alex said a have had software issues with other planes in the fleet. this is bloomberg markets: asia. >> trepidation and the markets here in asia. there is some cautiousness and the markets. ,e have geopolitics and trade front and center at the g20 meeting. it is looking like this at this point in time. japan is being breakdown by exporters. cash holdings right now are at the highest level since 2011. equity allocation is seeing the biggest drop on record.

look at where we are. this is not available, that may happen. we want to point out, this is for the assetked classes since may 6. that is one they ratcheted up the tensions -- when trump ratcheted up the tensions. i wanted to show you the haven place. it is up by almost 2.7%. they were some inflows from foreign investors in particular. there was a drop leading this. this exposed the china and u.s. trade were.

a pretty interesting look across the asset classes. william: -- this is on a higher tear at the moment. they did rather well against the west indies. there we go. there is the dollar against the rupee. the 10 year yield has been creeping up of late. we saw this victory in the election. this rally was really getting going there. advantage that you had with the 10-year note in india. four basis points down. 6.94.e up to

we will look at this. this is the first word news with selina wang. the front one or for -- front-runner boris johnson is refusing to rule out a no doubt brexit. he is being vague about the possibility of suspending parliament to force a hard split through. isresa may has indicated she willing to vote against johnson and a jeremy hunt if they pursue a no deal divorce. -- nesia has ratified saidonstitutional court that they failed to bring the deficit for the allegation that combined to help him win. decision was not unexpected as the appeal documents were

printouts of local news articles. -- loans should ease in the coming months. the r.b.i. stress test showed lenders -- this dropped by the most in 15 years. the r.b.i. is raising the alarm about noon defaults -- renewing defaults. india has the highest bad debt in the world. -- boeing said it could take months to fix the 737 max. filing -- that pilots flying boeing jets have reported additional software problems on different jets besides the max. than 2700 more journalists and analysts in over 120 countries, i am selina wang,

this is bloomberg. back to you. >> the g20 summit is underway. we are seeing world leaders arriving. we are expecting the open. yvonne man is at the summit. trepidation. yvonne: you are seeing that family photo of the g20, getting up there and taking that picture. we heard from some state leaders. expectations are low to have any kind of consensus on trade or climate change. we saw plenty of other meetings this morning as well.

president xi talked more about -- he isand have years condemning it. he commented to the every leaders. he called this bullying. we saw some chinese officials talking about the need for dignity. all of those things send a message to the u.s.. does need a trade it with the u.s. but he needs some kind of breakthrough. whether it is a temporary stress or -- china wants to be seen as an equal in these discussions. >> president trump was watching the candidate debates. how will he use that in the trade discussions?

he will have to play a harder line because he has to bring something home. >> those of is trying to watch the game at halftime. -- donald trump is trying to watch the game at halftime. said, we are coming into the end of the election season. he will have to come across very strong to his base particularly. backeds to be able to go to the u.s. people and say that i have a deal with xi jinping but it is a beautiful americans. i will bring up -- bring manufacturing back. the impetus for him is on the domestic side to get a good deal. towardare looking ahead trump and vladimir putin. what are we expecting? >> just the fact that the meeting is interesting because

trump has called president clinton twice now since they meeting in helsinki asking for a meeting and getting pushed off. trump said the mother inquiry did not find any -- mueller inquiry did not find any probl ems on his part. vladimir putin, just getting the sit-down is a win. >> will they not talk about the pipeline? >> the issue with that for donald trump is germany. thosesn't appear that trump run-up with angela merkel. he might talk about issues around iran and syria. >> thank you for joining us here. plenty to look ahead to. that's events. rishaad: back with you.

we will stay with g20. joining us is stephen. former md. he served in the office of legal advisory from 1976-1979. he helped establish the chromatic relations with china. thank you for joining us. betweenhave things got china and the u.s. behind the niceties? i think the relationship is deeply troubled. the trump administration has followed policies that have pretty much incited nationalism in the united states. the chinese government has adopted policies that have basically disaffected the thatrical constituencies

supported constructive u.s. china relations. it is not good. in the next 24 hours we will see if there can be a write-in of the relationship where president trump and president she -- president xi a great -- agree on suppose. the tariffs are supposed to go into effect next tuesday. the higher tariffs on $300 billion of chinese goods are not put into effect. we don't know. rishaad: shinzo abe is sitting next to the chinese president, shinzo chang -- xi jinping. what is the best outcome you could hope for? afters the one you expect that chat between the two presidents? stephen: i hope that we see a suspension of the tariffs. i hope you see a clear path

toward stopping this decoupling that is beginning to happen. i hope we see a consensus on to allow themei to be a customer of u.s. and china business. i hope we see a consensus on allowing investments and united states and china to expand and fortran in the united states to expand. what we are seeing is the building of barriers on both ines that are ultimately not the long-term interest of either side. it is important that the two ship -- rightte a a ship that is wrong. rishaad: what will we actually get? you would have to ask president trump what we would get. we have heard conflicting signals from the administration. we heard president trump say huawei will be able to buy

american goods. we have heard the chinese take an increasingly tough stand on what they are prepared to do at these negotiations. the viewers need to keep in mind that both sides have an overwhelming interest in getting the train issues solved. these are bad for the united states. their bets with people of china. it is this overwhelming interest but there are people within the administration that accompanied president trump that believe it is perfectly good to have this decoupling. regardless of the effect on the american people and american workers. what we are seeing is american workers and consumers are being punished. what we are seeing by the chinese is that the punishment of the majority of chinese people and the protection of incumbents. it is important that both sides act in the interest of the majority of people, not of a vocal minority.

in china, that is state own enterprises. owned i think the overwhelming majority of americans believe this is a total fallacy. does the u.s. and trump see china and xi jinping as an equal going into these negotiations? stephen: does he see him as an equal? i think he sees china as a rising power, that it is important that we deal with them. t xi's visit to north korea, 14 years between visits, that was a clear signal to president trump that we need china's cooperation to deal with this signature issue in american foreign policy. the denuclearization of the korean peninsula. it is critical.

this was a clary beal -- very clear warning to do with us to get and fairly resolution on the korean peninsula. does he see them as an equal? i can't answer that. there are people in the administration that have a very president xi of and the rest of the communist party that are ruling china. we had a statement from the head of the policy planning and the state department that this is the first time america had strategic competition with a non-caucasian strategic power. wrong and incredibly misguided view. does president trump sure that you caution mark i don't know -- that view? i don't know, i can't tell you.

>> how much pressure is the at toe for both trump and xi come back with a good deal? stephen: there is increasing pressure on both. in president trump's case, we are seeing a letter from 661 american businesses objection to these tariffs, saying it is hurting america, it is hurting americans, american workers. we are also seeing some unrest among farm belt republicans about the tariffs. the export of u.s. soybeans and corn. these traditional republican areas are beginning to experience a lot of unhappiness. are they still with president trump? will they continue to be with president trump while we are seeing from is experiencing failures? i think that is an open question

within congress and the american electorate. that is increasing pressure. we have a slowing chinese if the, these tariffs, tariffs are put into place on tuesday, we will create a lot of pressure on president xi. there is overwhelming interest on both sides to reach a deal and put the u.s. and china on a road toward resolving these issues. resolution of these issues is not going to be simple. you have a 90 minute meeting 24urring at almost precisely hours, with a resolve all the issues? no. can they reach a principle that will allow for the resolution of the issues caution mark i think that is altogether possible. i think you have to ask president trump and presidents -- president trump and president

xi. rishaad: is this about the narrative from the white house? stephen bannon is not there at the moment. about maintaining americana? stephen: certainly, the perception in china is this is about keeping china down. in the united states, you are right. probably anin, handful of others see this as a way to keep china down. they are perfectly comfortable with the decoupling. the majority of the trump administration and over whelming amount of the american people don't want that. a prosperous china, a china that house keep peace in the world. this is in the interest of the

american people. i think the american people realize that. term,s why in the long despite these disruptions, i am an optimist about u.s. china relations. the american people understand that we need cooperation to deal with the critical local issues that exist. is --you think that assad we may have been going about it in the wrong way. that are things brought the top of the political agenda. there is no question that the reforms they are asking for in his proposals are in the interest of the united states

and the chinese people. the opening of markets are good for the chinese people. the majority benefit. the minority that are the incumbent lose. the loser is the incumbent. my years at carlisle, i loved being incumbent. i loved when the government protected might market share. was this in the interest of the consumer or the customer? no. what the chinese government used to -- needs to do is make policies that will benefit the majority. most of these reforms are good for the chinese people. when you have protected markets it is not good for economic growth. it is not good for the consumer. it is not good for the people as

a whole. a lot of what is being asked for will help china's economy. the slowing we are seeing in china's economy today is to self inflict economic policies that are favoring state owned enterprises over private enterprises. they are stifling economic growth. for 40 years i have been working here and i see it is the private sector that is the engine of growth. these policies that are favorite the state on sector are stifling economic growth. in osaka.ake a listen much, prime very minister. it is an honor to join you and

so many distinguished world leaders. this is based on the free flow of data. this is access to capital and innovation. the united states is committed to sustaining this approach long into the future. we are eager to work with like-minded partners to advance these priorities, the digital economy is a crucial driver of economic growth. as we expand digital train, we have to ensure the resilience and security of our five g networks. this is essential to our shared safety and prosperity. further, united states opposes policiesalization and that have been used to restrict digital trade flows and violate privacy and intellectual property protections. seeks tod states

empower all of our people. we look forward to working with .ther g20 members this will bring new prosperity to all of our nations. thank you very much. rishaad: don from making a very brief statement there. leaders there.us they're talking about an open market and fair economy. this is something that people should be listing four. -- listening for. has been banned from the united states effectively. they have to show the resiliency and safety of five g networks.

that is what we got from that statement from donald trump. trump is busy with g20. we have one eye on this democrat debate that has been taking place in miami. we can also have a little bit on that later on in the program. what about what is going on in we just heard rk -- osaka? >> we just heard from present from. he mentioned when it comes to 5g, they must ensure that brazilians and security of 5g networks. this is in light of this whole the u.s. hashat imposed on china and his company. a lot of questions about what they will and whether

be sewn into these talks with president trump and xi jinping. there were talks that perhaps china would not a great to a deal unless the u.s. lifts the ban. >> we will continue to cross over to yvonne man. busy with g20 and the second round of democratic debates just ended in miami. let's go to our chief washington correspondent. kevin, give us the highlights. , live,we are here senator bernie sanders is talking to reporters behind us. on day one, he would work to address that, there was a key exchange between former vice president joe biden and tomatoes.

>> i believe you when you say you commit to finding common ground. i believe it is personal, it was hurtful to hear you talk about the reputation of two united states senators who built their on civil rights. >> it was a farmer contentious debate than the first part. it comes at a time in which senator harris try to emerge as a breakup contender for the democratic primary. she took on the former vice president. senator bernie sanders, the clear front in terms of the democratic-socialist wing of the

party also laying out his vision in terms of how he would be able to take on president trump. this is to kickstart the presidential season into high gear. >> what about g20? donald trump is looking in on this debate while he has been making the rounds there. what is the domestic digestion of what is going on, globally speaking? >> president trump has been twittering about the debate. he has made some remarks in terms of the negotiations he is having that are ongoing. no finalized deal between the u.s. and china on that front. >> that was our chief washington cyrillic int kevin miami.

>> the g20 meeting is currently in place. you have prime minister abe shaking hands with the other leaders in the meeting. we will continue with our coverage live from osakea, this is bloomberg. ♪

>> positions have grown harder since the addition of huawei to the department of commerce's entity list. i think there would be -- it would be unrealistic to see gapping of the fundamental -- differences between the sides. if there was a truce and andshake and agreement -- agreement to not continue additional tariffs, that would be more likely. >> there has not been as much preparation has been needs to be. two sides have been escalating. the question is if they can

reach a temporary decision, not to continue to escalate. over the medium term, it will be very difficult to come up with a real breakthrough. >> the best outcome from this to render the momentum, denuclearization talks. it seems they are ready to talk but they seem to be expecting the other side to be more flexible. we have our guests speaking about the trade war. yvonne man is in osaka for us. >> we're just getting underway for some of the sessions here.

we are expecting that meeting between president trump and vladimir putin. yvonne: we heard from president trump in the last couple of openingtalking about market discussions when it comes to trade, resilience and 5g networks. we heard president xi jinping condemning bullying by other nations ahead of these talks with trump. >> companies must continue to plan based on the assumption that u.s. and china tensions are both long-term plant and a problem that could escalate at short notice. let's bring in andrew gillum.

andrew joins us from seoul. what indications are you getting from companies now? andrew: companies are back in the position they are -- were in back in september and december. they are hoping that these talks will avert but if you look at the upcoming u.s. antenna tensions, there is more volatility and uncertainty. i think people are hoping for the best. they are hoping for a temporary reprieve from the uncertainty. these talks are happening as we speak. a lot of people talk about the collateral damage.

who is most at risk here? any company that is exposed to that bilateral trade ,nd investment relationship this is exposed to this. a lot of companies are looking at essential is to position themselves. even non-us companies are being drawn into this fear of china ifpping up retaliations these talks don't go well. i think we are closer to the stage than we have ever been .efore companies will be caught in the middle. it is about all these other forms of escalation. all of these other leaders will be cold when these things break

down. rishaad: the people should really assume that no deal will ondone and perhaps carry their supply chains. has the spat brought forward what was going on before? andrew: that is true to some extent, companies can't really just wait for the month-to-month meeting to meeting and react to every tweet and positive or negative meeting that happens. back tore going to go the way they were a couple of years ago. they really have to be planning longer-term than that. one of the ways they are doing that is reassessing the role of china in their supply chains. for a lot of companies, china is a lot more than just a supply

chain, it is a critical market. there is no easy answer trying to maintain that will in china. -- role in china. it is a real trade-off and a lot of impossible choices being put in front of companies at the moment. rishaad: even if there was a trade deal done, should corporations look at that with fresh eyes and realize that things will never be the same as they were before? have things irreparably changed irrevocably changed? andrew: yes. we have a scenario where we are getting a readjustment by both sides to a new kind of u.s. china relationship. that is the message that xi jinping is going to try to push in a soccer. osaka.

no deal will make that a smooth process. it will be a very contested process. one that is contested over many years. a trade deal is the best we can hope for. it will have a lot of domestic accusations,lot of accusations of failure to implement. anyn't think we will get kind of deal in the behemoths. it might reduce the scope of the pace of escalation. i think these kinds of issues are something we will be talking about and uncertain about for years to come. >> paint a picture for us. what does the deep -- decoupling look like for the u.s. and

china? is it a bifurcation or something more selective? andrew: the idea of decoupling as this broad and complete process is exaggerated. we are seeing the first signs of it. this is about the extent of reliance. strategic in the sectors. this is about technology, not just military sectors or infrastructure. this is about 5g, telecom, cutting-edge technologies.

this could mean the more fundamental question is a leading player in china. that --ngly, the answer to that might be no. yvonne: both leaders are expected to kick the can and continue until it becomes so big that they can't anymore. what kind of fallout will we see eventually? andrew: i think we will see this through the 2020 election season. there isn't really a conclusion insight. it is a question of how this plays out and if it will be mostly with these fairly or if thingsics will move back to a more 2020?te position at the

the same issues are being contested but we are slightly less aggressive with the tactics on both sides. the u.s. --t whether it is at osaka or down the line, we can see them do this. china is at the point where they will not react quite so proportionately. i think we will start to see them use things like this. they will take action against growing companies in the way they think the u.s. is taking action against chinese companies. i think that will be with the next phase of this looks like. -- rishaad: thank you. he was joining us from seoul. yvonne will be back with you later on.

you saw shinzo abe talking. here are the lines he came out with. he was talking about the global economy reflecting what the general view is. saying it faces the downside risk. the tensions are rising over trade and geopolitics. discussthey want to excessive payment imbalances as well. of the remarks that shinzo abe has been making in osaka. now we can move to beijing where we have selina wang. selina: president trump wants to delight the u.s. census after the supreme court ejected his plan to include a question on citizenship next year. the bureau says this could lower response rate for minorities and result in undocumented immigrants not being counted. that could mean populations losing status at the electoral college. the front runner for u.k. prime

minister boris johnson is refusing to rule out a no deal brexit. he is being vague about suspending parliament. theresa may has indicated she is against johnson and his rival, jeremy hunt if they pursue a no deal divorce. european powers are failing to prevent iran from breaching the 2015 nuclear deal. this would be designed to circumvent this. signatories' is that a trump's decision to abandon it. the reserve bank of india says that blondes should ease in the coming months. the r.b.i. stress test shows shows -- salome the r.b.i. is raising the alarm

about looming defaults in the shadow banking center. india has the worst bad debt in the world. global news, on tictoc and on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i am selina wang, this is bloomberg. >> still to come, the problems pile of foreboding. -- pile up for with thehe new issues 737 max. this is bloomberg. ♪

we are getting to the opening in the indian financial capital of mumbai. let's get back to what is going on with the flag carrier of indonesia.

we have had the auditor's license of the company frozen for 12 months. this is after another auditor found violations in the company 's annual reports. 2.5% in jakarta as the government found this violations conducted by the auditor. to the open in india. let's get straight there. we have seen a little bit of movement. it has been a little bit of movement of late. >> not really different, not very different at all. this is largely on account of lack of trigger. we have seen some moves here and there. that is largely on account of global things coming in. too much atooking

the 2% gains. the banking index will be trending marginally in the red. just a very quick word on the indian rupee. that is looking at a lot of strength, it is now at 68.9 against the u.s. dollar. that is the big talking point of the day. >> raising revenue guidance for the year. any implication for indian i.t. companies? that therederstand has been an improvement in a lot of these. this time around, they have done well. there has been an increase of guidance, there has been an increase in communications.

that is the reason we are looking at these gains. that is why the nifty index is higher. >> now to a bloomberg scoop, pilots have logged in place about software problems on other boeing jets other than the 737 max. those are still in the air. this report is coming out as we hear the faa has found a new flaw in the 737 max. what is going on? >> the report that pilots on previous versions of the 737 aircraft were encountering difficulties, these have emerged from analysis of reports that commercial pilots register.

aviationalled the safety reporting system. this is anonymous through a pool of safety reports. if pilots have trouble during a flight, they can log it there. reports showhose that increasingly, software issues are causing problems on older generation boeing aircraft's preceding the 737 max. they produce a range of problems amid air from planes lurching to the right. they gain speed, without any input from the palace, they lose speed. this is partly because of the rey complexity of software in his aircrafts. fallouty points to the in the race to ultimate flights flights.te

it does have consequences of its own. >> it seems that a lot of these problems are related to automated systems on these aircrafts. them.e said to get rid of the can't because modern-day aeronautics need them. >> it is probably fair to point has producedmation vastly safer flying conditions in the past few decades. when you go back to the jet year in 1950, right through to the end of last century, it is very common to have more than a thousand people died in commercial jet accident. morehasn't happened for than a decade. a lot of that is due to automation. computers don't generally make

mistakes with the same frequency as pilots. you don't want to get rid of automation completely but you have to be aware that unless you get it right, unless you get rid of the codes during development, they're going to crop up when you don't want them, that is in the middle of a commercial flight. that is what these pilots are encountering. they are producing almost unmanageable circumstances. in the same way that the 737 max planes crashed. they were both caused by software functions. yvonne: it is kind of mind-boggling, so many problems for boeing but it seems to be holding up pretty well.

suffering?t >> the stock prices are almost back to the level they were before the crisis started. oft of that is a reflection the duopoly that boeing and airbus have. airlines don't have a lot of alternatives. they are still having to order planes from boeing. committed to buy 200 more of these before they were even cleared to fly. boeing will see this through and the max will get back in the sky. the cost to boeing is not trickling. it is not in existential threat as of yet. each month the max is granted, the market believes

they can still see this through and the cash flow will return to get boeing back on an even keel. that said, the more problems we another safety issue that the faa had identified that needs fixing. the more problems we have like tot, the bigger the threat the ultimate fate. it is not looking good. >> thank you very much indeed. we will have the very latest from the g20. we will have a look ahead to the most important meeting of the year. trump and xi, we are back in osaka. that is next, this is bloomberg. ♪

rishaad: we are back, this is bloomberg markets. i am shot salamat -- rishaad in hong kong. yvonne: i am yvonne man. eric -- our co-anchor yvonne man is at the summit. the yen is strengthening, what has happened so far? what else are we expecting? yvonne: you heard from shinzo abe, the host of the g20. are talking about trade. putin, that happens in about an hour's time. they have been trying to set up a meeting with president trump after six months ago, president trump surprisingly snubbed them and canceled this meeting. that is with the naval clashes

in the backseat where two dozen ukrainian sailors were held to a rush in jail. that was a condition at the time. expectations are pretty low for this meeting. they are saying that it might be pretty brief. experts say that just the fact that they are meeting alone is russia,nd positive for they have all but lost hope. even after the fact that this him.t claims exonerate that is going to be cute to watch. even though nothing will really happen. maybe there is some type of rebuilding when it comes to relations between the u.s. and russia. all of that would be ahead. we have climate change, on top of that, we have geopolitical tensions in iran

and a host of other things. maybe we can get some traction. what are people saying about his other problems the world is facing? the geopolitical tensions are front and center. you mentioned about iran, this is after president trump upped the ante on iran. a lot of questions about whether the g20 will try to do something to diffuse these tensions. are there any back channels with deescalate the spec? the french maybe the people to do so. there will be some europeans that will try to salvage what is left of this iran deal. perhaps we will some type of coordinated effort. we'll see if this comes out. rishaad: thank you very much. from yvonne more later.

that is a look at what is going on there. haslinda? >> that is it from bloomberg markets: asia. china is down half a percent. that is it from bloomberg markets: asia. this is bloomberg. ♪ we're the slowskys.

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