an end soon so that listings can have a better valuation. ramy: you seem quite optimistic on this as we continue to talk trade war tensions. percolation, what might it have f or ipo's talking about possibly holding off until 2019? benson: of course there is such a possibility. at this point in time, we have not seen any of our mega sized ipos postponing their plans. in fact, we have raised our ipo forecast earlier this year. we predict there will be like to 20 ipo listings -- 220 ipo

listings in hong kong. we did not change our forecast s comparedas -- as compared to earlier this year. if the uncertainties in the market, particularly the trade war, take some time to get settled, we predict in 2018 total ipo fundraising will be closer to the lower end of our estimation. ramy: you are thinking it might be the best thing for technology and innovation ipo's. all of these technology stocks are being thrown about. what are you seeing? kong, what weg have been seeing is encouraging. a few have already submitted their ipo applications. for the past 10 years in china, there are a lot of patent company and startups. now they have become like

unicorns. they need a way out. they need additional fundraising and rusher from investors to exit. in the second half and in the future, say next year and the year after, there will be more unicorns coming to hong kong for a listing. yvonne: we have a problem of these companies having a hard time meeting these high valuations. we have seen that with xiaomi. to some of these other chinese companies listing in the u.s., they appear to be doing better. is is that these valuations are still priced on the frothy side? benson: for valuations particularly in the second half, expect professional parties

will be too aggressive. back,ng kong, a few years we said there was a lack of patent companies. now we have started to pick up the momentum. it will take some time to become the u.s. market. yvonne: i want to talk about china. you are expecting things to slowdown in that market? benson: the cdr is a major milestone for the asian markets, because it will be able to .ttract overseas companies they are listed within the existing legal framework in china. yvonne: but there are reports alibaba might as well -- does that impact the sentiment as well? benson: it is hard to say.

it is such a milestone in the markets. we believe the direction is correct, but to really get to the approval, it will take some time. there are a lot of legal questions, a lot of accounting questions that need to be kosher, that professional and legal markets need to resolve. benson wong of pwc talking about hong kong ipo's. could be a blockbuster year. this is bloomberg. ♪

yvonne: now for a look at what is coming up in the next few hours on bloomberg television, let's bring in david. a lot happening in malaysia. we are expecting to hear charges from the 1mdb scandal and najib razak expected to face charges soon. >> we will be live out of kuala lumpur. he faces a legal battle, which could actually see him in jail just two months after elections. we are watching that as well. a few other things -- there is the china angle to this. when you look at the data that has come through, it has really been the worst set of data for the chinese mainland in two

years. when you look at the surprise index on china, that is at its lowest level. we have a few guests coming on to talk about that. li cui is coming on from ccb to talk about that change in the data. one angle that has not been discussed is whether weak currency will become inflationary. that is another thing altogether. ramy: thanks very much david. we will be looking at what is happening with najib razak in malaysia. a quick look at how markets are trading right now. they are mixed. nikkei 225 down six terms of 1%. -- 6/10 of 1%. this is bloomberg. ♪

♪ markets across the asia-pacific trading water. investors increasingly nervous about a trade war. to china withs currency and stocks in the spotlight. the pboc promising not to use it as a weapon. prepares for trade talks in europe, and says countries must work together against protectionism. also, malaysia's missing billions, facing charges related to the