haidi: good morning. i am haidi -- shery: i'm shery ahn. welcome to daybreak asia. stories, the apex wraps up, the u.s. and china barbed comments. no communicate -- communique. russell says the u.k. transition could be extended. the u.s. prepares for reports of the jamal khashoggi killing.

the cia assessment is premature, since trump. shery: u.s. futures looking higher by .3%. this coming after we got positive sentiment across u.s. markets on friday, the dow gaining for a second consecutive session while the s&p 500 was up .2% after president trump signaled there could be a deal g20e made with china at the . we did not get pessimism from retail and consumer stocks. they took a hit. it will be another big week for retail earnings this week as we get results out of target, best buy and others. .2% asthe nasdaq lives we had disappointment over nvidia and their fourth-quarter outlook but all of this will be felt in the markets across asia. haidi: absolutely. getting a quick look at how we are trading in the asia-pacific.

we are getting aussie markets coming online. it is a staggered open but there is a flat state of affairs the we are seeing materials and energy, early gainers in the session. we saw gains or stability returned to oil markets. in new zealand seeing that turn a -- turn negative. the kiwi dollar and aussie dollar, the top one and two performers, retreating after hitting multi-week highs on friday after the apec meeting really highlighted the fractured relationship between beijing and washington and downplayed the hopes and optimism we had at the g20 to bring conclusion to this trade war. let's get you to first word news. president trump visits california, seeing firsthand devastation from the deadly wildfires that have killed 76 people, left 1000 unaccounted for and forced billions of

dollars in damage. the president is stressing common ground on how to approach a problem, marking a change of tone to previous criticism of the democratic leaders. mr. trump: see what has happened here, nobody would have thought this could happen. behinderal government is each other. i think we can truly say, and jerry and i have been speaking and gavin and i have gotten to know each other. we will work together and do a real job. this is very sad to say. rosalind: theresa may is continuing to sell her brexit are noaying there numbers to remove her. her leadership has been threatened but not formally announced. removing her will not change anything. the e.u. is saying this should be extended to 2022.

italy' populist religion is ready to talk abouts their budget, but the e.u. says it must remain in place. luigi says the government is ready to eradicate wasteful programs but the basic reform plan will stay. brussels is expected to reject that when issues of a review of the spending plans wednesday. the european union is working on new rules to prevent foreign investment in red -- amid increasing security concerns with china. the legislation may be announced tuesday which will include how far e.u. members can push concerns with their peers. early germany was blocked from buying a robot maker. spacex is not planning to upgrade its workhorse, instead making the second stage reusable. elon musk said the market will

have -- the rocket will have minor changes to improve reliability. they will focus on the falcon heavy booster with an accelerated design program he said is delightfully counterintuitive. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am rosalind chin. this is bloomberg. shery: president trump says we may never know the role saudi crown prince mohammed gilles simon -- mohammad bin salman played in the death of jamal khashoggi. there were increasing indications the murder was ordered at the highest level. then brodie has the latest. president trump saying the u.s. what issue a very full report. will that be enough to satisfy congress?

ben: i think it will not be. the cia believes this was ordered at the highest level, the prince. it is interesting that lawmakers, democrats and republicans, haveben: suggesteds will not be enough. they want to look at something u.s. support for the saudi war in yemen, ending arms sales and increasing sanctions on individuals. what happens when this report comes out is it goes back to them. the pressure wraps up. -- ramps up. the president's words may not mean a lot. shery: touch on the molar investigation, because there were lots of concerns with the acting attorney general matthew whitaker, the investigation could be curtailed. with -- have we heard anything from the president? ben: he said he would not overrule whitaker if you were to curtail robert mueller, cut off his budget or fire him. it is strange the president would say that because the concern is whitaker would do .hat, what trump wanted to do

it is not an overruling situation. democrats want to bring whitaker in to congress to testify. they also say whitaker himself may not have been constitutionally appointed. the white house and justice department say it was constitutional, he is the acting attorney general, but there could be a push and pull on that. haidi: we are still going through the midterm counting. democratic senator bill nelson has conceded in florida. what does it mean? does it mean anything for the republican balance of power? ben: they expand their votes in the senate which allows them to through and confirm government appointees like a future attorney general. but you still have the way the senate works, 60 votes to get most things done. with divided government the government is held by democrats.

so to get legislation done, you will need bipartisanship and dealmaking. the house of representatives, even now we have a few votes and the latest on who has actually won some districts because we had not seen the result out yet. do we have any more updates? ben: in the past couple of days we have had a few races called largely in california. orange county, which has been a historic bastion of the republican party, it now has an all democratic congressional delegation in the house. it is a mixing -- it is amazing. in the two weeks since the midterm elections we have seen democrats expand their power and it did look like a blue wave people were predicting. haidi: thank you so much for that. let's take a look at saudi's concerns, and economic cold war potentially dividing asia.

the apec summit ended in disarray. stephen is just back from the meeting and back on dry ground, covering the apec summit. i guess.ers this is the first time there hasn't been a joint communique since aipac -- apec began. choppy waters. a lot of contention of course. mike and xi jinping spoke back to back on that pacific explorer. the battle lines between the two giants of the world being underlined on issues of global trade, world trade, the belt and road initiative. the prime minister of papua new guinea, you see in the yellow, one of the yellow shirts, he the entire world is worried. the aipac nations and economies make up half the world trade,

60% of global gdp, and those 21 economic blocs or nations, they are in the cross fires of china and united states for your they rely on trade and were not able to put out a communique. let's hear from the main players, being xi jinping and mike pence. mankind has once again reached a crossroads. which direction should we choose? cooperation or confrontation? openness or closing one's door? the issue of all countries and the future of mankind hinges on the choices we make. >> the united states will not change course. >> the bill initiative is an open platform for cooperation. it is guided by the principles of the consultation and cooperation for a share of the benefit.

it is not designed to serve any hidden geopolitical agenda. it is not target against anyone and does not exclude anyone. >> the united states offers a better option. we don't don't -- we don't drown our partners in a sea of debt, don't compromise your independence. we deal openly and fairly, do not offer a constricting built or one way road. we offer to work with you and we all prosper. stephen: that summed up the mood at the marquis theater on the pacific explorer. a u.s. official is telling bloomberg news, why did the communique fall apart? china objected to a pledge for all of the members to fight against all unfair practices. other 20 members agreed to, but china is not. that was a report from afp

the chinese delegation or some of them actually stormed the offices of the foreign ministry in papua new guinea which was drafting the communique to strong-arm china's influence on that final communique. police were reportedly called. i must emphasize china says it was made up by a parties trying to influence the narrative. shery: not really surprised you saw the rift. mike pence has been a driving the hard-line rhetoric against china especially with his speech in october. is there at this point any sign we could get some sort of breakthrough? stephen: everyone is looking for signs and we know president trump and president xi will meet. we got signals late last week of the market rebounding in the united states, that the chinese and u.s. officials behind the

scenes were working hard to reach a deal. perhaps they could avoid the increase in tariffs from the united states in january. but after personally experiencing this at the meeting lines, underlying battle there doesn't seem to be a lot of concession. you have heard from mike pence saying we will not change our course until china changes. they are getting down to stubbornness right now. .hery: thank you so much stephen engle joining us from hong kong. we will have more on trade with capital markets and mickey leavy. he said china needs to maintain its trade channels with the u.s. haidi: alliancebernstein joins us to see whether they are seeing value in asian credit. this is bloomberg. ♪ is bloomberg. ♪

asia. this is daybreak i am shery ahn. haidi: i am haidi stroud-watts. markets are rebounding and currency.supporting bolstering market sentiment, but , it leaves -- apec the the sentiment worsened for wear. let's look at the first -- fixed income portfolio manager. the disarray in papua new guinea couldn't even get it together to put together a broad set of principles in a joint communique , does that lengthen the odds we will see resolution in buenos aires by the end of the year or next year? >> it places additional pressure on the g20. markets are not really expecting any significant announcement or trade deal out of the g20, but i think there is anticipation we will see the framework for agreement to be established in the future. haidi: in the meantime you have

seen pressure come off on it comes to the emerging markets with asian assets. you see markets, equity gets finally stop underperforming. you see the 100 day moving average finally being broken through. lessou seeing values with risk? brad: we are. there are certain parts of the asian local currency bond market where it yields have risen to levels where it is hard to ignore the valuation. we are impressed with the way asian central banks have reacted to the tightening of financial business in the u.s. bank indonesia and reserve bank of india, the central bank of the philippines all tightening over the last six to 12 months. their currencies haven't weekend, but they are at levels where it is time for investors to commit to investing.

we are looking at yields in excess of 8%, real yields and many markets exist at 3%. 8% investing in a yield at can reduce your income. shery: investors have turned more bearish when it came to a couple of months ago when we saw pressure on emerging markets. this gtv chart showing indonesian bonds, indian bonds, most vulnerable with further em weakness. we had higher oil prices, stronger u.s. dollar, saw the recent reversal in oil prices. is this going to change the appetite for investors? i think for emerging markets the fall in oil places -- oil prices is positive. economiesing market are importers of oil. dollar, if we think

about that, it is at the top end of its range. we are not expecting a strong rally from here, so those two conditions that have been appear to have subsided. let's also not forget within china, they are evading policy. the backdrop of a tightening u.s. financial conditions in asia is offset by conditions in china. shery: china's government bonds, now the best performing so far this year. are we seeing more room to advance given more easing measures? end of thehort represents value, and we expect yields to be falling further. it will be nuanced. that using a policy in china will not only be monetary

but fiscal. they will have to issue or government bonds or special local government bonds for dedicated infrastructure spending. that will keep pressure up on the longer end. on the short end we are expecting china to be one of the top performing markets. haidi: let's look at the em problem children we were talking about, here in asia. the likes of indonesia, .rgentina, turkey, russia our this turning to look more stable and more appealing? particularly markets like indonesia. india has seen risk. it will be interesting to watch their central bank meeting this year with pressure to reserve -- release reserves. but indonesia has had high -- hike rates consistently. the indonesian rupiah got to quite a cheap currency. let's not forget they are now

investment grade by all three agencies. ignore.t easy to haidi: this board meeting happening at the r.b.i., we see the battle of independence between the government and central-bank in india all the time. is it coming to an inflection point where it will start having the ripple on in fact with investments? brad: yes. we are try to look at what that ripple effect is because for the institutional manager who likes to see separation of institutional power between central banks and government, of theosion institutional support of [indiscernible] [indiscernible] is worrying. in the short-term if it provides liquidity into the indian economy, that could be positive. it is a little nuance for how it is positioned. pressure on this is

the central bank of india, not just an indian phenomenon. we see that globally. look at the u.s. where quality is loose at the moment. .hery: thank you so much alliancebernstein 60 income portfolio manager brad gibson. top brass from australia's big banks are expected to testify in a new round of hearings into misconduct. we will discuss potential follow. this is bloomberg. ♪ mberg. ♪

haidi: this is daybreak asia. i am haidi stroud-watts. shery: i am shery ahn. let's get a look at business flash headlines. google cloud wants to have a change of leaders. the ceo will step down in january and will be succeeded by a former oracle executive thomas who will join the operation leader this month and work

alongside others. google -- google cloud expanded heavily to challenge amazon and microsoft. the woman intends to remain on the board of alphabet. bank, in a money laundering scheme. multi -- this person led the trading operation until 2014 and left after alerting management to suspicious amounts of money going through the estonian unit and spoke out through the media. shery: blackrock is thinking of applying for a mutual fund license in china to have more control over its operations. sell their talks to china investment management and have asked about a regulatory joint venture. the ceo hopes blackrock and become a strong player in china.

-- can become a strong player in china. resuming hearings with the heads of big australian banks called to testify. our investor reporter joins us here. we have seen them come back from recess after opening statements were made. you can watch this on the bloomberg. what will they be talking about? we have a litany of poor behavior in the interim. hero one person started speech, and what they want to look at, we know of misconduct but what caused that? a question of panic, governance, culture? does a law need to be changed? she was giving a warning to the banks appearing. they don't want more apologies. they want to get to the bottom of what has caused the misconduct and scandals unearths

by the previous round of hearings. -- unearthed by the previous round of hearings. haidi: you see one person here being asked a number of questions. what is the potential fallout? we have seen a retracing with the big aussie stinks -- bank stocks. the bad reputational news doesn't seem to get much reporting. >> it is starting to affect their business. the big thing is what kind of regulation changes are brought in as a result. we are already seeing the banks trying to get ahead of this. commonwealth bank, one of the hardest hit, is getting out of the wealth management business and will spin that into a separate one along with mortgage and financial planning. their going back to the core business of being a retail bank which makes it a utility, getting out of sort of like trying to be a one-stop financial services business.

haidi: thank you so much. you can continue watching that on the terminal at live go if you are a bloomberg subscriber. this is bloomberg. ♪ omberg. ♪

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sydney --30 a.m. on in sydney. markets have been trading for half an hour, seeing declines at .4% for the benchmark asx seeing pretty much everything in the red, communications there in the green but the biggest declines going through again for energy which was badly -- badly beaten down on this roller coaster ride for crude prices. 6:30 in new york, s&p futures under pressure. we have another big retail week in the u.s., earnings from target, best buy and some letdowns by nordstrom and macy's. we will see what happens.

right now futures under pressure after the rocky week we had last week. i am shery ahn in new york. haidi: i am haidi stroud-watts. not just earnings, we also have black friday and cyber monday getting geared up. shery: i am excited. haidi: first word news. aipac -- apec summit roundup without a joint communique for the first time since 1993. officials said china balked at the wording of the wording on trade where it they would declare any unfair trade practices. the trade war overshadowed the talks. people treated back and forth. >> mankind has once again reached a crossroads. which direction should we choose, corporation or

confrontation, openness or closing one's door? the interests of all countries in the future of mankind hinges on the choices we make. rosalind: the trump administration will issue its jamal into the murder of khashoggi on tuesday, indicating the killing was ordered at the highest level. the cia said the crown prince approved of the murder although president trump said that could never be proved. the president also said a cia report is for mature. -- premature. mr. trump: will anybody really know? he had people recently close to him that were probably involved. on aaw heavy sanctions large group of people from saudi arabia, but at the same time we have an ally. i want to stick with an ally that has been very good. than 2.5 thousand

central migrants -- central american migrants have arrived at the border. cannot --f two juana t juana cannot cope. thisdent trump tweeted blockade could last six months and the u.s. will not stand for an invasion. newspaper saidss the emissions scandal could have been averted after a senior executive reported manipulation in 2011. documents show the whistleblower alerted the authorities and talked about vw illegal activity. they didn't talk about the exact issue that's good -- triggered the schedule. -- scandal. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am rosalind chin. this is bloomberg. haidi: let's take a look at what you should be watching as trading gets underway in asia. we have adam haigh with us.

looking at the key trends of 2018, we are trying to see a reversal with the u.s. equity markets story that has seen rough patches. adam: over the course of the been one s&p 500 has of the opera farmers. that is starting to turn. what we are seeing is assets like emerging-market debt, equities and really hard hit currencies starting to rebound. notably in the equity market we are starting to see outperformance of value against growth, very rare for us to have seen that outperformance over the last kind of nine or 10 years with the bull market. the chart shows it is clear in the e.u. and the u.s., value is starting to outperform notably overgrowth. some of the real losers this year, the likes of the aussie dollar leading to currencies lower going into october and now enjoy a pretty significant rebound. that is looking well supported

here, technically a lot of people saying it bottomed here and looking for further upside, shorts gone into this move, very heavily squeezed. certainly a lot of people on the other side looking for it to extend further. is an interesting juncture, rounding out 2018, people unsure about how 2019 holds and whether these reversals start to become a longer-term theme or whether they are a blip and we go back to the old ways of u.s. equities outperforming. that is a key question. also what happens to trade we are two weeks to go g20l the much-anticipated meeting. what does it mean for risk assets? adam: going into the end of last week, there was certainly a sense we might get to the end of november when president xi and

trump will be at the g20 meeting and there might be optimism going in that we might have somework at least for conciliatory talks that allows risk assets to move higher. the chart shows well these times of ebb and flow, and they have really been for the most part u.s. equities have been able to rally through most of this change. recently it has been harder to predict. certainly over the weekend and what we have heard from mike and's very hard -- mike pence's very hard remarks on china is we are starting in a poor sentiment for risk asset. u.s. futures are following a bit, seeing strengthening in the yen. once again it puts that, have this kind of sway from optimism back to a slightly more cautious approach to the fact we might actually get out of g20 with not a huge amount having moved the

dial on the talks between the u.s. and china it will be interesting to hear any kind of comments that come out over the next 10 days before we start the g20 meetings in buenos aires. shery: thank you. global markets editor adam haigh. let's continue the discussion. it is a holiday shortened week and the tail end of earnings season. corporate reports, fresh economic data and oil prices likely to dominate the trading headlines. su keenan is here with the latest. we also have black friday. i'm excited to go shopping. it will be huge. expectation this will be a bright note. we have the best prospects in a decade. let's go to the market snapshot. down day for stocks. brexit looks worse than expected, u.s.-china trade still

a big question mark in terms of whether it gets better. the oil price run could set the tone along with black friday sales. semi conductors down with amd chipnother big graphic stock down as well. the dollar bulls and bond bulls .ave been boosting positions gtv is where you find the library of charts. we have seen yields come down from the seven record last month. let's go into the list of stocks that will be, or companies that are reporting earnings. the large majority of these are retailers. target, the parent company here, victoria's secret. you also have other companies gap,it like jd.com, campbell soup. that is a big activist battle as

well. it should be interesting and clearly move the needle of the market. thanksgiving holiday, expecting thin trading, which could lead to low volatility. could berices significant. the stock market could take its cue from the oil market. the big picture story is 25% plunge in prices from five weeks ago when we were at a four-year high. and naturalo $56, gas along for the wild pony ride if you want to call it that. oil was falling, and we can go into the bloomberg one more time and as oil was falling, natural gas was spiking. -- lostnot only lose money as they try to stop the falling prices and natural gas, but there were spread between

the contracts march and april that got a lot of traders off guard. as shery and you have mentioned, markets were closed. thanksgiving holiday week. kicking off the holiday shopping season, black friday, cyber monday. what are the expectations? missed, it will be negative for stock split u.s. retailers, take a look at the headlines here that have year to . there is a lot of money to keep up with amazon. the have cut a lot of their profits. macy's is one of the retailers that is expecting a robust market. a lot of stocks that will be sales, thepositive reason black friday is called that is because sales went into the black as opposed to read. , buts has already reported most of these companies will be reporting, kohl's, it will be

interesting to see what they have the say as well. haidi: watching amazon this week as well going into black friday. shopping mania. su keenan in new york. its talk about the reserve bank of india. the government's fight reaching up event -- fever pitch. they are going to discuss what if anything they can do to meet the government and business demands. kathleen hays is here with more on this debate. central bank independence, prime minister modi, election motivated, they say the central bank isn't doing their job. kathleen: it is a question that is at once technical. but as part of the reason it is subject to interpretation. prime minister modi is against an important general election in 2019. he wants the banks to be lending, have more liquidity.

maybe that could help get the economy on better footing. the real question, the bloomberg , the r.b.i.am banking could be more generous with liquidity. but modi's team is saying probably the r.b.i. has been too tough on banks, trying to clean up their bad debt. they think the case for lower reserves is strong. they cited sanction -- section of the reserve bank. minister said he will not let the economy suffer because of liquidity. he criticized the r.b.i. for lending to much from 2008 to 2014. he wasn't the chief of it then. the r.b.i. wants to preserve its .nflation fighting and ability it says the reserves are telling us to let loose, but they are no

show reserves, queued to the reevaluation of the for a concerted -- the foreign currencies they are holding. against technical. biggerve to consider a group that is fixed, to decide on monetary policy. people don't expect any big moves out of this meeting today but perhaps more conversations with the government and maybe they can find a place where both sides can be happy that the r.b.i. gets some ground. the government is saying it is needed but still preserve their sense of what they are supposed to be doing. very important the whole question of independence. the boj gets important data, one of the most important indicators area it is inflation. doesn't really move much, but what are we expecting with this oil price? kathleen: this will not reflect the increased in oil prices. i imagine we would get another

geth's data, then we will that. it is important to bank of japan trade data. it will be interesting to see what exports are doing because it is a driver of the japanese economy. in terms of inflation, looking for numbers, not much changed. the headline number going to come in again -- the headline will rise, but that is reflecting energy prices. the white line has been at 1.0%, moved to 1.4, that would be welcome. purple --me is the the white line -- that is the one that is 1.0. it is the yellow line -- i am getting my the lines mixed up. i could be rising. we will see what happens. trade today, later in the week inflation. one other member today -- number is the thailand gdp number is the thailand gdp numbers are they held key rates steady, sort of signaling their next move is

a rate hike but inflation in target, maybe this will give them a second thought. u.s. we sawe interesting comments from federal reserve officials. is they: the message think they are going where they richardthey would area clarida, the new vice chair of fed, he said getting into neutral would make sense but acknowledges the stock market risk. most interesting to me, patrick harker, not a voter this year, never fed left, he is not convid a december rate hike would be prudent. this makes us think of what jay powell said wednesday. we carried it live here on the show. the fed has this big challenge now looking at the number of rate hikes and the pace. maybe he is saying don't worry, we are watching this closely. said, even though he

is not worried about inflation rising, he is looking for two or three rate hikes next year. this makes december all the more interesting. they will update their economic projections which could be somewhat different for what they are looking for for rate hikes in 2019 pierpont the traders are more skeptical about the global economy. towill be a very interesting see what comes out of that and nice to get some hints ahead of it. shery: thank you so much. u.s. china trade differences on a full display at the apec summit, and this this -- and that it could be hitting the chinese economy more. this is bloomberg. ♪ this is bloomberg. ♪

down toe are counting asia's first major market open this monday morning. there is the picture in tokyo, minutes from trade numbers coming out of japan.

deficit is lower in october on a seasonally adjusted basis, looking at exports slowing when it comes to the faster pace of imports expecting to see. with the tokyo open, positive but the nikkei and the topix trading at three week at lows. we had a relatively positive pickup in u.s. equities at the end of last week. this week likely to be holiday disrupted. part of friday and thursday closed for thanksgiving. this is daybreak asia. i am shery ahn in new york. the simmering trade war is beginning to hurt trade -- china with warnings of the economy is already asked. thing a slowdown. -- experiencing a slowdown. great to have you with us. talk about the slowing chinese economy and manufacturing pmi slowing. how much of this slowdown is to do with the trade war and how

much just because of deleveraging already happening in the economy? >> it is a great question. my feeling is the chinese .conomy is slowing potential growth is slowing. it is the second-biggest economy in the world, the unit laser -- unit labor cost rising quicker than other nations. is the note this year chinese consumers business hasn't been responding to the monetary credit and fiscal stimulus that is supposed to stimulate the economy. gradualn a slow, deceleration, and i would note the trump trade negotiations at a bad time for china. let me break these headlines from japan. we are getting the trade balance and a much larger deficit than expected from the japanese economy with the deficit coming billion.9.3

the expectation was for shortfall of ¥70 billion, after a surplus of ¥130 billion in the month of september. for september and october, bigger shortfall for the trade balance at ¥449 billion. when you look at the seasonally biggerd numbers, also a shortfall than expected of ¥300 billion. when it comes to export numbers, they did bounceback for the contraction -- from the contraction. missing expectations, imports higher year rising 19.9% , much faster than expected for the month of october or as we had exports being supported by every recovery supply chain after september's natural disasters but imports increased at a faster pace than exports in japan. let me bring back our guest and

discussed these numbers in japan. a lot to do also with what is happening on the trade front. when we talk about japan and the supply chain and how they are still so dependent on exports. they could get you by the trade war -- it by the trade war. we know china has increased its reliance on domestic conservator -- consumer substances, so if we talk about the economy in china slowing, will the global economic impact be reduced and limited because they are not as export dependent? >> no. china has been successful in relying more on domestic consumption and services, but exports are still 18% of its gdp. exports, it it is requires imports, not just durable goods for production processes but also chinese consumers are importing. look at japan's exports to

china, it is a combination of autos, consumer goods, and durable goods used in production. these are critically important data because japan domestically is doing quite well. employment is up, the unemployment rate is really low. wages are rising, inflation, everything is going well domestically but china has significant exposure -- china -- japan has picked significant -- has significant exposure to china. we think china will grow strong forever. it is not. as we see signs of it, it is starting to affect global trade. that was always the case, structural slowdowns for china before the trade war exacerbated the negative sentiment. i'm wondering about how flexible

supply chain relocation is around this part of the world. is there an argument to say there are companies because of the trade war uncertainties but also rising costs in china, they are rearranging their supply chain to come out of vietnam or pakistan? do expect to see reallocation and that dynamic change here? not seamless. is china relies on durable business supply chain for some production processes. these seamless. we don't know all of the micro as they unfold. but it has to be disruptive. china is the biggest traitor in the world, it -- trader in the world, imports and exports. some supply chains are flexible and others are not.

what is going on has to be causing some disruptions. we keep talking about a potential compromise between president xi and trump when they meet at the g20 but even listening to mike pence, his tone and criticism of the belt and road, saying the u.s. is in no hurry to make a deal until china changes its ways, does this speak to the structural structuralcentral -- , existential changes, they have to do that, for washington to claim that as a political win? >> >> hoped for is an agreement -- the most that can be hoped for is an agreement to agree. eventually china desperately to do that, for washington to claim that as a political win? >> >>needs to keep trade channes open with the united states. united states is china's biggest trading partner.

it will keep those channels open. the issue i believe goes way beyond the economics and tariffs. it gets to issues that go beyond economics to what the u.s. perceives to be national security issues, cybersecurity issues, treatment of intellectual property. these are details that will have to be ironed out eventually. for now what we are looking for you the two -- looking for is the two leaders to agree. i don't know if that will come a g20 but eventually because once again china needs the u.s. as a trading partner. from: last week we heard commerce secretary ross talking about beijing's decision to onuce retaliatory tariffs u.s. lng, saying china needs lng, the demand is insatiable. how big of a part will this play? lng will be the thing

that breaks the ice between china and the united states. china is the largest importer and user and importer in the world of natural gas. demand is increasing. marginal cost getting it out of the ground is like zero dollars. itss ramping up distribution lines, shipments. its cost is going to be reduced. i think what will eventually break the ice between china and the u.s. will be long-term, 20-year agreement of china to buy lng, but that is the beginning of what has to be done in a full negotiation. shery: thank you so much for your time. the chief economist for the americas and asia. the markets.ook at

the asx 200 is down for the second consecutive session. futures on the nikkei and kospi are looking higher. we will have more next. this is bloomberg. ♪

haidi: asia's major markets have just opened for trade. shery: welcome to daybreak asia. haidi: the tech talks wrap up as the u.s. and china trade comments. shery: theresa may fights for survival as her enemies threatened a revolt. brussels says the u.k. transition period could be