carol: welcome to bloomberg businessweek. jason: we are here at bloomberg headquarters in new york. carol: we have a special takeover on the new economy. we have to talk about china and india. we are exploring the challenges of growth as they advance. jason: the u.s. is raising the stakes.

it is said to be premiering more tariffs on chinese imports. off, president is spending his final days on the defense, troubling to support republican candidates. jason: white house officials have all but given up, bracing to lose gop control of the house. >> there is anxiety at the white house. on staff it is a strong possibility democrats could take the house. hear,enario i most often may republicans control the house by a seat or two. scenario, they are aware of what that would mean for the second half of trump's term. me how this jives

with what we are seeing with trump? shannon: the midterms gives people a good excuse to leave. move on to something else or get prepared for the candidates to be reelected. this administration has had an enormous amount of turnover. it is a handful of people who are with the president through the campaign. there has already bending enormous burnout. staff we talked to our tired. -- are tired. it might be good to get some fresh eyes in the administration, to get some new energy. there is also this issue of free staffing. -- re-staffing. carol: it is a different town. -- tone. we is michigan,

pennsylvania, wisconsin -- where is michigan, pennsylvania, wisconsin? those are not on the map. florida,it is indiana, montana and west virginia. is not necessarily read the white house thought they would wherethe final weeks -- the white house thought they would be in the final weeks. there is a lot of momentum in the white house. republicans were energized by the battle over the brett kavanaugh confirmation. now the president is spending most of his focus going and campaigning for senators in solidly red places. the governance is one of a handful of new economy themes issue, aeek's special

complement to the new economy forum hosted in singapore. devisepants will solutions to the issues facing the global economy next year. joining us now is our bloomberg businessweek editor. tell us about your thinking. we divided the magazine pillars.-- by on the hills of the brazilian election, we wanted to look at big news in brazil. whaany people in brazil use app that protects users, but also makes it so that it becomes an echo chamber. carol: who knew they used it so much in brazil? try to look at every pillar through a specific lens. india, we looked at climate.

southeast asia, through data. jason: it is a very personal essay, you talk about your hometown and traveling overseas. what inspired that? oel: one of the things you can do with an issue like this is make it personal. i grew outside of -- up outside of portland. oregon has advanced land-use planning. i saw controlled growth strategies. i thought this was an interesting place to start when you start talking about the global engines of future growth. from a personal level, in attempt to saw an not have unbridled growth and be strategic about it. singapore, i was able to look out a window and saw land xp photo for the city

has been developed. right at the foot of where the city has been developed. singapore is planning for growth in a strategic way. this will be where the global growth comes from. the challenge is how to make this not just be unbridled growth, but something more strategic. carol: still ahead, surviving fake news. london'sd the city of wall street equivalent is scrambling to deal with brexit. carol: this is "bloomberg businessweek." ♪ carol: welcome back.

on thejoin us every day

radio from 2 p.m. to 5 p.m. wall street time. you can also listen to our podcast. carol: you can also find us online and the mobile app. we are having some closely watched global elections. brazil marked a hard pivot to the right. but real and fake news campaigns on whatsapp has prompted a lot of concerns. brazil has an extremely social culture. the people have been ahead of the game in terms of adopting social media. in brazil people use facebook and twitter. what they are using a lot is whatsapp. is the primus -- primary messaging forum here. election, everyone in

the u.s. would be talking about it. in brazil, that would happen on private whatsapp conversations. jason: take us inside some of those conversations. anyone who is a sentiment human that tears about politics -- cares about politics, everywhere. u.s.,n: just like in the you have families that come together at thanksgiving, cousins and uncles. people are together in a forum having a conversation about to they will vote for in one of the most important elections in the country's history. a lot of brazilians ended up leaving their family groups,

quite a statement, to check out entirely from your family conversation. they could not handle the and the phenomenon of this election, the fake news. we saw a dramatic spread of fake news throughout this election. carol: you use the and the phenf this phrase, virtual propulsion jet for news. whether it was real or fake. thisis what we got, incredible velocity of news on whatsapp. much of it was not real. shannon: we are familiar with the concept of it in the u.s.. brazil, this was definitely the first election where it had been an issue. it was playing out in these whatsapp groups. someone's dad shares a meme

spreading some kind of information that is fake. it has become a popular meme because it is funny or makes a politician look bad. it would get spread in one group and someone would copy it and spread it in another group. what are the consequences of this viral nature of fake news? whatsapp is a private forum. it is not like you can easily monitor what people are sharing and whether it is true. we have an immeasurable impact fake news had on the election. i don't think we'll ever get a good measurement. arol: london scrambles to deal with quitting the european union. leaders are deadlocked in brexit talks. there has been a lot of huddling

in london. : march 29 is the deadline to depart. to build london as an international financial hub may evaporate. coming into the summer and out of the summer, there were many city traders and money managers who believed this was not going to happen, for there would be a cushy transition -- or there would be a cushy transition. the political situation is really deteriorating. the k government and brussels are deadlocked. you have to scramble in the city. it looks like it is going to be a no deal brexit. jason: who are the potential winners? who will be picking up these jobs going to leave london? edward: paris, amsterdam,

dublin, frankfurt to a lesser degree. big metropolises with sizable service industries. it looks like big banking in london and a lot of the action and london will be distributed ondon will be distributed, depending on the type of business and what deals are getting done. this is the contingency planning. jason: as london diminished -- is london diminished for the foreseeable future? dward: you won't have this sudden break come march 29. it will really be over a long time. all of the opportunities that could be lost as a result of

this was something i kept hearing from people i spoke to in this story. if management wants to grow to capture european customers, that will not happen. arol: it is not just the financial damage to london. it is reputational damage. ward london has long been seen: as a reliable, pragmatic, transparent, entrepreneurial place to do business, with what could be the world's best legal system, another huge draw for business. that is now in a state of play. i spoke to a leading anti-brexit advocate. that reputation could fracture, it is no longer reliable.we don't know what will happen politically . there could be a general

election next year. corbyn could be the prime minister. how do you build a reliable reputation as a business center? jason: coming up, according to reports, the u.s. may roll out tariffs covering all of china's $500 billion in exports. lee saysd u.s. companies are not ready for chinese ai. jason: this is "bloomberg businessweek." ♪

jason: welcome back. carol: you can also listen to us on the radio on sirius xm, and in new york, washington dc -- >> and in london and on the

bloomberg business app. rol: u.s. officials during to chinesee tariffs on exports. jason: we break down the billions of dollars of goods. lor: it is not dollar for dollar. have a good explanation so you can see how this all breaks down. only $155 billion, versus imports, about half $1 trillion. on thursday, president trump was tweeting about talking with the chinese president ahead of the g20 summit. trade talks are going well, but we never know. carol: when the rubber hits the

road for the chinese economy is the question. tariffs are expected to slow chinese gdp growth by half a percentage point in the year ahead. check out this chart. if the u.s. follows through on their threat to raise tariffs further, growth could be slowed by 1.5%. jason: when you see it in black and white, it is startling. here is the chief economist for bloomberg of a guideand author to china's economic data. tom: this is part of the motivation for the trump administration. the headline you hear them talking about is the trade deficit with china. behind that is a deep concern about chinese industrial policy ambitions.china wrote

this down in a policy document and published it in 2015. they set aggressive targets for grabbing market share and globally across all of the key sectors of the future of the global economy, everything from robotics to new energy vehicles to artificial intelligence to medical devices. china has a plan and a target for grabbing global market share. if you think about over the last 50 years, where we have seen nation say, we want to dominate a market, germany and japan come to mind. what is different about china? tom: china is really big. 1.4 billion people. if it continues to move toward the technology frontier, they will overtake the united states

as the world's largest economy. that's an existential fear too many in washington dc many in washington dc. chinese politics are not like that in germany or japan. rise comes with a bunch of geopolitical baggage. has china become good at compared to the rest of the world? why are countries worried? tom: they have gone head to head with germany on autos and taiwan on semiconductors. one of the oddities is that in most of the sectors china is targeting, the u.s. is not a major player. carol: bloomberg businessweek

e he isith kai-fu le funding and china -- about artificial intelligence companies he is spending in -- funding in he spoke with us china. spoke with us before the official release of his book. >> china has more or less caught up with the u.s. and i ai. beyond the theory tendcompanies like google to be focused on. jason: i have to go back and read about techno

utilitarian policy. it encapsulates what he's trying to do. >> command and control policy. china will put its weight behind companies it thinks will be world leaders. the government has invested significantly in infrastructure, particularly in wireless coverage for the rural parts of china, an area where the u.s. lags. trying something and seeing where it goes is an incredible freedom, to have the government say, go try. sales pitch tot chinese ex-pats in silicon valley who have seen frustration out of school as to what they eiling,ke is the bamboo c

the perception brilliant chinese engineers cannot advance far enough in the valley. chinese companies and venture capitalists are saying, but for throwe salaries -- let's salaries at them. the trade-off is having data to play with. son: is this enabling china to catch up, if not pull ahead? are there constraints? is there a different mentality with the administration or the way companies are being run in silicon valley? something that people will have to worry about in the

year ahead. people are starting to become aware of how their data is being commodified and sold. politiciansead to finding political favor in trying to regulate industries more strictly than the bare regulations being imposed on them. we have not seen too many proposals along those lines. the test will be over the next year. california will be writing a sweeping privacy law set to take effect in 2020. that may be a blueprint for federal law, or preemptive. you have two great eeconomic powers. a.i. ultimately creates problems. but the u.s. and china might

want to work together. jeff: jobs may have to be radically re-envisioned by 2030. that will be a massive challenge. jason: the urge to build cities has never been stronger. we have our creative director on putting the world's growth engines on the cover. projection to work the earth according to country-size. it creates this map where you can look around and see this change in a visual way. to headline is a nice way for thehe big concept issue this week. ♪

jason: welcome back to "bloomberg businessweek." ahead, closing the cash gap in kenya with crypto. done tond what is being clear air pollution. carol: this is part of the special new economy issue. economypreview to the

forum that will be hosted in week.ore next participants will be devising solutions to issues facing the global economy in 2019. ason: we have more on the daunting challenges these growth engine space. here is our bloomberg economics editor behind this issue. llars, the pi important topics that are the foundation for the conference going to happen in singapore -- . governance,gs like inclusion, trade. we have to tell stories that are fresh and new, and representative of the challenges these countries face. carol: let's take a look at folks re-creating cities, planning communities. : this is what everyone

wants to do. start from scratch. carol: cities grew up, become chaotic, and then you want to start over. cristina: new cairo. it does not have its own name yet. a new city is built that will become the -- is being built that will become the administrative capital of egypt. that was a project born around 2014. it is moving along at a quick pace. this is post arab-spring. anunder the auspices of autocrat who is looking to impose a different structure politically and economically on a country that is complicated in those regards.

bornina: that project was out of the optimism from the ng but is being executed from some of the authoritarian elements of the new government. city they arest doing is the government one. a group of city planners got together and took the idea to the government. he said, start with one city. there are problems in this project. the designs are going to show a bottle of water elements. lot of water elements. it'san issue in cairo. are going to have to

siphon supplies from other cities in the area. carol: nature here is dredging up the atlantic to create a new is dredging nigeria up the atlantic to create a new community. cristina: lagos is sinking. it has this issue of not being able to grow any further. chinese dredgers were brought in. they dredged up ten kilometers off of lagos. we see big towers in the middle, a marina district, renderings showing beautiful buildings. there is a gigantic sewall -- se

awall that will protect the island from surges. redging causes a provision in the surrounding areas and may cause more damage from storm in the-- erosion surrounding areas and may cause storm surges. activists have called this a climate change apartheid. many stories talk about bouncing growth and sustainability. balancing growth and sustainability. cristina: it is difficult. we have seen the impact these big projects have. people who are critical of this new cities,h for that is what we hear a lot of. new cities being created are enclaves for the rich, and put a

strain on ecosystems. build for what you think is coming up next, but you do not anticipate what is coming further down the line. cristina: we looked at a place in the middle east. it is in the uae. it was conceived to be zero-impact, totally sustainable in terms of energy and water. features -- it has this transportation system, mini-cost to jet around between stops. the designer said, we did not anticipate advances in electric vehicles would be so fast. our system looks a bit passe

already. carol: you also look at what is going on in india. far from perfect. there are trying to deal with basic needs, including sanitation. india was a country where more people have cell phones then toilet until recently. the government kicked off a campaign called clean india in 2014. watched what is the biggest toilet building spree in the world. something like 110 -- 110 million toilets will be built by october of next year. that is the anniversary of mahatma gandhi's birth. up next, an update on how bad air pollution is in light of global economies emerging. and how cryptocurrency is

revolutionizing local commerce in kenya. carol: this is "bloomberg businessweek." ♪ jason: welcome back.

carol: join us for bloomberg businessweek every day on the radio from 2 p.m.-5 p.m. wall street time. you can also listen to us on our podcast. jason: and find us online and our mobile app. year, you might u.s. pulled out of the paris climate agreement. other nations are still committed to reducing greenhouse gas emissions. jason: that will not be easy for two of the fastest growing

economies -- economies trying to lift the people of their nations out of poverty. particulate matter is small, 2.5 microns, tiny. asian cities in recent years have grown particularly infested pollution --xic litigants. they come from cars and coal plants. fields.ing agricultural it is startling when you start to think about the number caused by the particulate matter pollution. >> indian air pollution is your

mid century black cloud of pollution. it is the sixth largest cause of premature mortality every year worldwide. more than half of those deaths occur in china and india. in a report that came out 99% of the children under the age of five in the south and east asia living under this black cloud. year,dds up every something under the order of 700,000 deaths of children under the age of five, once you consider the problem of indoor air pollution largely caused by wooden cook stoves. children born into this,

these developing parts of the world that are going to have this pollution for a wild. they are going to grow up in it. >> people are very concerned about the long-term field. india and china are having comparable problems, but india's population is much younger. has more of a robust population. they will become more susceptible to this -- diseases being caused by this bad air. burning, increased coal indiag, automobiles -- has become the top of this list. the top 10 most polluted cities

.re all in india what about london, madrid, and new york? jason: and riyadh? >> there is an element of dust. in india, we see dust from construction. there are more factors than just from combustion. it is a more complex picture. jason: is this part of what the climate agreement in paris was meant to solve? >> is strongly related to that. -- it is strongly related to that. climate advocates are working together on issues because of the source of this particular

--matter pollution. a big part of it is combustion. the faster be clean up our economy -- we clean up our economy, whether motivated by public health, whatever it is, they are what the wonks in washington call co-benefits. it is worth looking into european cities. there is a hopeful story. numbers are dire and upsetting. proven theys have know how to combat pollution. we have seen that in the last 1-3 years in china. there are blue skies in china in a way that was not true 10 years ago. carol: coming up, blockchain is taking off in kenya.

using dna to: discover your family tree may have unforeseen consequences. carol: this is "bloomberg businessweek." ♪

jason: welcome back. carol: you can listen to us on the radio at sirius xm, and in new york, boston, washington dc -- >> in london, and on the bloomberg business app. some of the worst neighborhoods nairobienyan capital of currency,dealing with werey for goods in areas access to paper cash is rare.

carol: our reporter explains. you to look at the way cryptocurrency is being used outside of wall street and silicon valley. the whole idea of blockchain is going to change everything. i wanted to see if there were real applications. inpoke to this program anya, which is turning poverty alleviation project into a cryptocurrency project. i started reading it and phrase.arol's wait, what? moving from colored paper, straight to blockchain. these are poor people who

live in kenyan slums. they have things to trade, but not official shillings to do it with. we agree this paper voucher is worth something in our community. carol: they call it a community currency. it helps the community and terms of an economic payoff? dune: they continue to get things they need. the program has been successful. they have about six of these in different communities around kenya. outside of nairobi and in nairobi and in moving box a -- mumbasa. it, an who started displaced californian turned economist.

phrase.reat he wondered how to bring these communities together. he found his answer in blockchain. jason: how would we use this? dune: if you have a smart phone, this is sort of any mobile money payment. you would type in something on your smart phone and make the transaction. you would not see any of the complex stuff going on. aith-basedso use the f system. kenya is a great place to try

beyondcause it's gone where developed economies are in terms of fintech. you can take cash and put it onto your phone and you don't have to pay for anything. testing is rising in popularity and becoming big one iss for companies -- a small data analytics company to team up with law enforcement to solve decades-old murders. carol: we speak to our reporter. were used by cops to try and find murders were to try to establish paternity's, and meddenly you have 23

marketing these things, discovering where your ancestor came from and what diseases you might have a proclivity towards. there were these weird consequences, like in the subculture of genealogy. people realized you could use this stuff to find relatives you were looking for, long dead or living. realized, you could use murder in a cold case. all of this has resulted in arrests. tell us about the woman who has made her life's work of this. her first love was musical theater. she was not a struggling actress, but someone who never made it big. , shemany genealogists said, wouldn't it be neat to put

together my family tree. she went down the rabbit hole. around the to be time people were realizing you could use this genetic information as an adjunct to the staff. leaders ofone of the this movement. she became good at finding things like the parents of amnesiac'sor helping discover who they were. she could really solve these incredibly weird, hard cases. it was not long before actual detectives started asking whether they could help. just because you don't give up your own dna doesn't mean you can't be identified by even if a distant relative does. drake: how far you can go and

still find people is the question. a study came out. estimated if you have a third cousin on one of these databases, you can be found. everyone has maybe 130 cousins. cousins.ird if you have native american ancestry, 60% of americans can be found right now. whether or not you were on it. jason: where does this go from here? drake: the fact that you have these high profile arrests, many involve the woman we wrote about, has gotten everyone's attention. right now, this is not regulated at all. some states have put regulations

on searching in the police forensic criminal dna databases. maybe you could do something like that. it is kind of the wild west. bloomberg businessweek is available on newsstands now. jason: and online and our mobile app. carol: tom orel talks about the trade implications with the tariffs in china. he reminds us about the long-term investments, the plan in place to dominate different industries. we are talking about high-tech industries. this could change the future of china. i think people are wondering where the rubber meets the road. dune's piece on the kenyan cryptocurrency experiment i find fascinating. i spend so much time listening

to wall street bros talk about crypto and the blockchain. this is a real world example. africa is a great test lab for future financial technology. check out our daily business week podcast, which features interviews of the past week, including the interview with the author of "how the internet happened." alexander, founder and ceo of ember. it is my go to travel mug. and one with a comedian and smart writer, who has her "how to beout, successful without hurting men's feelings. have jason: more bloomberg television

starts right now. ♪ >> i'm selina wang in for emily

chang, this is the best of bloomberg technology coming up, another big week for big tech earnings apple and facebook reported. plus, big blue's, big deal, ibm looks to the cloud. plus, a hotly debated about issue here in texas go