other industries. but it's going result in a cold war between the u.s. and china and it's not going to be easy to find a solution to this problem and the consequence the line -- the coupling of the global economy. will be the disruption. by next year, it will be the escalation. >> this is a fragmentation of what is going on. the fragmentation of geopolitics and deglobalization. this is a long process. how badly does the economy suffer? >> it is a medium-term rivalry in china but even in the short run, let's assume there is not

an agreement on trade. they will not be an agreement on huawei. the u.s. is out to destroy by disconnecting it from other components because there is a national security element. they will not be an agreement on trade or tax. tensions will escalate. rishaad: what kind of lifeline is there? >> there is a long lifeline. this could happen any day. can't use it. ory will not use the huawei five g networks. maybe a system does not work in terms of software or hardware. these rivals are much more serious about tech and globalization.

with a global supply chain, it depends on the integration of the global economy. once you've vulcanized, we will have a global session. rishaad: are we seeing signs already? some of that is spreading into the service line of the economy. trade is that, global also falling quite rapidly. how bad does it get before things improve? do they improve? trade in tech in the u.s. and china will get worse. with the u.s. and tehran escalate, there will be a spike.

you have two major conflicts, geopolitical. this affects services, the tech sectors have slowed down. option waiting. if you have any business or what you do is you stop doing investments. we have already seen this collapse. once that is down, the production is down. you have the beginning of a global recession that started in tech. we are seeing it in the data. rishaad: when does it permeate into becoming something that you can see materially? recession? a it isms to me that

further than it is likely to be. speaking, this is a slowdown in the global economy. this was a few months until this negotiation between the u.s. and china will fail. both on the trade side and the tech side. these tensions will escalate anyway that will move to another supply. inyou have to supply shocks the global economy. one coming from tech and one coming from all. exhibit 3, 79, 99. we had a global recession. this will happen in 2020. >> you made your point about

when that can happen and the reasons behind it. is anything we can do? -- there anything we can do? >> we are limited. there is not much room. even this third could go from 5:25 down to zero. then what? they will go back to mac -- policy rates? the are already doing negative policy. this is more limited on the monetary side. this is a high visit. politically, their ability to backstop corporations and houses like we did during the global financial crisis is limited for two reasons.

economy, nobody will want to fill this up. markets for now our rallying because they are hoping there will be a trade deficit in china. meanwhile, the fed will start copying rates. those cuts are about the recession? no. the stock market fell. all of this using is going to a month of that recession. full trade tech and cold war in china. there is no way, one of them is not enough to lead the global recession. in eighth --ill be

severe session. behaad: i was asking you to dr. light here. iminish.me even more d we had no efficacy of fiscal policies. then we have no efficacy for monetary policy. where does that leave policy? compared to the global financial crisis, monetary policy, fiscal policy, i missing there is no policy but it is limited. however constrained it is will present ae to

recession. is the fundamental problem that we will not be able to inflate our debts away? >> we have been trying to monetize those debts with the date of easing. 10 yearsty is that after the global financial crisis, around the world, overall, private and public debt is higher than before. servicing ratios are low today because they have near zero policy rates. those are emerging markets. credit them and go higher. then they have massive corporate debt.

you could have massive increases in debt services. even unsafe presses like government bonds and jersey. economy has seen steady growth in the first half. in the proper range here as well. do you believe them? >> there was a growth and then it in the monetary stimulus. from china,ata whether you look at trade, pmi, they are the beginning of another sharp slowdown. we have a full-scale trade war with the u.s. and china. these cuts are sharply down because there are massive amounts of policy uncertainty. china is going to have a massive slowdown.

they are going to do another stimulus. it will increase the debt ratio. that is fine to kick the can down the road. if you have a shock to trade even theirge enough, own policy stimulus will not be able to prevent something of a harder landing in china. rishaad: you haven't mentioned much about indebtedness. qe and the ballooning , is thatssets worrisome? >> decorations around the world, emergingnd public, markets, whether you look at the private sector, corporate, the public-sector, foreign debt, those are high. so far, that had been low.

qe, these rates were very low. ,n spite of everything will this is a spike -- grade for higher leverage and loans. even with the lower government bond, you're going to spike investor ratios. make the debt ratios that are now under control unsustainable. this was a recession, a very deep recession. how far are we in danger of going through a depression ? we will go into that recession. central banks are going to be

even more unconventional. rates,t beautiful policy not just negative policy rates, they will start doing a constant drop of money. that is what they said. we have to go to even more radical and unconventional marketing policy. that is what they are suggesting. i think that compared to the risk of going through the , the great depression eventually led to a geopolitical

disaster. the severity of the shops, if u.s. andion to the iran escalates, -- rishaad: china will keep economic growth stable. they will not flood the economy with excess liquidity. >> every time in the past, there has been a growth slowdown. they are trying to reduce overcapacity. there is monetary easing, fiscal easing. this backstop the economy. this growth rate is officially at 6%. when the shock occurs, they give up on financial stability. they do it in 2008, 2009, 2016,

2018. they have been doing it, talk is cheap. the chinese react by doing stuff. then is to be more leverage in the economy. rishaad: let's look at this trade conflict. it is spreading out to india. we have had the eu for a while as well. how bad does that get? how does that become an aggregate. rishaad: trump was elected on a slogan of america first, make america great again, like america, higher america.

they were steel and aluminum and then other goods and services. now he wants to get out of the wto. he is a protectionist. this is an services, capital, labor, technology, data, this is the beginning of big globalization and localization of the global economy. the world is going to be divided into trading blocs. one big on the u.s. and one in china. want -- do more training investment with china. this is in europe, asia. the u.s. is going to say you're with us or against us. it will negatively affect europe and asia and the rest of the world. people have to choose was side they are on. that will slow down and that

will lead the recession. rishaad: can it be that binary? you use my 5g or the chinese 5g. you use my ai or the chinese ai. robotic automation or the chinese. even the smartphone, if it is a , 5g, i don'thuawei want your toaster. it will be collapsing on the global economy. can you allow the chinese to be controlling 5g? this will abide every good and

every service once we have this decoupling. this is a complete radical change. a regime change. i, we had a.ar where globalization what to do goat -- went to deglobalization. the soviet union was a declining power. roads were collapsing. in the u.s. and china' and's, china has the biggest economy in the world. this divorce is going to get ugly compared to the divorce with the u.s. and the soviet union. there was no trade between the u.s. and the soviet union.

rishaad: is that why these -- we saw in the beginning of may that chinagotiations between and the u.s. fell off. cryptocurrencies rallied and have rallied ever since. that is why you are here, we are here to talk about blockchain as well. >> gold went up 10% and down again. currency, you have to have no goods or services pricing. the price of bitcoin has fallen by how much? 30%. it is not a means of payment.

not even the blockchain continents take it. with a visa system, you can do 25,000 transactions per second. billions of people are doing digital money. it is been low and paypal in the united states. they had nothing to do with blockchain or trade talks. this is the future of digital money. it is a failure. nobody is using it for any transactions. for atrading one coin nother coin. this is pumping and dumping, from running. it is a big scam and nothing else.

>> can this actually be adopted? maybe you should give it some time. why are you against it so much? >> it has been around for 10 years. 75% of these apps are casino games and ponzi games. are exchanges35% that have no liquidity and nobody is using it. so much for the 10th -- so much for the centralization. this is not the beginning of the internet. does the launch of the world wide web, you had one billion users and that it became 2 billion. there are a number of unofficial users.

the real users is 23 million. now that he is using crypto for this iss of services. not of the website, of email. comparing to the internet is a joke. it is just peddling and talking your book. it is utter nonsense. rishaad: you are talking the author. he was talking to us. we will see some of the questions that we asked him. these are the key comments you have been making about cryptocurrencies. here is a question of your finances. >> he is a hater. someone who doesn't have any bitcoin. he wants to press rocket.

harsh, don't is you think? >> maybe but it is true. >> that is nonsense. boasting because he said there was a whole million of degenerate gamblers and retaining bets for suckers. we will create something where they can leverage not 10 times, 50 times but 100 times. cocainel give you crack for free to get you addicted and then they view broke. he is a drug dealer, that is what he does. tohaad: i would just like add that those are his views, they don't reflect the views of bloomberg. peggy for joining us dr. roubini.

have steve on the ground as well. also, my co-anchor. i am sorry we have not been him to get a look in through all this. >> we are watching it now, he just wrapped up. he covered a lot of ground. i am not saying he mentioned anything about the hong kong situation but i am reviewing some of the transcripts right now. he did talk a lot about globalization and protectionism. andalked about opening up give some specific dates for opening up sectors of the economy. he talked about the challenges, both defensively and externally. let me run through headlines. all have benefited from globalization. no country can benefit in isolation. referring to the allegations from donald trump and company,

we have to knowledge a problem has arisen. we cannot be made the scapegoat. globalization must be balanced and inclusive. he says protectionism and uncertainty is rising. trade and investment is slowing. he said china is going to keep its growth rate stable. china will not flood the economy with excess liquidity, monetary policy will find tune appropriately. swallow the medium-sized enterprises to these difficulty. this is coming from some of these hard and fast deadlines. china will further open up access to the manufacturing sector. benefitsp has shared with other nations. he also said china has paid a price for this integration. china has persevered.

he says they will scrap ownership limits by 2020. we have already heard that they plan to scrap those ownership limits. we are getting more of a concrete date. 2020, next year. scrap ownership for the insurance industry. they will also shorten the negative list and open up more. we heard that yesterday. this is the list of sectors china has to foreign competition. he said china supports foreign entry into the i.t. space, into pharmaceuticals and into new material. they also plan to open up the bond market wider. currency, the yuan, in this trade war, the yuan will be kept at an equilibrium level. china will not resort to competitive devaluation. that is a lot. not much on hong kong. nothing. stephen engle, thank you so

much. i just want to check markets as well as we go to the lunch break. we are seeing hong kong leader gains here. this was closed yesterday for the public holiday. the hang seng index is up by 1.2%. this is coming through for most of the stocks. i am hearing myself. it is worth noting what we have been watching in the chinese session. yesterday, very difficult to focus at the moment. worth noting what we have been watching. these are coming through in that sense that we had a little bit of paring back of those gains. they are still under a little bit of pressure as we go into that lunch break. the hong kong dollar is up by -- 0.7%. technologies, up by about

9%. elsewhere, some of those tech stocks you have been watching are falling in seoul. this is bloomberg. ♪

a.m. here in11:30 singapore. that is life picture coming through of the world economic forum. theave been hearing from chinese president. we will keep you updated. caps is to and ownership for companies by 2020. let's get the first word headlines with tom mackenzie in beijing. the trump administration is turning up the heat on the eu. threatening the measures. the trade office is proposing an extra list of headings with a

value of about $4 billion. he says move is to enforce u.s. rights in the wto's. the two sparring over eu subsidies. is european central bank dictating that more stimulus is on the way. worry.ntinued recent measures have been effective. more can be done if needed. the ecb will cut interest rates in the coming few weeks. the opinion -- european union leaders have failed to agree on the makeup of the top jobs of the block. concern about gridlock in brussels. these talks reduced no agreement

this is the head of the eu commission. he is backed by angela merkel. to extend our production curbs. this is about the relentless rise of u.s. shale. ministers agreed to prolong descriptions to train the market and balance the market. show opecxtensions challenged in the age of shale. this is at its lowest since 1991. >> the nine-month extension is unequivocal. i have heard individual commitments. rishaad: global news, 24 hours a twitter,on tictoc on

powered by more than 2700 journalists and analysts in more than 120 countries. i am tom mackenzie, this is bloomberg. just getting you back here. we are talking about china earning this. pressure to the economy there. they will take active measures to respond in the q&a session there. let's get some analysis and reaction here. this is the economist that lord of these analysts. these analysts. the reaction that we had, will they keep the chinese economy stable?

with all these pressures coming from the global side of things, how? >> i think the interesting thing is the positive tone it struck. it was spouting the benefits of global trade and global benefits. not just for china but the benefits of china taking a greater touch of the international stage. it was also interesting to see that there was such a focus on reform going forward. we had really seen through 2018 there was an important shift away from focusing on internal reforms at the expense of upping the stimulus anti-to better support domestic demand and trying to stabilize it in the context of a in addition to the

impacts of the trade war. rishaad: dr. roubini had said -- that would be more fiscal stimulus. more infrastructure spending. there are limits to that. suggestingve people this amount, there is not a lot of little rome. -- wiggle room. .> it was mentioned in a speech it would still be the peace now stimulus measure. there was a lot of airtime given to the fact that it will continue to support this small to medium-sized enterprise. it is not just about a blanket stimulus. it will really reinvigorate the economy. shoring up those

smaller players and increasing access to credit and also tax cuts. it will also support the smaller players in this very slope rebalancing of the chinese economy that is happening away from state owned enterprises and where the private sector. we are getting someone's about those tax cuts you mentioned. they're working on tax cuts of 2 trillion yuan in 2019. they will deliver all of the tax cuts if there is one way of putting stimulus is. local chinese governments are raising fiscal revenue difficulties. when you think about the smaller areas of government, how do they get a good boost amidst all this? >> that is a good point. it is such a difficult balance at the moment. it shows the extent of vulnerability and the chinese economy. one of the reasons they are not significantly upping the ante is

because they don't really have the ability to do that. they have to keep reverting to these piecemeal measures without inflating the debt profile too much because it is not just a sustainable ability -- sustainability problem. it will be favored by investors as well if they up their debt to gdp ratios. weakness also seeing on the factory floor. we had the pmi's. i have a chart on my terminal showing manufacturers still ailing a man -- amid all this week demand. do you think they are holding up a little bit better and somewhere -- then somewhere expecting on the factory floor? what is important to look at is the trends. it is one of weakness. the more forward-looking

this new series points to ongoing weakness in exports and also in manufacturing. there has been direct onsequences of the trade war the manufacturing sector and the export sector. given the trade war is far from being resolved between the u.s. and china, there is no expectations that we would see a rebound in any of these sectors through 2019. we have manufacturing, we have global trade at the moment. some of that manufacturing slowdown. we have asian populations, unfunded health care, unfunded pension liabilities as well. things are not looking good. >> it is hard.

china is experiencing a double whammy. they are in the midst of a statistical slowdown. global demand has slowed. on the other hand, they are experiencing a structural decline. that comes back to the asian population you mentioned. it is very difficult waters that china is navigating through. the fact that they are still focusing on reform to live a more sustainable outcome in the future, that is a positive. the fact that they are focusing on the peace now stimulus to support this is important as well. we want to get her thoughts as well about what is going to happen with the rba. traders are saying that there is a 77% chance of a continent.

our economist ismist is back wis next. this is bloomberg.

you are watching bloomberg markets, i am rishaad salamat in taipei. -- am juliet. the city leader has condemned those that storm the building as gathered rapidly. we are talking to david outside of the building. how things look into the -- looking today? david: we are seeing a massive cleanup from the devastation. it looked as if there was some movie.f post-apocalyptic

they have really cleaned it up. you can see the legislative council. we were allowed in earlier. now it is being courted off because it is a crime scene. if you go further in, you can see the front windows, these big thick plate glass windows leading into the legislative council have all been smashed by protesters using everything they could possibly find, including roadside barricades. fromoffense they have torn fences and used as weapons to gain entrance to the council. got in there, they trashed the interior, there is spray-painted graffiti everywhere. hung a union jack over the desk of the president. the interesting thing that happened was police withdrew,

that allowed these protesters to begin their assault on the legislative council. a lot of questions about why the police actually withdrew. they did not come back until midnight when they dispersed the crowd by using tear gas. the crowd was gone by about 1:00 in the morning. rishaad: david, what was the response from that? we saw them testing with champagne. away, it wasards her saying that she was visiting people, people who had been pepper spray. how did she responded this time in the middle of the night? as we were discussing earlier. thate interesting thing is she came to the press conference three hours after.

she gave a press conference to condemn the action of the most violent and militant protesters. let's have a listen to exactly what she says. >> the extreme use of violence ,nd vandalism by protesters this is something we should seriously condemn. .othing is more important >> this is for :00 in the morning, condemning the action of the militant protesters. is ake to claudia, she pro-democracy lawmaker was making the point that she thinks what the government is doing is typical communist party strategy.

that is to try and turn public opinion away from supporting those protesters. remember, 2 million protesters have come out into the streets. many hong kong people are extremely concerned, not only about the extradition law but also about freedoms any encroachment. yesterday was a day to mark. the handover, a lot of people asking the question if the ed.ernment forces withdraw other questions are about what about the tactics of the militants? they are not winning a lot of friends. we will see if it plays out in

the next few weeks went public opinion has changed. >> david is outside of hong kong's legislative building. india's markets have just opened. what's get mumbai. -- let's get mumbai. looking like we could see some more gains in india today? morning,n a very rainy gains are the same. both of them are advancing. we do have some gains in the banking industry. this means move back into the red. we can't really talk to much about that. the positive highlight in the last few days has been the indian rupee.

that is the big positive. >> this is for june. how is that sector doing action mark -- doing? volumes.e had mixed they declined in volumes for the month of june. some of these numbers were a little better. have some games. on the whole, the auto sector is currently trending with a negative bias. we need to keep an eye on the companies. they will come out about this later on today. we are less than an hour from

the reserve bank of australia's policy decision. this could lever for second executive interest rate cut. let's bring back katrina l. she joins us from sydney, katrina. the first time in more than 50 years. why do you think they will hold? there is no reason for them to rush with the rate cuts. there are two reasons for that, the first is they don't have a lot of faith when it comes to the traditional rate cuts. we are thinking it is better to hold fire and take a more measured approach. the second and more important point is there are already signs of positive signals in the economy. one of those important things is the market. we are seeing the pace of decline and correction.

it has started to slow. of correction has started to slow. that should put up lawfully having market correction by the third quarter. that will really have important, positive spill over to the sector of the economy. on top of that, you have a more supportive fiscal policy environment. them to no need for rush with the traditional rate cuts. -- nextleads to my nest terminal. this is one of the key points. households are not really dipping into their savings. that is unlikely to boost inflation. what do you think can drive inflation? i think we need to see a broader pickup in activity. if we are seeing green shoots of

that, we need to wait a little bit longer. we need to a for the fiscal policy to come on board. a more broadrive improvement in the economy. it will take time for inflation to material returned to that two or 3% target. >> one bright spot has been exports. we saw that in iron ore. that was quite a tremendous thing coming through. is this likely to continue of mixed the concerns of the u.s. china trade war? >> i don't think so. i think these policies are performing well. with the greatest stimulus left, that includes greater infrastructure spending, that will support hard commodities.

particularly iron ore over the next year or so. >> you touched on the aussie dollar there. there has been a lot of focus on the pivotal level for where that goes. it does seem to not want to move far past 70. where do you see the dollar go? to holde expecting it roughly steady over the next three or four months. that is quite a low level considering recent history. we are seeing that is a disorder of -- a supportive level. that should also be another factor that will drive a little bit higher. inflation could support higher domestic pressures as well. we will see about how all this really flows into the overall gdp picture. it has been a remarkable growth story. so many years without a recession. the export factor helping to

boost to their. what else can we see in continuing this very positive trajectory? >> a lot of things need to fall to continue to see ongoing growth that we have seen. we are not at risk of a recession anytime soon. external conditions, particularly the trade war has increased downside risks to the global economy. to aalia is not immune material downside shift in the global economy. as long as we have the more supportive this will end monetary policy that we have at the moment. i think that is a key factor to support ongoing prosperity going forward. analysts, economists, that he so much for joining us. if you are a bloomberg subscriber, you can catch up with all of our interviews by using our interactive function,

tv go. you can send instant messages to our team. check it out on tv . this is bloomberg. ♪

>> you are watching bloomberg markets. i am juliette in singapore. michael anchor is in taipei. is ind -- my coanchor taipei. rishaad, you have been watching development over there. rishaad: the showdown is tomorrow. they will both be making various speeches here as well. this started with a little bit of a twitter storm. dr. roubini came in and attacked arthur hays.

he said that he was from running and did not have any business. what is going on here? >> he is a hater. someone who does not have any bitcoin. rishaad: that is harsh. >> it is true. be some there should real fireworks. they also decided to counterpunch. nonsense, such a failure. trading [bleep] coin for

coin]. that is pumping and dumping. that is a scam. rishaad: we have news coming through in the markets. we are going to singapore. we have jewels taking a look at that. uliet: if you look at my function, you can see that it has that black box around it. kong's market playing catch-up because it was closed here today. we really missed that global rally. the hang seng is up by 1.4%. inittle bit of weakness

south korea and taiwan. they had that very solid move yesterday. this is bloomberg.

>> our top stories this morning. >> after the imperative -- apparent trade truce, targeting europe again. washington as more product to a list of goods that could be hit with tariffs. to boy oilempting prices. we will be live with the latest. >> hong kong is back in the headlines after a night of and unrest. condemning vandalism at the legislative building. yousef: iran says it