francine: beijing's top trade negotiator is cautiously optimistic. but could a bill passed by congress supporting protesters set up a confrontation with china? the chief executive says he is encouraged by trade. i think there is a good chance we see progress on trade. speak been fortunate to with policymakers on both sides and i am encouraged. toncine: the u.s. ambassador the eu says everyone knew of the quid quo pro.

and we speak live to the former white house chief economic advisor gary cohen. up, a new community pro or a new economy -- for a new economy. we bring you exclusive interviews with the credit suisse chief executive, ubs, and many more. welcome to "bloomberg surveillance". i am a francine lacqua. before we get to any of those interviews, let me just have a quick check on the markets for you. look at stocks dropping in europe. asia was a mixed session. fromcomes as support congress for protesters, kids prospects of a trade deal. we are also looking at bonds edging higher.

beijing's chief negotiators says he is cautiously optimistic after a phase one trade deal. let's get straight to first word news in new york city. >> rudy giuliani and donald trump demanded a quid quo pro from ukraine. is astunning admission damaging testimony for president trump. he went on to say giuliani was holding up a white house meeting unless ukraine announced investigations. the latest debate, democrats focused on president trump and largely avoided fights. there were differences over climate change and health care, but candidates were fairly united on foreign policy and race relations. unity, to come on the impeachment hearings. on the impeachment

hearings. china's vice premier is optimistic and confident of an agreement but confused about u.s. demands. president trump has threatened more tariffs. u.k., the labour party he urging voters to take down billionaires who quote profit from a rigged system. launching theis election manifesto promising radical change across the economy. he says he welcomes the fury of the rich and powerful at his labour is ons that the side of regular voters. israel is nearing its third election after a year after any against was unable -- benny gantz was unable to form a majority. now, something that has never happened in the country's history parliament gets to line

up new governing coalition. the deadlock,reak israel goes back to the polls. global news, 24 hours a day on air, on tictoc, and on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. francine? much.ne: thank you so let's kick it off with another exclusive interview. is looking to deepen its presence in china. the successful spinoff allows the company to concentrate on expanding business in asia as well as the u.s. and africa. joining us is the chief executive. i know it has been a busy day. mike, when you look at your focus on asia, how much of a focus is china? mike: it's massive. if you think of structural demanded china, a third of

health care expenses are paid from cash by the consumer so our work on health inclusion is valuable. on aging, you- have got 250,000 people turning 100 and that number is scheduled to double. allssumptions about savings play to our core strengths. francine: does that mean you want to increase your stake or give more money? is the plan getting bigger? mike: there are multiple extensions of that. we are increasing the effectiveness of the business we have. we have a completely digital platform for the consumer. francine: that is more attractive? mike: much more. it is how they are used to doing business. facial recognition is a software

for security, so that is one aspect. we now have 85% of the country under our licensed footprint. we are a health and protection provider, multiple times faster. the other is product range. we have a lot of new products in china. we have trial products in three different cities. francine: how much money are you putting in china? your relationship with the gc will increase? mike: that will be one intention. it has become quite successful, the joint venture. we talk about ownership and structure in our meetings. in that buying more is necessarily the only way to increase value. 44% shares in the first half of the year.

regardless of your ownership, that is excellent and closely aligned the government objectives no government wants to spend health demands. they want to make sure consumers don't have a financial crisis because of those issues. francine: do the hong kong protests curb your appetite for china? mike: no. hong kong has had a variety of challenges and this is clearly a serious one. are one of the largest life companies in hong kong with the regional office there. i'm sure everyone is watching it carefully. i'm not going to try and predict the outcome. it is certainly changing in nature, but i think there is an outcome on the horizon that is a return to something resembling normalcy. we have been in hong kong since the early 60's. it is not the first thing we

have weathered. francine: you have quite a lead in singapore. any m&a? mike: we look at m and day across the region. -- m&a across the region. we keep growing at double digits. it is an example of what we are doing across asia. digital side is supporting other businesses, the lead agency model in singapore. the average household there has almost three products of hours -- ours. if they trust us enough for a second relationship, that is an important transition for us. so i love what we are doing in singapore. i was just there for the 25th anniversary of asset managers. francine: would you consider m&a

or not? made east spring, we have two purchases of asset managers in thailand. our asset managers are run out of singapore that is the headquarters. in singapore, we have everything we need and can organically produce anything a competitor has. we are bringing next hour health platform. that pieceound out of their business plan. we have been there almost 90 years. francine: when you look at the trade war, does it impact how many people want your product? mike: great question. we are seen as a u.k. firm. francine: though you don't have anything in the u.k.. mike: we are listed there. that definitely is a respected structure in this part of the

world. u.k. governance is a proven model and risk management for those tools are seen as best practice. in the u.s., it's no different than any other political issue. it slows down how long it takes the consumer to make a decision but also increases the likelihood they stay with us. ,rom an investor perspective persistency goes up because people are risk-uppers -- averse. that's true anywhere in the , we see that pattern emerge. francine: what do you do in the u.s.? mike: we have set it to investors that our u.s. business is based on structural demand in the retirement market. we took a fairly unique structure on a product set that is very successful with

consumers and investors but we would like to diversify with outside capital. there is a lot of interest from long-term capital the u.s. market and our investors want to see capital allocation come to asia. so you will see a blend of those to come to market. we have operated through a variety of structures and are working on that now. francine: but you are not exiting the u.s.? mike: we think it is an excellent market with high returns. we have an advantaged position. we are the number one provider in our products and are well-liked by distribution. all the things consumers and advisors need. francine: how difficult are negative rates? mike: i have the privilege of saying we don't own anything with negative yields. market, andot our

from a return point of view, not something we thought was appropriate to own. we moved our businesses away from what the industry called a state of guaranty. asia, over 80% of what they sold his health for protection and 90 plus is recurring revenue. that is intentional. -- does: is that mean that mean you have an advantage over your rivals? a 170-year-old firm, you tend to think long. i don't think credit crisis is are avoidable and we differ by markets. value ofmental quantitative easing is diminishing. and if you have negative yields, it is real suspect what the value is.

to align withing non-economic policy so i like our position. we own bonds that have yields. we are high up on credit, careful on duration. and there are changes by markets issuing more debt than they historically have. liquid stillch is is, but has different dynamics in terms of buffers. liquidity.y hard at beyond just the simple stated ratings. francine: what is the chance of a recession in the u.s. or worldwide in two years? mike: i think that even in the u.s., all of these are regional. in the u.s., it looks like good structural growth, but i would not say that's true all across

the u.s. at the same time, or for all of asia. certain markets have structural demands. we tend not to look at countries homogenously. the sectors often have a geographic bias, but in certain industries, there is growth to be had in the u.s. and across asia. francine: mike wells, thank you for joining us. plenty coming up, including the former white house chief economic advisor gary cohn. doug missed that interview from the bloomberg new economy form in beijing. this is bloomberg. ♪

>> we should pursue common, comprehensive-- security. >> only cooperation is the answer. by working together, sorting out differences. confidence from a single source for anybody in the world has produced. >> i worry it is irreversible. it is so important it gets resolved. >> as tariff negotiations go seenrd, we have not production moved. we continue to serve customers in china. some of the views from top chief executives and officials at the bloomberg new

economic forum in beijing. . this is "bloomberg surveillance." we have another two hours and will bring you more exclusive interviews. we understand that carlisle is set to bid for dr. martin's. we all wore them when we were teenagers and we will have plenty more on this deal. we are also looking at a couple deals.eals -- m&a lvmh andin with tiffany's entering a tile. vuitton in talks, louis looking to pay 100 per share, $10 apiece higher than the previous offer. prised fiat with a lawsuit implicating the former chief executive in corruption. 80 years along record

already cheme and has -- a year-long racketeering scheme. buy a stakealks to in an indian tv network controlled by a billionaire. bloomberg has learned sony is conducting due diligence before a possible offer. they seek to tap booming demand for content in india. that is were bloomberg business flash, francine. credite: coming up, suisse's expansion plan. we hear exclusively from chief executive tidjane thiam on focusing on growing his emerging-market business. this is bloomberg. ♪

francine: breaking news here in beijing. fee -- stanofi is previewing options for his health arm, the $30 billion consumer health arm. expandingsse is business in emerging markets and we spoke to the chief executive. we have taken a majority of our securities on venture here.

we are in joint ventures with icbc, the second third largest asset manager in china. we are recruiting and investing in one of the most exciting economies in the world. we want to play a role. francine: when you look at clients and asia, are the impacted by the trade war? -- are they impacted by the trade war? tidjane: it has a number of impacts. it reduces visibility so it is more difficult to make long-term investment decisions. ledhe positive side, it has to a lot of restructuring of trade flows. if you consider vietnam or the philippines, a lot of our clients had operations in those countries and can shift production from one country to another. you have seen the growth of trade as a result but we also hope for a resolution.

francine: did the supply chain change? than have resolution more a phase i, do supply chains come back to china? tidjane: i am not sure. i worry some changes will be a reversible --your irreversible. francine: every time we talk about calls and i'll edition -- talk about consolidation, should we have a banking union? tidjane: it should be positive, but at the end of the day, what we need is growth. this is why our focus on emerging markets is very important. focusing on entrepreneurs in emerging markets and growing their ultimately is the answer -- there ultimately is the answer. consolidation is the answer in europe because we have too many

banks, but long-term, european banks needed to win outside of europe. francine: are you hiring in emerging markets? tidjane: yes we are. almost across the board. lots of dynamism in brazil we are excited about. the middle east, also. southeast asia is huge china itself is huge. we are hiring everywhere. and i surprise you in switzerland. we do a lot there. francine: that was tidjane thiam , the chief executive of credit suisse. cohng up, we speak to gary , talk to about the white house, cryptocurrency, and markets. this is "bloomberg surveillance." ♪

beijing's top negotiator are justly optimistic. could a bill passed by congress

supporting hong kong protesters cause a confrontation with china? >> i think there is a good chance that we will see some progress. encouraged. francine: exposes testimony of the u.s. ambassador to the e.u. and we are hearing china on the new economy. up next, former white house chief ech executive advisor gary cohn. good evening if you are here with us in beijing. get to first word news in new york city with viviana hurtado. viviana: we begin in the u.k., where the labour party is urging -- to quoteke down

profit from a rigged system jeremy corbyn is watching his election manifesto and it promises radical changes across the economy. he says he welcomes the fury of the rich and powerful and adds is onthe best time, labor the side of regular voters. president trump is expected to sign the bill supporting hong kong for testers as soon as today. it was passed by both houses of congress. this could imperil the long-awaited trade deal beijing says is a violation of international law. wife wantsghosn's him to stand trial in france because she says he will not get a fair hearing in tokyo. in says it considers people total -- guilty until proven innocent. she also criticize the fact that she has not seen her husband and almost a month. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more

i am vivianatries, hurtado. this is bloomberg. francine? francine: viviana, thank you. my next guest has one of the most influential voices and donald trump's white house. in a banking career in goldman sachs, spending more than 25 years, he rose to president and chief operating officer of goldman sachs. in january 2017, he became theld trump's appointee as director of the national economic council. and the president's chief economic advisor. welcome to bloomberg. gary: thank you for having me. francine: do you have any insight on how this could end? get aomes after it if we phase one deal? are: first of all, we ho having a trade skirmish. the two countries -- there is a

lot of trade still going back and forth. the united states is receiving the goods from china that we need to have a functioning economy, and our economy is functioning well. i hope we get a phase one deal done, and i think it is in everyone's best interest to get a feels one deal done. francine: it has moved, has it not? gary: the supply chains have moved. maybe the countries are too concentrated in one market, and maybe we are seeing more global diversification in the supply chain. in the end, it is probably a good things for -- it is a good getting a supply of goods. francine: if you have a skirmish that lasts 5, 10 years, that must hurt the world economy. gary: don't interpret this as a good thing. what i am trying to say is, everyone talks about how dramatic this whole trade confrontation is. it is having impact, but

whenever you have impact and countries are disagreeing in some fashion, markets make up their own mind what they need to do. markets have very quickly made up their mind, companies have made up their mind. we need to diversify our supply chain. we cannot be dominant independent on one country as we were in the past, so we have to create more diversity in the system, which is a good thing for the system. yes, it is having economic consequences, but it is not the only thing going on in the economy. francine: you worked for president trump. how does he view china? presidency's 10-year trade confrontation, or is it a deal that he wants fast? gary: donald trump is more interested in getting it right in the long term. that said, he understands how important it is to get the congress back to work in the united states. we have a big agricultural economy. back tot the farmers

work in the united states. we have a big agricultural economy and they are going through a tough cycle here. our farmers need to get back what they lost. they need to get that back by next summer. getting a phase one deal done we get farmers back in the growing cycle, become a major exporter back to china. the chinese need to import food, so the question is, who are they going to import it from? importing it from the united states is very important. the president understands that it is a short-term term phase one fix. --ing our farmers back into getting our farmers back into selling in china. much more increased farm exports from where we are now. back to where we were now. in the end, president trump cares about protecting u.s. intellectual property. he cares about protecting aboutght, and he cares

protecting u.s. companies, which makes a lot of sense. in the united states there are 350 million consumers, china, 1.4 billion consumers. wouldn't you want to open up the market to 1.4 billion consumers if you are a u.s. company? of course. he is trying to make sure we have a level playing field where u.s. companies can access chinese markets, just as the chinese have access to u.s. market. francine: chief executives around the world, given low visibility, are not investing in their market. it could be a chief executive in ohio, in germany. it must be a negative. gary: there are a bunch of negative's going on in the investment cycle. i will be the first to tell you. when you are looking at capex and investments in the u.s., the first thing you will look at is building buildings. you will look at buying steel, buying aluminum. thingse the first two

affected by the tariff. i would never tariff input products. tariff goods and services than input products, something you will build to create jobs. so while the cost goes up in the united states, it takes away the competitive advantage we gave them in lowering corporate taxes. we lowered corporate taxes to compete with the rest of the world. we made the cost of steel and aluminum higher. disincentive for opening plants in the united states. it is a very tough environment to take a decision to do a major capital venture in the united states because you do not know what the political environment is going to look like in the united states. we have a lot of candidates going after corporations, corporate earnings. off to wait for

more clarity before you make a big capital investment. francine: so, what, november 9, 2020, the chief executive will come back into capex? gary: i don't know what day. companies are spending money in capital, but if you are going to build a big what we would call bricks and mortar or steel and aluminum and copper facility, and you are going to hire a lot of people to do that, you probably will wait until you get some clarity to what it is going to cost you in terms of labor and what it is going to cost you to run that facility, vis a vis opening up that facility in canada or asia. an economye have that seems to be holding up, but i guess it could turn. gary: the federal reserve is an independent agency in the united states, and i think protecting the independence of the federal reserve is of utmost importance.

ofy have done a good job walking the line of independence. they are making their policy decisions based on the data they are saying. they are always trying to figure out what is going to go on in the economy in the future, which is a very difficult thing, especially when you are a globalized world. all the other voting members have been making the right decisions based on the data they have at their fingertips at the time they make their decisions. francine: but is the fed now central banker to the world? gary: the fed is the central banker to the dollar. the dollar is a key trade currency in the world. dominate.nomies a lot of trade happens with the dollar. what the fed does has an impact on the world. francine: is that far behind? it, right?ook at gary: of course, i still look at markets every day. i think the dollar will remain

on the relatively strong side. people talk about low interest rates. compared to the rest of the world, we have high interest rates. the high -- the dollar is a high-yielding currency. francine: i know we will take a break and talk about crypto and things we are focusing on. will we see -- gary: i am not sure that is gary cohn's next step. besides speaking, writing, and teaching, which occupies a little bit of my time, i am spending an enormous amount of time in venture capital in two areas -- medical technology and in the security medications, secure data phase. that takes you to the payment space because if you can secure communication, you can end up in the payment space. francine: we will talk about the payment space shortly.

gary cohn, former director of the national economic council. coming up, we will have more with gary cohn and then bill windsor on the u.s. china trade and the u.s. markets. this is bloomberg. ♪

francine: welcome back. this is "bloomberg surveillance" live from beijing at the bloomberg economy forum. we are back with the former white house chief economic advisor. many of the things that you're butng are not only right, how will the payment system change? this is one thing that -- are the big banks ready for it?

gary: we talked about the size of the economy. everything gets paid for. the payment system is as big as a global economy and may be bigger than that because things multiply. parts of the world right now have digitized payments. i think the parts of the world have -- that have digitized are the less regulated, where you can be in the payments business as an unregulated entity. francine: like china? gary: ok, like china. in the more regular the markets like the united states, it will digitize. we will have more of a digitize payment system, but it will look more like banking. you will have to know your customer, anti-money laundering. it will have some kind of trail, and it will have to coincide with traditional banking laws. digital payment really is the future for everything we do. francine: how is the current

system going to be disrupted? will they still be here in two years? there are many, many people in the payment phase trying to disrupt it. not all of them are going to survive. that i know for sure. some major disruption will happen. there will be some winners and there will be some losers. i think the winners will be those that understand that europe and the united states are going to look like a more regulated market than an unregulated market. so the extent that you are playing with that in mind and you're building a platform and building technology, it dovetails with the existing regulations. i think you have a very good future. you are trying to do it in an unregulated way and just intervene or just diss intermediate for the sake of this intermediate and, i think the euro -- i think that europe and the u.s. will be the top places. cohn, thank you very much. we will have more from the u.s.

economy forum in beijing. we go to annmarie hordern. annmarie: there is a lot to choose from. u.s. regulars are hitting the brakes on plans that would drastically reduce the amount of nicotine in cigarettes or certainly the tobacco companies like the sound of that. downloading to present this morning. gm has surprised fiat with a racketeering lawsuit. gm is saying that fiat bribed the workers union for competitive advantages that they would not give to gm. fiat chrysler has denied the allegations. we should mention that it would implicate the late ceo, sergio marchionne. losses will significantly worsen, so they are set to scrap their dividend payments. the ceo was talking about the performance of a number of businesses just not being satisfying, what they said the

company would press ahead with the sale of its elevator unit. francine: thank you so much, annmarie hordern. extremely ins hel-positioned right now and told bloomberg exclusively that there is no need to change. toward ourhe center position as the leading wealth manager in the world, leading asset gatherer in the world. -- the need of an individual investor to save money and invest money is something that plays very well to who we are. so we are extremely well-positioned to capture growth in that sense. so you have all the chess pieces on the board.

the more exacting question is, are you at the right scale? is it the right scale to take it forward? >> we are the largest wealth manager in the world, not only because of the size of the we are asets, but also leader in the u.s., one of the leaders in the u.s., in asia. and europe and switzerland p therefore, where well-positioned to capture this. it is eventually going to be an issue for many players. >> are you telling me you are not going to need to do a deal? you are looking at this asset manager. are you going to need to do a deal to change the scale? >> we don't need to do a deal. but, you know, it is exactly like saying you're never going to do to a deal or you need to do a deal. really, in nd

industry -- in any industry, say you are rooting out doing a deal. but we are not forced to do deals. we have a good strategy that has been quite successful over the last few years, and where well-positioned to capture organic opportunities. of course, if we have an opportunity to evaluate the nonorganic options, we will. but it is not something we are forced to do. one, you wantcent to stay until 2021. you and i -- is it reasonable to think that 2021 would be a time for you to think about moving on? >> are you tired to interview me or? no, no, i come to germany every year. it is theu think right time for you to think about it? >> i said it in the past.

enough has been said about succession. we have said everything that has to be said and i don't really want to comment on this. ubs chiefthat was the executive. more coming up from the fromberg economy forum -- bloomberg, the u.s. economy forum. and on the global economy. this is bloomberg. ♪

>> one of the measures is for the u.s. and china to co-assist more productively economically. -- two coexist more productively economically. wem encouraged that i think can probably expect the progress to be in stages, but i am hopeful we will see some progress. i think it is important. i think here in china, the chinese, it is important to them. the u.s. realizes it is important for the u.s., and candidly, for the economic growth around the world, given the size of both economies, it

is important for everybody. francine: does it lead to a phase two? does it mean something for the world economy, or is it status quo? >> i think we have to hope that economy is being super important to global growth, we can focus on all these issues. certainly, a step in the positive direction is a step in the positive direction. i am a glass half-full guy. i am sure that the china interest in the u.s. interest, the interest to see it progress, we should see progress over time. francine: you are just in hong kong. >> we have been celebrating around the world this year, the 150th anniversary of goldman sachs and we have been having events to celebrate or commemorate that with clients. i spent some time in hong kong, and it is a very complex, multilayered situation that we

are watching very closely. i was glad to be in hong kong and spent some time with our team. we have over 2000 people on the ground, and i would say that when the routine that people experience in a city like this is disrupted, it is tense. it is tense, quiet, there were not as many people on the streets. you could clearly see the impact on the economy. we are watching this very closely and are hoping for revolution -- for resolution. are you seeing anything in offshore accounts? >> i don't see any change in behavior and clients that are significant hong kong has always as avery important financial center across the asia-pacific region. i think china recognizes the importance of that. i think the rest of the world recognizes the importance of that, so it will be important that we find a solution in the near term. francine: can it lose its status

as a financial hub? >> i don't see that as likely. i don't see evidence of that. the situation needs to be resolved, and obviously the people who live there and are affected by what is going on, it is very challenging. francine: that was david solomon, chief executive of goldman sachs, speaking to us earlier. , ande looking at stocks they are down. this is on the hong kong bill this is what markets are worried escalates orr this could have repercussions between the u.s. and china. the --, our guest from tom keene joins me in new york. this is bloomberg. ♪

♪ francine: top trade negotiators

cautiously optimistic. could a bill passed by congress supporting hong kong protesters set up confrontations with china? explosive testimony. you said -- u.s. ambassador to foreu says quid pro quo's at there live in beijing new economy forum. exclusive interviews with mike ands chief executive surgeon moderate -- this is bloomberg surveillance. i'm francine mike bryan beijing at the bloomberg -- i'm francine newa in beijing at the economy forum. tom: not only the tensions of hong kong but certainly what we saw the democratic debates,

distance from china by republicans and democrats in the united states. extraordinary political forum in beijing. francine: we are getting some global growth forecast being cut down 2.9% instead of 3% in september. let's get to first word news with viviana hurtado. viviana: china top trade negotiators as he's cautiously optimistic about reaching an interim deal with the u.s. the vice premier says he is confused about the u.s. demands. yesterday, president trump said china was not stepping up to the level he wants. the trump administration today pushing back against crucial testimony from a u.s. diplomat as the impeachment hearing. gordon sondland testifying he had a green light from the administration when he pressed ukraine to announce politically motivated investigations.

global news 24 hours a day on air and on tic tok at twitter powered by more than 2700 journalists and analysts in more than 120 countries. i'm viviana hurtado. this is bloomberg. tom: thrilled to give you a great international relations and politics today from beijing, but we've got to continue to look at the data. equities, bonds, currencies, commodities, continued pullback, phase one directly linked by the end of the trade war with her flattening. euro not selling much and oil struggling to find a bit onto the next screen. the vic's showing the angst in the market. i 12 handle out near a 13 handle while on the vicks. yields coming in along with the curve flattening, 108. out with the survey. always an important estimate. they bring it down and what's

important here is the timeline. we see from oecd as we see for many others, moving out any sense of normality or recovery. the ecd saying delayed until 2001 with aca growth pickup. from paris, lawrence boone as well. more coming up on a show today including quite good conversations. francine., francine: let's get another exclusive interview. that was goldman sachs chief executive -- we asked him about the global economy. >> i think one of the big issues anything about economic growth in the medium and long-term, is the u.s. and china finding a way to coexist more pro -- coexist

more productively. there is a chance we will see progress on the tray discussion. fortunate to speak with policymakers on both sides and i'm encouraged. i think we can expect the progress in stages but i'm hopeful we will see some progress. i think here in china, the chinese realize it's important for them. i think the u.s. realizes it's important for the u.s. and candidly for economic growth given the size of the economies, it's important for everybody. francine: does a phase one move to phase two? is it just a status quo? >> i think we have to help overtime in a world where both these economies are important to global growth that we can find a way to make progress on these issues. certainly a step in the positive direction is a positive direction. i'm a glass half full guy. i'm going to assume china's interest, it's in the global

economy at large, in its interest to see this progress we should see progress. francine: you were just in hong kong and you postponed a party there. >> we have been celebrating around the world this year, the 150th anniversary goldman sachs and we've had events in cities to commemorate that with clients so we did postpone an event in hong kong but i spent some time in hong kong. it's a very complex, multilayered situation that we are watching closely. i was glad to be in hong kong and spend time with our team. we have over 2000 people on the ground. the routine people experience in a city like that, when it's disrupted, it is tents. there were not as many people out of the streets. you can see the impact on the economy. we are watching this closely for resolution. francine: what are clients in the hong kong asking of you?

if they diversifying? >> i don't see any change in the behavior of clients that are significant financial players in hong kong. verykong has always been important to the financial sector across the asia-pacific region. china recognizes the importance of that. the rest of the world r recognizes the importance of that. francine: can it lose its status peasant asian financial hub to mark david: i don't see that as likely. for the people that are affected by what's going on this is a challenging time. francine:francine: that was david solomon chief executive of goldman sachs, now to another exclusive interview from beijing , the beverage industry may be getting a boost in 2020 that's according to data from break

intelligence. with increased expansion into new beverage categories and competition from the surging spiked saucer market, traditional beverage makers are poised for new threat and innovation. i'm delighted to be joined in by adv -- how is your business in china? how long will that impact last? >> something happened third-quarter. big business in china. we lead with budweiser, the number one premium blend in china. china has always been a very good market, one of our top five markets, very profitable. many years ago -- the premium side of the market man was nothing. that market became very special because there we were with our

brands waiting to migrate up. you're francine: francine: not seeing a lasting impact on the changing my life hours? carlos: we are very strong of the nightlife. during the third quarter, the nightlife -- it is coming back. carlos: francine: francine: how can you replicate the success with budweiser elsewhere? carlos: in the u.s. like with -- most brands, the outside brand -- our three budweiser,ds are corona and stella artois. they are strong. doing veryds are well in korea, india, also vietnam.

they do well over asia. francine: how is beer consumption doing overall? so much competition coming from cocktail makers, other beverages , can you stay up top? carlos:carlos: we are a global company. if you look at beer on a global basis, food and beverage categories, beer in which you -- it has been very healthy. a very healthy category and that you have that balance. francine: can you continue hiking prices in the global trade war? are you worried the consumer will start drinking less? carlos: we are not economists, we are brewers. as long as consumers are doing well we continue to trade up. and more mature markets, less mature markets, and all those

markets, the segment of consumers looking for the next opportunity to trade up. francine: talk to me about supply chains. have you had to change your supply chain because of the u.s. china trade war mark carlos: 95% of what we produces local. we are sourced locally, we saw back to local communities. in the other hand, the u.s. put the tariff on aluminum, that impacts our business in the u.s. is a tax on the industry. a big disadvantage for the brewers compared to brewers percent on the u.s. exports. francine: this is for real. --uess overall impact

impacts water security. carlos: sustainability is our business. no water, no beer, no farming, no beer. no communities that are thriving, no beer. we are a community business. when you talk about consumer changes, one of the biggest changes you seen with this new generation, for the first time this generation realized there be, only planet a. companies and brands and how they work together to have a positive impact in the world. that is why our brands are all connected. butected, good for business also the environment. breaking news on u.s. china. tom: important news coming from

dow jones. there will be a meeting in beijing. the bloomberg new economy forum. beijing inviting the treatment negotiate or of the united states, mr. lighthizer, to beijing for talks and i see immediate market moves with yields turning around. higher yield space. it is an extraordinary bloomberg new economy forum led by a conversation of mel ferguson after his wonderful book with a gentleman who is now 96. it harkens back to 1971 and 1972 as well. dr. kissinger talking about the foothills of the cold war in a zero-sum modern relationship. richard haas, next. ♪

francine:francine: can last couple of seconds we had breaking news from dow jones reporting china has invited u.s. trade negotiators for more talks. jones, china'sw move sent an invitation to lighthizer and mr. mnuchin. i'm delighted to be joined by one of the experts when it comes haasade relations, richard , council of foreign relations president. ambassador, thanks for joining us. that possible breaking news that china has invited u.s. trade negotiators to talk. will they achieve anything? richard: it's a question of when or if they get this modest deal. they will probably get it. it won't make much of a difference. the bulk of the trading

relationship, not to mention the bulk of the overall relationship , will not be determined by minimal trade deal. francine: will it help u.s. farmers and is not why president trump once the deal for the phase one to mark a little relief -- phase one? a little relief. let's bring you and i hear sarcasm ambassador has. tom: thank you so much for joining us. moment toxtraordinary see henry kissinger speak of a old war. we talk politics in a moment. foodlose are we to zero-sum economics and a zero-sum politics? how do you suggest as a political process we move ourselves away from a trade war toward some semblance of a trade piece? ce?trade peave

richard: it ought to be the goal of america and chinese officials and diplomats to avoid that kind of an outcome. both would pay a large price. trade, i think we will get this first phase deal. that leaves a lot of issues to be negotiated and a lot of issues that are negotiated to be executed and implemented. ask too much of trade negotiations. certain things are never going to resolve bilaterally, some things need to be resolved unilaterally. many cases the answers going to be what the united states does for itself. what are we going to do for innovation strategy? why don't we spend have federal levels historic -- historic levels for federal r&d. i realize the politics of this, we enter -- we reentered tpp.

we gave it away for nothing in the first week of the trump administration. tom: i'm glad you bring that up. we see dr. kissinger speaking with mel ferguson at the moment on dr.n's wonderful book kissinger. we have not one but two parties, don't blame trump folks where we are distant from tpp and everything accomplished in 1971 in 1972. ss prescription to get an agreed america back toward tpp and any sense of multilateral discussion? tough.: it is both sides are against it. zero cents china gamed the system. -- there is a real sense china gamed the system. trade is blamed

for what technology and productivity increases have done. there's not a lot of people standing up for trade. with the new technologies coming on board, robotics, artificial intelligence, we better get serious about education and so forth. where the scapegoat trade or not, millions of americans will find themselves out of their existing jobs and the education system we've provided is not enough. they are not ready to move onto the next job. it but maybe have missed i don't hear talk about it in the debates or the white house talking about it. this is one of the real international challenges. the sort of thing that g20 or g7 ought to focus on. francine: we will talk about geopolitics and artificial intelligence and the need of retraining. stays with us.

bloomberg new economy forum in beijing. here's a goldman sachs chief executive who says he's encouraged by what's to come. >> i think there's a good chance that we will see some progress on the trade discussion. fortunate to speak with policymakers on both sides and i am encouraged. ♪

francine: this is bloomberg surveillance. tonk keane in new york.

the kissinger comments that u.s. and china are the foothills of the cold war. saying thedor was conflict could be much worse than world war i. this left to be on -- if left to be unconstrained. richard: unconstrained would mean not just an ideological conflict but obviously a physical old-fashioned kind of conflict and that could involve new technologies. the intersection of things like artificial intelligence and robotics in modern warfare. one can imagine the scenario. something growing out of taiwan is not inconceivable. rationwe stop this teary in u.s. chinese relations? i have never seen a major foreign policy change as far and as fast as the u.s. consistent -- u.s. consensus about china. i think regardless of who's the next american president this has

got to be at the top of his or her list. how do we arrest the decline in this relationship? tom: what is so important here is a step forward and that begins with the secretary of state. mr. pompeo may leave office. he's looking at the politics of kansas. how do we, after trump, whether democratic or republican president, how do we begin to get back to state department not -- state department normalcy? richard: you need a serious interagency process. you need to re-staff the state department. you probably have to bring in some experienced people and the lateral way but you also have to believe in diplomacy. with north korea we just can't be repeating the mantra of denuclearization.

same thing with iran, with china. why don't we have a real strategic dialogue? why don't we talk with china about areas of cooperation like climate change? like afghanistan? korea.omise on north in an anonymous potential agenda to size need to start addressing. tom: ambassador, thank you for joining us today at the new economy forum. i want to bring your attention to a headline just raking. jon ferro today, china will resort to flood style strong stimulus. this is bloomberg. ♪ everyone uses their phone differently.

that's why xfinity mobile lets you design your own data. you can share 1, 3, or 10 gigs of data between lines, mix in lines of unlimited, and switch it up at any time. all with millions of secure wifi hotspots and the best lte everywhere else. it's a different kind of wireless network, designed to save you money. switch and save up to $400 a year.

and now get $250 off google pixel 4 during xfinity mobile beyond black friday. that's simple. easy. awesome. click, call or visit a store today. ♪ francine: this is bloomberg "surveillance." i am francine lacqua in beijing, tom keene in new york.

trade, dow jones saying china invited representatives for trade talks. that was something dow jones broke today, that the invitation apparently came last week. tom: i do not to oversell the market reaction, but i want to make clear of these chinese headlines, we see a reversal in the bond market. futures were red and are green fractionally. the 10 year around to a positive one, not a big move but nevertheless, any kind of move would be important. with your first word news, here is viviana. viviana: a new confrontation between the u.s. and china could put the trade deal in jeopardy. donald trump expected to sign legislation in support of hong kong protesters.

democratic presidential candidates avoiding big fights , 10he debate in atlanta democrats on stage. overdid attack each other climate change and health care differences. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. hurtado.ana this is bloomberg. francine: thank you so much. i came to beijing thinking i would escape brexit and u.k. elections, but not sough because we have richard haass and we must ask him about how he sees it all going. when you look at the polling, which i don't know that you can trust anymore, we also have the labour manifesto with things like nationalization, continuing spending, stopping austerity. how does it go?

do you trust the polls? richard: i don't trust the polls. this is hard to game out because you have the brexit vote, the personalities, and the party platforms. the british people are being asked to vote about all three at once with permanent consequences on brexit. i would not trust the polls because a lot of people will be conflicted. they may agree with one or the other candidates on one thing but may disagree on personality or party platform. francine: it's quite right wing or left wing? in the u.k., a more centrist system is something they are not used to. is this a sign to come elsewhere? richard: you have seen an anti-status quo mood around the world and it does not matter if it is left or right, we are seeing opposition. you are seeing the proliferation

of smaller parties and it is bad in the sense that governing is tough enough, and whatever the electoral outcome is, if you a coalitionogether or minority government it will be extremely difficult. francine: i want to talk about iran because we have not talked about the middle east much. what will happen? richard: the sanctions are having a greater effect than people thought. we are seeing popular pushback against the regime. i do not see any sign the regime itself is an existential danger and i think the danger is in the larger sense, that the regime is feeling pressed and we are practicing economic warfare against them. they will practice other warfare against us, potential attacks against tankers or saudi facilities. we are seeing the day-to-day gradual breakdown of iran of the 20 -- nuclear agreement.

tom: in these good conversations on populism, a fractious united kingdom, on iran, i want to go back to winston lord and the moment in china years and years ago where people thought strategically, when we began a discussion with china to isolate moscow in the heart of vietnam for the 2600 mile border with china, etc. how do we as a nation get back to strategic thinking instead of applying policy moment by moment? richard: you are right. the historical break there which you talk about 50 years ago now was premised that the united states and china were against the soviet union. the soviet and chinese were having a board, -- border conflict and we were having the cold war. it is now more than 30 years

since the cold war so we have the -- we no longer have the glue of what we opposed. economics have become more a source of friction then cooperation, so we need a modern rationale for u.s.-china relations. some of it can be economic. can we find a way to cooperate on the global and regional challenges we face together? that is the big question. francine: we haven't asked the other big question which is hong kong. how will protests unfold? richard: at the moment, i think they will continue. it is hard to negotiate with a movement. the movement is divided and there is no leadership. some of their goals the government can agree with, but some of them they can't, so i think this will grind on for a while. the economy will slow.

relations,-chinese we have the legislation you talked about. we cannot leave them vulnerable. there is real differences between the united states and mainland. why do we pass sanctions that hurt hong kong if we are going to introduce new sanctions? why don't we have targeted sanctions on the mainland? i understand the motive for what congress is doing but i do not understand the vehicle. ambassador haas, thank you for joining us. conversationthis from beijing is kallum pickering and marilyn watson on queen victoria street. i want to take all that we are hearing in international relations and politics and bring

it over to what are we going to do in 2020? ladies first. in your fixed income space, i have noticed in the last 90 days a massive move of lower for longer, moving off the x-axis. the oecd is moving out to 2021 growth as well. how is blackrock adjusting to the length of time before we get any recovery? longer isower for certainly the phrase. when he saw the minutes from the fomc, clearly they are on hold for some time. i think the ecb will hear from president lagarde tomorrow and they are not going to be doing anything anytime soon. we are lower for longer, but there are a huge range of opportunities in this environment. , they look at the risks also produce opportunities. opportunities even

on the curve in the u.s.. we like the front end of the treasury curve. decent liquidity, decent risk returns, and a hedge. in the u.k., likewise when you look at brexit and politics, we like a steep -- when you look at the different asset classes, it is really being nimble in finding these areas for investors. tom: i love the phrase steve short used the other day. outaid there is hopium there. that headlines on trade will materialize and lead to growth. explain how political process leads to growth. we need business investment, a resilient consumer. how do we get from these

headlines to economic growth next year? corem: it is the political that the global economy can recovery next year. when you have political uncertainty that weighs on confidence and investment and production and trade, you see it in the data. we have a global recession in trade and production which weighs on business. the politics go the right way, that part of the economy moreves, we get some normal. francine: kallum pickering and marilyn watson both stay with us. coming up, more from our exclusive interview with the ubs chief executive. we also spoke to the credit suisse chief executive, all of that coming up. -- saying he is well-positioned despite the risks.

>> we are not forced to do deals. we have a good strategy. it has been quite successful for the last few years, and we are well-positioned to capture organic opportunities. towe have an opportunity evaluate nonorganic options, we well, but it is not something we are forced to do. ♪

♪ we welcome all of you bloomberg "surveillance was "surveillance"-- friends. an important conversation with dr. kissinger earlier today. the news flow of the world in the realities of profit in america, cnbc reports a merger

on global wall street and decidedly on american wall street. a pleasure to speak with joe rickett, founder of td ameritrade. this would be a mating of schwab with td ameritrade around the global price war we are seeing in commission three. ,chwab is 20,000 employees ameritrade is about half the size, 9000. of $29d revenues billion, that coming from schwab ish from tdon- ameritrade. , widelya classic scale anticipated, as we see a rollup of free to do trading environment. we have seen that in the last 90 days and we will monitor that, td ameritrade up 90%.

francine: talking about trade, we had a number of conversations with chief executives from the banking world, from the european banking world and the emerging-market world and we asked about consolidation. we spoke with the chief suisse.e of credit speaking exclusively to us earlier, he sees opportunities in china. tidjane: now stepping up, we have taken a majority of our , and we have a joint venture. it is the second or third largest. we are recruiting and investing in one of the most exciting economies in the world. we want to play our role. francine: when you look at

wealthy clients in asia, are they impacted by the trade war, do they invest less? tidjane: it has a number of impacts. to makere difficult long-term investment decisions because of that. on the positive side, it has led to a lot of restructuring of trade in asia. vietnam, a lot of our corporations can fix production and manufacturing from one country to another. for is for hope resolution. francine: do the supply chains change? if we have a resolution, more than phase one, do supply chains come back to china? tidjane: i am not sure. i worry that some of these changes will be irreversible, because once you -- you get

results. francine: every time i talk to you about consolidation a negative rates. well consolidation happened because of negative rates if we have a banking union? tidjane: it should be a positive outcome for consolidation. at the end of the day, what we need is growth. focus onhy the emerging markets is very important. we will be focusing on entrepreneurs and emerging markets that are doing well. consolidation and cost-cutting is necessary in europe. , the goal is to win outside europe. francine: are you hiring in emerging markets? tidjane: we are. francine: in all units? tidjane: pretty much across the board, in the middle east also,

southeast asia, china is huge. we are everywhere. offshore.t of this is also growing. beijing,ing in francine lacqua was someone we hear often from, credit suisse. what we would like to do with this news from schwab and td ameritrade is bring in our good guest, marilyn watson from blackrock. i will work around the niceties that you do not want to talk about tangential competition. kallum pickering with us as well. this is about scale and goes back to catherine man. companyickering, any whether it is investment or whatever, is dealing with the need for scale given low nominal gdp, the dearth of animal spirits out there.

do we have a 19th century rollup of our industries because no one can find growth? kallum: it makes sense to be as broad as possible in an environment where growth is not strong. growth is low, interest rates are low, which helps financing. if we can get the politics write soon, things can start improving. i've -- if i look at big tech, big data, these are the source of transformative technologies that can put us on a 20 to 30 year growth path. my bet would be this is as bad as it gets and the outlook is good on a long-term view. tom: let's go to marilyn watson in london and not get her in trouble talking about competition. if you go to the bloomberg, this is the weighted average cost of bloomberg, an for good way to look at the capitalization structure and

profitability of a company. this is schwab. interesting is the 12% long-term debt. money costs nothing. do we ever get back to a point where there is a real cost to money and transactions and mergers? marilyn: yes, i think we do. i certainly think it is a good point that we have seen a huge increase in the size of investment grade debt issuance, and an enormous increase in the triple b space. we have seen this because of the debt for mna, because of the issues that go to market, and because debt is very cheap, but it is the cost. when you are looking at companies and issuers, the willingness to retain their rating and the ability to retain their rating is one of the key things to look at.

the overall trends in different sectors, the things that drive different sectors whether it is technology as you mentioned, or disruption in the auto industry, the electric car, things like that, the cost of capital. growing and the economy overall is decelerating a bit, but it is in a positive trajectory. we are getting towards a very long cycle and i think we will see increasing scrutiny on the fundamentals of individual companies and i think that will play a part if you get further route, maybe not next year for the year after, but it will come to the fore and it is important to focus on the fundamentals of a company, and cost debt and leverage will be incredibly important. francine: thank you so much, marilyn watson from blackrock

and kallum picking -- kallum pickering staying with us. from beijing at the new economy forum, back to back big names including pimco's vice chair, senior fellow neil ferguson, just some of the names we will be speaking to. this is bloomberg. ♪

♪ "surveillance," from beijing and new york. kallum pickering and marilyn watson. how does the greater economy react to a sub 6% china gdp? marilyn: the years of -- kallum: the years of china droving -- driving the global trends are probably over. economies need to boost their domestic sectors, otherwise slower growth. tom: does that mean they export deflation to the rest of the world? marilyn: i think the world will

stay lower, not only in developed markets, but in china itself. further monetary policy easing, i think we will be in a low-inflation world for some time to come. tom: thank you to both of you for being with us today in a news flow that has been extraordinary. francine and beijing in your evening in beijing, what do you see at the new economy forum? francine: a lot of the focus today was on the world economy, how you predict and get ready for the next financial crisis. a lot of the talking tomorrow will be on u.s.-china trade talks, and coming up we speak to lawrence boone. this is bloomberg. ♪

when you move homes, you move more than just yourself. that's why xfinity has made taking your internet and tv with you a breeze. really? yup. you can transfer your service online in about a minute. you can do that? yeah. and with two-hour service appointment windows, it's all on your schedule. awesome. so while moving may still come with its share of headaches...

no kidding. we're doing all we can to make moving simple, easy, awesome. go to xfinity.com/moving to get started. ♪ this morning, and evening from beijing and the bloomberg new economy forum.

henry kissinger says america and china are in "the foothills of a that the" he asks china and united states have the commitment to overcome our 21st century politics. -- must abandon "zero-sum thinking," according to the chinese ambassador. assured phase one, possibly becomes phase none. from bloomberg, we welcome all of you. in beijing, francine lacqua at the new economy forum, and the headlines signal some form of hope for a trade piece. -- peace. francine: not sure there is a lot of hope.

there is a lot of warnings from the new economy forum. some of the warnings we had from hank paulson, bill gates, and henry kissinger. the conversation started off and talk aboutt supply change, but it quickly turned to more warnings than messages of hope. tom: i spoke with dr. kissinger a few years ago, now at 96 years old, and here he is with neil ferguson who wrote a fabulous and allhenry kissinger the controversy around dr. kissinger, an extraordinary moment for all of bloomberg to have dr. kissinger in beijing 50 years, pushing on from the historic 1971 to 1972. viviana: china reportedly invited u.s. trade negotiators to beijing from our talks. thevice premier extending

invitation to robert lighthizer and steven mnuchin. dow jones reporting the u.s. team is looking for chinese commitments on intellectual property protection and agricultural purchases. plans to introduce a windfall tax on oil companies, following jeremy corbyn declaring war on the richest people. to take downvoters bankers and billionaires who benefit from a rigged system. he promises tax heights -- hikes will target only the richest 5%. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. ,om: let's look at a data check equities, bonds, currencies, commodities. several nuances off the china headlines, particularly from

chinese leadership in beijing. pretty negative two, much where they were, but a shift in the bond market. the vix back out to a 13 level. officult is the news flow the last few days, but higher bonds, a.22% 30 year reversal over the last 90 minutes as well. atncine: i am looking european stocks and european stocks are drifting a little bit. before china's chief negotiator invited his american counterparts -- did not decline because of that but it did not get better on the news that trade talks could be back on. treasuries pretty much drifting. a lot of the focus is on congress when it comes to hong kong. joining us from the new economy

, previously orlik based in asia, now in washington. thank you for joining has, because you make us smarter about everything going on. does u.s.-china trade get that are? been greatre has reporting on this from bloomberg and others. i am not sure it will be moving forward the market understanding of what is going on. clearly we are close to a phase one agreement but equally clearly a number of things could go wrong. isn't significantly moving the needle for u.s. or european stocks. francine: what could go wrong? tom o.: any number of things. after a year and a half a failed talks, there is a significant

amount of mistrust which makes it difficult for progress. of theu throw the idea rollback of tariffs into the mix, which china has requested, that phase one deal becomes much harder to do. have the you u.s.-china trade impact on the economy. tom o.: the first thing is the tariffs. the tariffs are an obvious drag. if we get december tariffs, that will hit the electronics supply chain and will be significantly negative. the other thing that is important is the and certainty. one of the things that has been a positive for the global markets and one reason we have seen global manufacturing on the soft survey data do better in the last couple of months, is because some of the uncertainty has come out of the market. we have not had president trump

tweeting so much. francine: tom orlik stays with us, our bloomberg chief economist. at the economy forum we sat down with the goldman sachs chief executive and asked about liquidity in the market. >> a significant shift in market structure regulation over the last 10 years. we have not had a lot of market stress so one thing we think about a lot at goldman sachs, where can there be liquidity issues? i think the events in the repo market a month ago are it indication of the fact that when market structure changes and for some reason the dynamic of the market changes, you cannot have tidy liquidity. francine: can you protect yourself in some way if it happens again? david: i don't think it is so much about goldman sachs protecting itself. securities,y liquid

participate and markets, and are looking at the amount of liquidity available for those products. one thing you have to do with risk managing is think about what you own and in stress you have to expect there will be less liquidity and you might be in a position where you hold that longer than you might necessarily like to. francine: apart from liquidity and the trade war, what other issue, shadow banking, or investors looking for yields and taking too many risks? worry.it is my job to it is my job to worry about clients. i think in a lot of ways the environment at the moment is relatively benign from an economic perspective. the u.s. economy is doing quite well. economistslead u.s. over the last 24 hours was talking about the fact that we

might make some progress on trade and monetary policy has been mark, date of. he expects a 2020 slow acceleration of growth from where we are. he commented on the fact that he thinks both in the u.k. that there is more confidence, there will be a path out of brexit without an abrupt disruption in economic activity. across europe may be an improvement across what has been slow growth. economically, we are doing ok. francine: is there anything that is positive? you are describing things getting less bad. theana: the world -- david: world is growing at 3%, 3.5%, which is not bad. everyone is looking for what is going wrong. is there uncertainty? yes. a the china-u.s. trade

headwind to growth? yes. do we have to make progress? yes. at a high level, things are going ok. the economy is looking forward and there are lots of issues and political processes that need to be discussed and dealt with. we can all find places where we need to do better, but generally speaking we are doing ok from an economic perspective. francine: that was david solomon, chief executive of goldman sachs, speaking to us earlier on. he also defended the apple call, saying there was definitely no gender bias. tom: a return in the yield market off the chinese headlines and breaking news this is no surprise at a time of scale in the battle for profit. seriousschwab is in talks to buy td ameritrade. earlier.rting this we have the perfect guests to

speak to global wall street of the past to this announcement, some say this afternoon. he is joseph quinn lend. everybody sat out a million years ago with morgan stanley and said this guy can write. you have been doing this for a long time, well over 20 plus years, and we have seen this evolution of competition in discount brokerage. madness ofto the free commissions. ameritrade, 23% of their business is free commissions. is this the ultimate free lunch, free commissions? joe: there is nothing free in life, so something is always extra. the competition around blockchain, the trading, it is not a race to the bottom, but

everything is being compressed including financial services. the overlay with technology is pressing down and making us more productive. tom: you see ameritrade up substantially, up 20%. withtreet likes this idea interactive brokers and the other stuff. all this comes back to this word 1990e moment, "scale." at -- in 1993 at morgan stanley you were not writing about scale. does the demand for scale come from slower economic growth? --: slower growth, economic aging population, huge amounts of cash ready to be inherited and pushed to the next generation. the way to track that money and capture it, because the bigger you are, the better you can be. tom: someone you and i both

, she is catherine man worried there is too much scale and we will get back to monopolistic characteristics. is that a legitimate concern that it becomes america a monopoly? joe: we are not there yet. that is the conversation in technology. you look at u.s. airlines, health care. i don't disagree with that thesis but don't think it warrants a danger point where we shouldn't see things happen. big companies are buying smaller companies so we are not getting innovation from the ground up but the top down. i agree with the thesis but do not think we are at a dangerous stepping point. tom: this harkens back to ,mbassador haas from beijing

really pushing forward that idea. coming up next from paris, speaking of the oecd, we speak to lawrence boone. she is wonderful, and will speak to us on how they partition slower economic growth and yes, lawrence boone on china. new economy and the form, this is bloomberg. ♪

♪ and then of course we have the external conflict or the issues of the rising of the great power, china rising, and the united states having its,

let's say relative decline. we are at a point that is similar to 1944. there is a war after a period of war. there is a period where there is peace because nobody wants to fight the country that won the war, and there is a new world order. francine: just some of the conversation from the new economy forum, that was ray dalio, bridgewater associates cochair and chief executive officer. still in beijing is tom orlik. we talked about the u.s.-china trade war, but what are the consequences of lower for longer interest rates for the world economy? tom o.: i think where we are now, is a world where growth is -- the trade war appears to be in a truce, brexit appears to be heading away from a hard brexit

outcome, so some of the concern about global growth has disappeared. the reality is the risks are still there, and extremely low interest rates in europe and japan, a little bit of space in the u.s. and china, but not much , mean that if we do have a bigger than expected fight into 2020, the monetary space to offset that will not be there. francine: how much more can china throw at its economy? tom o.: what has happened in part has been an absolutely critical chinese response. remember the 4 trillion yuan stimulus in 2008 during the sovereign debt crisis. we also got a big chinese stimulus that pulled china out of the slump and pulled the world out. and we are seeing in 2019

2020 is a china that has a lot of problems to deal with. the economy is off balance and that means china needs to be much more cautious, and china's growth continues to grind lower. china is not providing the boost to the rest of the world it has in the past. thank you sok, much, in beijing. we have terrific news flow this morning. and we aree quinlan, thrilled to bring in lawrence , who, oecd chief economist has come out with an update on the greater global economy. this is something everyone uses to dovetail in the view forward. your report is so voluminous. what is a single key distinction that lawrence boone sees in your oecd report?

we have some technical difficulties. lawrence: hard to understand what you say, but let me repeat what i think our messages is -- messages are today. protecting against stagnation of the global economy, moving from 2.9% to 3% in 2021. the main factor behind this stagnation is uncertainty. there is uncertainty about the resolution of the trade tensions. it is also some risks coming from china slowdowns. two veryly, they are strong structural factors hampering global growth, which is having an impact, the lack of

government -- on digitalization. difficulties for us today to come to you from paris, so we will leave it there and we will have much more with dr. boone on bloomberg radio. we will catch up and synthesize with the news flow with mohamed alianz. of elian's -- stay with us from beijing and new york. this is bloomberg. ♪

♪ [applause] >> and running them for the people, that is real change. jeremy corbyn, the leader of the opposition party in the u.k., the leader of labour publishing his manifesto for government, taxes on the wealthy. he includes a financial transaction tax, 1% increase in corporation tax, and windfall tax on oil companies, and a higher tax on the top 5% of earners. it seems like a key moment in the election campaign, jeremy corbyn lagging more than 13 points behind the conservative. tom: joe quinlan with bank of america there -- bank of america

merrill lynch with us. oldy kissinger, 96 years and there have been 4300 reasons to go to cash since july 1972 where they changed the world. how do you do that? how do you stay invested, have the confidence to be invested given all the political moments we face each and every week? the if you start with 1970's and roll forward to the oil shock, reagan revolution, technology revolution, i am optimistic by nature, but if you look at human process in terms of cross-border flows, and supply chains, we are still growing. we will have a $100 trillion global gdp. never underestimate the steady progress of humanity. there are problems, no doubt.

you want to find the best companies that can leverage off that, have the scale and the plans, pull the emerging market consumer and tap into new resources, which is key. tom: we don't understand the size and scale of the global economy. we are understanding the size and scale of charles schwab, larger than td ameritrade, a 26 billion dollar transaction announced by cb's -- cnbc. maybe the cubs will finally get a designated hitter. they are in the national league. they don't have a designated hitter. this is bloomberg. ♪

♪ >> and hong kong, it is a very complex, multilayered situation.

>> the environment is still ok and the impact on our business has been ok. >> we see clients thinking about contingency planning. >> people are taking a bit of wait and see attitude. -- this will is get resolved. >> the downward pressure on economic activity, we can expect to see more of that. >> so far, we have not seen any outflows or major movements. >> we have not seen any change in the behavior of clients who are significant financial players in hong kong. francine: to talk more about hong kong and of course the impact it has on trade is tom orlik of bloomberg economics. how much of an impact does this have on hong kong and how much will it have in two months? tom o.: the protesters are having a crippling impact on hong kong's economy.

suffering tourism are , and let's not forget that hong kong is one of the world's most open economies. a port, which is the staging post for chinese goods as they had to america -- head to america. they are now being hit by the process as well. as long as the protests continue, they will stay in recession. francine: because of the bill we saw on hong kong, how does china react to the trade war? tom o.: the economy is important for the economy. xi jinping does not want to face a wave of joblessness and social unrest, but is not the most important thing. territory and integrity is most important, and what the senate ofl does is test that kind

redline for china. china has been above the fray. they have said, the huawei executive is locked up, that will not affect the trade talks. --,u.s. is talking about that will not affect trade talks. the u.s. is interfering in hong kong, will that affect trade talks? there is a risk. francine: what kind of economy does president xi need? tom o.: we are seeing a transition in china's growth model toward a more service and consumption driven economy, which creates more jobs with less growth. growth is going below 6% in the fourth quarter and staying below 6% in 2020. we have more optimism from some people at the nef today, but even with the economy growing at

5.7%, 5.8%, we are not seeing higher unemployment. francine: we have so much chinese debt. tom o.: and it is still there. debt andaged down the when he do that, you have less lending and investment and growth. they havee time, exports from the trade war, two things heading simultaneously, which we think will push growth below 6%. you som orlik, thank much at the bloomberg new economy forum. 2% in has become positive the news of a $26 billion acquisition. in new york city with your first word news. democratic presidential

candidates avoiding big fights at the debate in atlanta. the big theme -- how much better they would run the country. they did attack each other over climate change and health care. to the u.s. economy remain elevated but the fed agreed to put interest rates on hold. that is according to the minutes of the latest meeting. officials rejected the idea of negative rates as an option. , on the labour. party, a plan to introduce a windfall tax on oil companies and income tax increases on people making at least 80,000 pounds. labor leader jeremy corbyn declaring war on the country's richest people, urging voters to take down bankers and

billionaires. he promises tax hikes that will target the top 5%. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am viviana hurtado. this is bloomberg. tom: thank you so much. it is percolating as we drift into the holiday season, the idea that a bottom has been had due to central-bank accommodation. clearly, we have seen that from the united states central reserve -- federal reserve. leading on that has been joe quinlan of bank of america and merrill lynch. you stressed the idea of stay with america, but have a watchlist of international higher. joe: in the sense that we will see fiscal stimulus start to take hold and the debate in germany and the european union, when the europeans talk about,

we want to do it ourselves without america, luxury brand goods out of france based on the premise that the trade war is cooling off in the chinese consumer will come back. i also like the chinese tech giants. they have 70 million data users. they will export this to india and other parts of the middle east. firste the u.s., america and portfolios, but we also like europe. i like the chinese tech giants because of their capabilities. tom: an hour ago, we had a chinese leader saying it will not be china to the fiscal rescue. how do we get jan to the clear and embedded -- beyond the clear toedded austerity of elites targeted fiscal stimulus? joe: it will be hard because we

are so far in debt from that starting point. will fiscal stimulus be for local companies? you is lacking is something know, lack of coordination from policymakers across the world. multilateralism seems to have declined. oecd can come out with points of trade tensions but there is nothing from the top down from a global multilateral level that is affecting growth. tom: future linkage of monetary and fiscal policy, monetary is pretty surgical. are you telling me fiscal can be surgical? joe: no evidence of that, but interesting to talk about more fiscal stimulus accompanying the monetary policy. particularly in europe, the euro zone is a huge surplus part of the world.

they have the excess savings, germany in particular, but they are sitting on their hands and if there is any talk about money being deployed, that will be a lift to the market. tom: i want to pin you down and 3300, i saw someone at 33% a week ago. year,300 by year end next 6% or 7% from where we are. we see a grind to head and opportunities, yet growth is slowing. there is good opportunities still in equities. tom: joe quinlan, wonderful to have you here, and extremely well-timed. the ultimatemay be rollout in your commission free world. charles schwab rumored to acquire td ameritrade is a $26

billion transaction. the differences in the companies are extraordinary. schwab, 8%ssions of of their business is commissions. business ameritrade's is commissions. they are giving it away for free, so what do you do? you mate. this is bloomberg. ♪

♪ the federal reserve is an independent agency and i think

-- ing the independence think jerome and others have been making the right decisions at the time they make the decisions. very good, some technical difficulties. good morning, and good evening to francine lacqua in beijing. we want to move on to what we saw last night in atlanta. it was a ferris wheel of opinion from democratic candidates. joining us in atlanta in the early morning, kevin cirilli in front of the skyview ferris wheel last night. there is always that candidate stuck at the top of the ferris wheel when they stop the thing, swinging around. which candidate got left last night at the top of the ferris wheel? gag --i think pete but a

came in- pete buttigieg as a front-runner. everyone was looking for him to have a tense exchange with joe warren, and- sanders, and his most tense moment came against tulsa gabbard. beyond that, amy klobuchar had a continued successful night. to say she is able to win over midwestern voters. up until virtually the hour before, the impeachment inquiry hearing was ongoing, so it is just a consideration of how these candidates are having to be competing with the constant barrage of headlines. tom: i thought yesterday was a real seachange in the

impeachment process, and there is more today with fiona hill. what should our viewers in america and worldwide look for today in these hearings. -- in these hearings? kevin: republicans, where do they stand? they are still standing with the president, still backing president trump. it is not enough for the likes of senator mitt romney to be critical of the conduct of the president in terms of it having an outcome -- effect on the outcome. unless republicans break ranks with the white house, this is largely political number. increasingly a number of folks inside the beltway who are republicans are raising the concern that they don't agree with the president's conduct related to foreign affairs. this was also yesterday a damming day for rudy giuliani, this testimony seemingly

indicating he was profiting off of some sort of shadow state department. that has pushed him in the crosshairs of many politicians in washington. tom: kevin cirilli, thank you for the early morning brief, our chief washington correspondent. with bank of america merrill lynch private bank. sluggish american growth of the , 3.5 percent, 4% gdp is gone. law put out a fabulous essay on the inequality. how unequal our way as we go into this election? care inequality, gender inequality, are pretty inequality. , people are angry

and upset. insecurity, about whether it is trade or immigration, hasn't gone away. americans wholion don't have a high school education, who are in the workforce. even the lowest labor components in terms of skills is getting a pay increase. that will not settle anything, but it is a start. tom: these are seismic shifts in america. let's go to the seismic shift in china. this is one of my favorite charts, not chart of the year but maybe chart of the decade, and with the backdrop of dr. kissinger speaking at our forum, china gdp, this is a long chart, that is linear and persistent. we are at 6%. the merrill lynch view of next

year may be sub 6% and joyce chang models out somewhere in .he distance a 4.5% economy if we persist at vector, what does it mean for the global economy? but i agree with joyce think 5% growth in china, get used to wet. it is -- get used to it. trillion, $13 trillion base and that is a lot of output and demand. the chinese consumer only accounts for 40% of gdp. -- 30% of gdp. we are 70%. more consumption, less growth. steal a chartg to from joe quinlan with merrill. we thank him for being with us today. francine? francine: you have to pay royalties.

coming up, more highlights from the economy form. the ubsbe hearing from chief executive sergio ermotti. >> we have a good strategy. it has been quite successful for the last few years, and we are in a position to capture organic opportunities. if we have an opportunity to evaluate nonorganic options, we will, but it is not something we are forced to do. long-term --ium to in the short term there are some pressures. pressuresrowth, these dynamos of they are the economy and i think it will continue to get stronger. ♪

♪ >> look at the dynamic with rizzo, the middle east -- brazil, the middle east also. southeast asia is huge. china is huge. we are everywhere. china [indiscernible]

that change was happening in any case, but it is not forever. a supply from a single source for anywhere in the world has been reduced. i think the world will be spinning their bets. francine: we had a number of chief executives from the banking world joining us from the new economy forum. a lot of the economy was on negative rates, trade, and whether hong kong would lose its status as asia's financial hub. tom: right now on schwab ameritrade, cnbc reporting there will be a mating. foxbusiness news talking about a statistics of $26 billion. sonali basak joins us. it is like lemmings over a cliff. this mating of

the less profitable and will act? is it the american banks, the european banks, the brokerages of the united states? sonali: i think the american banks are watching and laughing because they saw the zero fee were coming from a mile away. you have e*trade and interactive brokers saying, do we need to mate now? tom: within all of this is the planning into next year. let's move from schwab-ameritrade over to what you report on every day with our team among american and european banking. how focused are they on profitability in the next year, or is it still about a revenue build? sonali: everybody is worried about profitability because everyone needs to grow and spend on technology and spend on people, even though they are cutting a lot of headcount.

there is definitely pressure in areas of revenue, especially in the interest income. these guys have to look more like banks as they change their business models away from trading. tom: let me go into the idea, mr. solomon at the bloomberg new economy forum, the future of goldman sachs. reporting all of our as goldman sachs tries to get into retail in other ways even if they are not in the commission area. what is their plan, buy interim brokers? sonali: absolutely not. member sachs is a hybrid of wealth services, the wealthier part of the client services. they are trying to lower their costs of capital, that we reported on the hiccup with the

apple card so consumers coming into the goldman platform consider banking through credit cards and they are doing so, probably not at the breakneck pace you would see to get them to sax or jp morgan or anything like that. -- sachs or jp morgan or anything. tom: macy's, wow, what a week for retail. , home depot, macy's crushed. not a surprise. from beijing and the bloomberg new economy forum, this is bloomberg. ♪

♪ alix: china is cautiously

optimistic. china's chief negotiator sounds more positive on a trade deal. don't say i didn't warn you. china issues a stark warning to the u.s. after congress passes a bill supporting hong kong protesters. in the foothills of a cold war. henry kissinger on u.s.-china relations. leaders way in at the bluebird new economy forum. welcome to -- leaders way in -- leaders weigh in at the bloomberg new economy forum. this is a miss and a cut, and the stock is down about 5% premarket. comp sales are down by about 1.5% on the low end. they also missed on earnings in the third quarter. they say they are confident in holiday strategies, but it doesn't look good in terms of their guidance. you're really