♪ >> welcome to bloomberg markets: asia. we are counting down to the major market open. ♪ >> top stories we are covering, china pledges fiscal stimulus as a struggle to control the coronavirus.

let's get over to china correspondent in beijing for more. what are the latest developments? the economic front, we did hear from the finance minister over the weekend.

there will be additional measures from china to cut taxes and fees to support the economy. we saw additional meters over bond issues at the local government level. additional letters from policymakers to support the economy. meet its social and economic target. the question is how much budgetary pressure china will be under and how aggressive these stimulus measures are going to be. pboc has lowered interest rates --ensure financial markets in terms of cases, 68,500 are the latest numbers in terms of infection. 1600 deaths. the rate of infections continues to slow.

we had a doctor out of one of the hospital say that now according to state media, this is starting potentially to peak the rate of infection. the new officials on hubei profits, wuhan is the capital, population they are told not to leave their homes. leadership, the mayor of shanghai with a background in police and security, ramping up those controls and they seem determined to get these under control. tom, there was initial criticism of how the government handled be crisis in nearly days. how is president xi responding?

interesting. over the week and there was a speech published by president xi that apparently he talked about being in control of the situation in hubei. he said he had given verbal and written instructions to officials, but it was in fact xi , in the speech, who ordered the quarantine of surrounding cities. it seems the publishing of this speech is an intent to push back against criticism that he has stepped away, really, and that he was largely unseen during the crisis. him up toes is open criticism, because many say the handling of the crisis and the wuhan and hubei an issue and there are

concerns about the was of lower doctor -- whistleblower doctor who died. it really leads to as many questions, some could argue, as answers. it's interesting that president xi sought to publish this, pushing that against criticism that he has stepped away from handling the crisis. president xi says he has been in control since january 7. paul: all right, tom mckinley in beijing. thanks so much. the spread of the coronavirus forcing bond yields lower. let's take a listen to what investors have told bloomberg. >> yields will continue grinding down. >> lower yields. >> lower yields. >> yields will move lower. >> lower yields. >> the lower bond yields are

giving the u.s. some attention. >> you don't see the yields going up with the highest quality growth you can find. >> software is in that category. >> in the context of incredibly low bond real -- bond yields, they are more attractive. bond yields are lower, giving us a signal equities are at risk. -- they are able to issue what ever they want in the corporate bond market. >> it has changed strategy. equities rallying because of the two-sided nature of these things. paul: investors overseeing are plowing dollars money into u.s. government debt like never before. the dollar gaining strength as the spreading coronavirus spreads doubts on the global growth outlook. for more we are joined by the .pmorgan cio

bob, a pleasure to see you here in sydney. you said 2020 will be a good year to invest in the debt market. we heard from a number of voices effectively echoing that. if you look at the chart on the bloomberg terminal, you can see it is already close to double last year's records. where is the best value right now? >> i think you start by thanking your favorite central banker. if you look at last year, 48 88 timesanks cut rates four 9000 basis points. more importantly they have indicated to all of us that they intend to keep rates low for the foreseeable future. that has given markets a lot of confidence to invest. so downside -- don't fight it. fight it,say don't and you continue to look for opportunities. but the greek 10-year is now at 1%. you have a nagging sense that it

is not sustainable and central banks are looking at a real crisis? it is ironic that the greek bonds are effectively at the same rate as australia. i will give you that. the reality is the central banks have little choice but provide a backdrop of accommodation as they struggle to get inflation up to their targets. if it means keeping rates artificially low for the foreseeable future or balance -- balance sheet inflation, they will do that until they pick up to the 2% target. he knows when that will occur. they have been trying to get 2% since the financial crisis and have not managed to do it on a sustainable basis. argue the bank of japan has been trying to do it for even longer and have not --aged to do it areabob: have not managed to do it. bob: for a good 20 plus years. august leave the

coronavirus will have an impact on global growth. does this have an impact on a recession? it does. if you look at the trade were between the u.s. and china, the inverted yield curve, the world in already effectively manufacturing recession. when we look back at sars, we think the global economy can sustain about 12 to 15 weeks of impact. it may take gdp negative in many parts of the world, but when you listen to the central bankers, they are willing to look through it. they see the recovery on the other side. it means the next couple quarters will be distorted by the coronavirus. you previously said you could see yields go to zero and i have heard a number of other voices say potentially the u.s. 10-year could get there in another couple years.

is that still your outlook for yields? and how long? when do we get to zero? it has moderated a little bit because of the tremendous amount of central bank response we see, but the reality is, we have a tremendous amount of gdpral bank response and struggles to get to trend. you wonder, 10-plus years into is noty -- i know it 10-plus years here. but the rest of the world it starts to get long in the tooth. you could see yields go back down to zero. what is missing from all of this .s fiscal stimulus you need in economy, you need a country that has the courage, ability, and capability to deploy some fiscal stimulus and that is few and far between. paul: that's definitely a hot topic of debate here in australia. let me bring up another chart on the bloomberg terminal.

of negativewhole yielding debts. it's rising above $30 trillion. can you see that taking out the highs above last year? i think in the first half of the year is almost impossible to see economic growth or in inflation surge which would rattle bond investors and cost -- cause yields to go. at a time when investment banks are expanding balance sheets, that will find its way into the bond market and pressure yields lower. i think that will continue to rise, certainly through the first half of the year. paul: where are you seeing the best value right now? we like government bonds. we like credit. the one change in our portfolio is we have added a lot of emerging-market debt. you get a number of things.

you get very high yields and central banks with a capacity to .ring yields down a lot both of those things are missing from development -- from developing markets. if you can take emerging-market currencies, we think that they oversold.urally there's good reason. the trade war is one of those reasons. as we start to get into a phase trade agreement and coronavirus gets into the rearview mirror, we think about the second quarter on an emerging market currencies, we do very well. paul: anything you are absolutely avoiding right now? bob: it's hard to find anything to avoid, to be honest. the weight of cash is too great. stephen: let's check -- paul: let's check the first word news

with su keenan. interview with bloomberg, the managing director of the imf, kristalina georgieva , advocated for more structural reform and measures to boost monetary policy, given the uncertainty surrounding the coronavirus. she said it was premature to impact of economic the outbreak, but did praise china for its efforts to contain it. >> we do not make rejections. the mostill hoping scenario would be relatively rapid containment of the virus. we see the dropping of economic activity in china and a very fast recovery. from ouran hear more

interview with the managing director later on "bloomberg markets asia." fanning fears that thousands more have been exposed -- a woman tested in malaysia where she had phone after disembarking in cambodia with more than 2000 other passengers. the ship spent two weeks in limbo, being turned away from five different ports before cambodia finally allowed the ship to disembark. u.s. delegation come palesecretary and house speaker nancy pelosi brought their concerns home to the munich security conference over the weekend. officials warned that european corporation with huawei could undermine the relationship with its allies. global news for hours a day on

air on and quick takes by bloomberg powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg area -- this is bloomberg. come, peterto coleman joins us. plus more on the coronavirus outbreak. this is bloomberg. ♪

paul: this is "bloomberg markets asia." i am paul allen. let's bring in our next guest on how the coronavirus is hitting energy markets. we have the woodside managing director and ceo peter coleman. plans are still running to plan, but is there any risk that could change? -- notwell, certainly

for our country. i have heard in the mac it -- in the marketplace, others are having issues. others are open for business. i think the key is they can stay open for business and what the shipping does. clearly the man has dropped off in china. demand has not picked up after the lunar new year. prices are being affected by this because you have a combination of lower demand in into and supply going europe with new projects in the u.s. it's a difficult time for this market. companies like woodside, the vast majority of our volume is in the contracted market, which still represents more than 80% of our revenue stream. paul: you did tell my colleague in sydney that you are having

trouble finalizing contracts due to travel restrictions around the virus. do you have a sense of where this might end and what knock on effects you might see? well, we are hoping we will see the normal summer burn off the virus. typically these things are -- typically, these things are difficult to predict, but typically we see these during the winter months. doing a good job of trying to contain the spread of the virus. hopefully when we get through the traditional flu season the travel will open up and we will be maybe on a restricted basis for a while. that simply saying we need to finalize these discussions in a different way. having to move to technology, that all is fine, but again the restriction on individuals being able to attend the offices in china as well to get access to their technology. but we are talking weeks, not months on finalizing these things.

unfortunately, at the end of the day, when you come down to the final details of contracts, they do require face-to-face. we will go through it. certainly the intent on the other side is still there. we don't expect that to change. concerns eating into the growth outlook for lng? peter: not really. the fundamentals are therefore growth. our expectation is once the industry kicks off again, there's obviously pent-up demand there. it's difficult to predict what that demand will be. we think china austria's manufacturing will get back to capacity levels quite quickly, and so the push will be do we go from a loosening of the market to a tightening of the market and what does that mean? no one can predict that.

arere seeing that buyers taking the opportunity to stock up. the china buyers, the cheap cargo in the marketplace at this point in time -- we will have to see how this plays out. the majority of volume sold on the world markets are not under the long-term contract. on the short-term pricing. eace -- it's a two-pace effect on the market. paul: you mentioned the cargo. with those prices, will they lead to production cuts intentionally? the rising, actually has gone a little lower than last week, so we are seeing cargoes going away in the high dollars at this

point. if you look at the cost of supply, the marginal cost of supply, those volumes can still get into the marketplace. there are questions about u.s. volumes. those numbers are very low going into europe with respect to pricing. nobody has stopped u.s. volumes. i think if this pricing outlook continues, you could very well see volumes getting cut from u.s. producers. paul: just to get back to the point you made a minute ago about briar stockpiling and being attracted -- are you seeing new buyers come into the marketplace? i'm thinking about the indians. indians areinly the in the marketplace. is very attractive for the indians to get into the marketplace with sources of

energy. it's a good time for india. india is a market that is always very sensitive to pricing points. clearly these pricing points are very attractive at the moment to get into the market. we are seeing a lot of indian buyers in the marketplace at the moment, as you would naturally expect. the biggest issue, of course, with lng is stockpiling is limited. it's not like other commodities where we could maybe store it on the wharf. the cost for storing with lng is very expensive. and of course you have ongoing losses as the gas itself warms up in those ships. you can't do it can definitely, it certainly at the moment buys up all of the available storage. a sense, you give us finally come out the environment is affecting investment decisions on big projects and how the process is getting contracts in place? peter: we are making very good

progress in getting contracts in place. amount ofsignificant our volume we are producing .lready undermining contracts we have nonbinding offers in place. driving thes not sentiment. the issue is getting across the table to clear it with potential buyers. clearly, sentiment drives how you feel on these things at any one point in time. -- the people we are sailing selling to take a very long-term view. they know this is not a structural shift in the marketplace. this is a motivation around an essential event to the industry. the fundamentals are still very strong. it's not stopping anything at all. it's just kind of delaying the signing of the final contracts. all right, woodside

petroleum ceo and managing director peter coleman. thank you for joining us. be sure to stay up-to-date on developing coronavirus story by going to the function of iris .us you can see headlines from the newsroom and how specific companies may be this is bloomberg. ♪ impacted.

paul: let's get a quick check of the latest business flash headlines. hsbc is facing uncertainty that could result in a surprise ceo. change is expected tuesday will see a management reshuffle and a withdrawal from businesses and globe.uctions across the it will be their third major overhaul in a decade. have been suffering from

protests and the coronavirus. toyota will partially resume operations at three plants in china, bringing back some of the production. this is bloomberg. ♪

9:30 a.m. on a very pleasant monday morning in sydney. we have the market opening 30 minutes away. futures down a quarter of 1%. nded mixed one friday. i'm paul allen. let's check in on first word news with su keenan. su? su: the global number of is nearing cases 70,000 cases as the you forth death outside mainland china was recorded of the weekend. the taxi driver who died on

sunday carried three passengers returning to the country from china, hong kong, and macau. meanwhile, the number of cases dockeddot dime -- diamond princess liner has soared with 40 americans among the cases. and on sunday, china announced measures to combat the economic impact of the virus including a lower corporate tax. of a tsunami like shock that could lead to a budget deficit. outlinee is expected to measures as it faces the biggest budget gap in two decades. and finally, the number of $3.2l permits have raised billion. totnced info and tru and

were involved in the bidding process. the first reaction will be when markets reopen. 24 hours a day, on air and on quick takes on powered by more than 2700 journalists and analysts in more than 100 20 countries. i'm su keenan. this is bloomberg. paul: thanks. nikkei futures are off by three quarters of 1%. new zealand is already trading in that market and its down 2/10 of 1%. is calling for coordinated global action in tackling the spread of the coronavirus. this comes as the risk of global growth surges. so, the government in hong kong

proposing a spending package to shore up the economy. what are the details? least 3.2 billion dollars, we have learned from carrie lam, on friday, that they are proposing to the legislature. the financial secretary talking about the city facing tsunami like shocks from the coronavirus continue in the city. the effect of the coronavirus on the economy goes far beyond relatednd the tourism sectors. on tuesday, the singaporean unveil at is set to strong budget according to many analysts. analysts predicting the biggest deficit in two decades. citigroup put the numbers at more than $500 million. keep in mind, back in 2003, this

is three times more than what the sarst during epidemic. they are warning it could be worse than what we saw back in 2003, paul. we will see fourth-quarter numbers later. will we see anything reflected in those numbers or is it too early? perhaps a little too early. we continue to assess the corporate fallout, right? we continue to see the headlines. hsbc in hong kong revealing one of its employees was put in her insane after being in contact -- in quarantine after being contact with relatives diagnosed with the virus and shell sending people home from the trading desk after an employee came in case.t with a coronavirus

operations are not impacted from these development, but all employees from the trading desk will be working from home. side in hongm kong, not looking good. air traffic in january down nearly 12%. it looks like it could get worse . preliminary visitor arrival date in february, so far, the average daily traffic to hong kong than 3000 fewer people. a year ago, we were talking numbers of 200,000 arrivals a day. and 99% to klein so far -- decline so far. man in hong kong. thank you. let's talk about how the coronavirus is likely to affect us in the coming trading week. david joins us and in sydney we have the global markets editor adam haigh. adam, they believe that the

cases probably peaked on february 12. is that a consensus view? one of the market indications? -- what are the market indications? people are expecting that rebound. clearly, large swathes of the chinese economy are in complete lockdown, not just people at home, but not spending. we have heard indications over the weekend of a bit more of a gocal package that would some way to, you know, putting in a little bit of a damper on things here and quashing some of the real ultimate fallout to the we had a bit of a conversation this morning about whether or not this is the right kind of support needed and indeed, whether corporate tax cuts and the other things mentioned can do enough to stem the flow. but certainly from a markets

perspective, we have had encouragement and improvement in sentiment of late and part of that continues to be that the death toll gets contained inside china and is not too much further spread outside the country. paul: david, i want to talk about gold, with its sixth week of gains in seven since the new year. what is the thinking around gold right now? david: first, to bounce off what adam was mentioning -- there are two things. gold is the hedge, generally speaking. that with the inverse correlation to the dollar, they are usually inverse correlated anyway, but that relationship, the negative yearionship is an eight low, which tells you people are going back. but also, obviously going into gold as well, they are potentially moving up. the other part of the story is

the positive correlation of gold prices to treasury prices and markets -- the markets' way of using gold to express the offsets of the global economy. , to rates are low supplement that point on the another commodity on friday, on copper and what is happening in china might actually help the inventory situation in copper. so they are basically cutting to 5900er price target metric tons. paul: adam, i want to get back to you. mentioned we have seen

some policy response pledges from china and singapore. how much of this is baked into the market prices? is there room for more surprises? adam: you seem room in bond and equity prices in recent weeks efforttored in a broader i governments -- not just in china, but in other parts certainly of asia -- they will come to the table and offer support in a time of much-needed support. we heard over the weekend from the head of the imf saying, maybe we need to get to the stage where it is more of a synchronized policy response around the world, not just on the coronavirus, but also the impact of an already slowing global economy coming into 2020. there's a lot of debate about whether we would get a pickup. of course, pmi data has been suggestive, but the coronavirus has turned things into a debate.

a lot from the monetary side and liquidity injections to the way that markets the head, that certainly will alleviate some of the real investors had. with the fed not going as far, so far -- jay powell saying, well, listen, if things get worse, we are here and we are ready to act -- the point is market still think central banks and the policy support more probably will be there and if things get worse, more can be done. paul: david, in terms of things getting worse, there's a whole lot of data out. fourth quarter gdp numbers from around the region. what is top of mind? david: three countries. i love the title of one of the reports out of the bloomberg

about a week and a half ago. what they are essentially saying is a lot of this is backward looking. the momentum the data will show -- example. is a good you have thailand coming up. .xports as of december and i loosely obviously january -- rates were bad. we have not gotten february data yet. rates were bad as well. low-end prime rate in january which may give us a look at how rates are being pressured in china, a response on the fiscal, monetary policy.

the banks fall right in between when it comes to the chinese context. and adam,right, david thank you for joining us. you can check out our library for some of the charts we are talking about. you can find that on dtv go -- go> on the bloomberg terminal. still to come, kristalina georgieva this is bloomberg. ♪ this is bloomberg. ♪ on the impact of the coronavirus. this is bloomberg. ♪

in sydney paul allen and you are watching "bloomberg markets asia." just want to get -- to ricky news across the breaking news across the bloomberg terminal. we've got news that u.s. ship that from that was stranded in japan are leaving on chartered flights. they left early monday japan

time. u.s. passengers getting off the cruise ship and heading home. of the imfthe head saying that she hopes for his synchronized global response to the world economy. kristalina georgieva also discuss the coronavirus, telling bloomberg that she sees are relatively rapid -- sees a relatively rapid response to the outbreak. she spoke to use of vomiting. yousef.poke to are --ina: the measures 19% of the tourists, are a very important part of the tourist industry. ,nd in manufacturing terms manufacturing, so even a month woulduction activities

have an impact on china and some of this would be translated to the rest of the world. but we need to give this time, measures,y aggressive the liquidity, 100 $15 billion from the people's bank of china, cutting interest rates . -- $115 billion from the people's bank of china, cutting interest rates. my most important message here is actually a broader message. we do live in the era of uncertainties. we just saw the reduction of trade tensions and the coronavirus. yousef: i was going to follow-up

on that and, if i may, flesh it out in more detail. you have the coronavirus to deal with. on the imf level, what kind of pulls are you looking out for a potential synchronized response to mitigate the downside kristalina:? kristalina:-- the downside? kristalina: we very much value the fact that since 2019 shipped up to be the last year since the financial crisis -- shaped up to be the last year since the financial crisis, central banks with a rate cut and more monetary easing, what they have done is the equivalent of a half a percentage point boost. we also saw these fiscal countriesoming from that have fiscal space. what is missing is a more

aggressive swing in structural reforms, and that is where we expect that if there was to be more attention, it should go. obviously monetary policy space is shrinking and the reliance on fiscal measures to boost growth ought to be stronger. more coordinated response. i am quite optimistic that in a very difficult moment, we could see the appetite for more action. at this meeting of the g20, that is a good place to talk about that. yousef: that leads me to my next question, which is on lebanon. given your experience in doentina, how much appetite

you have to get involved in the economic and political turmoil currently playing out there? alwaysina: we are wanting to help those who are struggling with the most difficult challenges. this is our mandate. at this is our role. what i will stress is it is a very difficult situation. seriouso take a very look at what they can do to reform the economy, not to respond to us, but to respond to the lebanese people. we will see where they are and what we can do.

away fromnot shy risky situations. they areis a call, if convinced there is a seriousness in the approach of government. a team you say there is there. if i can just follow up and ask, what would you like to see in principles an imf perspective? kristalina: what we need to see is realism in the budget and the projections of the government and a good constructive measure that is going to address the long-standing structure of government in lebanon. paul: that was imf managing director kristalina georgieva. just to want -- just want to get you some breaking news. we are receiving the updated numbers from hubei province for

coronavirus cases. 1933 new cases. of cases ise number close to 70,000. slightly more cases than reported the day before, but the mortality rate appears to remain steady. 933 new cases reported on february 17. plenty more to come. this is bloomberg. ♪ ♪

paul: i am paul allen in sydney in your watching "bloomberg markets asia." measures to combat the coronavirus our top of my for g20 officials meeting and saudi arabia this week. here to discuss more, we have correspondent enda curran.

we are seeing signs that they are ready to roll out more fiscal stimulus. slightly encouraging? enda: we are. the regional economy took a hit. course, deeper into the red. the commentary accelerate. certainly in asia, they are trying to figure out a trigger to pull to add more support. paul: we were discussing this today, but there are a number of economic readings in asia, including fourth quarter gdp numbers for a number of countries. what are we expecting to hear? sure if it isot disaster related events or weather-related events will have an impact. no one is looking for a great reading out of japan, i think.

chinese trade, the problem with chinese trade is it well be a -- will be a big story anyway. it is in the rearview mirror. , thatsia' central-bank could be one to watch. bank,onesia's central that could be one to watch. all right, enda curran, thanks for joining us. let's get a check of the latest business flash headlines. basf's rival bsa up -- u.s. face awards in the they now face more than 140 lawsuits. they acquired monsanto for $22

billion. tesla of us his plans for an electric car company near berlin appear to be up and running in 2020 are under threat. a german court says that they must halt. azing and area was challenged by environmentalists. -- acision is expected decision is expected. hsbc is facing a huge overhaul that could result in a surprise new ceo. the changes are expect to be -- expected to be announced on tuesday. they could include a management reshuffle and a withdrawal from businesses across the globe. this will be the london leader's third major overhaul in a decade. their hong kong office has been suffered from -- suffering from protests and now the coronavirus.

toyota will bring back some capacity in china shut down from the coronavirus. factories will restart on monday . operations and shenzhen will -- restart on will tuesday. a fourth plant will restart next week. still to come we will have more on the coronavirus response. we will be joined by richard mcgregor. also we will be looking out for japan's latest economic data. we will have reaction from wisdom tree. also we will have the aussie markets opening in just a couple minutes time. .he futures after the reset down about a fifth of 1%. there was see the aussie dollar hanging on. new zealand has been trading for a couple hours now.

stay with us. plenty more to come. this is bloomberg. ♪ everyone uses their phone differently.

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>> a very good morning. marketssydney where have just come online. >> welcome to "bloomberg markets asia." haidi: our top story. china promises fiscal stimulus to fight the coronavirus. the province at the center of the outbreak has reported nearly 2000 new cases, breaking a

downward trend in infection. and figures out shortly are expected to show the greatest contraction in china since .14. -- 214. a cautious move to start. we had futures edging higher. take a look. it's pretty staggered. start to the trading week so far. new zealand was down a 10th of looking vaguely positive, and of course, tomorrow is president's day in the u.s., so no trading in the financial markets, but really investors are keenly waiting to see the trend reported out of hubei. thatd one hospital had say they are seeing stabilization in

those numbers for her to at the same time we have the hong kong government as well as singapore saying fiscal support will be out in force. the report of 2000 more cases, breaking a downward trend in infections. that is as china is launching new fiscal measures. we have tom mackenzie and yvonne man in hong kong. tom, how are things looking on the ground as the outbreak continues? tom: i have lost connection, unfortunately, but i think you are asking about my visit over theweekend, some of villages outside beijing. we have seen the usual jacobian measures being rolled out in

hubei province. private cars are banned. the new leadership is rolling out controls to try to get on top of the spread of infection. in beijing, there are additional controls as well. we went outside the city to villages and there were roadblocks manned by many local village committees, stopping us, taking her temperatures, and stopping those who were not residents from getting in. those controls also in beijing. not nearly as extreme as in wuhan, but they are checking as well. have had four or five deaths. we have a total death count of 1765 for china. as you said, almost 2000 additional infections out of hubei. you are right to point out there

n whoseoctor in wuha adjusted we are reaching a peak. today's data suggests we may be days away from that. it should be worth reiterating that most of those infections do province.hubei we heard from china' us finance minister that there would be additional tax cuts and cuts to hereto support the economy in china. we have heard that in terms of bond issuance and the softening of the quota around loans for the real estate sector. the question is how much budget tree pressure the government -- budgetary pressure the government can come under and ultimately they will have to raise their deficit to gdp target -- whether they will have to raise that in light of the economic pressures is another question as well. how much additional stimulus can policymakers really push to grapple with because

consequences of this virus? and they pledged their commitment to stability. , the imf is calling for corrugated global response. but hong kong and singapore looking at potentially wider fiscal gaps as well. it may not be court noted, but we are seeing steps from hong kong. this is after we heard from the financial secretary warning of tsunami like shocks to the impact, the coronavirus only worsening the recession after months of political saying that it goes beyond retail and tourism. he says the budget shortfall is expected to continue for some time. meantime, the singaporean government expected to deliver

on a strong budget on tuesday. analysts are predicting the biggest a djitte deficit in two decades. it could be around 1.5% of gdp. numbers ating those close to three times more than saw during the sars epidemic and what the government spent at that time. the government prime minister warning the economic effects of the worst in what we saw in 2003 . we saw a jump of cases at some the five in singapore. let you go, what happened to the diamonds cruise ship that was the largest cluster of infections outside mainland china, right? yvonne: we just heard they will start a vacuum it in passengers from the diamond princess. they have the largest group from america, around 600 people. we heard similar measures from

canada. hong kong as well. there are 70 new cases, bringing the total to triggered 55 passengers. ship, theyet off the will be subject to a quarantine for 14 days. it could be some time before these folks and up going home. shipe meantime, another docked in cambodia. an american woman tested positive for the disease in malaysia. there are concerns she could have exposed other people on board and about to head home. this seems to be confusion about virus testing on the ship, it also questions over why has taken japan so long to test everyone on the diamond princess as well, right? askne: yes, you hear people

why weren't the passengers onboard quarantined before they left? that was a big concern and prevented thehave spread of this one-woman onboard. we. we're hearing from carnival cruises, they believed they are --perfect shape and help health. even when it came to the diamond say the, they quarantines in cruise ships are not quite effective in the first place, given how we have seen another 70 cases on the cruise ship, confirmed cases. the effectiveness is not good as well. everyone is weighing on what the safest option is. yvonne man anton mckenzie. thank you to you both. atwill take a closer look president xi of austria's response. we will speak to richard "xi: the the author of

backlash." >> and now we have more first word news with su keenan. in an interview with bloomberg, managing director of the imf, kristalina georgieva, pushed for more structural reform and budgetary measures to combat the effect of the coronavirus. she said it was premature to assess the economic impact of the outbreak, but praised china process efforts to contain the emergency. make projections. we operate scenarios. we are still hoping the most likely scenario would be relatively rapid containment of v-shape dropping economic activity in china, and a very fast recovery.

of in thailand, the number 5g permits has raised five point $3 billion, more than $1 billion -- about a billion dollars more than expected. the winners will not be announced until later. the first time for investor reaction will come when the markets reopen amid concerns that high license outlays could burden balance sheets. thein the u.s. and europe, question of technology is becoming a question for data. a bipartisan delegation headed by secretary pompeo and house rammed homey pelosi their concerns during a munich security conference over the weekend. officials warned that european cooperation with huawei could undermine washington's relationship with its allies.

global news for hours a day on air on and quick takes by bloomberg powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. thank you. our guest willn, tell us why he is optimistic despite a sharp contraction. >> and it has been a difficult time for companies related to the consumer. our next guest tells us why he is positive on china's e-commerce stock. this is bloomberg. ♪

shery: this is "bloomberg markets asia." i'm shery and a new york. strout. am haidi

ofironmentalists are warning an impact, but our next guest is positive on china for the long-term. let's bring in our guest. great to have you. would you say this is a buying opportunity? yes. i think the impact on the economy will be very severe and we probably will not know until mid-march when full resumption occurs in china. the early signs of pretty positive. people are returning back to work. china is doing a good job trying to contain the virus. the consumer impact might be short-lived. against this, you have a situation where the chinese government is trying to ease measures. the chinese fiscal deficit to gdp is potentially close to 4% or 5%. 2020, they are looking at other measures to stimulate growth era that could be relaxation in the

property market, relaxation on restrictions, more liquidity funding for developers, which will probably have a positive impact on the consumer in the near term. companies like alibaba are well-positioned for long-term growth in china, particularly the cities of china. that is not going away. yes, it's destructive for a quarter or two, but long-term fundamentals remain robust. e-commerceen up new categories such as fresh fruit, which alibaba is well-positioned for. so -- teedo things that were interesting to me, how across the board alibaba's business was affect it, but also how it changes the spending patterns of the chinese consumer, right? i want to bring up this chart. still in the u.s. we are seeing

as a trendvaluation at the moment. ,iven the recent price action do we see the u.s. as basically the safe haven, the continuation of u.s. exceptionalism, but there seems to be a flight to safety for u.s. equities right now? yes.: one of the things about a chart like that is the constituents, the constituents within asia n equities that are low on pe austria's. you think about chinese banks that are trading on quite low pe's. perhaps not the most interesting businesses over the next several years when you talk about china, in payments in with alipay taking more share over time. i think they reflect what is happening in the market. having said that, i think that there are interesting

opportunities in emerging markets. i think about the e-commerce names in china versus the u.s.. there is a rebel to -- there is a relative differential there appeared at the moment, chinese economic growth is uncertain. it does create a little bit of a flight to safety, as you said, which a lot of those u.s. product names are benefiting from the last couple months. but i think as we roll forward, it if the chinese economy does recover and you have added all of this fiscal and monetary stimulus, you could have much in the secondts half. all of this is whether it will morph into something more minor. haidi: you mentioned chinese banks. take a look at this gtv chart.

you say chinese banks being really cheap compared to peers and the spread widening in the bottom panel. economy werehinese to recover, would you be willing to get into this sector when you arising as debt continues to pile up across the economy? banks areh, chinese an interesting bunch. dot chinese banks don't retail lending. so other than the big five and a banks, mostsector chinese banks are heavily corporate. but i think the real interesting opportunity in the chinese financial system is lending to retail and also off the back of lending to retail, what kind of you can alsovices collect off that. there are a few banks i think are very well positioned in that

case. bank.ve the peon we're quite positive on them and they are 55% controlled by their group and that's a good way to play that. i think what will happen over see alipay, pin pay will take more share. they are like the paypal of the u.s.. these two giants are effectively oligopolies. it's actually quite nice industry structure, very conducive for profits and can be very rational. it could be quite substantial going after the profit pool. it's an interesting opportunity

over the next two years. the financial services sector could be a surprise over the next couple years. haidi: yes, and tencent has been really underperforming because of government regulation. their mobile games were not being approved. how much of an opportunity is this for them, despite the fact rate,ou have this out that all of their businesses are not as exposed to the virus and virus-related slowdown? sunny: yeah, sure. you are absolutely right. tencent has been this great platform that other businesses have benefited from, whether it pbd or someone else. tencent has to look at the value .hey are creating elsewhere one of the big beneficiaries of

the 5g rollout will be mobile gaming. you have a situation and we think that 5g will be more of a priority of the government's given what has happened as it is quite easy to get the state enterprises to get on with it. but a lot of meant to low-end handsets will be capable of games that ared potentially on the cloud in mobile gaming could be a bit thin -- beneficiary. -- andncent could tencent could be a beneficiary of that outcome. it is about monetization. fromhing that is clear tencent, they are also a big beneficiary of -- let's call them off-line to online e-commerce.

interactions through we chat which tencent does not monetize all that much. that could be a change if the company wants to start to utilize that opportunity through ad revenue and take rates. that's an opportunity for tencent. meanwhile, there is the tech business on the side. and other allah ballistic -- it is still the market structure of an oligopoly. haidi: thank you for joining me. ceong up next, the acting explains the alliance with nissan in 2020. this is bloomberg. ♪ loomberg. ♪

renault posted its fourth

annual loss in a decade. tried to reassure investors by planning a review of chinese assets and exploring plans to cut costs. >> it has been a difficult year. to be honest, we suffered for many reasons. one reason being the markets. the markets have been tough. especially where we are strong, argentina, turkey, russia. and we also suffered for internal reasons. first, internal governance. it has not been a very nice trip over the last 12 months, but also high costs in r&d, for example. it's not such an efficient alliance. content in our car

which we have not been able to fully price to the customer. is it going to get worse before it gets better? it will get worse in 2020 to be honest as we suffer from volatility in the market, from capex regulation. nevertheless, we are engaging in heavy reduction plans to rebound. today tonounced billion euros of cost cutting. details are going to be provided in may. plants not excluding any closures. that is a difficult strategy politically, isn't it? >> yes. but we were in die mention a lot more volume than we have. ,hat we see is as years go by there is growth on a year on year basis. we cannot have such a capacity

installed. so we are reviewing that and trying to find out what would be the best footprint for the alliance. that was the renault acting ceo. let's get you the latest headlines. toyota will partly reopen plants in china to bring back some of the capacity shut down because of the coronavirus. will restart on monday. operations in shenzhen will restart on tuesday. a fourth plant will start next week. japanese carmaker honda also plans to renew china operations in coming days. >> has of las vegas plans for an electric car dashed has loved -- cara's transport electric went in berlin is under threat. there is a challenge by

environmentalists. the decision is expected in coming days. >> coming up next, the man who wrote the book on china's government -- richard mcgivern -- richard mcgregor. this is bloomberg. ♪

[ fast-paced drumming ] [ fast-paced drumming ]

this is bloomberg markets. the number of coronavirus cases has passed 70,000 people. this is the fourth death outside of -- this as the fourth death outside of mainland china was reported over the weekend. the number of coronavirusa taxiy had carried three passengers who were returning to the country from china, hong kong, and macau. among thosef cases on the diamond princess cruise liner has soared, with 40 americans on board confirmed infected. boardyear-old american on another cruise ship has tested

positive for the coronavirus, fanning fears that thousands more could have been exposed. the woman was tested in malaysia, where she had flown after disembarking in cambodia with more than 2000 other passengers. weeks inspent two limbo, being turned away by five different ports before cambodia allowed the ship to dock. area, hong kong, singapore pledging extra fiscal stimulus to counter the economic hit from the coronavirus. sunday, china announced measures which include a lower corporate tax. in hong kong, the finance chief warned of a shock that may lead to a record budget deficit. singapore is set to unveil a measure this week as it faces its biggest budget gap in two decades. finally, to thailand. the countries auction of mobile permits has raised $1 billion more than anyone expected.

was involved in the bidding process. although the winners will not be announced until later, investor reaction will come when the markets reopened amid concerns that licenses could burden balance sheets. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. we are seeing a bit of a mixed picture with the fx 200 -- the afx 200. this is coming from a three week high. gains inur sessions of our being dragged by financials and communication stocks. kiwi stocks are unchanged. nikkei stocks pointing higher. fourth-quarter's gdp numbers. they probably contracted sharply

in 2019. u.s. futures, up 0.1%. the session was mixed on friday. we had positive u.s. retail data, at the highest level since 2018. a mixed picture when it comes to the new coronavirus infections. let's stay on the markets as we begin another trading week in asia. david ingles is joining us. investors on the coronavirus, but also on policies, especially coming from china. david: good morning. if investors had a third eye, it would probably be on the moving target on what the economic impact is. this probably has to do with the second point you are making. -- citint is saying the is talking about the mark.

i am not saying they are wrong. what i am trying to point out is it is perhaps not the most complete way that one would try to measure risk in the markets. i am not hitting on citi at all here. we will hear news coming out in terms of china shutting down hubei province. they will be telling people to stay at home. while it is probably a good indication for the trajectory of when this goes away, it does not tell us how bad the economy will be affected because that is still a moving target as we speak. haidi: is there anything specific you are watching today out of china? david: prices are coming out from january. typically, that is when people go out, especially when they have time.

we are getting, the prime rate out of china. that is expected to show the downward pressure policymakers are putting on the rate market as well. we will have to wait and see. later today, we are hearing from the shanghai exchange that they are given more freedom and with 70 companies needing to disclose things like earnings. it is a moving target. -- it underscores the point of the story. shery: despite the optimism we have seen across equity markets, the skepticism is shown in commodities markets. goldman sachs slashing the price target for copper. david: $5,900 is what their target is. base base case is -- their case is the virus story is

contained in the first quarter, but demand will see a significant demand shock as well. 300,000 is there next demand -- 300,000 is their next demand. markets elevate, bond markets would have yields. thank you for that. david inglis coming out of hong kong, looking ahead to the open on monday morning. we will continue with our top story. the coronavirus outbreak has been described by some as the biggest crisis yet for chinese president xi jinping. authorities have been criticized of doing too little, too slow to react to the virus. let's bring in richard mcgregor, here with us in sydney. great to have you.

i want to talk about quotes that we both read from the professor, who i understand has been placed under house arrest and has had the internet taken away from him after putting out this essay, being heavily critical about the political structure, saying the chinese political system turns every natural disaster into an even greater man-made catastrophe. is saying ishat he has to putre of it the preservation of the party above anything else. an incident like this ends up being far worse than in any other country. are a lot of big issues which will come out of the coronavirus. one is the economy, but the other is what impact does it have on the chinese political structure? hisheory, xi jinping and years in power has attempted to perfect that.

he hascentralized power, dictated the process, how the localities should talk to the center and the like. in theory, the process he has put in place, reporting up the line, not saying anything out of line, has been part of the cause of the way the virus has spread. haidi: did this two week delay about when the province finds out about something and when they can say something, they need aging's approval -- they need beijing's approval? weeksd: on january 7, two before he made the public announcement, the public bureau discussed the virus. we don't know what level it might have been. it might have been 21 out of 30 agenda items they were looking at that day. the whole issue of governance -- it is a terrible word, it can mean anything to anyone -- but xi has emphasized this. governors ande the process of how they managed that did not work, and has made

the situation worse. haidi: what is interesting and productive lives you have something like this, clearly a struggle on behalf of of those census to control the message and across the internet and from these prominent academics. but a lot of people say this was a crisis from regime change. is it that much of a threat to the party? richard: i don't think so at all. it may corrode their legitimacy, or it may, particularly if the impact is sustained, we don't know. when we talk about regime change, there is no loyal opposition waiting. i think people should be very cautious about that. and including how long it affects xi jinping's longevity, we just don't know at the moment. shery: we still have seen perhaps not organized

opposition, but we have seen during this outbreak a doctor speaking out, who unfortunately passed away. we have seen a few video bloggers coming out and showing the public, trying to show the public, what is happening at ground zero. now reports that they have disappeared. if there is some sort of opposition in china left, where will it come from? richard: that is a very good question. therek under xi jinping, is not even any opposing groups, as opposed to a single opposition, because it is difficult for anyone who is critical of him, and there are a great number of people on a lot of topics. they cannot organize. it is isolated voices. what has been interesting about the coronavirus is it has been sustained criticism, not just of xi, but of the system generally from a range of people. on this occasion, the criticism

we hear has all been focused on one single thing, and that has made it much more powerful. that is why at the moment, the case you mentioned, the vloggers being detained, we are seeing less of this. the system is starting to tighten up. see thes we system tightening up, we see top chinese officials being removed. is this enough to keep the blame down there and not spread the accountability up toward xi jinping? richard: that is the most interesting question. you often get this dichotomy. i think that is very wrong. as you say, we have the first people held accountable in the health commission in wuhan. now the party secretaries have been sacked. the very interesting question is, is anybody in the center accountable? it certainly appears these

cases, the early cases, late december and early january, were be reporting -- were being reported up to beijing. the extent was hidden in some respects. i don't think it was true in the chinese media that beijing knew nothing until late january. i am very interested to see how much -- how far off the accountability goes. at theif you take a look doctor who died who was one of the first whistleblowers, and that has created a real firestorm of criticism and grief but ifchinese internet, you look at the latest numbers, around 1700 medical health care professionals that have been affected, is there a crisis in the sense that this desperation from some of these professional sectors, doctors, lawyers, academics, that are struggling with the system in their own way? richard: that has been another

fascinating aspect of this crisis. doctors,rs want to be the lawyers want to be lawyers, journalists want to be journalists. in western societies, more broadly speaking, they are independent centers of expertise. in china, no one is independent of the communist china. in the case of dr. li, he was sharing information amongst his professional colleagues and he was shut up. that has a longer-term impact. the impulsive xi jinping is less openness. how do you manage that openness? it is going to be very interesting to see whether xi himself -- he has to set the tone. that changes how he deals with his expert groups within the chinese society and economy. indi: one of the points made the essay is the threat is coming from home. for all the rhetoric and

propaganda about the u.s. trying to destroy china's economy with the trade war, what is the that this is a homemade bread and the political reaction is endangering it? -- that this is a homemade threat and the political reaction is endangering it? richard: it is what you would expect to have the chinese propaganda about, western countries taking advantage of it, trying to weaken china. this is an internal issue for china. they have incredible strengths for how to deal with that. some may not agree in quarantining populations. it has also shown weakness in the chinese system as well. i would hope we will see the conversation in china focus on that. haidi: 760 million people under some form of lockdown. great having you here.

richard mcgregor here in sydney. coming up next, japan's latest gdp numbers. we get the outlook from our guest, who great says a slump is inevitable. this is bloomberg. ♪

we are just a few minutes away from getting the latest gdp numbers out of japan. fourth quarter economic growth is projected to slide, with the coronavirus adding further challenges. our guest joins us from tokyo. it seems a negative quarter is inevitable at this point. we have the tax hike, consumption being hit, experts being pulled down by external demand. but you are saying this could be a buying opportunity. tell us why you think this could be a positive, and there could be light at the end of the tunnel. this ishe realities, october, december, very much

backwards looking. in the current quarter, generally to march, the negativity of the coronavirus is going to probably force a technical decision in japan -- a technical recession in japan. unlike all the other countries, japan already took the countermeasure because prime minister abe already has the supplementary budget. may, publicapril, demand will add as much as 0.7%, 0.8% points to gdp. that will give you the on-ramp to recovery. shery: yet, you are still expecting a technical recession. jesper: yeah, absolutely. we get the data in a couple minutes for the october-december quarter. that will be negative. generally to march, likely to be negative as well, particularly with consumer spending here in japan. the underlying strength you got

from business investment and consumer demand because of wage growth is still there. come the april quarter, this is a japanese economy that could be growing by 4%, 5%. are also expecting declines when it comes to trade later on, as well as orders. given the imf is calling for coordinator doctrine to counter the economic impact of coronavirus, is it time for japan to consider structural reform? the countermeasures from the imf, that is something that needs to get set. structural reform is ongoing here. look at the wave of mergers and acquisition going on here. we do start to see industrial consolidation, so the private sector is going ahead in making japan a more efficient and profitable industrial sector.

we are seconds away from gdp numbers. as you mentioned, we had private inventories that could potentially support the economy, according to bloomberg economics. as we discussed, higher sales tax, disruptions from typhoons. analyzed gdp growth. a contraction of 6.3%. these are the preliminary numbers, but they look really bad compared to estimates of 3.8%. four is also disrupting quarters of growth we have seen for the japanese economy. quarter on quarter, negative 1.6% contraction, also bigger than expected. also inflation increasing from the previous quarter. we are seeing business spending in contraction territory.

which is a of 6.3%, bigger contraction than the estimate of around we .8%, and also holding four quarters of growth. we are not seeing nikkei futures under pressure. the japanese yen at the moment unchanged, still holding about 1 89.82. badnew it was going to be a quarter, but did you expect it to be this bad? what happened? jesper: no. it is clearly sticker shock here. we have a much worse than expected composition. you do see all components of demand collapsing. that to we can blame the sales stack. but from a expected,

policy perspective, remember that prime minister abe already did take the countermeasure with this massive fiscal spending package. from a policy perspective, yes, the numbers are worse than thereed, but is something new that is going to be happening? i think the answer unfortunately is going to be no. haidi: this is the biggest contraction since 2014. does this change what we expect from the bank of japan, if the coronavirus impact widens? there ammunition is pretty depleted -- their ammunition is pretty depleted. jesper: i think the bank of japan is going to do absolutely nothing. it is one of the most uninteresting central banks in terms of the leeway to do additional policy measures. if we yen were to surge, were to get a collapse of the u.s. dollar, a collapse of the

chinese currency and the yen were to surge past the dollar, i think we would get an additional round of quantitative easing. i think even with today's gdp sticker shock negativity, i don't think we will get any action from the bank of japan. haidi: what impact do you see on the supply chain? this is the worst rating on record. this is the stuff you would expect to see after a sales tax hike. let's stick with the coronavirus aspect. in terms of the supply chain, how much impact would you expect to see detrimentally? 10%er: you find that about to 13% of the various components that the japanese industry depends on is made in the people's republic of china. there will be some negativity that comes through. but ironically, that is actually good news because it will remove some of the lot of excessive

ended -- some of the glut of excessive inventories. assuming the coronavirus will move out once we get to warmer weather, toward the springtime, the temporary supply, the contraction we actually get, is quite good news because it cleans the pipes and sets us up for a good slingshot of positivity once we move toward the summer. shery: why is private consumption so weak? declining 2.9%. jesper: come on. shery: we saw that domestic to japan -- we saw that domestic demand was pretty good. is full of data that goes into it. consumption is complete and utterly explained by the fact that the consumption decks went

-- went to 8%. we had the winter bonuses contracting. on the income side of things, we see weakness. is sticker shock there, but really point your finger at prime minister abe and say, you hiked the tax, you knew it was a risk, here we go again. a big negative number for gdp. shery: when will the impact of the massive stimulus package actually start to kick in, physically, business sentiment, consumer sentiment? what can weng, expect for wage negotiations in the spring? you talked about wages as well. jesper: you are putting your key point on it. the demandpackage,

positive effect, should start to come through in the months of february through march. in the data, there is about ¥7 trillion of public works spending. there was a lot of destructionre after bad weather, the bad typhoon damage. that should start to lift overall sentiment later this month, early next month. haidi: how do you assess the japanese government's reaction and handling of the coronavirus issue, given that we are in an olympic year? good.: so far, so everyone is scrambling for new ideas. obviously the cruise ship is a tremendous challenge here. but for all intents and purposes, the aims is to have the -- the aim is to have the olympics right on schedule and

it will be a great party. [laughter] see an impact after the olympics are over? what you call the olympic cliff, in japan? jesper: this is where it gets very interesting, because japan has this very dull and boring economic outlook, where the economy was going to grow between 0.5% and 1%. now with the coronavirus, we are going to get some real volatility, which is very exciting. the first half of the year will be negative. the second half of the year, ironically, is actually going to be much stronger. shery: always great having you with us. jesper koll joining us from tokyo. japan fourth-quarter gdp numbers plunging 6.3%, a much bigger hit

that we had expected. take a look at nikkei futures under pressure, 0.2%. although the japanese yen has not moved much, trading at about 109. this is bloomberg. ♪

good morning. asia's major markets have just open free trade. shery: i'm shery ahn. looking to bloomberg markets: asia. -- welcome to bloomberg markets: asia. [laughter] -- ♪ shery: our top stories this hour, the province at the center of the coronavirus outbreak has reported 100 more deaths and nearly 2000 new cases, breaking a downward trend in infections. china has pledged extra fiscal stimulus as it struggles to control the outbreak.

other hard-hit governments are set to follow suit. japan's gdp takes a significant hit. the figures just out shows a fourth quarter contraction of 6.3%. a shocker of a japan gdp. but let's take a look at singapore gdp numbers. the singapore economy growing by 1% on a year by year basis. this was in the fourth quarter. 0.8%was faster than the that economists expected. on an annualized basis, the singapore economy expanded at 0.6%. we were looking at growth of 2.2% in the previous quarter, but that is a pickup from the 0.1% we were expecting. this is key in terms of the coronavirus threat. gdpall of 2020, the forecast was downgraded to a 0.5% to 1.5%f

growth. the singapore budget is due to be delivered tomorrow. we could see the biggest budget being delivered since the outbreak. it is key to point out, the government is vulnerable to supply chains. it has heightened its connections to china in terms of tourism, in terms of trade as well. we will watch very keenly as to what that fiscal gap will look like once we get that tuesday 2020 singapore budget delivered. gdp numbers for fourth quarter, not at all bad on most indicators. a tick above expectations. let's take a look at markets. there is a real blow coming from the fourth quarter japan gdp numbers being such a mess. asian markets are just coming online. let's take a look at markets. our reporter is with us. reporter: it was a real blow. we are seeing equity markets

react to that. you see japanese equities continuing to trend lower after closing lower last week. you see the nikkei and the topix both near 1%. the nikkei continues to test its moving average. that is a technical line to keep an eye on. you see the japanese yen keeping steady. the safety bid did start to evaporate. also 10 year yields yielding negative three basis points, holding steady. andh korea coming online, we do see slight weakness in the buton as well, down 0.2%, not nearly as much as japan at the moment. we also see strength in the cost be last week -- in the kospi last week. this after closing last week just china of fresh record highs. at the same time, we see key stocks roughly flat on the day.

let's get you a look at your fx markets. we see the aussie dollar continuing higher. this after a gain last week. that was the first gain in seven weeks. continuing to the upside for that risk currency. at the same time, we see the offshore yuan on the stronger side. offshore markets are closed for holiday. the last time the 10 year yield traded was at 1.58, right in the middle of the range. after, u.s. equities closed at a record high on friday. shery: thank you. the province at the center of the coronavirus outbreak has reported just under 2000 new cases, breaking a downward trend in infections. that as china vows more this skill stimulus measures -- more fiscal stimulus measures. let's go to tom mackenzie in beijing.

let's get started with you, because you have been around some areas around beijing. how do things look on the ground that were weak into this outbreak -- now that we are a week into this outbreak? tom: it is eerily quiet. we have gone to some villages around the great wall. many of the roads and on the outskirts of beijing are sealed off by local village party committees, who test your temperature or stop you altogether from driving down those roads. the restrictions are in place on the outside of the capital as well. that is a major hit for that economy as well. many farmers who turned their hands to tourism now seeing a major slump in revenues. some say they can carry on for one or two more weeks on the cash piles they have, but it will not last that much longer. they are not getting help from the local government. in the capital, many people are trying to get back to work. many are still working from home.

we did see a tick up in some of the numbers coming out of hubei. that was an increase from the previous day. it does call into question a claim by a health official in wuhan who said this was starting to reach a turning point, the virus. we are seeing 1765 deaths . of the about some restriction measures in place here at around the chinese capital. in wuhan, officials have told people, and this is a population of 60 million, they are not allowed to leave their homes unless it is an emergency. businesses largely remain closed. you can think of the economic impact as they try to continue to ensure the virus does not spread beyond that province. we have had cases in most other provinces, but they want to keep it relatively contained. on the economic front, we heard

from the finance minister. he wants to see more cuts to fees. that calls into question the budget restraints, especially at a local government level where before the crisis over half of local provinces were saying they would see less revenue than they saw last year. whether china has to raise its deficit ratio is a question economists are grappling with. we will worry about the consequences later. yvonne, we are also seeing similar rhetoric from hong kong and singapore. singapore just coming out with its gdp numbers, which were not bad, but noticeably revising down its 2020 growth forecast. the singapore budget is due tomorrow. we are also hearing from hong kong. wider fiscal gaps around? yvonne: it seems they will be persisting for some time. morning ofekend,

these tsunami like shocks to the economy, this could worsen the recession here in the city after months of political protests. the government proposing 3.2 billion dollars in fresh funding to try to offset the bloke to the economy -- the blows to the economy. the effects could be far beyond what we see in food and beverages, retail, and tourism related sectors. singapore is said to have a strong budget on tuesday, despite the gdp numbers looking better than expected for the fourth quarter, because it is about 2020 now. they are predicting the biggest deficit in singapore in almost two decades. they are forecasting 1.2% gdp. those numbers are at $500 million. of those are three times more than the singapore government spent in 2003. the prime minister saying the economic impact already seems to be worse than what we saw during

the sars epidemic. politicalterms of the temperature check in beijing, how is gdp responding to what has been criticism and backlash -- how is xi jinping responding to what has been criticism and backlash to his handling of this crisis? there: there is -- tom: tom:, you had the publication of a speech reportedly given by xi jinping on february 3 where he said he has been in control of measures to contain the virus in including january 7, written and verbal commands to local officials, and also saying he was the one who said that under fo should be put lockdown. this could be published to show the team is being decisive, taking control after criticism that the president had been in termsstep back

of how this unfolded. it does lead to the question of why were there no public statements from january 7 earlier in terms of what was happening with the virus? he did not talk about this until january 20. it potentially leaves him open to criticism. he did not take the opportunity. it is a reminder that there is still anger over the handling of this virus, particularly the death of the whistleblower dr.. this is not just an economic or health care issue, but also a major political challenge as well. shery: the largest cluster of infections we have seen outside mainland china has been on that cruise ship docked in japan. yvonne: the latest is countries like the u.s., canada, hong kong are moving to evacuate passengers off that cruise ship. this is after we saw an

additional 70 new cases on board that vessel. the fact that they are doing this even before japan's so-called 14 day quarantine was supposed to end on february 19 does show that perhaps these governments are not thrilled with how japan has responded to this health crisis so far. the we are learning at american side is those who tested positive will be sent to hospitals in japan and be treated. those who tested negative will be able to jump on these charter flights, and once they do arrive on u.s. soil, they will be subject to a 14 day quarantine at u.s. military bases in california and texas. those who chose not to be on this round of flights, they will stay in japan 14 days, go through testing. it may be time before folks get to go home, given that not everyone on board has been tested yet. it does take some days to get the results out. haidi: yvonne man in hong kong,

and tom mackenzie in beijing, joining us with the latest on the coronavirus. you can keep up-to-date when it comes to the developing coronavirus story. you can just go to the terminal function on your bloomberg. you will find our quicktake landing page with the latest headlines from the bloomberg news room, as well as a look at how specific companies and stocks could be exposed. that is at vius on the bloomberg. as we kick off this new trading week, our guest joins us. we just got the singapore fourth-quarter gdp numbers. the figures themselves were ok. we are looking at downward revision in growth. japan's were horrid in terms of market reactions. we are already starting to see in the futures market how the japanese gdp numbers will be taken, right? guest: right.

really, this is about how the countries are situated heading into the coronavirus situation, since these were before that. you can see that japan is in a weakened state anyway. they may have more trouble coming into the next quarter, whereas singapore seems like it might be in an ok situation, but there is a difference between coming in all right versus coming in already weakened and markets are definitely going to be worrying about that, as you can see from the reaction in japanese stocks. shery: not to mention that bonds are getting abused as well. what else are markets watching? joanna: markets are definitely going to be watching for what actually happens with the what singapore says in

its budget, how people react to what china is talking about, what hong kong is talking about, how coordinated people feel, any assistance for the economies. everyone is watching to see if the federal reserve will say anything. they are the giant in the room, that now they will be watching with the regional economies are going to be saying, the regional central banks will talk about doing. ossinger joining us out of singapore. singapore saying they expect the full impact of the coronavirus to be felt in the first half of the year. let's get you the first word news with su keenan. su: we are going to start with the latest from the imf. the head of the imf says a lack of reform is pulling back the global economy. in an interview with bloomberg, kristalina georgieva argued for

more structural reform to boost monetary policy in light of the uncertainty surrounding the coronavirus. implored them to assess the impact of the upright, but praised china in its efforts to contain the emergency. >> do not make projections. that theill hoping most likely scenario would be relatively rapid containment of the dropping of been withctivity has a fast recovery. su: the fight between the u.s. and europe over chinese technology is becoming an issue for nato. delegation leds. by mike pompeo and nancy pelosi brought home their concerns during the munich security conference over the weekend. the officials warned that european cooperation with huawei

could undermine washington's relationship with its allies. to thailand, the country's auction of 5g mobile permits has about $1.2 billion, billion more than anyone expected. advanced info and the state carrier were involved in the bidding process. although the winners will not be announced until later. first signs of investor reaction will happen when markets reopen, amid concerns over expensive license relays. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. we are just getting another report from south korea. south korea confirming one more case of the novel coronavirus, after an additional case was confirmed on sunday.

that brings the total to 30 cases in south korea. that country has close economic ties in china, leaving it quite vulnerable when it comes to visitor flows as well as supply chain disruption and trade disruption. it could lead to another cut from the bank of korea. we will get you details on that story as they come to us. we will be, discussing how the outbreak is affecting china's property sector. chinese home prices are due out later. shery: plus, signs of the virus abating will not be enough to push brent above the $60 a barrel mark. our guest joins us next. this is bloomberg. ♪

we have not seen this divergence between the rebound in equity markets and the slump in commodities.

the chart showing you exactly that. wti under pressure again after falling for the first time under five days. vandana s for more is hari. always great having you with us. we saw them recovering some ground last week, but it remains in bear territory. could we see a rebound anytime soon? vandana: what we saw last week it cautious optimism that if is not peaking just yet, it is not becoming any worse, and the coronavirus mostly so far appears to be contained within china. that cautious optimism, in my view, is not enough for crude to recover. it is in bear territory. whereis nearly 18% below it was just before coronavirus stormed onto the world stage.

what could take it back to the mid 60's, i believe would be a deeper cut by opec and its allies. shery: with this outbreak of coronavirus, how much of the oil demand lost through this period could be recovered once the outbreak peaks? seen quite aave wide range of estimates. it is without a doubt that china is the second largest oil consumer. its own consumption has been hit severely. what the market has been trying to do over the past couple of thes is estimate what is impact distributed over the first and second quarters of this year. close to half a million barrels per day of chinese demand has been lost, destroyed over the first quarter. it would probably take a different view from what seems to be the market consensus, a v

shape or hockey stick recovery in chinese economic growth and oil demand growth. the first quarter, the worst hit. the second quarter, probably coming back to normal. the second half of the year, everything hunky dory? i don't think so. i believe the repercussions of the damage being done will be felt quite a lot in the second half of this year within china. feel that overall global economic growth might be quite anemic in the second half of the year as well, which means opec, will be reassured that second half is all right. i think maybe they would need to tighten their belt for the rest of this year. bit ofit seems like a wishful thinking if you look at the numbers. a lot of the comparisons are comparing to sars, which was 17

years ago. there was not quite the interconnectedness in reliance on china. are we underestimating the amount of disruption we are likely to see in supply chains? vandana: we probably are. we are probably underestimating world,inese share in the oil demand for china was about 5.5 million barrels a day in 2003. oil demand.f global today, it is 13 million barrels. absolutely, i think chinese ability -- we are hearing about policy support, fiscal and monetary support, but china is in a very different situation now. people are already acknowledging that the room for monetary support is quite limited. a lot of the really small businesses in china, which are

laying off people, may never be able to get back on their feet in the second half, especially in the retail space. canimpact of that, all we say with certainty is it is very hard to calculate. i would caution against oversimplifying it or comparing it too much to sars. i have a feeling unfortunately it is going to be far tougher coming out this time. haidi: always appreciate your time. vandana hari, founder of vanda insights. next, more to come. this is bloomberg. ♪

haidi: let's take a look at the set up this monday morning. cautious optimism, or just plain

caution is the name of the game as we get the trading week started. u.s. markets will be closed on monday for president's day, so not much on the stateside. the nikkei, we are in positive territory, but trading deep in the red. after japan's gdp numbers underperformed expectations. it was the fourth worst reading of all time, and the biggest contraction since 2014. it doesn't bode well, given that we have yet to see the impact of the coronavirus across the asian economy. reporting that another coronavirus case has been confirmed, taking that tally to 30 in the country. one of the lesser effected economies when it comes to the number of cases we have seen. in australia, we are seeing downside of 0.3%, despite the aussie trading higher on the fx fund. new zealand looking pretty flat

at the minute. we have had lots of data this morning, including singapore and japan gdp. but we are looking at the fiscal side of things, particularly when it comes to singapore budget being delivered tomorrow and china home prices today. this is bloomberg. ♪

we are seeingry: a month on month growth of 4.6%. this is surprisingly stronger than expected. the expectation was for contraction. we have seen a positive turnaround at the end of 2019 because of the pharmaceutical shipments, but they tend to be volatile in the cycle. we were expecting a contraction, but for january, we are seeing growth of 4.6% month on month. year on year, a contraction of 3%, but not as big a contraction as we had been expecting. in the previous month, we saw growth.

falling 13% on year for the month of january. this is also easing declines. we have seen declines of more than 20% for the past two months for the month of january. those have declined for electronic exports, only up 13%. we did get the fourth quarter gdp numbers coming in stronger than expected for singapore, so we have more positive numbers for the export sector, with month-to-month numbers for january growing 4.6%. there is still a lot of caution out there, especially with the outbreak of coronavirus in the month of january. that is when we started to see those headlines. we will keep a close eye as the monitoring authority of singapore says they are changing their status to remain unchanged. we will be watching closely what they do with the currency trading, because they have said in the past they could potentially allow more weakness there.

let's get a quick check of our markets in asia. our reporter joins us now. reporter: at one point, the topix was down 1.5%, but very much a rough start to the morning. you look at the nikkei, plunging decisively. and the nikkei down. the kospi down right now, but still just 1.5% off those pre-coronavirus levels. take a look at the commodities, because we are not seeing nearly as much reaction here. a change from what we had seen the last couple of weeks, when we saw outside moves in the commodity space you look at oil holding at $52 a barrel, roughly flat after gaining last week for the first week. copper moving higher once again, continuing its gain. last year, we saw copper habits best week since mid-december. gold moving lower.

you would think if there were worries about growth you would see people moving to gold, but that is not the case so far today. just one more chart i want to show you, the msci all country world index. this includes emerging market and develop market regions. it has been a trend higher. 15 of the last 19 weeks. year andover the last trading near record highs. there inrah ponczek new york. our bloomberg anchor david inglis joins us from hong kong. investors are keeping one eye on increasing policy support, not just out of china, but singapore and hong kong. we are watching whether we will see some stabilization on the virus cases. david: those two things are very interesting. if you look across some of the

research notes coming through, thegroup has to do with trajectory is up. at some point, do we get the de-escalation? the other side, what is the impact on the economy? a very good example of that is a epicenter inhe terms of cases and for ptolemies. but hubei is escalating its restrictions and movements, everything from people staying home, from the usage of private vehicles. that is an ongoing story as far as the economic impact will play out. while people say the number of cases rising has been increasing slightly, that is not a reflection on a decreasing expectation of the economic jury is stillthe

out on that one. shery: it is a data heavy day. what are you watching in china? david: home prices are coming out in an hour's time for the month of january. certainly, to put it in context, the lunar new year is a very long holiday and people usually go out and shop around. that did not happen this time around. it will be interesting to see what those numbers look like. later on this week on thursday, we have the loan prime rate. something to look forward to in terms of policy support and pressure on rates. the downward pressure policymakers are putting on rates, we will see if that is reflected in those numbers on thursday. haidi: we have had some really interesting stock specific stories.

onwhat was one that surged in hong kong? david: the ticker for that is 1991hk. it was up by as much as 130% at one point. it is not a company that makes facemasks. statemente out with a to the exchange on thursday, which led to the rise, that they did receive an order for 5 million masks. going into the close, it was up almost 20%. something to watch today on whether or not they are in the business of making masks or if they are just making masks for their own employees. that is another thing altogether. haidi: david ingles in hong kong. let's get you the first word news with su keenan. su: we start with the global number of coronavirus cases. it is passed 70,000 people.

this is the fourth death outside of mainland china was reported over the weekend. driver who a taxi died on sunday had carried three passengers who were carrying travelers. the number of cases on board the diamond princess cruise ship docked in japan has soared, with 40 americans confirmed infected. andwhile, china, hong kong, singapore are pledging extra fiscal stimulus in order to counter the economic hit expected from the coronavirus. sunday, china announced measures, which included a lower corporate tax. in hong kong, the finance chief warned of a su niemi like -- a tsunami like shock. singapore is set to unveil a strong packet of budget measures this week as it faces its largest budget gap in almost two decades. an 83-year-old american woman on

board another cruise ship has tested positive for the coronavirus. this is fanning fears that thousands more could have been exposed. the woman was tested in malaysia, where she had flown after disembarking in cambodia with more than 2000 other passengers. you may recall, the westerdam spent two weeks in limbo, as it was turned away by five different ports before cambodia allowed the ship to birth. japan's economy shrank by the most in five years last quarter, fueling concerns of a recession as the outbreak hits. gdp shrank at 6.3% from the prior quarter. that was much today per the on the three point 8% decline economists had forecast. the supermed on typhoon. global news 24 hours a day, on

air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. the head of the imf saying she is hoping for a synchronized global response to the risk facing the world economy. kristalina georgieva discussed the coronavirus, telling bloomberg she sees a relatively rapid containment of the outbreak. she spoke with yousef gamal el-din. be -- today,it to china's sharing the world econom -- share in the world ecy is significant. world.the every dollar spent by tourists, $.18 comes from china. manufacturing firms, 28% of

manufacturing. the amount of reduction in activities inevitably are back on china. some of it would be translated to the rest of the world. again, we need to give it time. on the more positive side, we see china taking very aggressive measures for containment of the in importingso liquidity into the economy, the equivalent of $115 billion from people's bank of china, cutting interest rates, driving stimulus already in the direction of affected regions. my most important message here is a broader message. we do live in an era of heightened uncertainty.

we just saw a reduction of trade tensions and the coronavirus hit. yousef: i was going to follow up on that. we are just coming off the back of the trade tensions, now you have the coronavirus to deal with. on the imf level, what kind of tools are you looking at for potential synchronized response to mitigate the downside? >> we very much value the fact that when 2019 shaped up to be the worst year since the financial crisis, central banks went to a synchronized rates cut, and more monetary easing. what they have done is the equivalent of half a percent used. measures, afiscal

boost coming from countries. the moreissing is aggressive upswing in structural reforms. where we expect that if there was to be more attention, it should go. not every policy space is shrinking, and the reliance on fiscal measures, as well as on structural reforms to boost growth, ought to be stronger. wasi: -- shery: that kristalina georgieva with yousef gamal el-din. china promises to ramp up spending. our guest joins us to gauge the impact. this is bloomberg. ♪

haidi: home sales in china have been dealt a huge blow by the coronavirus. figures show transactions plunged 90% in the first week of february. joining us is liang hong, head of research and chief economist at cicc. we have seen the likes of these bestial -- these special promotions. if you take a look at the real estate sector, how much of an impact will coronavirus be, given that we are hearing estimates of upwards of $800 million under some form of quarantine or locked across the country? have ait definitely will very severe impact on real estate sales. construction work will be delayed. however, we have to keep in mind, february and march tend to be the lowest season for real

estate transactions. i think it is critical to watch how quickly the virus can be contained and how quickly normal activities can be resumed. if things start to get normal from march, i think a lot of the real estate companies can still recover or survive in the coming quarters. players thate weak have financial issues, that is more concerned, and that will depend on whether the government will give them a lending hand this year. haidi: what do you say is the impact on consumer sentiment broadly? that feeds into sentiment with the real estate market as well. it goes beyond just retail investors, but also looking at commercial properties, office buildings. do we expect to see wide impact? guest: i think at the moment, if

you look at consumer sentiment, even though people are concerned about the virus, if we look at online sales and some of the retail, stable stuff, it is still strong. keep in mind, the chinese consumers have a very big savings pocket. savingsl dig into their and try to bridge this over. the long-term impact, we are seeing more activities, even though china already has a lot of retail activities online. but i think this virus will show an acceleration of even more activity, like education, online teaching, even online medical services. a lot is being pushed online. i think that impact will see how much that affects commercial real estate going forward. are getting the latest

numbers out of china. this will be the national total for the coronavirus cases. they are reporting 2048 additional coronavirus cases as of february 16. the death toll raising by 105. latest gotten the numbers out of hubei province. nearumber of cases spiked 2000, holding the downtrend in new infections we have seen since accounting methodology changed. the number for additional cases coming in at 2048. when it comes to the death toll, rising to 1696. we have globally infections 70,000, with taiwan logging its first death, a taxi driver in his 60's. let me go back to liang hong and talk about the chinese economy,

because we are talking about these numbers coming out. we see the numbers rising when it comes to the coronavirus outbreak. how are property developers going to fend these concerns? we have seen that many of them don't have a strong cash flow situation. how vulnerable are these chinese developers? we areas you said, seeing the consolidation in the past two years. the weaker players with financial balance sheets are getting out of the industry, and the leading top 10 started to get a much bigger market share. i think that will accelerate this time. but i think the concern for employment at overall economy, i think the government in the short-term will try to pump more liquidity and support the larger players, even if most of them have a weaker balance sheet, and try to help them survive this

short period of shock. shery: china saying coronavirus to 705ave risen 48. 105 twoh toll rising by 1170. chinaeconomic picture in -- let's compare the economic picture in china to 2003 during sars. how much more severe could the impacts be this time around compared to 2003, when you look at the state of the economy? guest: we have been trying to distinguish the impact. distinguish the impact. it is bigger because the chinese economy is four times bigger than back then. in terms of the impact on growth

rate, it is still unopened question because the virus hit at the activity season. despite the criticism of early responses, the response was much faster than last time. last time, they took china almost five months to have a central government nationwide response to the virus. this time, it took less than two months. hitvity seems to have during a relatively light activity season during the year. resumeactivity starts to from march onward, and if they mostly lost in the first quarter, the impact will be much lesser than compared with sars. what does this mean for the pboc as they try to remain committed to financial stability and also committed to the campaign of deleveraging? they had the finance minister saying, cut taxes, cut associated fees.

. there will be a longer-term fiscal impact, but we can worry about it later on down the track. guest: i think the fiscal side, china had fiscal savings and a very different situation compared to developed countries. for the monetary side, when we look at how the pboc has responded, to use mostly short-term tools like pumping out liquidity using repos, i think that reflects their view this looks like a more short-term economic shock rather than long-term. they have not resolved it. cautious inen quite lowering the rates. this is so far the response. it could turn out to be worse than they expected. they have room to cut rates and cut reserve requirements. at the moment, it seems to be mostly using liquidity injection to keep the system afloat.

haidi: we are expecting a reduction in the prime rate as well. thank you for joining us, liang hong head of research and chief economist at cicc. technologyout huawei is threatening to drive a wedge between the u.s. and europe. we will discuss the implications next. this is bloomberg. ♪

the fight between the u.s. and europe over chinese technology is becoming an issue for nato. officials for washington have doubled down over there concerns of using huawei technology. julie schneider -- jodi schneider joins us now. didn't vice president pence and chancellor angela merkel clash last year? what happened this year? jodi: what we are seeing is a huawei fromttack on the u.s. side. we had mike pompeo, the secretary of state, but also nancy pelosi, the democratic leader of the democratic house representatives -- of the house of representatives, saying they are concerned about having huawei technology installed. mr. pompeo in tweets over the weekend from the u.s. ambassador to germany indicating that

european countries went ahead technology,huawei and they could be threatening their alliance with the united states. this is going into a new level of tension. last week, we saw the u.s. ring some charges against huawei, a statute from the past used to prosecute mafia leaders. ofhave seen a succession tensions rising on huawei. -- thely threatening u.s. threatening european countries, saying if you go ahead with this technology, don't expect the u.s. to treat the slightly. -- to treat this lightly. haidi: what are the implications for nato? obviously, it has been a rocky time for the alliance. there are structural issues still there.

jodi: this is not only about .uawei these tensions with nato have been rising from the u.s. side. obviously president trump has had an america first foreign policy, a go it alone policy, and he has done things in the past that make it clear that he is not so sure the u.s. should have such close ties. now, this is another chapter in that. there are real concerns about what this means for the future of nato. haidi: jodi schneider, our senior international editor. our more to come, including guest joining us next. this is bloomberg. ♪

>> 9:00 a.m. in beijing. welcome to bloomberg markets china open. i am shery ahn. haidi: we are counting down to the open of trade in the chinese mainland and in hong kong. our top stories is monday, the province of the center of the coronavirus outbreak reports 100 more deaths and nearly 2000 new cases, breaking a downward trend in infections. shery: china struggles to control the a break. their coffers are already looking depleted. haidi: economic from the shock has reverberated across the globe, with singapore pledging financial booster