paul: welcome to "daybreak: australia." sydni.ul allen in new >> i am in new york. e: and i am sophie kamaruddin in hong kong. ♪ paul: here are the top stories we are covering in the next hour. a warning for davos. risks are rising around the world. saying risking dangerous with trade at its lowest in three decades. the general slowdown weighing on

in lowerotes coming than expected. >> the u.s. slow today for the martin luther king jr. holiday. check of the dollar index. a six-week high after the great rally that we saw in the past week, however, we seem to be looking at some risk-off sentiment filtering through the markets. level ins the highest two weeks, really gaining ground against most of the two center and we had trade tensions, concerns simmering, and at the expecting theare -- backing parliament ruling now, days, alsohe brexit ruling out a second referendum. wti, at the highest level in two

months, as we continue to see u.s. production slowing down. one thing to note, stocks in canada, on the s&p toronto, really see a winning streak that we have not seen since 2014, gaining ground for a 12th consecutive sessions your let's see how we are doing for asia sales. , a muted start of the session after a five-day rally. we could see some more gains for the nikkei after a two-day, after the doj kicks off its policy meeting. investors will be watching to see if the central bank takes a more bullish view on the economy. the imf a touch more optimistic on japan.

paul, on the agenda today, south korea's economy in the fourth expansion compared to the 2% that we saw in the previous premarket. that would mean 2018 saw the slowest pace of growth in 20 -- since 2012. elsewhere, we will get sales from japan, and later, malaysia will update its foreign reserves as of january 15, paul. paul: all right, sophie, thank you for that. let's check on first word news with ramy inocencio. ramy: paul, thank you so much. u.k. prime minister theresa may is refusing to delay a process to avoid an economically damaging no deal reward. may is under pressure from a cross party group of politicians for drafting a new law that could force her to ask to extend the brexit deadline.

she told the house of commons there is no justification for a second referendum. pm may: it would require an -- an extension of article 50, and i also believe there has not yet been enough recognition of the way a second referendum could damage cohesion, by undermining the start. mr. portman: the prime minister seems to be going through the motions an expecting results but is in reality in deep desire. cured the prime minister must change her red line, because her current deal is undeliverable. more free markets move out of london. thegroup moving forward, exchange is $16 billion in may, in therld market moving exchanged us increased range of the netherlands.

they are looking for approval of dutch financial authorities. india is set to be considering a plan to transfer cash to farmers to ease their cost instead of offering subsidies for farmers. it was $10tend billion, providing all subsidies into a single annual cash handout. the plan comes after modi's ruling was defeated last month. india faces a general election this may. and ireland has nominated central bank governor phillip wayne to join the ecb. eurozone finance ministers met in brussels. succeeds, he could take the road at -- role as the ecb chief economist. he is widely considered the front-runner. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am ramy inocencio, and this is

bloomberg, shery? shery: thank you. trade tensions deliver the weakest expansion in three years. local economics and policy editor kathleen hays is here. secondn, this is the downgrade in three months. what is going on? kathleen: mainly, it is too big things, recently, the slowdown by germany that the imf is seeing. they also have a big red flag over china, because china of course, as the roles since-largest economy, 2009, is able to do that now. clearly one of the imf's concerns here. listen to what christine lagarde said earlier in davos. the economy continues to move ahead,

significantly higher risks, some of them actually related to risks are, and these increasingly in a trend. andk of how higher tariffs rising uncertainty over future trade policy, higher market all until he. -- volatility. kathleen: and certainly uncertainty about trade, nations in the european union, certainly around the region. volatility, a list of concerns, a growth in the u.s. and china, unchanged since christine lagarde made this report. and it is interesting, a lot of people worried about a slowdown in the united states. china of course just giving their report since 2009, but

tariffs, financial conditions, a brexit, a deeper china slowdown, all of these things are on christine lagarde's list. paul: kathleen, you can usually rely on germany to be a pillar of strength in the eu, but the imf just cut germany for its forecast, slashed it into the red. kathleen: did they ever? paul, when i was reading the report, that is what left out at me, a zero 6% cut just since october so let 1.26% again, but that is quite a reduction in the outlook. weak factory output. let's jump into our bloomberg library. factory production just going off a cliff in germany, and we can say certainly the u.s.-china trade war, including the china over, also the brexiteers

the eu it is also true that they cut their slow growth forecast to italy. we know they were battling with their budget. finances more expensive in the midst of all of that. france, protests against president macron's policies, another one who had forecasts cut. what is interesting to me is the ecb is meeting on thursday. well mario draghi acknowledge this, acknowledging a softening in europe? we are getting ready now may be to cut that and what that means for ecb policy. will that rate cut ever happen? some people say maybe by the end of this year, maybe not all. the imf, emerging market forecast, 4.5%. that is only down 0.2% from october, so at least it looks broadly the out markets are holding up pretty well amidst

all of this uncertainty over trade, financial markets, and more. paul: all right, global economics and policy editor kathleen hays in tokyo. thank you for that. chinese president xi jinping said political stability is in serious danger. concern in the party about the social implications of the slowing economy. china correspondent tom mackenzie joins us now from beijing. tom, there seems to be a sense of urgency from president xi. tom: i think that is right. we have heard from president xi in the last few months, talking about the downward pressure is on the economy, talking about pressures, that of course the trade tensions with the u.s. this is the first time we have heard president xi talk about serious risks and dangers to the communist party's long-term rule. they have not had to wrestle with a slowdown of which we are

seeing now, at least over the last three decades or so. kathleen was pointing out fourth-quarter growth came in at the lowest since 2009, but a full 2018 growth, it came in at 6.6% at the lowest in three decades. there has been an assumption amongst officials over the last three decades in china that as growth continues to grow, they can pretty much have a grip on social stability. it is a key concern, social stability, and our team has been traveling around china, and it suggests at least the manufacturing parts of the country, there are increasingly off. -- increasing layoffs. this is an unusual meeting between leaders in beijing. there was a lot of statement. -- secrecy. we only heard about it when president xi release a statement. a risk to the communist party. if that is not are on the communist already cadre to get their act together, then nothing will. there is something to be said

about the anniversaries late this year, some key anniversaries. some china watchers could be a flashpoint for those with anxiety, for those with issues, they could coalesce around some of these anniversaries, including october 1, the 70th anniversary of the people's republic of china, and also the 30th anniversary, i should say, of the tenement square massacre -- tiananmen square massacre on june 4. there will be concern among some in the communist party, but certainly a pretty clear-cut warning from president xi, particularly given the slow down here and of course the pressures with the trade tensions with the u.s. , the president of france seems to be making the most of china's economic slowdown. minutes ago, he tweeted "china post slowest economic numbers since 1992 to u.s. trade tensions and policies make so much sense for china to

finally do a real deal and stop playing around," and yet, tom, there seems to be increasing difficulties when it comes to any sort of agreement, especially on structural reforms coming on china, like ip protection. paul: hmm. this is bloomberg. ♪ absolutely, -- tom: absolutely, and this seems to be a shift in tone from president trump. she had come out with a number eets saving pretty positive. we have tweets from president trump say in talks are moving along well. this may be an acknowledgment of the president around of course those issues, suggesting there has not been enough movement, at least from the u.s. perspective, on the intellectual liberty theft -- intellectual property theft. there is concern that when the vice premier goes to the u.s., they will have to do something really substantial to go to the table to move something to the

march 1 deadline. we have been talking about the economy. there is a view linking back to kathleen's comments around the global growth picture, that china is not going to be able to provide the kind of support it has in the past. 2008, 2009, it injected record stimulus in the economy. there is an expectation by capital economists, for example, that china will not 0.2% off of global growth for 2019. the big question is if the data points keep deteriorating, will be chinese policymakers resort to the kind of master stimulus that they have in the past? so far, they have tried to hold the line on that, and that shows china will have big role in the global economy this year. paul: all right, tom mackenzie, thank you. to breakingt you news across the terminal. u.k. opposition proposing an referendum.e brexit the labour party creating a lot

ofcriticism, so a lo bit clarity coming through here, options should not pollute a public vote on brexit, proposed in the name of labor leader jeremy corbyn, who demands parliament should hold a vote on options to avoid a no deal. a proposal there for an option of a second referendum as well. still ahead, the world if economic forum kicks off in davos. what will happen should the u.s. and china fail to reach a trade deal? shery: but next, striking a deal with russia, but it will not be easy. this is bloomberg. ♪ this is bloomberg. ♪

paul: i am paul allen in sydney. shery: i am shery ahn in new york. you are watching "daybreak: australia." warning that the global economy is at a turning point. we have someone at the event on what will be on the agenda.

>> the theme this year is globalization 4.0 in the sense of some defiance on the part of the world economic forum, a backdrop of rising global angela's asian -- anti-globalization sentiment. globalization may have peaked, but government leaders will have to continue to work together to advance issues like populism, easing growth, climate change. china is now looking at the slowest growth in about 10 years, since the last global financial crisis. the brexit situation in the u.k. and the u.s.-china trade war does not seem to be easing anytime soon, no solution in sight at this point in time. what is apparent, of course, is the absence of several global leaders, the likes of president may, who have decided to stay home because of

domestic issues. all of these reflect very challenging times and the issues that will have to be addressed at this world economic forum. shery: bloomberg's haslinda amin in davos. eurasia groupis to res director of japan. joining us. you for president trump is not attending, prime minister theresa may also not attending, of course other domestic issues they have to deal with, including the shut down here in the u.s., not to mention brexit. how important will be. postmeeting be, -- will be davos meeting be, when we continue to see u.s.-china trade tensions? scott: davos will always be important, because you have so many brilliant, important people

, but at the same time, as the world grows closer together, i think we are seeing even more of these types of events, and unfortunately, i think it becomes difficult for will leaders and titans of industry to try to obtain. japanese also have prime minister shinzo abe meeting in moscow, and they are trying to discuss their own issues, including the sovereignty of four small islands. are we expecting any progress on this issue? scott: not really. obviously continuing what has been a pretty good relationship with both countries, abe would very much like to make some sort of concrete progress in his efforts to include a peace treaty, long-standing territory. but neither side seems really

ready to make a big deal. news of aalso we have possible second summit between president trump and kim jong-un on north korea. mind, the first one to not really achieve a great deal beyond a media frenzy. is there any reason at all to they north korea will give up its nuclear weapons? scott: i don't think so. i don't think many people have thought from the very beginning of this process that north korea was really interested in giving up his weapons. this will be another opportunity for president trump, of course, to have a high profile type of encounter with kim, something that probably will be very important for trump back home, to appeal to his base. but we do not see that there will be any significant progress. perhaps they will get some additional momentum behind the negotiating process, as some people have said. it has really stalled out.

we do not see any big change in north korea's position. scott: -- paul: yeah, and you reinforce that point in your notes, that kim will find ways to invade or whittle away at national sanctions. it really is straight out of the playbook, this kind of behavior, isn't it? around we go again. how does this cycle get broken? scott: well, we do not see it being broken it for quite some time. we long-standing call is will continue to see this type of engagement through the rest trump's current term -- current term, and we think there they be reason to think will use this as part of the 2020 presidential campaign, perhaps arguing that he was the only one to start the process, and therefore he needs another turn to be the only one who can actually finish it. we are likely to see this process rock on, if not for the next couple of years, then longer. on, if not for the next

couple of years, then longer. it could be february, but as we have had the government shutdown for more than a month now, south korea also is home to 28,000 u.s. troops. we have had president trump announcing withdrawal from syria and afghanistan. coulds is possible, reductions in staff beyond the table, and what are the implications of that? scott: i do not think anything is off the table in the sense that i would not totally discount the possibility that perhaps trump, in agreement with south korea, would withdraw a symbolically small number of public opinion, both in south korea and in the united states, is really strongly behind keeping u.s. troops there. that does not mean trump is going to simply take it out without some sort of bargaining but ultimately, there

is not much support on either side for that type of change. this is bloomberg. ♪ -- all right, scott seaman, eurasia group director of japan and korea, thank you for joining us on "bloomberg daybreak: australia." bloomberg subscribers can go to on the terminal, and you can customize so you only get the news that you care about. this is bloomberg. ♪ this is bloomberg. ♪

>> i think they have to defer, they have to delay, and i think the possibility of no brexit at all is rising. shery: let's get a quick check of the latest business flash headlines. former barclays ceo john barley is going on trial for investing after the financial crisis. the capital injection theecured to avoid government bailout. the case against varley and three others is on information in moree the market

than $1 billion in emergency cash calls. paul: restricting the number of people in message can be forwarded to in a global of attempts to keep things from going vira. a test in india limited it to four or five recipients in a group. the changes now being implemented around the world. shery: google has been fined almost $57 million under new privacy laws which allow much heavier penalties for data protection cases. it has come under scrutiny and france before, but is suggested $170,000. regulators say the fine is justified or the severity of the infringement. coming up next, the world's top miner detailed impact on the

runaway shipment of iron or. =-- iron ore. this is bloomberg. ♪ this is bloomberg. ♪

paul: 9:30 a.m. tuesday morning here in sydney, another warm and sticky summer's day. in 30e markets opening up minutes time. futures currently looking unchanged. in sydney.len shery: i'm shery anh in new york, 5:30 p.m. this is "daybreak: australia." monetary international fund cut its forecast for the world economy predicting the growth in three years and saying fresh trade tensions would mean trouble. a second downgrade in three months, the fund blames softening demand in europe and recent volatility in markets. christine lagarde says growth is slower than expected and risks are rising.

>> even as the economy continues ahead, as i said, it is facing significantly higher risks. actually related to policy. risks are increasingly intertwined. ramy: china's president jinping stabilityeaders that is crucial in the face of slowing economy and simmering trade war. party must communist make greater efforts to prevent and resolve threats saying areas from politicsge to the environment and global circumstances. says.k. home secretary britain should work with allies on a coordinated approach to telecom networks. parliamentsked in whether theresa may's government 55-g inock huawei from

5-g in the u.k. and petro china has brushed off $1.5 billion writedown from the disposal of some assets full year nett income more than doubled last year thanks to higher crude prices. oil and gasest producer says net income could and jumped as much as 132% that would take it to $7.8 billion for the year. hours a day on air and on twitter powered by 2700 journalists and analysts in more than 120 countries. inocencio. shery: ramy inocencio with the latest, thank you. asian markets start trading in a few minutes. kong.k from hong >> as global growth risks pile up, asian stocks are set for a start this tuesday. shares looking change after a five-day advance after the

longest winning streak since november for the asx200. afterarch on the radar the company reported fourth 4.6%er ruction that was below estimates and as for 2019 estimates, growth seen as much in25% after the earthquake papua new guinea. search said the partial alaskan assets and softer second quarter numbers the production halt on upgrades and b.h.p. will be in focus with its fourth-quarter report. more details with david stringer shortly. on the deal front, keeping an helius after reports that healthcare player will afload operations at a time global fund set to be considering a takeover offer and bears watching on a report that its prime sale of

project in queens sland on the back burner and origin may of gasidering an i.p.o. operations. shery: thank you so much, sophie kamaruddin. the u.s., the longest government shutdown on record, entering a fifth week. president trump and senior democrats are taking the first small steps toward a possible playstation -- and border security. bill, great to have you with us. saw a few minutes ago president trump tweeting that if walls aresi thinks immoral, why isn't she requesting that we take down all the existing walls between u.s. and mexico even the new at herilt in san diego strong urging, let millions of unchecked strangers flow into the u.s. this doesn't seem to be the rhetoric of anybody who's ready deal.e a

bill: the weekend started with hopes that maybe republicans and start workingd out some of their differences compromise nearer to but we've seen very little progress so far today, on monday, a holiday here in the u.s., of course. lawmakers are expected back tomorrow. senate majority leader mitch mcconnell said he would put president trump's proposal for $5.7 billion in funding in a temporary reprieve for dreamers onnown as to the floor for a vote but democrats have rejected that as it's not clear when some sort of compromise proposal will come forward. workers -- if this extends through the week, many federal workers will go without a second paycheck. so this is really dragging on longer with bigger consequences than people point.d at this paul: in terms of compromises, why are we at with the trade china?tween the u.s. and

increasingly, allegations of theft are emerging as a key sticking point. bill: i.p. has been at the core of u.s.-china trade disputes before this president took office and it looks like those to the biggest hurdle reaching broader agreement. we've had some good news over the last week or two in these with china's commitment to helping reduce the trade deficit with the u.s. but the reality is, people on both sides of the political aisle here in the u.s. there needs to be significant progress on intellectual property issues and people close from to those discussions so far is that they haven't found any kind ground on that area and, of course, there is early march deadlines set by president trump to reach an agreement or face the risk of higher tariffs on hundreds of billions of imports.n chinese

fariesll right, bill joining us from washington, d.c. here in australia, b.h.p. released second-quarter figures with iron ore and copper outputs coming in shy estimates. over to melbourne and our commodities reporter, david stringer. what impact have we seen from the issue b.h.p. had with the runaway iron ore train in november? david: good morning, paul. you recall, in november, extraordinary incident in hub, aia, the iron ore driver stepped off one of the iron ore trains to conduct inspections and it without him hurtling 90 kilometers through that part of western australia without a aboard, out of control, until brought to a halt when in perth deliberately derailed the train. today is thatid

cost them four million tons of output in the last quarter of 2018 and we're seeing an impact on shipments. 7% lower than the same period a year earlier. perhaps more importantly it's terms of off track in meeting full-year guidance. is a littleed rate bit shy of the target for the full year at this point. so certainly some impact from that incident. not surprising. leave trainas to wagon mangled across a mile-long stretch of track. shery: b.h.p. has also had issues at its copper operations. impact of overall that? david: that's right, it's not inlated, that one insdented iron ore. they've been encountering chile aties both in the spence mine and also in australia, the giant olympic dam, copper, gold, uranium mine with fires and outages. result is b.h.p. says

they will lose $600 million in losses as a result of lost production, outages, maintenance costs. it looks like it will add to what already looks like a slightly difficult environment we move into an earnings report next month. that sort ofagged targets for operational costs creep a little bit higher which could have impact profit. paul: and david, volume's down in b.h.p.'s oil division. it sold itsafter u.s. shale assets but are there to add more conventional output? david: absolutely. 11 billion divestment of the u.s. shale assets completed last year and very much a focus on growing production from conventional oil. talked about success they've had in the trion project on the mexican side of the gulf mexico. they've encountered oil there

up exploration licenses in canada. very much a focus on pressing with building out that conventional oil pipeline. they'll consider an investment a joint venture with b.h.p. in this current quarter. energy andr commodities reporter, david stringer, in melbourne, thanks very much. next, singapore's next leader goes down the rabbit hole of what if the u.s. and china can't reach a deal and he doesn't like what he sees. we'll have that interview from forum in economic daves on next.

paul: i'm paul allen in sydney. shery: i'm shery anh in new york. this is "daybreak: australia." andapore's next leader current finance minister told bloomberg it's vital the u.s. and china settle differences to

avoid damaging the global economy and spoke to us at the forum in dasvos. >> i think both sides are trying and we have ant few weeks to go before we see the final decision. bothnk it is important for sides to try and cut the deal because the impact on the global economy of any trade friction is going to be very negative. haslinda: where do you see room for compromise between the u.s. and china? >> i think there are a number of it's not just about the trade figures, it's propertyt intellectual and longer term balance between the two economy so there are a number of items they're discussing including the way in companies are dealt with and the way intellectual with andhas been dealt the size of the deficit. but the deficit in many ways is reflection of broader

economic factors, like aonomists will say that it is measure of the balance between savings and investments in the and those sorts of changes will all need to be made but byt by one country all countries involved. haslinda: if when there are the supply chain as a result of this trade war, where place?ese changes take >> the global supply chain today is highly integrated. multinationals in particular overbeen sourcing from all the world and it's a very delicate, integrated supply so in the short run, many companies are really scrambling they cant how restructure the supply chain to resilient.ittle more haslinda: from china to vietnam, china to? >> i think so. there are some aspects in the china andia between

southeast asia. southeast asia companies will have the benefit of some of this restructuring. for instance, some logistics companies are reporting that as conflictof this trade as well as broader longer term shifts in the economic numbers, instance, the rates across world, itparts of the is really shifting, accelerating. and at the same time chinese going out of china. china has an explicit strategy of encouraging companies to go out. so as they go out, the entire beply chain will reconfigured. haslinda: countries like china and russia have been seeking an dollar.ive to the u.s. what do you make of the dominance of the u.s.d.? >> the u.s. dollar has been very widely used for many years now across the whole economy. global, during the

financial crisis of 2007-2008, u.s. dollar played a very important role dollar. what do you and i must say that the federal reserve played key role in providing u.s. dollar toe enable the global economy to recover and prevent deeper recession so the u.s. dollar remains a very important currency. i would say in the short runs a -- no clear alternative to the u.s. dollar. the u.s. has the largest economy today, will remain fairly run.ficant in the long in the short run. but in the longer run, i think otherwill be arrangements. paul: that was singapore's finance minister speaking with min in davos.

discusseda chairman european risks in an exclusive interview. the issues we, have around the world are virtually all political. politicians can get together, solve that and help the world economy rather than the cycleit, i think could go on for some time but the reality is that they're way. the opposite my first boss always said over politicianslly the will f it up and at the moment they're definitely doing that. how bad is it? guy: it depends where you are the u.k. it's almost rationally invest in the u.k. at the moment unless you're really looking at distress because there's masses downside which are unquantifiable. you don't know. and the upside is very limited. contrast, somewhere like

italy which in some ways has basket case for years, has this huge economy measure and the you have there are, massive upside so i'd rather go for italy than the u.k. which is something i would not have said in the last 50 years. >> what do you make of what is continent atthe the moment? germany close to a recession. in germanysted before in the past. france is slowing down rapidly. the italian economy, you've about, but it's teetering on edge of recession. spain is slowing down quickly, well. are you surprised by the speed of what is happening? particularly. people always sort of feel that the politics is not relevant you're in business and it's not relevant until it's very it'sant and at the moment extraordinarily relevant because you don't know how to have and if i don't have

confidence, i know the average person on the street doesn't ave confidence because i'm risk taker by nature. people are scared. they don't know what's going to happen. the french germans getting together against maybe poles.lian that's a bizarre conversation. meanwhile, britain is saying all by ourselves and where does that leave the irish? you go through europe and besides the nordics, everywhere face.as real issues to >> where are you seeing opportunities? you talked a little bit about italy. scene int the economic front of you, where would you be prepared to invest right now considering the political chaos face? guy: we've just done invest in finland. comfortable about that. we are seeing some investment germany buts in we're looking for businesses local or either very the opposite, have a global position. which aren't easy to

understand and which we hopefully can buy at a because therice other issue is that prices, very,vanilla, prices are very high at the moment and that's dragging even businesses which are really not plain up so you've got to really go for the extremely quirky to find something that is reasonable value level. shery: that was the chairman of exclusivelyspeaking to bloomberg. if you missed part of that conversation, tv go is your function. you can watch us live and see our past interviews there and dive into any of the securities or bloomberg functions that we talk about and also you can be part of the conversation. bottom left, ask the guest a question, send us your questions. we'll try to ask them. this is for bloomberg subscribers only. this is bloomberg. ♪

shery: welcome back, i'm shery anh in new york. paul: and i'm paul allen in sydney. watching "daybreak: australia." let's get a quick check of the headlines.ness blackrock is gon have -- known to have exposed of 20,000 advisers. the lpl says the leak affected blackrock'sork with ishare exchange traded funds unit. sees 2019as says it being a good year with sales and profit expected to rise. c.e.o. says the company aims to gain market share in coming months and plans to boost the production of shoes containing plastic waste from five million pairs last year to 11 million, involving turning aastic bags into a yarn for

use in the shoe body. raising the minimum age for drivers in the netherlands after a series of accidents, from 18 years to 21, insisting the drivers have at least one year's experience behind the wheel and introducing a mandatory safety 25.se for all drivers under at least four people were killed involving uberes netherland cars. it's been more than a decade milk powderd infant in china killed six children, others and0,000 exposed neglect of food safety. today, chinese parents still don't trust local companies to their babies. business reporter has been looking at this. how are foreign makers taking advantage? >> 2008 was the start of the

scandal and foreign players are cashing in, emphasizing foreign credentials, green credentials, agricultural credentials and milk and chinese parents are lapping it up. we saw nestle's market share more than quadruple and even upstarts from new zealand, close to oneed to billion new zealand dollars and observe the crisis it was barely over a million new zealand incredible growth in market share of foreign brands they're taking advantage of that deep mistrust left over from the 2008 scandal. seeingwe're also incredible growth of this market in itself. of course we have that after thed baby boom end of the one-child policy in china. how big is this market? and do domestic players play at here? >> that's a good question. the market itself is enormous and still growing.

there's only a quarter of chinese mothers who breast feed forhat's a huge scope infant formula sales, to grow $40t 20% to more than billion in 2023. as we look in the next 10 years, it's really going to shift to lower tier cities, if you like, beyond the wealth of and shanghai looking into the hundreds of smaller cities where the battle for will take place between chinese domestic players by nestle anded dannon. these battlegrounds are key it's in these areas where the chinese players have the best chance of grabbing market share. ony can compete better price. secondly, there are fewer oflets that stock the likes nestle brands and dannon brands. and lastly, perhaps critically, longer this goes on, the more likely they are to find parents that aren't psychologically scarred by the 2008 crisis.

the institutional scale of that crisis left deep scar tissue that hasn't healed but the on, the better chance the chinese players have success. shery: angus, thank you so much for that. bloomberg, we're bringing you exclusive interviews from the 2019 goldman global macro conference in hong kong. 11:40 sydney time, u.s. strategist and then goldman's chief economist. president with former adviser,ama's top asia medeerose. paul: we have futures looking a little weaker after the reset, just off .1%. we are up and running in new zealand. .1%.arket off we'll have the market open at the top of the hour and bring you details on that but for now,

that's from "daybreak: australia," all the action "daybreaknext in asia" this is bloomberg. ♪ amazon prime video is now on xfinity x1.

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paul: good morning. i'm paul allen in sydney where australian markets have just opened. shery: i'm shery ahn. >> i'm hong kong. welcome to daybreak asia. ♪ paul: the top stories this tuesday -- a warning for devos. global growth is slowing further and risks arising around the world. president xi talks of serious dangers with china facing a simmering trade war and growth that has slowed in three