>> coming up on bloomberg best, the year's most compelling conversations on business and finance in asia. china's richest man focuses on giving back. >> you have to make the organization warm. >> jack ma speaks about life after alibaba. >> i have learned so much in the past few years and it is my responsibility to share. >> investors hope 2018 will be a land of investment opportunities. >> we want to make sure you get all the ducks in a row. >> the reality is the u.s. and china need each other. they are dependent on each

other. it is a symbiotic relationship. >> and politics around the region, there were surprises. >> every country should not try to dominate the world. >> and practical adjustments as traditional alliances shifted and strained. >> we want to make sure new zealand does not catch a cold. >> why governor kuroda feels the policy has worked. >> it has been successfully reduced. >> plus a look at the ipo scene in 2018. >> we hope for $10 billion or higher. >> it is all straight ahead on this special edition of bloomberg best.

hello and welcome. i'm yvonne man. on this edition of bloomberg best, we will look back at 2018 in asia by revisiting some of the most interesting interviews with policymakers and figures in business. we lead off with alibaba chairman and founder, jack ma. he has been turning his focus to charitable giving. he spoke with bloomberg's correspondence in september about his vision for philanthropy. >> we have so much talent.

i worry if we do not put that kind of love, respect, responsibility into our business model, this giant alibaba could destroy a lot of things. it could do good things, bad things. technology is very cold, but you have to make the organization warm. people are warm. >> are you succeeding in that mission? >> 10 years when i said we should put a portion of the total revenue of alibaba to protect the environment, at that time nobody cared. 0.3%. you have no revenue. go ahead. now, we have such big revenue. we have to do this. it is not 0.3%. it is the revenue. >> in terms of technology, how do you bring that into play?

>> everything we taught the students in the past 100 years about knowledge, science, in the future we will teach about innovation, how can you do the things machines cannot do? that is about education. i'm thinking all the time about that. >> that would be a focus. >> i can be a teacher and a mentor for many young entrepreneurs. i am successful on life. i have gone through a lot of decisions and tough days. these can be very good for many young people. i'm not going to teach math, english or business in the schools, but i'm going to teach young people how to face challenges. >> when you communicate, can that help bridge divides? >> i hope so and i think it will. there is one thing we have in common, people in china and america, we all have the heart

of love, respect and trust. this is the common language we should have. as i said, the first revolution, caused world war i. the second caused world war ii. we are a third technology. if there is a war, a war should fight against the poverty, disease and environment. it should be together. we should find the common things we're working together. that will build trust. it is easy to complain. it is easy to finger point, but we have someone and this is the problem. if you work together, this is the opportunity for all of us. >> in the same conversation, jack ma talked about life after alibaba and afterwards he announced that he will step down as chairman of the company in 2019.

ma told bloomberg what he intends to do in this next chapter. >> i do a lot of things on education because i think education is so critical for the future. education, environment, these are two things that i focus on. there is no one thing that is the most important. the most important is everybody do something. >> to what extent do you think your identity has been shaped and forged by your first love? your first job, english teacher? >> people don't like me to talk a lot. i speak china. that is because i am a teacher. the only thing i can do is share. i have learned so much from alibaba the past 19 years. i think it is my responsibility to share. whether people like it, agree or disagree, it is ok.

the thing is, you have to share. society gives us, gives me so much resources, so much experience. you should not waste it. share with the others. >> do you miss teaching? would you like to be back in the classroom? >> i miss it so much. i think i came to business, and accident. just coming and instead do it. i think someday i will go back to education. this is something i have more confidence. i think i can do much better than the alibaba ceo. >> that would be quite something. >> i love that. this is why i have the jack ma foundation. all these things i've been preparing for 10 years. this is something that i want to devote most of my time when i retire.

>> one could that be, that transition? >> very soon you will know that. >> this would be you stepping away to focus on education. would you look at a bill gates model, for example like giving away most of your wealth? >> i think i can learn a lot from bill gates. many years ago, people said bill gates. i said i can never the richer than bill gates, but one thing i can do is retire earlier than him. one thing i can do is education that is unique and different. >> still ahead, plenty of politics with prime ministers speaking their minds. >> your personal thoughts on president trump? >> he is mercurial. >> 2018 was the year of trade tensions between the u.s. and china.

>> the danger about this is the impact he has in expectations and in sentiment. >> this is bloomberg. ♪

>> this is bloomberg best. i'm yvonne man. revisiting the year's top interviews on bloomberg television in asia, global investors watched with interest to see if the chinese government would follow through to liberalize the nation's economy. in may, bloomberg's asia correspondent spoke exclusively with jamie dimon reiterated the bank's intention of one is a percent ownership of a chinese brokerage.

>> what we want is simple, 100%. i think it is better for the chinese. joint ventures, a lot of these are hard to govern, not very successful and don't bring the best of jpmorgan. for example, you can sell here, beacon not sell it there. you have to negotiate the fees. once we have 51%, 100%, you have the full faith, recruiting, product services. we bring china's multinationals. we bring chinese multinationals. we are optimists. we have regulators on both sides, so that is part of the

process. >> do you see this is the step-by-step process and then maybe after three years they allow 100%? >> yes. when we have something to announce, we will tell you. >> what is your timeframe? >> as soon as possible. we will make sure we get all the ducks in a row. >> what is the key priority? last year you said joint ventures are sloppy. >> at 51% control, we know the path to ultimate control, that is a whole another thing and it actually works. yvonne: optimism about china's economic reform was soon eclipsed by anxiety over trade wars. for much of 2018, investors and analysts debated the impacts on global productivity and market stability.

here are some high-profile guests that joined us. >> i believe there are solutions to the trade issues. a long-term trade war, it is not the solution. if anything, it will make things worse. >> do you expect to see a slowdown in chinese growth? >> this year will be slower. 2017 was already lower. 2016 was a huge year. i suspect it might be even lower. we will be looking for those deals in europe and we are doing a lot in japan in the last 10, 12 years. at the end of the day, capital can go wherever it is welcome. >> over the next five years, china is going to import $8 trillion worth of goods.

because of the trade war, this is going to hurt everybody and close off a lot of opportunity for producers in the united states. >> alibaba said they plan to create one million jobs in the united states, but that might not happen. if the trade war moves ahead. will those jobs not be created? >> jack ma says we could possibly create 10 million jobs if the trade flows are open. if the opportunity is shut off, because there is a trade war, the consequence could be quite severe. >> there are clearly infractions that need to be corrected. there are certain industries and countries that are not playing by the rules and that needs to be fixed, but the broader is economic growth that

has brought prosperity around the globe and the u.s. is now talking about tariffs. i think $50 billion on imports in china. assume those tariffs reduced those imports by 20%, that would take a 2% move. it is going to change everything? is it that important? i am worried the rhetoric is punching above its weight relative to what they are trying to do. what i think they are trying to do is there have been obvious infractions or inconsistencies. what i hope they are not trying to do is enter into a major global trade war. i don't think it is in the u.s.'s best interests.

the u.s. is 5% of the population and 25% of the economy. >> are you able to say who has more to lose from this trade friction? >> very hard to pick winners and losers when you're talking about the economy. i think the reality is the u.s. and china need each other. they are dependent on each other. this is a symbiotic relationship. it is a rapidly evolving relationship. the u.s. runs a trade deficit on goods. it runs a surplus on services. the fastest-growing part of the economy. this is not about a winner and loser, this is about finding obvious infractions and dealing with them. otherwise, open markets and global trade has been a net positive for both china and the u.s.

>> i believe the situation gets worse. trump is not going to give in and going to continue to hit at china in terms of the incredible trade imbalance. it is the biggest of any other country the u.s. has. i believe it will be a real problem going forward. the good news is that some emerging countries will benefit from this. for example, soybeans. the u.s. is a big exporter to china. argentina could benefit. unfortunately they are suffering from a drought and they had downturn in soybean production. generally speaking, you will have the winners and losers coming out of the emerging markets arena. >> have you known anytime like this? we are in uncharted territory. how do you look at it from a fund management perspective?

>> we are going to have to focus on individual countries, individual companies to see where they winners and losers are going to be, but it is going to be very interesting in the next year or two years. >> if you look at trade deficit trade is at record levels. it is not like trade has gone down, but the danger -- the impact in expectations, sentiment. you are seeing a little bit of that. the fundamentals seem to be fine, sentiment is in a danger zone. >> takes time for the actuality. looking at the landscape, how do you prepare for it? >> yeah, it is a combination of things which is rates rising in the u.s. which will have impacts on

emerging markets, combined with the geopolitical situation around china and the u.s. centering around trade. i think it is a broader geopolitical issue and then some noise coming out of europe with italy widening, so you see the combination of those three things and then you overlay that with the fact that it has been 10 years without having any significant recession in the u.s. or around the world and then you have to think about preparing for all sorts of scenarios. yvonne: much more to come from bloomberg's asia coverage in 2018. up next, a conversation with the new zealand prime minister. >> we are geographically isolated, but linked through the trading ties.

>> later on, highlights from asian ipos. >> we are an internet company that can do e-commerce well. i don't think there is anything like this in the market. >> this is bloomberg. ♪

yvonne: you're watching a special edition of bloomberg best, highlighting the year 2018 on business, finance and politics. i'm yvonne man. many countries cope with the aftershock of trade tensions this year. new zealand was no exception. it was a signatory to the trade agreement gaining steam at the collapse of the u.s. led tpp. we spoke with the new zealand prime minister in singapore.

>> we are a trading nation. we are geographically isolated, linked to the world through our trading ties. for us, maintaining that is incredibly important. that does not mean we don't have a job to do domestically as well. opec nations have been discussing for a couple of years how to have greater inclusion. how do we ensure more more people benefit from trade? we have seen some corners in the world a push back from people who don't see those benefits. see the cost of globalization. we are trying to rebuild that mandate and if we follow trade rules and take upon ourselves the responsibility to see everyone's well-being. that is a recipe for success.

>> did you manage to convince the u.s. to make an exception to steel? >> i am such a broken record on this. i use every opportunity i have to raise it. yes, i did raise it. it was a conversation. >> it has been stalled, countries like china and singapore wanted to push through by the end of the year. that is not likely to be. what caused the stall? >> we are looking at 2019 and we have roughly seven chapters that are looking good, but i think there is more of a conversation to be had.

from our perspective, it is about balancing pace with quality. we do want to see these additional benefits. that is why we will keep pushing to bank what is already negotiated and push a little further. again, i think we will demonstrate that it can be derived from a multilateral agreement. >> is there concern it is driven by china? >> no. that is not a concern. from our perspective, making sure we don't sacrifice quality for pace. particularly given its gestation. >> what are your views on the u.s.-china trade? is it getting better and what are the indications are you getting from the rest of global leaders? >> certainly from a domestic perspective, it is having an effect in the sense that the confidence might be looking out and seeing what is happening as a result of the trade conversations going on,

that it might be having an impact on global growth. from our perspective, we want to make sure that if the world sneezes, new zealand is not catch a cold. there's something to be said for the architecture around trade. we see no benefit, so for us we will keep pushing hard and abiding by those trade rules and agreements that we have signed up to. yvonne: coming up, more geopolitics. it is hard to imagine a nation experiencing a more eventful year than malaysia. and we covered it from every angle. >> is essentially, a business issue became a political issue. >> i think the wealth of the world should be shared.

yvonne: this is bloomberg. ♪

i'm a long man -- yvonne man. this is a special edition of "bloomberg best," wrapping up 2018 in asia by playing back the year's top interviews. malaysia held national elections in may with the ruling party fully expecting to maintain a monopoly on power it had held for six decades. the incumbent prime minister entered the campaign facing corruption allegations for his role in the 1mbd scandal, which centered on the misuse of the country's sovereign wealth fund. bloomberg sat down with him for an exclusive interview. and offered his side of the 1mbd story. >> it started from the business model actually itself. it was not that sustainable.

but it became an issue for what is essentially a business issue. it became a political issue, because my opponents wanted to use 1mbd to change a democratically elected government between election cycles. that's why they created this as a big issue. meanwhile, our rationalization program is working well. our debt level has gone down to about $30 billion from $42 billion. and we've got enough assets to cover our debts. >> what do you say to those who say you have acted dishonestly about the funds? you've been called all sorts of things, including a thief. what's your response to that? >> there's no evidence of that. you cannot just accuse somebody

of being a thief or anything, unless there's evidence. and, again, if i can quote, gao said that we have to act on evidence and they couldn't find any evidence of wrongdoing. so that is a politically motivated statement. >> but you have admitted that it ended up in your accounts, even though it was a donation from the saudi government? >> it has been clear, there has been no wrongdoing. i stand by it. the saudi government has come out with a statement, admitting that it is an official donation. so, you know, i mean the facts speak for themselves. but it has turned to become a political issue. >> do you regret what happened, and looking back is there anything you would have done differently? >> yes. i would have done -- i would have probably not have that kind of business model. probably i will make sure tight supervision.

but we all learn from our mistakes. you know, and that should not, you know, detract from -- on the huge number of successes that we have in other areas. yvonne: in a stunning upset, malaysia's opposition led by , former prime minister muhammad, toppled najib and ended his party's long dominance. he has agreed to step aside in two years to allow his coalition partner to become prime minister. abraham spoke soon after the election to discuss whether the government would seek to hold the outgoing prime minister accountable for the 1mbd financial abuses. >> i can't predict what will happen but i think due process will have to take place. many asked if he was responsible

in the second imprisonment, -- he has said it's a miscarriage of justice. it wouldn't have happened if the judiciary was free and not under instructions by najib. but on a personal level, i forgive him. i'm not going to pursue that against him, for the crime committed against me. but what was squandered from the people, from the wealth of this nation, he has to answer. >> realistically, how much can the current government achieve in the next five years? >> if we can dismantle the more compromised, corrupt establishment, judicially, free the media, make sure the advancement of policies are

efficient, and disciplined, i think there's a major breakthrough. but i think you can achieve this, even in the one year, two years. i think it would be great, when the major task has been played. yvonne: stabilizing the economy and settling accounts for 1mbd are among the new malaysian government's top domestic priorities and there are foreign policy issues to be worked out as well, including the nation's relationship with china and singapore and its vulnerability to u.s. trade protectionism. in june, we discussed these topics with the prime minister in an exclusive interview. >> chinese investors wanting to bring in technology and capital,

to set up a plan, that is welcome. as we welcome other countries. >> some argue because of china's rise, there needs to be a balance and that balance could come from india as well as japan. what are your thoughts on that? >> well, every country should not try to dominate the whole world. i think the wealth of the world should be shared with all. >> your personal thoughts on president trump? iswell, i worry that he material in that he changes his mind within 24 hours. first he wants to meet president kim, then he doesn't want to meet. then he met. now, he thinks president kim is a great person to do business with. >> so can you trust a man who

changes his mind about issues and policies every other day? thaten you have a man like you need to be cautious. , you need to know whether this is for real or not. >> how would you deal with a man like president trump? >> like with any normal person, because nobody in this world is perfect. everybody has got his own weakness and we have to deal with them, knowing their weaknesses as well as their strengths. >> do you think the world order would change with a leader like trump? has it changed? we seem to have issues with nafta, now tensions between the u.s. and china, trades. are you concerned that perhaps he will turn around and make a trade issue with malaysia?

>> well, if there is a good proposal, why not? we must be balanced. i don't believe in free trade, absolute free trade, because then the competition is between the weak and the strong, you need to have some protection for the weak. >> malaysia shares the waters with its closest neighbor, singapore. are relations better now than before? >> relations with singapore have been quite ok, because we cannot avoid the fact that it is our nearest neighbor. but there are certain issues that we need to settle and i think we can negotiate a settlement of these issues. >> what are these issues? >> among them is water. >> what is the sticking point? >> hmm? >> what is the sticking point? >> well, they're still paying $.03 for 1,000 gallons. and once the 1,000 gallons is done, we can buy back 10% of that. at the same time, they can sell 1,000 gallons for 17 singapore dollars. that is a lot of money.

>> is there a resolution in sight? where are negotiations right now? >> we'll sit down and talk with them like civilized people. yvonne: still to come on this special edition of "bloomberg best," the government of the boj -- governor of the boj talked about central bank communication and admits it's not always crystal clear. >> maybe the market people have not understood exactly what we have been doing. yvonne: this is bloomberg. ♪

yvonne: this is "bloomberg best." i'm yvonne man. we're looking back at 2018 and asia business, finance and politics through the lens of the year's best interviews. while the federal reserve and the european central bank began

to at least signal moves towards policy normalization in 2018, the bank of japan has given little indication that it's preparing to wind down its stimulus program. at the imf and world bank meeting in october, kathleen asked of the governor what investors could expect from the bank going forward. >> at the last policy meeting, at the end of july, we decided basically two things. one, we will continue the current extremely accommodating monetary policy for the time being. because, yes, the economy improved greatly. the economy is growing 1.5%. unemployment rate is 2.4%.

the corporate sector is enjoying profits. but inflation rate is still less than 1%. far away from the 2% tariff. so that we have to continue the current conditions for some time, longer than we anticipated. that is one point. continuation of monetary. easing. the second point is things we have to continue much longer than we originally anticipated. we have to avoid side effects, some negative impacts on the financial sector. particularly in the market. since we introduced the controls, saying that 10-year rates be targeted around 0%, markets took it so -- ha ha! the fluctuation was plus-minus 10 basis points.

so because of so narrow structure, sometimes there are buyers and no buyers, but no sellers. so this kind of market dysfunction is not good. so we declare that we would allow much wider fluctuation, although the 0% interest rate target would not be changed. but the rate could be fluctuated much more widely depending on economic inflation , situation. so one is continuation of very accommodating monetary policy. the second is, since we will continue this monetary policy for some time, we have to avoid the side effects, like the market dysfunction.

kathleen: tapering you're , probably sick of hearing that, because you say we have not changed anything. we have just adjusted to keep the policy for sustainable. however, 80% of economists surveyed by bloomberg say this is still tapering. the target is 80 trillion yen, just down to about 40 trillion. you have this tweak to allow the range to be wider. is this a question of miscommunication? what is it the markets don't understand? >> i think it's not miscommunication but maybe the market people have not understood exactly what we have been doing. i mean, just two years ago, september 2016, we interviewed -- introduced so-called

controls. so we switched the monetary operation target from the amount to control, saying that the 10-year rates be around 0%. so that it became invariable. it is not the target anymore. so the actual amount certainly have been with fluctuation, to around 43 yen. but around 0% interest rate, 10-year interest rate, have been well-kept. that is the operating target.

so of course it's necessary to target 10-year rate around 0%. but the amount of the purchase is not operating target anymore. so that is the one point. second is, as i said, from the outset, we didn't intend to make jgb10-year rate exactly 0% with some fluctuations. but fluctuation has been successfully reduced by market participants. so we told them that -- [laughter] it could be fluctuating much wider, depending on the economic circumstances. but at the same time, we stick to the 0%.

kathleen: so what -- when you're actually someday ready to exit, is it -- what will the signal be? what kind of thing, changing the interest rate? changing bond purchase? >> i think the amount of purchase is no more market operating target. it's only the control. so minus 0.1% on the demand deposit held, and 10-year rate, which is now around 0%. so the control is the main tool of current monetary. so when, of course, we discuss exiting from the current extremely accommodating monetary policy, when the 2% interest

rate target is met or is close to be met, of course we can change the target, monetary operating target, of interest rate. in due course. but at this moment, inflationary rate of 1%, so that we would continue the current control, at the current level of interest. ♪

yvonne: welcome back to this special edition of "bloomberg best," summing up the year in conversation with a focus on asia. let's look back at some of the year's ipo action, including smartphone makers and food delivery. executives from two companies

spoke with us on the day of their debut. >> we are a new species. we are an internet company that can do e-commerce and wealth at the same time. i don't think there's anything like us on the market before. >> and how are you gonna go from getting about 80% of your revenue right now is in hardware. and they want to build out the ecosystem of services, video, music and other things. how are you going to, and over what time frame do you see the revenue mix changing? >> so internet services for us is first and foremost to provide a better user appearance. -- user experience. we have found it's a very highly monetized source for us as well. last year we were at about 8.6% , of our revenue, internet service as a whole. by the first quarter, this has risen closer to 10%. so the trend is this is becoming a bigger part of our revenue going forward. >> he also said he wants to get eventually more than 50% of revenue from overseas markets.

and i would assume not just , selling hand sets from services. india, you're doing well. but where would the priority be and how would you crack the u.s. market? >> i think for internet services, the priority is always to make sure that the user experience is good. we are starting to do this internationally. we think over the course of the next two years, we're going to extend this as well. million people0 order food from us. i think it is a huge market, because everyone needs to eat and most people eat three times a day. so now, i think we are going to really have an even bigger platform. so i think it is going to become one of the most important technology companies in people's lives in china. >> now that you're listed between market share and profits, what are you prioritizing? >> so, if you look at our business we have a business

, that's more mature. for example, the in-store business is already quite profitable. and it is still growing. also we have our largest food , delivery growing super fast. it's very close to even. on the third, we have new initiatives. because we believe we are going to build the largest e-commerce platform for local services. i think we are going to become a more mature business. at the same time we are going to , invest in our new initiatives invest for the future. ,yvonne: what does the future look like for chinese tech companies? the ceo and chairman of sinovation talked about the public and private funding environment for firms that hope to compete with silicon valley. >> not only do we hope for several unicorns, we hope for a decacorn. that is $10 billion or higher, because that's really going to be the one driving the return.

tom: what is exciting you now in terms of tech in china, where do you want to be putting your money? >> retail, health care, education, has all opportunities that china could disrupt with both tech and also in each of these three cases, perhaps having a late mover advantage of skipping a generation. tom: how would you describe the funding environment now in china, in the vc sector? >> funding environment is a little tricky. last year, there was a lot of money in both u.s. dollars and currency. this year, i think the supply is getting more constrained due to the deleveraging efforts by the banks, as well as the stagnant stock market that's limiting the wealthy from doing more investments from their own pocket or their corporate pockets. so the funding is tighter. but u.s. funding is still

plentiful. that is foreign investors from u.s. and europe, i think people are looking now at china with a lot less of the skepticism we saw a decade ago. at this moment, i think we've gone past the era of huge amounts of money. it's coming down a bit. and some companies are having trouble raising money and justifying the valuation, so we see a very healthy correction happening. tom: there was a lot of excitement this year for some of the tech listings, and then there was the disappointment. what is going on? how do you read that? are these companies going to market too early? >> no. i think these are good companies. i think the issue is there's -- there was a clear misalignment of the prepublic companies and the public company valuations.

i think the late-stage investors value the company's higher than the public market or wall street or chinese analysts. and that is what caused the price to come down. i think a little bit similar to when facebook went public, some eight years ago, there was a similar thing. but i think, you know, these companies are solid companies. their prices may need to correct due to the public market valuation and other issues, but if you give it another two, three, four years, the great majority will do very well, just like facebook has. yvonne: that wraps up our special edition of "bloomberg best." hope you enjoyed these conversations from bloomberg television's coverage of business and finance in asia during 2018. we look forward to bringing you more interviews, analysis and interviews in the year ahead. thanks for watching. i'm yvonne man.

this is bloomberg. ♪

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simple. easy. awesome. click or visit a retail store today. selina: i'm selina wang in san francisco in for emily wang. coming up in the next hour, after a tumultuous year, tesla named two new board members to keep elon musk in check. will it work? plus, the future of social credit. -- credit scores. how it will shape society. and as we look back on some of the biggest stories of 2018, we will bring you highlights from those who spoke