romaine: live bloomberg world headquarters, i'm romaine bostick. joe: i'm joe. romaine: s&p 500 and the rest of u.s. stocks fade on the day. emerging markets get a bit. joe: the question is, "what'd you miss?" romaine: we are talking about what has been happening in emerging markets. what has been happening in china. the recent moves by chinese authorities against companies like alibaba driving fears about

regulatory scrutiny that could spread around the country's most powerful corporation. we have seen volatility in chinese tax -- textures, one of the possible obstacles for emerging markets in 2021. we have everything from the covid vaccine distribution to geopolitics. even in the recent report strike in argentina. joe: huge news of course. whichrt off with alibaba, of course, high flying stock in these major chinese internet names expected to get it extra boost with the ipo of financial. that never happened. the plug was pulled on that a couple months ago. you see how the stock peaked at the end of october, having plunged significantly since then. more in the last few days with further regulatory crackdowns both on chinese internet in general, and financials, one of its holdings specifically. trouble in this area.

joining us now, sam mamudi who covers finance in china. thank you very much for joining us. it is hard to figure out what is the core story here. is it a crackdown on and, a crackdown on jack ma, is it a crackdown on the power of some of these tech make it caps on in china? what do we perceive is the goal here from chinese internet regulators? sam: hi, joe. the answer to your question is everything. all of the above. now, therimarily right focus is on financial. alibaba is under an antitrust investigation. i think it is fair to extrapolate that jack ma is clearly in their sites. as i'm sure you know, he made some controversial comments about chinese regulators. the low risk tolerance in october. which may have set things off. he is the richest man in china.

his two companies, they straddle the entire economy. with or without those comments, it could have been a question that the regulators, the party felt it was true at -- it was time to rein him in. when you look at companies such as tencent and mate juan have done, there is sentiment among investors -- these companies have fallen 15% since the financial ipo was scrapped. investors definitely think it could be a sector wide attack as well. romaine: there does seem to be, at least among investors, the general assumption, at least with jack ma, that they flew too close to the sun. the idea here that he is being made an example of. and that if you are a ceo or any sort of tech entrepreneur out there in china right now, you have to be mindful of the government system here. and maybe there are limitations here into not only how much you grow, but how you grow. as an investor, how do you get around that?

sam: that is the big question, isn't it? i think there is -- the party genuinely, from a very technical point of view, they do take financial risk extremely seriously. the political system there is very different to what we see in other market systems. but they are constantly tinkering with their rules and regulations to make sure there is no systemic risks, to make sure the average individual and investor can be made as whole as possible. level, theyome could say look, things are a little out of control and we are trying to balance them. as you say, for investors and just for the market, china has arguably been the most entrepreneurial economy in the world in that when he first century. it creates millionaires and billionaires at a very rack -- very rapid clip. jack ma is an extremely famous popular person in china.

i think they have to walk a fine line between saying, whenever the underlying political reasons let may be in the background, but just to the world and to the markets, to say we are trying to control things without giving the sense that they have become anti-entrepreneurial or anti-tech or anything along those lines that could scare money away. talk about financials, the business itself and what it looks like now and what it could look like going forward. we know there is alipay, which is a massively popular payment app. the aspect that is more controversial is sort of the more fintech, banking, lending aspect. how big of that is that within the financial universe, and how much does that shrink the ambitions of the company and by implication, alibaba, if that part is curtailed? sam: that is where the growth expectations are. so that is the issue for the

company and for the investors. alipay is everywhere. it is everywhere in asia. who knows, maybe it will be everywhere in the world one day. there is a certain -- it is a steady business. the wealth management side, the insurance side, the loans business, the connections they have two connecting the retail investor with bank loans and that, that is where all of their growth is coming from. that is where the high valuation comes from. today, our colleagues in asia reported that ant is looking at creating a holding company where all of the very bank like activities would get put. if that did happen, it would mean all those activities in the holding company would have to take financial licenses, they would have to have enormous capital requirements. they probably need 10 billion extra capital injected in it just to meet the regular boring

old bank financial regulations. then it just becomes much more like banking. like a bank. which banks are profitable, they make money, they are not a tech growth line. romaine: i'm curious about that. i don't know if you call it social, but the networking effect of how alipay evolved, and all of the services that involved a room that, that is kind of what made it not only successful, but really useful. the end consumer. if you say we want to push this into the corner where it is just a bank, from a consumer perspective, doesn't that make it less attractive? sam: from the consumer perspective, it remains to be seen how different the consumer experience would be as a customer. from the investor perspective, it makes it much less interesting. china flirting with ptp for a few years, and that was going to be a really big thing where people who may be can't get bank loans can get bank loans from other people

using fintech products. that got shut down by the regulators because of risk factors. sorry, ant financial itself has been almost like getting more bank like in its activities. for the consumer, it may not affect things. for the consumer -- our, bloomberg intelligence and hong kong, estimated the valuation of the company would go from 300 billion dollars to $150 billion if it adopts this holding company becoming a boring financial company plan. the other aspect is i believe today, the wall street journal was reporting that if such a plan came to pass and maybe some of the big state owned banks would start injecting -- they would take stakes in the holding company, which again, as you can see, then it really gets sucked into the kind of massive state owned financial system which again, much more staged. romaine: sam mamudi giving us

the updated with what is happening with ant financial. we will continue that conversation. we will broaden it out and talk about what is going on in the emerging market space. investing in china, asia, investing in those emerging-market names, and whether this crackdown going on in china may have a broader effect. emily wise is coming up next. this is bloomberg. ♪

onaine: today we are focused emerging markets as we head into 2021. we talk about the performance and the emerging-market space. this year since the big downturn in march. it has been on fire. outpacing a lot of the gains we have seen in developed markets.

a lot of that is because of the rebound we saw in china. joe: absolutely. china of course, the virus started their. but the incredible economic rebound poised to end the year at a higher level of economic activity then it started. various measures. bloomberg estimate rebounding sharply. another measure of chinese industrial activity also rebounding sharply. that is a v-shaped recovery. regulatory crackdown on tech aside, this is clearly a big source of global demand, global activity. romaine: you are ignoring that parallel line there. it makes a bit of a vase. joe: right. romaine: we will talk about that after the show. let's bring in emerging-market strategists emily weis. let's start with china. obviously, they are a big driver of global growth, a big driver for a lot of em trades out there. generally, how are you viewing the recovery in china right now?

emily: yeah, so it is somewhat where we have this bounceback an activity that we have seen on the consumer side and consumer led demand as people go out for luxury goods, jewelry, big purchases. we also see that on the manufacturing side. they have had this rebound due to their involvement in the global supply chain, and being able to really participate in that sooner than the rest of the world because of the way they reacted to this coronavirus crisis. the economy was able to get control sooner has provided them with a base to rebound. joe: what is the nature of this growth? crisis, therethe was talk about and balanced growth in china. it was veryat investment led and it needed to bounceback to more consumption, redistributing some of the wealth toward more household purchasing power. is that happening in any meaningful sense? or is what we are seeing now in china simply looking like the previous growth regime?

emily: i think we are starting to see that shift. we have now seeing it encoded and policy decisions, as this dual circulation strategy where their direct focus over the next 10 years is to make it a more consumer led economy, and have that approach rather than reverting to the old model of what they have traditionally done. we have that. but on the same side, i think we also do see this constant background hovering of the concern in the past. i think that is some of the regulatory burdens that have come up in recent weeks and also we have seen a little bit more scrutiny from the government side. because there has been this big focus on cleaning up balance sheets, looking at shadow banking, and making the growth more sustainable going forward. that does come with that push and pull. romaine: it comes with the push and pull. a lot of investors looking towards china especially when it comes to fixed income, sovereign yields, and the differential you see versus what we have here in the u.s. how much of that will be a

driver of investor interest going forward? emily: it certainly is. in this world where we have the negative yield in countries, even yields on the emerging-market side, have become fairly compressed over the past six months or so. we do see that china has one of the highest spreads against u.s. treasuries, the emerging-market space. as noticeable -- noticeably as one of the countries that have not turned to policy during the covid pandemic, and has not loosened policy that extensively during the covid pandemic. yields are pretty high. that is juicy for investors who are looking to emerging markets for yields. there are some options there. china is one which surprises some folks. joe: one thing we have seen has cooled off a little bit, this incredible commodities industrial rally. whether you look at china or other em's in their state of recovery, is demand for commodities and demand due to the industrial rebound, in your view, going to stay up intensely for a while? emily: i think it will.

we have seen the chinese led demand for particular copper due to infrastructure investments has been reflected in copper prices for a while. we have a little bit off the highs. at the same time, oil demand has not recovered as much as we would have expected. when we look to the next six months or so, we are looking towards a period where folks will realize we have this gradual normalization, even through the next month or two may be difficult. it does seem like we are at a place where emerging markets tend to be closely connected to commodity cycles, and that does seem like we are getting to that place where there is further room to go as the world starts to reopen. romaine: when you start to look at a lot of the other asian em nations out there, are they able to sort of grow in a way that is not completely dependent on china's fortunes? emily: that is a good question. we have seen a little bit more of the general northern asia economies excelling during this

time of covid. really because of their connectedness to the global supply chains and their ability to deal with the crisis and continue to have their economies functioning almost as normal in some cases, which has been rare. especially in the emerging-market space. we have seen this divide between north asia and south asia, where some of the southern asian economies have a ways to go, and are not as connected to china anyway. is a regional differentiation where the northern trade oriented economies are exposed to tax are doing well and are able to function someone on their own. joe: do you have a sense -- i mean, one trump was elected of course, the relationship with china and how that might change was the huge part of the storyline of his presidency. do you have a sense or a forecast of how it might change or whether you expect the status quo to continue, the new status quo to continue under biden?

emily: yeah, i think that is certainly something that gets talked about a lot. that there will be this easing of tension as we head into a new administration. i think there is still a lot of demand in washington for that remain. on china to if anything i don't see a rollback of the tariffs that have been put on in-place and the pressure on the trade that we have seen under the trump administration carry over the bided administration. one thing i do think will be more predictable, and i don't think anyone will -- i think it has been said before, definitely being able to have more predictability in policy is helpful, and will provide a smoother talking point going forward. romaine: our thanks thereto emily weis, always great to have you on. we hope to talk to you soon. have a wonderful new year. emerging-market strategist there. we have breaking news coming out of colorado in the u.s. the governor tweeting that the first u.s. case of that covid-19 variant, basically this new strain that is -- that was reported in the u.k., that they

do have a case in colorado. this is a variant. we know these viruses mutate all the time. we don't have any more details about whether this poses any immediate threat. something we will keep an eye on. we want to get back to our discussion on em. after we come back from the break, we will turn from asia to latin america. soybean strikes leaving ports out there. we will have the latest. that is coming up next. this is bloomberg. ♪

romaine: welcome back to "what'd you miss?" we are focused on emerging markets. we were talking earlier about asia and china. there are issues going on in latin america that may have investors reassessing how they view things down there. joe: lotsjoe: us with the

latest, carlene them along. thank you for joining us. em rallying, commodity prices surging, but also laid -- labor strikes going on. what is the big picture story? >> that's right. we are seeing workers at argentina's processing claims have been in a strike since december 9. that has sent futures to a new high. workers are asking for more pay, including a 25% paid a salary increase for 2021. while that may sound high, inflation is expected to end the year at around 40% higher than the previous year. romaine: when we talk about -- low, i feel like argentina has been, i don't know, let me prevent myself from getting in trouble, but it has been a complex situation for investors the last few years. i'm wondering whether this changes the calculus. a lot of investors have started to bet that argentina has put some of its issues behind it and

was on a path to a little bit more financial stability and financial predictability. >> that's right. a lot of investors were confident and hopeful that argentina's debt restructuring was going to change the tone for assets going forward. that they have been in deep distress, even after september. the reason for that is that investors were looking for more signs from the government of a solid plan ahead. the government continued to tackle some of the issues like inflation or growth in a piecemeal fashion. stumbling. assets the next big hope is for a new program for the international monetary fund. joe: on the story question specifically, and you have connected two of their rallying in soybean prices, how much is it hampering global supply? how much of the country's soybean product is getting out?

talk about that specific bottleneck, and some of the ramifications of it. carolina: yeah, what we know is that there is about 151 ships waiting to leave. so that has had an impact on global soybean prices. and on the markets in chicago. so this strike has been ongoing been december 9, it has several weeks already. so today, the argentine government started getting involved and labor ministry is now involved in the talks. there is a lot of anticipation for resolution. investors and grains markets are looking forward to finding out whether this will be resolved before the new year. romaine: what happens here? we are showing pictures of these boats, these barges right now parked presumably off of the coast, just waiting for some sort of guidance as to what is going to happen. do some of these contracts, are they going to get rolled back or are they -- or are the boats

going to ride this out until they get clearance to offload their product? carolina: that is a moving situation. it is unclear how exactly the bottleneck will be resolved. certainly as soon the situation is resolved, all of these shipments will be looking to get out and continue. joe: does the surge in soybean prices and the potential lost revenue that is accruing through the people selling it because they cannot move it, does that increase the likelihood that the labor situation gets resolved, given the opportunity cost of not taking advantage of these high prices? carolina: absolutely. that is a very good point. because actually, every day that the shipments stay stuck in the river, they are unable to leave, it is lost money for argentina which is trying to get fresh dollar funds from some multilateral organizations. argentina, these dollar

exports, the dollars that come from the experts are very important. and that is what these unions have. year,ina -- through the so this will -- this is key for the national government. romaine: carolina, great to have you on. she is our bureau chief down there in buenos aires, giving us that update. interesting strike here. you brought this to my attention earlier about the tugboats down there and the impact on soybeans. i know you are a close follower of the commodity space. naturally. seriousness, there is a sense that some of the disruptions we are seeing there could potentially have spill over to some of the other nations and broader market. joe: and look, there is that and there are -- you look at any commodity deter. lumber, copper, iron ore, hot rolled coil, steel futures, they

are soaring to the moon right now. we are seeing the surge in demand coupled with crimping supply. pretty remarkable stuff happening across a range of areas around the world. romaine: really shaping up to be an amazing year. that is all for "what'd you miss?" joe: have a great evening. this is bloomberg. ♪

emily: welcome to "bloomberg technology." i'm emily chang insane with cisco. we're looking back on our biggest interviews this week. a year unlike any other. while the pandemic created tidal waves of uncertainty for many companies, the tech sector seemed to do what it does best, adapt. one of the companies crushed hardest by the pandemic was uber as commuting halted and ridesharing stalled. it is not the first crisis