>> we are counting down to asia's major market opens. welcome to "daybreak asia." our top stories this hour. washington ramps up tensions with china, passing a bill that could see mainland companies de- listed in the u.s.. lawmakers say beijing must play by the rules. global virus cases approach .5 million with 325,000 fatalities. brazil sets and on -- unwelcome record with 20,000 new

infections in one day. the fed acknowledges the virus poses a severe threat to the u.s. economy. we hear from robert kaplan this hour. we are just getting the australia pmi reading crossing the bluebird and it is a record low. we are seeing the may pmi number for manufacturing falling to a record low 42.8 when it comes to that pmi for manufacturing. from 44.1ing further in the previous month of april which have already seen as a pretty severe contraction. we are seeing the services reading falling to 25.5 but that is actually an improvement from 19.5 in april. the composite pmi, the preliminary number, coming in at 26.4 again, an improvement from 21.7, that we saw in the previous month, so certainly in some respects, you are perhaps

starting to see a bit of a bounceback given that these are forward-looking indicators at the resumption of economic activity but that manufacturing member, the record low 42.8 continuing to show these economic restrictions. the company shutdowns are really continuing to weigh on economic activity in australia. let's take a look at markets. overnight, what a session it was. u.s. stocks trading at 10 weak eyes. the s&p getting to the point where we are up over 30% from the march lows, shrugging off these concerns over the senate potentially looking to prevent some chinese companies from lifting the u.s.. we had the fed minutes showing the depth of their concern over the coronavirus impact on the u.s. economy and financial stability in the u.s., but still, it was a very positive session in the u.s. japanese and australian futures were looking like a positive set up with the strong lead from wall street. the yen holding steady ahead of trade and pmi numbers. new zealand counting back,

modest gains of .25% after yesterday's losses. taking a look at wti, we are hearing reports of more orders coming through from china, so really elevating a bit more of a positive outlook when it comes to oil, a report about inventories coming through at record lows. share a. y. cher e -- sher shery: chinese companies could be barred from listing in new york. it comes amid heightened tensions from beijing and washington across multiple fronts. tom mackenzie joins us from beijing with the latest and of course, this has not yet been signed into law. it has only been passed by the senate, but overwhelmingly. so what message is this sending out? bipartisan effort by senators. legislation, not in law yet, but a bill being worked through now in terms of congress, at the

stage where they have signed off on it. it would require companies to prove that they are not under the control of a foreign government. if the company cannot show it is not under control of a foreign government or it is an audit of over three years to make that determination, ultimately, you that is the bill being signed off and it could potentially impact the likes of alibaba and baidu. the senators who introduced this bill said it was about leveling the playing field, giving investors in the u.s. transparency that they do not have up until this point. house is discussing the bill. it is a bill introduced to punish china over beijing's handling of the coronavirus to issues human rights. we had another salvo from president trump in terms of pushing back on china. he said that the incompetence of china caused mass worldwide killings.

quite a criticism from president trump. strongly worded in terms of china's handling of the coronavirus, and we also have some pushback in china against an outreach or at least a message from pompeo, the u.s. secretary of state, who had broken with diplomatic tradition by congratulating taiwan's president starting a second term. we heard from china's military chief responding to that message, saying it is very dangerous and they would take all necessary measures to safeguard china's sovereignty. tensions between the u.s. and china remain fairly high indeed. reminders in the tech arena. what are we seeing at the moment and the chinese response? tom: china is drying up a new blueprint to effectively gain global leadership in a number of key technologies and to boost the economy which remains weighed down by the impact of

the virus. this is the new infrastructure plan involving investing around 1.4 trillion u.s. dollars over a period of six years, everything from 5g networks to surveillance cameras, sensors, ai software, that will underpin everything from autonomous driving to mass surveillance as well. private companies like huawei, alibaba, they have all been listed in this effort. local companies are expected to be the real winners. the expense of foreign companies, the idea as well is to reduce china's dependence on foreign technology. that is part of the post. very similar objectives to the maid to china 2025 program. -- made in china 2025 program. toled to moves in the u.s. block the rise of companies like huawei. the international people's congress gets on the way on friday here in beijing. our bloomberg markets how

anchor, tom mackenzie, in beijing. subscribers can join bloomberg economics chief asia economist for a special q&a blog on the economic recovery at 3:00 p.m. hong kong time. you can send your questions to top live at bloomberg.net. karina mitchell has the first word headlines. karina: global coronavirus cases are approaching 5 million with reported deaths your 325,000. the world health organization has recorded the highest number of daily infections since the pandemic emerged with more than 100,000 new cases. president trump says america's gradual reopening means he may make the upcoming g7 a face-to-face event rather than a virtual discussion. brazil has posted and daily record in the virus cases. infections rose by a fraction hundred 20,000 on wednesday, confirming a country of 210 million is the world's new

covid-19 hotspot. president bolsonaro told the health ministry to loosen protocols for the use of the anti-malaria drug, chloroquine, favored by president trump even though it has an unproven track record. japan is to lift the state of emergency in osaka and some other prefectures even though restrictions will remain in force in tokyo. the government is to announce the move after a cabinet meeting on thursday. the coronavirus devastated many parts of the economy with visitor numbers plummeting. than arrivals totaled less 3000, a slump of 99.9% from a year earlier. -- has made landfall on india's northeastern coast, forcing millions of people to seek shelter. the cyclone hit the coast with winds of up to 200 kilometers per hour late afternoon and is now making its way towards kolkata as a tropical depression. it closed india's biggest

phosphate fertilizer plant. 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 karina mitchell. this is bloomberg. shery: still ahead, s&p says china is unlikely to meet its part of the trade one phase the as tensions continue to escalate. we discussed with the chief asia pacific economist. the fed sees the coronavirus pandemic as a severe threat to the u.s. economy and financial stability. president,dallas fed robert kaplan, sees a recovery in the third quarter. this is bloomberg. ♪ is bloomberg. ♪

haidi: the dallas fed president says he expects widespread bankruptcies and restructuring and.s. oil drillers associated industries he says the covid-19 pandemic continues to crush demand. robert kaplan told us while he sees a recovery in the second half of the year, the government has to get health care policies right. reopening, iesses think you can see a good slow, steady recovery in the third and fourth quarters. what i am worried about is despite what the government may guidelines are, there's certain behaviors that consumers are going to be reluctant to engage in, whether it is shopping or going to entertainment or arts or anything where people are gathered, and this is an example for me. what the feds have done on our lending programs has helped stabilize markets. the fiscal policy is key but i think at this stage, to recover

faster, the health care policies are central. what do i mean by that? ubiquitous testing, contact and ig, good procedures, am one that is a little concerned. we are doing more testing in texas, but i would love to see a national initiative manhattan really emphasize testing and quick test seeing in front of stores, restaurants, other facilities so people have more confidence that when they go in, they are not walking into a situation where they could be at risk. i think until we have that, my concern is there will be limits to how fast we can recover, and that we will recover, but without certain types of activities, fully recovering, it will limit our gdp growth and it will mean the unemployment rate

will be more elevated than it would be otherwise. >> i cannot let you go without asking you about the oil patch here in the center of it. the federal reserve bank of oil as far as most people are concerned. do you have any forecast for where the industry goes, how many companies might go bankrupt? underd said when it was 30, they expected 40% bankruptcy rate. is that realistic? >> it might be. we are seeing it globally. in texas, lots of drillers shutting in, meaning it is not economic to drill, and they are just starting down, and we think total u.s. production will go from the fourth quarter of last year, 12 point 8 million barrels per day, it will lend this year closer to 10.8 million barrels per day. by permian basin may shrink

one million barrels a day so you will see bankruptcies, restructurings and failures, not only in drillers, but those who service them. having said all that, it is our own view that as demand returns, people begin to drive. activity resumes, which it must. we will work off the excess as early as sometime in the second half of 2021 or early 2022 depending on the rate of growth, and so, we actually think that -- it is not surprising to us -- you are seeing a firming and the price of oil. but in the meantime, this year, you are going to see lots of pain and restructurings and bankruptcies and challenges. >> how quickly do the people who shot in those wells turn them back on? >> depends what the price goes too. a lot of folks in the industry

have explained to me, once you shot in a well, it takes some time to un-shut it. my guess is the magic price probably starts to be in the neighborhood of high 30's or in the 40's. you will see people resume and it is our own forecast at the dallas fed even with that reduction of u.s. production by 2 million barrels per day, the actual daily production that is going on right now is much less than that. we even have further reduction. some of those shut-ins will come back by the fourth quarter. that is our view. we think the shut-ins in the united states may be at their peak as much as 2 million barrels per day. we think some of that -- a lot of that will come back. and so why will the u.s. production decline? because of the decline curve. even if you start drilling again, even without a lot of new drilling, you will have a natural reduction in out but

because you need to drill a lot more new wells just to replace the rapid decline curve of shale, but a lot of those shut-ins will come back by the end of the year. was robert kaplan speaking to our economics editor, mike mckee. we have breaking news at the moment. we are hearing confirmation coming from if don said that they are in advanced talks for a 9 billion euro government aid. they are saying the federal economic stabilization fund would take 20% stakes of increased share capital. this would come with some conditions, including the waiver of future dividends and also conditions related to management remuneration. two board seats would be filled with government agreement as well. let's turn back to washington because we have seen a response from the central bank but also now from the other side of the capital. it is the response from the

treasury which has the task of funding what could be for trillion dollars of debt by the end of the year. on wednesday, the treasury took one step in that direction, selling $20 billion of 20 year bonds. a positive session following the treasuries and fed response. the global head of rate strategy at td securities. great to have you with us. how encouraging is this demand for duration we saw today with the reintroduction of the 20 year benchmark? >> thank you for having me. it was impressive. i think we are seeing a lot of supply. last year, we saw the 10 year and 30 year options, much larger than the last few months, and now, we have the first 20 years since 1986 being auctioned that a larger size and it got taken down. well firstset up supply so the 20 year had cheapened on the curve. the curve itself had steepened. number two, the fed has taken a lot of paper out of that market

so the fed has bought 1.5 trillion and 20% of that has been in the long end. there is almost a scarcity of people in the long end. right now, this reception was great. i am a little concerned that a few months down the road, when you get option after option increasing, i think the market might test the fed and the fed may have to end up being the buyer of last resort. today, there was enough investor demand. we did not need the fed to buy. i do not know if you can extrapolate that because the treasury has a lot of funding today. onry: what are your thoughts longer dated bonds, because we heard from secretary mnuchin yesterday saying there was not enough demand to justify offering them. priya: right. they have been talking about this, i think secretary mnuchin brought this up last august as an idea to come out and issue more and it was unanimous agreement that there was not enough demand.

it ended up being a very small investor base. the insurance community tends to buy in the long end. it is further lowering the need for the long end. the fed is very clear that they are not about to hike in the front end. if you are a treasury investor, you might want to hold the front end because it is clear that the fed is not going to hike. the long end becomes much more tricky so i do not think they will come with 50 or 100 year but i think there is a limit to how much they can jam the sector, which is why they are increasing that. it continues, which is why the fed support to the treasury market will become very important in the months ahead. as you point out, the fed can help when it comes to liquidity risk but not necessarily solvency risk. you see so much risk appetite in risk assets at the moment. what does that tell you about the risk of defaults and the

outlook for defaults in the u.s.? priya: great point. i think we look at the risk asset complex and the fact that it has recovered so remarkably, and i think the market, you know, when you look at the risk assets, there is a liquidity risk component and a default risk component. what blew up in march was liquidity risk and that is something which the central bank -- and i would also give congress some -- i would attribute some of this to congress all the liquidity risk components have been in there. it has been a lot of money in the quiddity. i am less confident. i think that way to trade it is to do more credit work. i think looking at business models, the ones that make sense in this new normal, the ones where capital structure makes sense, you see more differentiation within the risk complex where default risk in certain industries and companies have to get repriced. we only know that when we know what this new normal looks like

and when you see the pickup in defaults. we are matter of time as not going back to the normal that existed in february, let's say. are we looking to get a build up in supply, and in that scenario, where do you find opportunities? priya: i think doing more credit work -- it takes me back to the previous qe period. so 2009 all the way to 20. lifts all boats and it was an expansion. there is a reason to put on trades but i think we will have to do a lot more bottoms up credit analysis. there are certain sectors i think that makes sense that may have been beat up more in the last few months which makes sense to own. utilities, etc., where we do not think rates are about to rise.

especially with high leverage loans that we do not like. i think this is not the time to pile onto risk because of the immense amount of uncertainty not only about the near term but also the long term impact of the pandemic will be. u.s. rates are really not moving much in reaction to data. u.s. economic data. we do get jobless numbers tomorrow as well. when will they become relevant again? priya: great point. we are seeing unprecedented data and getting no reaction. i think because the markets have priced in such an awful scenario. or 10r we get five sigma sigma data, it does not matter. it is all about the pace of reopening it on monday, we had a massive reaction because of this idea of a vaccine so it is all about -- partly, health care policy. vaccine or-- any

therapy would also -- the pace of reopening. the market needs to be forward-looking. if you had atherapy would crysto tell you a we were getting back to normal, i think that is what u.s. rates will react to. we are pricing and no hikes for the next three years, pricing in a very low level of rates so anything that suggests that we are getting back to normal faster, i think that can be a big market reaction, but right now, we are just about starting the reopening process so it is too early to get a sense of how quickly we are getting back, is output coming back online. that is our focus. termt less than the near economic data which we know will be offered. head: priya misra, global of rates strategy. thank you very much for that. just to clarify, earlier, we said the treasury will need to fund a potential for trillion dollar debt. we are talking about the budget deficit. the federal debt level is at

over $20 trillion at the moment. we will have plenty more, coming up. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. goldman sachs is reopening eight offices in europe including paris, frankfurt, and madrid as it reemerges from the coronavirus crisis. staff in frankfurt have been invited to return but only if they want to. paris offers will reopen next week. deserters in client meetings will not be allowed. staff at j.p. morgan will see a different workplace when they return after the coronavirus. protocols will be in place as the bank looks to cut office capacity by half. coming up next on daybreak asia, india set to allow airlines to resume domestic flights next week. two months after a lockdown

grounded all planes. we will have the latest moves to reopen in asia, next. this is bloomberg. ♪

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shery: let's get straight to sophie kamaruddin. expectations that the federal boost liquidity further given the concerns over the u.s. recovery could see u.s. asian stocks getting ground this thursday. we are seeing u.s. futures fluctuate. treasury futures are study after the fedeads latin and reiterated its policy stands in the april minutes. jgb futures settled higher after wednesday's strong 20 year sale that pushed along and yields lower and nikkei futures in singapore opening higher by .8%

ahead of japanese pmi and trade data to this morning. twitching out the board to check in on oil, we are seeing wti rising for a sixth straight session, holding your a two month high as u.s. crude inventories are dropping. one key wti oil spread is signaling storage stresses are easing. that when positive for the first time since december, haidi. asian countries are set to further lift their lockdown measures. nhk reports japan is set to end it's a state of emergency and osaka while india is allowing airlines to resume flights despite a surge in infections. let's get to yvonne with more. that's start off with japan. are we seeing signs of progress? yvonne: osaka, according to reports, should be lifted along with two other prefectures in western japan. is slightly earlier. these emergency measures were set to expire at the end of this

month so they could join the rest of the 39 prefectures where emergency measures were lifted a week ago but tokyo and some surrounding areas and hokkaido will continue its state of continues to see multiple -- sent to meet with the government panel on that decision. over to india, they are allowing airlines to resume domestic flights as early as next week so this is continues to see exactly two months after a lockdown grounded 650 planes in the country. the prime minister trying to gradually restart the economy even as infections jump at the fastest pace in the region. airlines around the world struggled to remain in business but keep in mind, india is home to some of airbus and boeing's top customers. carriers have ordered more than 1000 planes in recent years. indigo did the largest customer

of the a320 jets. check, one of the customers. it will be a balancing act as they try to reopen some parts of the economy while china flattened that curve, which they still struggle to do. which they still struggle to do. shery: the philippines considering downsizing. yvonne: -- villages and regions as we see more of this reopening in the economy. we have already seen as of last week some malls and businesses have an allowed to reopen in the capital, manila, but president duterte said stricter curbs may be brought back if we do see this second wave of infections happen, so what they are bracing for is the arrival of a lot of overseas workers. what they are seeing right now and perhaps are projecting that

some 42,000 migrant workers are said to arrive until june, so that might actually overwhelm the country's quarantine facilities. they already have 27,000 or more repatriated workers staying at isolation centers in the capital. haidi: yvonne man in hong kong. we will have more on how airlines are tackling the pandemic. the association of asia-pacific airlines director general joins us exclusively later. widely held early view that young people are less at risk than the elderly from covid-19 has led to widespread resistance of social distancing among that group, putting young people in a dangerous position. the john hopkins university assistant professor of emergency measures about how new data is changing early perceptions. >> we are seeing a lot of cases of middle-aged americans who

have these comorbidities, but we are also seeing younger people as well, so i think the early data that we saw that this was all affecting the elderly with comorbid populations is not true. we have a wide age range in our population. we have a lot of essential workers who have been working this whole time. we have a very large hispanic population that were serving at hopkins right now. that is true in many cities across the country. is that certain geographies were going back and you have young people going back and all that. when you see younger people trying to get back to what we knew, do you feel like they are at a greater risk because they think the only ones to get the virus are 75 and over? lauren: that early messaging about it only being the elderly did not help. i think we saw young people resistant to social distancing, resistance to some of the other public health approaches that we

used, and you know, exactly like you are saying, they were still going out, interacting socially, and i think we are seeing the effects of that resistance to adopting these measures. i think that is what we are seeing right now. --lso think that people are they are part of the essential workforce so we are seeing health care workers come across the country, we are seeing people from meatpacking plants, farms, food processing centers, and they are younger folks as well. >> talk to me about this moderna vaccine. it just did not give us enough information about whether it was going in the right direction. are we going to have to use things like that more regularly? lauren: it is not uncommon for these companies to put out press releases. usually, they have data attached to them. this report showed that the people in the study, eight people that they had conducted

the full review of, had neutralizing antibodies, which was good. they basically saw that people in four of the different arms that they built developed neutralizing antibodies. the challenge was that only being eight people is partially because it takes a long time to do the neutralizing antibody research. we did not hear from the other 35 or 36 trial participants as to how they did or why they did not develop neutralizing antibodies or even if they did not develop them. we need more time to understand those data, so there is no way soknow what these data mean, i think that that is what we are all waiting for. we are waiting for that resulting data set to do that analysis, to know if the response will be durable, to know what the rest of that vaccine population looks like. i think we still have a ways to go. upbeata surprisingly

result, but i think it is definitely a positive finding. we just have to wait and see what happens next. >> what do you make of what we have heard from the world health organization overall? who is in charge of briefing governments in this? do you rely on the world health organization or is it each country for their own? lauren: the world health organization is still our number one leading international body serving all of these member states, and they are putting in place the structure by which this entire international response is happening. we did hear -- it is a digital world health assembly, just two days. it will not be the same as it normally is. we did hear calls from the e.u. and australia for an inquiry into the origins of the covid-19 outbreak, which clearly seems to be directed at china, even though china was not specifically named. somenk that there remains ation in china's role

in this outbreak response not even the origins, but how this response occurred. we will continue to see that around the assembly but we have to continue to support the w.h.o. in their role in global pandemic preparedness and response. that was lauren sauer, the assistant professor of emergency medicine. is supported by michael bloomberg, the founder of bloomberg lp, and bloomberg philanthropy. coming up on daybreak asia, s&p global ratings says markets should not lose sight of the bigger game being played between the u.s. and china. that is next. this is bloomberg. ♪

karina: i am karina mitchell at the first word headlines. the u.s. senate passed legislation that could see chinese companies barred from listing in america as relations foul further between washington and beijing. the bill requires companies to certify they are not controlled by a foreign government. john kennedy says he wants china to "play by the rules." lawmakers have been increasingly critical of beijing amid the coronavirus outbreak. the last governor of hong kong has added his support to democracy demonstrators, saying they should end up for their beliefs.

chris patton was addressing the foreign correspondent remotely on the city future, saying he has no problem with china but criticized the communist party. hong kong's economy has collapsed amid months of street protests and the fallout from the virus. the bank of england governor says this time is right to examine how low rates can go as economies struggle with the fallout from the coronavirus. the bank is actively discussing rates and will not exclude the idea of going negative. his comments come amid a growing debate about rates showing u.k. and placing following -- inflation falling to the lowest level in years. >> now is the right time. [indiscernible] karina: 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 karina mitchell. this is bloomberg. shery. shery: breaking news out of south korea. export figures for the first 20 days of this month. now, exports falling more than year.own 20.3% year on imports also falling 16.9% year on year. when it comes to the export section of these numbers, we are seeing chip exports, semiconductors, rising 13.4% year on year so we have seen a little bit of strength when it comes to those semiconductor numbers, a recovery in the industry, but when it comes to the overall exports, still, a contraction of more than 20%. of course, we have seen exports being pressured not only on the coronavirus pandemic but also perhaps on lingering trade tensions between the u.s. and china. we are seeing those numbers in

the south korean trade numbers today. haidi. really, that first indicator of exactly how hard the pandemic and the global slowdown continues to hit. trade exposed nations. ahead of the national people's congress, china has hit out against what it sees as protectionism. and of course, these renewed trade tensions could not have come at a worse time. sean wrote is the chief asia-pacific economist for s&p global ratings and joins us now. korean broke those numbers for exports, falling over 20%. imports falling almost 17% on the year, and overlaid over the top of this is of course what feels like another round in a trade war, not just between china and the u.s. but also now china and potentially australia and other players. how dire is this for the potential for a nascent global recovery? it is going i think

to potentially hit one of the bright points in asia that we are seeing, which is technology. i think we are seeing technology demand being supported by working from home, online shopping, and health tech. the issue with the u.s.-china relationship, for us, it has always been about technology more than trade and we continue to see that as the u.s. is tightening restrictions on some areas of china's technology sector, even as both sides commit to keep the phase i deal on track for now. this is really about technology, and that is where you could see some of the pressures emerge if this gets worse. in terms of who will be hardest hit in the sectors that are hit, obviously, we have seen technology take on a leading kind of spotlight when it comes to the bickering between washington and beijing. we have also seen agriculture in

australia become an issue as well, so if you break down who gets more affected, are there any beneficiaries out of this in terms of supplies and the trade exposed nations around the world that could be caught in this trade war, this latest round of the trade war? shaun: i think what we learn from the last round of trade and technology tensions is that it does tend to hit technology investment, and that tends to hit some economies that are upstream from china in the supply chain, south korea, japan, and taiwan, to some extent. some countries further down stream from china, including perhaps malaysia and vietnam and thailand, they also get hit from these waves that come all the way down the supply chain, but it is really those guys at the top then get so much more value-added. for example, selling machinery to china. at the same time, they could -- last year.

for example, taiwan was a winner. taiwan managed to encourage some of its companies to reshore its facilities from china to taiwan to try and get around some of this tension and if you look at the taiwanese gdp numbers, that did lift the numbers last year and that will boost taiwan's capacity to keep on growing in so there are well winners, but broadly, i think if this does intensify, there will be far more losers than there will be winners. we are getting more lines out of south korea that there may -- 1.7% year on year, which is not really a huge contraction. and compare that to how much it chanted when it comes to exports to the united states, which was down 27.9%. this seems to be a clear indication that really, china is starting to stabilize while the u.s. is now suffering from a lockdowns from this pandemic.

pandemic, will this give beijing the upper hand if we continue to see this economic impact player in the u.s. headed towards a presidential -- while china is starting to recover? shaun: i think it has been surprised at the extent to which china has managed to get its industrial and technology supply chains back on their feet quicker than people thought. i mean, that's definitely true. if you look at the official numbers across the industrial sector in china, it is getting back to normal. some smaller and medium-sized enterprises are struggling but they are making progress week after week and you can see it in data across the region. if you look at taiwan's export orders, up very strongly this year, particularly to china, and particularly to the technology sector. and is helping across asia to some extent will be a source of strength for china all the

way through this year because i think they are showing the world that they do have an ability to get supply chains up and running after a shock and people were questioning that just two months ago. seey: if we continue to these tensions play out between the u.s. and china, how much more motivation will they give beijing policymakers to continue to invest in their own technologies, and could we even see their targets or technological targets being achieved even faster than most people expected just because they are going to fight back. shaun: what we do know is that china remains quite reliant on foreign technology. 650 technology producing firms in china, and if you go to steps or three steps back in the supply chain, about 50% of their suppliers are from other countries, and those suppliers are typically providing rocks that cannot yet

be produced in china. that's remember china's number one import is a semiconductors, much higher than crude oil. is to some extent exposed to foreign technology and i think the incentives for china to do more of this by itself is only going to increase in the future if they feel uncertain about those foreign suppliers. breaking are getting news out of japan and these are the trade figures. exports year on year declining, plunging 21.9%. downonth of april, imports 7.2%, which is a smaller contraction than what was expected. perhaps a slightly more benign domestic picture in japan. when it comes to the trade balance, adjusted, it is a deficit much bigger than expected. ¥996 billion. adjusted 930 billion yen. all in all, just supporting this

view that really the export strengtheninues to from these economies that are dependent on shipments. exports down in april for japan. you, we are now going to see these economies struggle to recover, come out of a recession in the case of japan that is already falling into a technical recession. if we see these protection area moves, more countries really moving inwards and global trade being affected and contracting, a trend we have already seen u.s.-china trade tensions. how will that affect the recovery path? shaun: i think it would have a very large effect because at the moment, as i mentioned earlier, technology is the one pillar of strength that we have and technology -- the tech cycle in asia, is incredibly important. overall growth in many countries. in china, if you look at the

share of value-added from technology, it is incredibly high, well into the double digits. it is important. i think the fear could be that aboutms feel uncertain tariff and trade outlook, they delay the investments that perhaps they were going to bring back online later this year, early 21, and that just gives us a much flatter recovery and we are probably going to have to wait for the smoke to clear until 2022, which would be a very bad result for asia. if this trade uncertainty affects the ability and the willingness of firms to execute their investment plans later this year when they feel covid is behind this, that would be very bad news for the recovery indeed. s&p global ratings chief asia-pacific economist shaun roache with us. great to have you on with sp or we are going to get more insight later on the u.s.-china trade tensions. we are joined by the former united states trade

representative. that is at 9:00 a.m. hong kong, 9:00 p.m. if you are watching in new york. this is bloomberg. ♪

haidi: oil held near its highest level in two months after reports showing a further decline in u.s. stockpiles added signs that the market is recovering from the supply glut.

joining us now is our energy reporter, james thorne, in sydney. we have seen oil on a strong rally. does this give us an indication that this is a sustainable trend upward? james: i am not sure about that, haidi. we have seen the worst from markets. you have seen the supply cut from opec and the u.s. shale producers starting to seep through in a rebalanced market from that supply glut. the lockdowns we have seen across the northern hemisphere. whether it is sustainable, that is a big question. we have had one or two analysts come out in recent days, saying there is a chance the markets could swing into deficit in the latter part of the year if demand picks up, as we expect, and these supply cuts continue. that is still highly speculative at this point because we do not know exactly when these lockdowns will be lifted and the profile of that demand recovery remains highly uncertain. i would say there is a question

mark whether the gains can be sustainable, but certainly, the situation we saw in may where the contract collapsed into negative territory, i think that is in the past. we can safely say we see the floor for the market. priceswe are seeing the of crude oil rallying. what is this telling us about the sustainability, quickly if you can. james: sure. i think that is true. there was a report overnight as well that canadian and alaskan order is in -- oil is in the chinese market. that is ramping up back to normal levels now and that is profile,ing the demand but yes, as i say, it is still uncertain. we also need to remember u.s. shale producers have been producing about $30 a barrel and we are there. whether they start producing, that could have an impact. thank james thornhill, you so much. we will have plenty more coming up on the next hour of "daybreak asia."

big guests. this is bloomberg. ♪

>> good evening from bloomberg's headquarters in new york. i am shery ahn. haidi: and i am haidi stroud-watts in sydney. asia's major markets have just opened. shery: our top stories, washington ramps up tensions with china, passing a bill that could see mainland companies delisted in the u.s. lawmakers say beijing must play by the rules. global virus cases approach .5

million -- .5 million. brazil says an unwelcome record with almost 20,000 new infections in one day. boosts the of tictoc parent valuation to more than $200 million. haidi: let's get you started with a quick check of the markets across asia. we are seeing upside with the nikkei jumping .4%. we are seeing energy and consumer discretionary stocks leading the gains across the japanese index. ,he japanese yen holding steady but this after rising against the u.s. dollar on risk off sentiment yesterday. we have vaccine optimism fading a little bit. this is coming on the back of pretty dire export numbers from japan for april with a plunge of more than 20% on year. south korea had similar numbers for the first 20 days of may,

exports falling 20.3% year for south korea. what is interesting with these economies is their experts -- exports to china declined much less on the plunge of double digits we saw toward experts -- exports in the u.s., signaling the different recovery stages and stabilization between the u.s. and china. the kospi up .6% and the korean won strengthening against the u.s. dollar after becoming the biggest loser in the previous session. we are also seeing a surge in local virus cases. here in australia and new zealand, we are seeing upside when it comes to the staggered start is trading in sydney. australian stocks getting close to record levels again as the market is continuing to recover from this virus-cause rout.

we have seen the 12 month forward ratio on the asx 200 swelling to close to the peak we had in february, despite today we got horrid numbers when it comes to manufacturing. pmi's falling to a record low. some optimism that we saw a recovery across services as well as the composite number. new zealand trading higher after yesterday's losses, extending gains by .4%. shery: let's get some more insight on the markets from our next guest from bangkok. it is the chief global market strategist stephen innes. we are seeing a broad rally today in the u.s.. we also saw broad gains across 11 sectors of the s&p 500. given the volatility we have seen recently, especially with the rally because of vaccine news and the selloff, how

fragile are the markets and can we trust this rally today? stephen: i like the rally the way it is setting up. a lot of it is on the back of the mobility restrictions, hence recovery optimism. what i like so far is the tape is gradually exhibiting emerging signs of cyclical leadership. forink this is favorable general risk assets. the near-term risk remains. there is justified worry that sentiment could turn on a dime if there is bad news on the duration of the coronavirus disruption. there is a lot to worry about. right now it seems like the extraordinary levels of fiscal and policy stimulus are papering over a lot of these fissures, which is quite good for equity investors. shery: it was interesting today in one of those export figures out of south korea for the first

20 days of may. we saw chip exports rising despite the fact we saw a broad decline in exports in shipments for south korea. for marketss bode that are tech defendant? not only south korea, but also taiwan? stephen: it is a good sign really. especially for taiwan, that is really in the crosshairs of the recent trade war imbroglio, it is quite sensitive. we are seeing a pickup in the supply chains that is quite favorable. these things can change on a dime when it comes to the u.s.-china trade tensions, so we have to remain focused on that. it is not only the two combatants that come under the glare, it is other economies in asia that remain sensitive to china-u.s. trade risk. we have to monitor that, although it has been put on the back burner as the markets

continue to focus on covid-19. we know from history that bear markets produce pretty good rallies. when you are looking at the rallies we are seeing in the u.s. as well as valuations climbing up in australia and across asia broadly, does this indicate this is a bear market rally, work something more sustainable to the upside? stephen: i am thinking more sustainable, but i am not really clear where the acro -- where the macroeconomic data is going to take us. my investment horizon is short duration right now. that's the problem, making the call on the long term -- medium-term, six to 12 months. i think the extraordinary policy levels are providing the input. we are coming from a low place as far as economic data goes.

as soon as we see consumers starting to spend at the cash registers and shopping malls, i think the indexes in the u.s. are going to search. i think this will provide a positive backdrop over the emerging nature of how people emerge from lockdowns. over the short term, i think sentiment remains ok. dollarwhat about the and, by correlation, where gold goes? does the weaker dollar help you make more of an informed medium-term call when it comes to gold? stephen: it does really. whether you want to trade gold or the dollar, it is easier if you want to sell dollars, to sell the dollar. the gold conversation is gradually morphing to -- there is a lot of stimulus talk -- but the point is, when do we reach the critical stage when it

becomes priced inflation kicks in and currency debasement takes over? i think with huge amounts of expansion in balance sheets, they have to be concerned about inflation hitting. once this recovery starts, i think inflation is going to kick in. we may see inflation bigger than any time in history. this tipping point is the argument around gold, not so much the dollar, but you would probably be happy if you kept gold in your portfolio through the end of the year after inflation starts to pick up around the world. haidi: we have heard from the be a wii's andrew bailey it is time to investigate how low rates can go. we also heard a narrative from the fed quashing speculation that u.s. rates will go into negative territory. who is right when it comes to the debate over negative rates? stephen: i think they are all

leaving that open in case they have to go into their policy toolkits. they don't want to shut any doors, because that would be perceived negative in the markets. it is like the old stimulus front. they are showing massively huge numbers at the markets they may not end up using. provided the market knows that policy -- that possibility exists, it is comforting. the point behind negative interest rates to suggest central banks are not out of their policy toolkits yet. this is being perceived favorably on risk assets. as far as currency markets are concerned, if everybody is below zero, what is the opportunity for diving in? the currency game becomes divergent to trade for the economies emerging from the lockdowns quicker. i think this is why we are starting to see attraction in the australian dollar. that economy is coming back

quicker than others right now. haidi: in terms of the longer-term outlook, would you expect to see economies back in asia or some of these emerging economies bounce back quicker in terms of the headline data? is that an area where you would see more investment opportunity? stephen: i think we will see headline data come back. my big wall of worries is around unemployment, whether employment comes back. this is a real concern because we know there is going to be significant job loss. how quickly can those jobs be replaced? right now we are possibly looking in the u.s. market about 10% unemployment levels toward your grandma and. how -- toward year end.

how does that extrapolate to asia and the rest of the world? that makes it challenging to make longer-term predictions because we don't know how jobs are going to come back. i think longer-term data is going to read out. i think the softer economic data is going to come back strong, but we still have to deal with employment numbers. that is the key driver as far as projecting the economy because it is going to be a consumer-like, demand recovery -- a consumer-led, demand recovery. shery: always great to have you, stephen innes, acxiom chief global markets strategist. let's take a look at how markets are trading. watching? are you >> asia stocks are modestly higher. focusing on bonds, jgb gaining assets on the strong 20 year sale we saw on wednesday. 20 year yields edging lower by

two basis points. korean bond futures continue the uptrend after cash yields fell wednesday on the government bond buying plan, which could pave the way to buy more sovereign debt, given the central bank will be buying riskier assets as borrowing costs climb. this morning treasuries are holding steady with the 10 year yield off by one basis point after cash spreads flattened. switching the board to check on currencies this morning. the dollar edging slightly higher after touching an april 30 low. the korean won stronger, trading at a may 19 hi. is trading atuan 7.11 against the greenback. the aussie dollar under pressure after mixed pmi's this morning. let's check one stock mover in tokyo. i want to highlight nissan, gaining ground nearly to present

this morning. we have local media reporting it is planning to cut annual sales targets to 5 million units in fiscal 2023. this compares to 6 million units in fiscal 2022. shery: still ahead, andrew keith, president of luxury department store lane crawford, joins us for a look at the post virus retail landscape. and a vigorous response to the u.s. tightening restrictions on tech. this is bloomberg. ♪

shery: -- >> you are watching daybreak asia. global coronavirus cases are approaching 5 million with reported deaths near 325,000. the world health organization has recorded the highest number of daily infections with more

than 100,000 new cases. president trump says america's gradual reopening means he may make the upcoming g7 face to face at camp david rather than virtual. japan is to lift the state of emergency in osaka, although restrictions will remain in tokyo. they say the government is to announce the move after a cabinet meeting thursday. the coronavirus has devastated parts of the economy with visitor numbers plummeting. april numbers totaled less than 3000, a slump of 99% from a year earlier. a cyclone has made landfall on india's northeastern coast, forcing millions of people to seek shelter. it hit the coast with winds of up to 200 kilometers per hour and is making its way towards kolkata as a tropical depression. the storm has disrupted local businesses. police in the u.s. have arrested

two men charged in japan for aiding the escape of carlos ghosn. they have been detained in massachusetts and face possible extradition. carlos ghosn fled to japan last year to escape trial. the men will appear before federal court by video link wednesday. carlos ghosn denies any wrongdoing. global news 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. the u.s. senate has approved a bill that could lead to chinese companies being barred from listing in new york. it comes amid heightened tensions between beijing and washington. bloomberg markets coanchor tom mackenzie joins us from beijing with the latest. what are senators in the u.s. opening to achieve with this bill? tom: they want to inject more transparency and create a level

playing field. this is a bipartisan bill that would require companies to certify they are not under the control of a foreign government. if they can't prove that, the company could be banned from u.s. exchanges. potentially it could impact alibaba and other chinese companies listed in the u.s. it is about transparency. it is likely the house is going to start discussing this bill, one of a number of bills introduced in the last few weeks and months to punish china on everything from the handling of the virus to human rights issues. in terms of the broader pressure from the u.s. on china, we had another broadside from president trump on china's handling of the virus, saying in a tweet that it was the incompetence of china that has caused mass worldwide killing. we have ongoing tension over taiwan and the outreach from

u.s. officials, including secretary of state mike pompeo, who said they message -- who sent a message to taiwan's president. you have officials saying, this is a dangerous move from the u.s. side. tensions continue to escalate. the latest is the senate move to edge toward a process where they could delist chinese companies. shery: what is beijing saying? tom: beijing so far is playing wait and see. you have the november presidential elections. there is an understanding in china that china will be hit as part of political machinations in washington. as far as the corporate level, you have moves by the likes of alibaba to have secondary listings in hong kong. in terms of the technology confrontation, china is pulling up a blueprint that could involve injecting $1.2 trillion

into technology ranging from 5g to ai. it could benefit companies like while way and alibaba -- like huawei and alibaba. part of it as well is to try to accelerate china's move away from dependence on foreign technology. we are expecting more details on this blueprint at the national people's congress, which kicks off on friday in beijing. shery: tom mackenzie in beijing. staying on technology, u.s. commerce secretary wilbur ross huaweiile way -- says remains an espionage threat. chiefsecurity cheek -- told bloomberg how the company will tackle the new curbs. >> we are working through it to determine what our priorities need to be, how it will affect our products.

that will be worked on over time. what is clear is that last year billion of over $12 nonsensitive technology to american companies. the white house press secretary said this would maintain the competitive advantage of the united states. i would love to see the competitive advantage the u.s. maintains. blocking us would help -- would hurt the semi conductor industry permanently and that is not helping the competitiveness of the u.s.. >> last year you had a gap of $12 million in revenue. fourth quarter growth was impacted and it has been more difficult for huawei to win contracts. how much of a gap you expect to see going forward if these restrictions continue? >> we are not able to make a dollar amount prediction yet. we know we will work through it. impact,ere will be an we are going to come out the other side. if we are forced to not buy from

american technologies -- american companies, we will go elsewhere and american jobs will be gone for good. that effort of the u.s. to her china by hurting huawei is going to cost american jobs and not help america maintain technological advantage in the world. >> as we have been speaking, wilbur ross has been on foxbusiness talking about huawei , reiterating the u.s. position, saying huawei remains an espionage threat. what is your reaction to that? >> it is disappointing. the united states and china are among five or six countries that have the ability to virtually implant hardware and software. we are asking for the opportunity to meet with united states government to talk about a proven mechanism to address risk, mechanisms that need to be in place for competitors as well. adversaries have the ability to

hack into everybody's equipment. we are willing to be more transparent than any other company in the world. we are ready to address larger malicious cyber activity efforts around the world and strengthen efforts to protect intellectual property. we would love to engage in those conversations with the u.s. government. >> as much as you have been pushing back on these comments from u.s. officials, there are analysts and consultants that see both sides. yesterday i was speaking with a strategic consultant with expertise on u.s.-china relations. take a listen to what she had to say. >> huawei is about after. there -- is a bad actor. there is intelligence suggesting they are close to the chinese military and chinese intel. the export controls you mentioned seemed designed to put huawei out of business, so it is draconian. >> it seems like two sides of

the same coin. what's your reaction? >> i think the effort to focus on the facts, the impacts of the escalating effort by the government are to her china by hurting huawei. i think escalation is terrible and i hope there is no further escalation by the u.s. or china. how can the u.s. compete more effectively to maintain advantage in innovation? which i would love to see them maintain. we need an effort not to hurt huawei, but to promote technology innovation in the united states. we need a private sector-led strategy to bring the benefits of technology to our people and organizations. that should be a major priority and it does not seem to be. the huawei u.s. chief security officer.

terminal subscribers can join bloomberg's chief asia economist for a special q&a ahead of china's key political session all about china's political recovery. you can join the discussion at . this is bloomberg. ♪

haidi: we do have some burger news when it comes to china. two additional coronavirus new infections for may 20. putting 31 new agent to medic coronavirus cases. a low number when it comes to regular cases. a swelling when it comes to a symptom medic cases. 31 new cases. let's take a look at how we are

tracking when it comes to markets. modest gains when it comes to broader asian markets. despite a fallr when it comes to japanese export numbers out in the last hour. this is bloomberg. ♪

haidi: more pmi numbers crossing the bloomberg. at 27.4. pmi coming in we have the services pmi at 25.3. the manufacturing pmi has fallen to 38.4. that is the lowest since march 2009. we are looking at those numbers now. have seends what we with the trade numbers that were out a little bit earlier on. painting the picture of the drag we see from not just the domestic emergency lucked on in japan but the external picture

of poor demand. shery: exports plunging almost 22% in japan in the month of april. we are seeing u.s. futures under pressure. down three tens of 1%. this after u.s. stocks climbed to a 10 week high. the dollar index gaining ground. we had seen the dollar falls of the lowest level in five weeks. we have seen the dovish f1 see minutes complained -- combined with optimism of economies boosting the equity markets. we are seeing a little bit of rebound. wti above $33 a barrel. not a lot of gains after five sessions of gains in the regular session in the u.s. brent gaining ground. more than half a percent at this time. the highest level since march 13. retailers in hong kong are suffering as the virus

pandemic squeezes the flow of tourists to barely a trickle. april sales numbers from china not meeting the estimate. a bit of an easing from the previous months. let's take a look at the landscape it comes to luxury retail in china and hong kong with andrew. both are units i've the joyce group -- units in the joyce group. andrew, great to have you with us. give us a snapshot of how your business has been affected. in hong kong, not just by the pandemic restrictions but 6, 12 months of the social unrest as well as what you have seen in terms of consumer behavior on the luxury front in china. andrew: first of all, despite the unrest we have seen in the

disruption the pandemic has brought, we have been in a fortunate position. our businesses have stayed operational in hong kong and greater china. that has allowed us to keep the cadence of the business. has allowed us to stay connected with our customers. our teams have been very focused on making sure they are using social platforms, they are engaging with our clients. they are using zoom to have shows. we have been doing live streaming the stores all in an attempt to stay close with our customers and share with them the fact that it may be difficult to get the stores that we have fantastic products. we can personally connect with them. i think that has helped us as we start to see certainly the situation in mainland china coming back to some kind of normality. clearly having been through the

social unrest in hong kong, -- sorry. sorry, continue. andrew: i was just saying having been through the social unrest in hong kong, that enabled the team to be more agile and creative in terms of how we are responding to the situation on the ground. when it came to putting in place new protocol for covid and looking at how we are making sure the health and safety of are teams and customers primary concerns, we were able to move quickly to the adjustments of the operating procedures. growthhow much of the you have seen has been in digital? tell us about the numbers in terms of how much uptake you are seeing in any commerce through your websites.

andrew: we have seen spikes in terms of the digital penetration. we are seeing customers become more comfortable with shopping online. it is difficult to look at it in a black-and-white because increasingly what is happening is customers are becoming comfortable with lots of different digital channels. as i said earlier, we are using digital as a way of communicating and staying in contact with customers. whether that be on zoom or a livestream feed, people are being able to use different channels to connect. those channels are becoming shop a bull as well. it is not just about.com shopping. it is about the holistic approach to how do we continue to stay in touch and relevant and personal with our customers? shery: will you be changing the ratio of your brick-and-mortar stores across china and hong kong against your online

presence? what we continue to see is this trend that despite the fact retailers are struggling, their online sales are surging. andrew: what we are seeing is we have a strategy where our brick create thethere to immersive as of what we do as a global curator of the best of luxury products. physicalitye is a and a human connection which is important. we are seeing that in china as customers are coming back. they respond to the level of personal service we can provide. thesafety of vip suites and intimacy that brings. gives usnline, that access to newer customers. we are seeing beauty purchases. we are seeing customers we would not necessarily have seen coming into the stores accessing through the digital platform. we have a personalized approach

to how we edit the assortment with the china stores. each store has its own buying strategy. clearly, the benefit of online means that all of that product is available. and so, we will continue to look at how we can further penetrate the digital presence in mainland china. shery: does that mean you are not making any adjustments whether it is cost-cutting -- because we have continued to see more and more retailers having to adjust their business operations given the pandemic and in hong kong, the protests as well. andrew: clearly, we are mindful in terms of how we are utilizing our resources and how we are focusing in terms of how we can drive differentiation and where we can get the value. cautionarythis spending is something we are focused on. it is important that at times like this, we go above and beyond to create specialness for

our customers. it is an opportunity for people to fall back in love with fashion. what we are seeing in china is how it -- is as people are feeling safer and they're coming out of their houses, the joy of being able to embrace reunion dressing, what am i going to wear when i am meeting my friends and family? there is a little bit of revenge spending, spending against covid. need is a humid -- a human to feel uplifted through this experience. we are starting to see that with the behaviors of our customers. we are also seeing in china, we have customers coming into the store telling us they would not normally be in china this time of year. they feel this is an opportunity for them to shop in china where they may have been in other parts of the world at this time. because yoururious

, every day there is an email and a.m. -- in my inbox, 20% off, 30% off. u.s. retailers are going out of business. we are seeing vouchers being used two incentivize spending in hong kong. the very premise of a luxury good is tied to exclusivity and its inherent value status. how does that play out when there is so much heavy discounting for these brands going on? andrew: i think that is an excellent point and it is something the industry has recognized. one of the benefits of being in lockdown is digital platforms allow us to get together. there have been a number of forums that have been industrywide over the past month that have been looking at how we can deal with the systemic discounts in the industry, the overproduction we have and how can we look at getting the cycle

, the seasonal cycle of retail back on track? pierpoint, it is really -- to your point, it is quite disingenuous to the customer ining them to buy a coat september and by october, it is on discount and you have not had a chance to where it. there is a number of people working across the industry with retail, designers and brand ceos looking at how we can come together to address some of these issues. shery: so your company is into everything, whether it is footwear, luxury, clothing, jewelry. is there anything in particular that is selling more than usual during the pandemic in the protests? andrew: we are a luxury specialty store. we cover fashion and lifestyle and all those other categories. what we are seeing is as people have been trapped in their homes , they have been looking around

and thinking, is it time to upgrade my furniture and look at how i can -- my house. home is an area we are looking a growing. we have seen an increased interest in wellness products. people looking at how they can -- organic in pure skincare. there is more of an awareness in terms of responsible products. when it comes to fashion, we are seeing people looking at how they can invest in pieces that are going to last them over a number of seasons. wardrobe essentials that you're going to love and cherish for a number of years. clearly, there are changes in terms of consumer sentiment and how people are making decisions about what they buy. shery: very interesting perspective. thank you very much. we turn our attention

to travel. dorset hospitality international is one of asia's fastest hotel groups. executivelk with the director. this is bloomberg. ♪

shery: the number of people coming into hong kong fell below 100 on average at the beginning of april amid travel

restrictions introduced by the government. hotels, hampered entertainment and the wider hospitality industry. joining us for an exclusive interview is winnie chiu, dorsets hospitality chief executive. we have been talking about infections stabilizing in hong kong and china. are you seeing any difference in it comes to your business in your different properties? winnie: definitely. the borderon when opens, when travel restrictions will be lifted. different travel behavior among -- across different cities in asia. that is what we are seeing. .hina has started traveling hong kong, we have had a very steady growth in market share.

we are one of the earliest who as healthhe pandemic and safety is our priority. we are a pioneer in upgrading our hardware in terms of making our aircon and working with medical grade disinfectant within the hotel premises. what is very important is training our staff. our occupancy numbers in hong kong have been outperforming our peers in the last few months. shery: but hong kong has suffered not only from the pandemic it also from the months of ongoing protest. after the pandemic is over, there are concerns the protests will be reignited. how do you prepare for this eventuality? on withou really go your business in hong kong when

there are so many challenges stacked up against you? definitely a is challenging time for the hospitality industry as well as retail. some hope there will be peaceful solution and indifference can be resolved. the social unrest may come in smaller scale. and all of our cost that, we are looking at how we balance between fixed costs and variable costs. arrivals,ith tourism we are already pushing for much more local traveling. packages, etc.. working with cross-border corporates for programs. expecthow quickly do you corporate business travel to bounceback?

on city bydepends city. again, as ag, -- group, we are already having quite a lot of corporate guests staying with us because of the cross-border closure. pickupactually seeing a on that. again, it is more long stay versus the short stay. when theomes to corporate will pick up, it really depends on when the border opens as well as the travel restrictions being lifted and relaxed. with so many aspects of uncertainty, what are you doing when it comes to staffing arrangements? winnie: on staffing with thents, we are --

government policy and subsidies -- we in, we are actually have not laid off any staff in hong kong. we have kept all of their jobs. this is our priority to look after our people. shery: well that need -- well that need to be readjusted if the pressures continue in your business and what would the factors be? earlier,s i mentioned i think there will be a shift in balance between fixed cost and variable cost. there will be maybe -- we are keeping most of our full-time staff. the part-time staff will be on the basis of when you need them. you have talked about potentially more properties being planned and in development in the pipeline. have all of these pandemic challenges protests affected

your future plans? winnie: no. all of the construction sites are still open. the pipeline hotels are all coming on board. going not affected our forward. how closely are you working with government policymakers to ensure the hospitality and travel sector gets through this with the least amount of impact, particularly when it comes to unemployment? winnie: in hong kong, the government has come up with their subsidy and employment scheme, which enables us to keep our people. they come up with the 9000, which is a must 50% of our workforce that can benefit. in different countries, there are different schemes we will be working with very closely to the

government. that is the most important to our group. we have heard in recent days that some of these plans with airlines resuming travel. there are some much uncertainty with what travel is going to look like in terms of social distancing and the numbers of people that will be going overseas and leaving their borders. is there a sense there could be a need for major changes particularly when it comes to past -- when it comes to capacity in her business? -- for the major changes, we feel there will be a few things. in terms of distribution channels, you can see that because domestic travel will be more and more important and there will be much more

continental travel coming along, places like japan, australia as well as china where they have over 70% of domestic travel will really benefit from the recovery in the next six to 12 months. what we are seeing in terms of our distribution channels, there will be a lot more collaboration with local businesses. there will be a lot more database sharing. we as a group have started working with telecommunication companies, credit card companies. there will be more gift cards presale packages and promotions coming out. i do think it is a good time to start planning for the next vacation. also, -- international president and executive director. thank you so much. next, now worth $100

billion. that is based on numbers from private share transactions. we have the details next. this is bloomberg. ♪

shery: to a bloombergs group. we are hearing the tictoc owner is worth up to $140 billion

based on private share transactions. the chinese market cap ahead of rivals including twitter and snap. still behind facebook. our asia tech reporter joins us. what pops up when it comes to that valuation? other than the fact that tictoc has become more synonymous with the pandemic lockdown. valuation.he the highest is 140 billion. you mentioned it is higher than u.s. competitors like twitter and snapchat. if we look at china like it is already higher -- puts it only higher than tencent and alibaba, which is the giant. what happened over the past two or three years is they have been

eating up the online advertising share in china. that has put huge pressure to competitors like tencent. they can keeps is trending on the viral apps and online services. shery: given the pushback against chinese companies, can bytedance truly become a global player? >> i think that is the biggest obstacle they have to face. we have done a lot of jobs to reconcile with the regulatory scrutiny. tictoc is now offered by a separate entity from the main bytedance entity. -- theythey hired 15 hired a top executive.

by putting a non-chinese face in front of the global market as the tictoc ceo and bytedance ceo, that might help them address regulatory concerns. shery: bloombergs asia tech reporter. there we hand it over to china open, take a look at how markets are trading across asia. the nikkei and kospi all gaining at the moment. we had both export numbers out of the two countries, japan and south korea. the latest numbers plunging more than 20%. the asx 200 up three tens of when percent. this of course as we continue to see australia outpacing their developed asian peers in it comes to earnings downgrades this year. there is broad optimism across markets in asia with qe stocks gaining four times of 1%. this after u.s. stocks climbed

to a 10 week high in the regular session. the former u.s. trade representative tells us how she thinks nothing tensions between washington and beijing will play out. this is bloomberg. ♪ staying connected your way is easier than ever.

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>> it is 9:00 a.m. in beijing, shanghai and singapore. but come to bloomberg markets. up tensions.mps passing a bill that could see companies listed in the u.s. they waters weighs in on issue, warning of fraudulent accounting. and, while way is ready to fight