>> they are still on the hold that on the whole more loyal to trump, today we saw 10 republicans and the entire house rake with their party. we saw some pretty strong straight -- statements and it is incredible that there were 10 republicans that broke with their party, but over in the senate, it is different. they do not think -- see reelection as often, as well as

we saw some more details come out over the past week. it was not just here were some protesters who broke into a building, there were people with arms, there were people who were planning to kidnap or even kill, people with zip ties, some of these scary details have been on the minds of some lawmakers who realized how bad this could have gotten if the protesters-rioters had been able to access lawmakers. >> what about the political calculus in the senate because as horrible as this was, you cannot help but think ultimately, republicans are thinking if donald trump has really damaged his legacy, his brand so much as he damaged the country, maybe i am smarter to not support him no. -- now. it is all politics, it is all about getting reelected at some level for these people, do you think that is what shifted? >> that is what shifted, we have

also seen a big rebuke of the two senators who led the charge of challenging the election results, they have been taking the heat both from their colleagues in the senate, from some of their mentors and also from donors. there have been a lot of announcements from companies saying they are not giving to members of congress who voted to overturn election results or not giving contributions at all. i think a lot of republicans looked at who they are donor bases -- base is and said they cannot afford to run for office without some of these factors. haidi: there remains the question as to what happens in terms of the timeline in the senate, what are the arguments going to be presented? is this something to fall down to a legal argument, because we have spoken to people who said when it comes to the evidence, it is all out there. it is documented on social media

and what he has said in rallies, so are we likely to see this being an open and shut case on the legal side of things? >> yeah, it will be very different from the last impeachment. this time there are videos, there are social media posts, there are some lawmakers who were first-hand witnesses in this attack, so will be different. it would be more of a political argument particularly because the president has left office. last impeachment it was about foreign aid and presidential interference, today they will be saying look, the president said this and then an attack happened. it would be a more concise argument to be made. it could be a trial that lasts for several -- several days. it will be a more open and shut case but it will not necessarily be brief. >> joe biden seemed forced to be

more in the camp of maybe focusing on the inauguration, not necessarily letting donald trump off the hook. do your contacts in the white house, and congress, if he is coming around much more to the side of no, we have to punish trump even if it takes attention away from the steps i want to take, even if he gets in the way of moving forward as speedily as we can. on getting cabinet picks appointed and getting some major legislation passed. >> here comes nancy pelosi, sorry to interrupt you, but she is walking now towards the floor of the house surrounded by security of course. other representatives to go and sign this bill which we have been waiting for. i suspect this is a rather triumphant moment for nancy pelosi? >> it is, but also a solemn one.

she has made that clear throughout the -- impeachment is a last effort situation, this is not something you want to do every other tuesday. she was wearing black today, she wore black a last impeachment, sort of a symbolic gesture to the solemnity of the occasion. >> laura davidson thank you so much, nancy pelosi is getting ready to walk up to the podium. again everybody with their masks on doing the best they can to keep a little bit of social distance going there, she is giving and aid her phone, she is perhaps getting ready to present some prepared remarks. we will see how quickly she gets to this, but clearly this is a very important and as lori -- laura just said, a very solemn moment. haidi: that is right, not every other tuesday as laura said, but

every other year. we are listening, let's listen. >> assistant speaker, also with their managers for the impeachment, lead manager jamie raskin, diane, david, joaquin, eric, madeleine dean, and joan. i think ted lieu is going to telecommute electronically, so we are very proud that they have accepted the responsibility. a responsibility we did not think one week ago we would have. today in a bipartisan way, the house demonstrated that no one is above the law, not even the president of the united states. but donald trump is a clear and present danger to our country

and that once again, we honor that ofo -- oath of office to protect and defend the constitution of the united states, so help us god. and now, i sadly and with my heartbroken over what this means to our country, of a president who would incite insurrection will sign the in grossman of the article of impeachment -- in grossman. haidi: we are seeing house speaker nancy pelosi there, a very solemn moment and a historic moment, officially signing that single article of impeachment that formalizes the second impeachment of president donald trump. the single article accusing the president of inciting violence

against the united states and its institutions for his role in inciting what led to the riots in the capital last week which we know led to the ransacking of the capital as well as the deaths of five people. we have in the meantime see president trump respond in about a five-minute video posted to twitter, not of course by his private twitter which has been disbanded, but to the white house official account. president trump saying that everyone must follow laws, obey law enforcement, but he has been brief when it comes to potential threats saying there is never a justification for -- and no excuses, acknowledging we have seen a political balance spiral out of control. we will continue to get more on that. let's take a look at how markets are reacting. sophie: we are seeing a change in australia, the start of cash trade being weighed by banks and

some gold miners. energy stocks under pressure and wti, extended losses before $53 this morning. we are seeing gains of about 1/10 of a percent after we saw the tech lead rise on wall street. and that pushback we saw on tapir talk. in japan we see futures in chicago we are seeing a downside. this is on several reports including recasting of gdp demand. quickly switching up the board, chinese tech firms very much in movement as alibaba tencent have been added to a u.s. like lowe's. also for carmakers, this after jp morgan raised shares.

>> let's get to karina mitchell. karina: in other news, world health organization experts are in china thursday as they open in interest to geisha and into the rise in the coronavirus. they seemed -- no focus on the outbreak in wuhan. beijing has resisted an independent inquiry, the team will spend two weeks in quarantine. iran has told nuclear ready gators -- wrigley gators -- regulators that it will allow under the 2015 accord with more powers, the iaea confirms it has been told of the plan which is part of the islamic republic's response to rising pressure from the u.s.. however, they have said they will roll back the measures if some sanctions are lifted. two weeks after brexit finally kicked in, eu regulators are

warning that financial firms are resorting to what they call questionable practices to preserve their single market status quo. the european securities and markets authorities say at some companies are skirting roles in solicitation which allows them to work for an eu client only if that story approached them. the european central bitcoin for allegedly facilitating criminal activity saying it has been up to quote funny business. the president says bitcoin is not a currency, but a highly speculative asset and has conducted what she calls quote reprehensible money laundering activities. bitcoin has surged over the past year. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell, this is bloomberg. haidi: still ahead we will be joined by a professor from the

university of chicago. we will get his views on the u.s. economy, emerging markets, and the future of monetary policy. you do not want to miss out on that later this hour, but first the outlook for markets we are joined about -- in a discussion about which sectors are in bubble territory. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

>> even in the face of political turmoil, markets have marched on. investigate -- investors are keeping an eye on stimulus. we are joining us -- we are joined by a guest from new york. obviously you have been following the historic news events that we have all been tracking so far. this a historic second impeachment underway for president trump. you talked about the idea of political uncertainty and volatility postelection, is that

still your viewpoint? it seems like market participants have a certain view when it comes to mostly being able to ignore what is going on in washington and continuing to drive equities higher. >> markets are looking ahead to the inauguration, they know a transition will occur, the transition date, that is clearly ahead and tomorrow, our clients will be focused on the biden plan that is to be unveiled. that is really the key things the markets are focused on, it is really the consequences of the senate runoff elections you had in georgia which means that another stimulus could be forthcoming in the first quarter of the year. that means more stimulus checks, aid to state and local governments. extension of unemployment insurance, all that really is hitting the markets despite the noise that we will probably be

seeing this in washington for quite some time. we had the u.s. economy contract 1% before the 900 billion passed at the end of december and we have seen 2.3 percent growth for the first quarter and we think there is another and hundred billion of fiscal stimulus to be passed in the next couple of months. >> what is -- what does the move in treasury yields tell you particularly when it comes to the outlook for emerging markets . we keep talking about reflation trade, is that something that will continue to play out for you? joyce: i think investors are focused on is there a risk in treasury markets? there is more of a focus on inflation. inflation is going to remain a theme particularly if we continue to see a move up in commodity prices across the range of commodities. markets are focused -- comments today made it clear that this is

not on the cards over the very near term. i think there has been more focused on treasury. we have seen reflation trade yields coming back online. this is going to be a theme throughout the year, you can see some overshoot on inflation just from the base we are starting from in the spring and the summer numbers. that is sending a very clear message that they remain on hold, looking at the accommodation and their ringlet -- their language reflect that. >> of course referring to the vice chair of the fed saying the fed would not think about raising rates until inflation is at or above 2% for a year. what does that mean for people who are trying to make money in stocks for example? you see the s&p 500 moving up to 4000 this year, you still like china although you said that you are neutral on chinese stocks because there was such a strong

performance last year. where do i make money in stocks? joyce: the u.s. started at 4000 and went to 4400, looking at the rest of the emerging markets we think there is room for catch up. a lot of those opportunities are in the asia region. right now we think there is some opportunities in the commodities place that includes indonesia. we took the underweight off of india and we are neutral now. china is the driver, we have chinese risks taking up to 9.2%. asia has opportunities outside of asia, we think some of the commodity plays like brazil and russia will also do well here. we see opportunities in the u.s. where we have taking -- taken the growth numbers up and we still see asia one of the biggest drivers of growth going forward. taking a look at the china

numbers, china at 9.2% growth, it is about 80% the size of the u.s. economy. we think it can match the size soon. there are opportunities in some of the other emerging markets, despite how interesting given the rally china has had. we have a chinese yuan at 6.25. ♪ kathleen: technical difficulty here, just a moment, there we go. joyce chang, thank you so much, chair of global research at j.p. morgan, pretty bullish on the s&p 500 going to 4400 this year and moving on india from underweight to neutral. looking at some good sectors in asia.

coming up, the trump administration has classified its strategy to restrain china's rise and maintain u.s. dominance. we will have all the details next, this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah. okay. plan, pivot. how do you bounce back? you don't, you bounce forward, with serious and reliable internet. powered by the largest gig speed network in america. but is it secure? sure it's secure. and even if the power goes down, your connection doesn't. so how do i do this? you don't do this. we do this, together. bounce forward, with comcast business.

kathleen: the trump administration has declassified its strategy to promote dominance over china with the focus on accelerating india's rise and bolstering the defense to taiwan. let's bring in tom mackenzie, what are the core elements of the strategy? taylor: >> this was a strategy signed off by president trump in february of 2018 called the united egypt framework for the india pacific and the key parts are the assumption that china, this is ascension from the u.s. and that china will undermine u.s. alliances in the indo

pacific region, that we will continue -- it will continue to malign trade practices and dominate key practices like artificial intelligence. the response is to bolster its ties with india as you said, to help strengthen the indian military and to help move india forward as an economy, as a nation with close ties to the united states. there is also a focus on taiwan, the u.s. will continue to help taiwan build out what it calls a -- an asymmetric military capability because they are concerned, and they assume that china will become increasingly assertive and muscular in trying to compel the reunification of taiwan with the mainland. on north korea as well there is an all-out policy to use every tool at america's disposal to pressures the resume -- regime of kim jong-un.

the question going forward is, to what extent the biden administration keeps the strategy in place, builds on it, or restructures it completely. haidi: we have also seen the u.s. putting more pressure on china when it comes to banning certain imports. tom: that is right, donation muslim or non-muslim has done more than the united states to pressure china over these rights abuses. this is the latest action banning the imports of cotton products, textile products, and tomato products from the region because the u.s. claims there are companies that in the -- that region using forced labor that is linked to these reeducation camps where the u.s. says as many as one million muslims are held in these camps. china denies that and describes the camps as schools but it is part of this continued pressure from the states. the u.s. imported about $10

billion worth of textile products from china last year, about $9 billion worth of tomatoes from the region. the biden administration has been focused on what they will do with this, joe biden himself has described what has taken place in the region as a genocide so it is unlikely he will roll back some of these measures. in terms of the broader trade picture between the u.s. and china for 2020 we will get the latest numbers around 10:00 local time, but it is likely you will see a trade surplus for china, global trade surplus. the second largest on record, about $532 billion u.s. that is despite the impacts of the pandemic. haidi: tom mackenzie there with the latest, let's get you the business flash headlines. tesla says its new model has one of -- a five star safety rating.

they texted the long-range drive but expect results from all variants of the suv. elon musk is hinting that tesla is close to starting work in india replying to a tweedy question about when he would open in the subcontinent a reply did -- replied soon. the executive is said to have been keen to his downfall is set to speak. the senior vice president is set to talk here at tokyo's district court later this thursday. his ally was arrested at the same time, bloomberg has reported that he drove the campaign, overseeing plans to integrate them. -- remains on -- upbeat saying revisit plans for these nonstop journeys between australia and london and australia and new york. the ceo says he is confident they will be viable as people

look to avoid layovers amid the coronavirus pandemic. he plans to buy 12 airbus one thousands for the long-haul project. singapore airlines has begun marketing its first elder dollar bond as the pandemic continues to hammer international air travel. the fly carrier is said to be offering a 5.5 year bond. the dollar offering comes after the airline raised $1 billion last year. coming up we will be speaking with the former rba governor about the impact of the turmoil in washington as well as the future of global monetary policy, that conversation you don't want to miss is coming up. this is bloomberg. ♪

karina: president trump has been impeach for a second time and will now face a trial in the senate. the house approved a single charge of incitement of insurrection for his role in last week's riot at the u.s. capitol in washington, d.c. the motion was supported by all house democrats as well as 10 republicans, the article now goes to the senate although it is not there yet. -- not clear yet when a trial will start. trump's son-in-law is said to have stopped efforts -- two fringe social media platforms such as parler after twitter and

others suspended his accounts. we are told jared kushner intervened when the president social media director saying the alternative sites are not suitable and cannot handle increased traffic. parler is suing amazon to include it. the italian government is one step closer to collapse, after a junior coalition member pulled out. the party has just 3% ocular support, but majority influence of the government. he is attacking the prime minister to hit -- for his failure to solve the coronavirus fallout. he is said to just set to widen the deficit by 24 billion euros. a reconciliation panel and to resolve them it -- problems with demonstrators will meet next week but without members of opposition groups. both camps rejected the idea when it was first voted last year, the panel made up of politicians and academics will address demands that the government resign and the

constitution be rewritten. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell, this is bloomberg. kathleen: thank, a second impeachment of president trump seems to be going largely ignored by the markets in terms of their movement. our global economists paying attention to the bigger picture and what this tells us about the political economy situation of the united states, we turn to a correspondent, now professor of finance at the university of chicago school of business. in the books you have written, in much of the work you have done you have looked at the social fabric, you look at the connection between government policy and what is happening in communities. when you look at something like this in the united states, what do you think -- not what it signals about the future, but what it does to us?

what it does to the foundation of everything about this country that has built up the economy? >> what distinguishes an industrial country with strong institutions from a fragile, emerging market is -- historically has been the quality of the politics. yes, people debate each other, people fight each other, but there is a point at which they stop and that is what makes the debt in these countries able to run right levels of debt, to run easy monetary policy without a fear that somehow the policies will go off real. that view has been challenged in a number of countries, certainly in britain with brexit and in the united states. we are still a long way for these countries to become fragile, but it is one step

along the way. markets typically ignore politics in though -- until it is staring them in the face, so though they are taking it in stride, it is not clear they will forever continue to do that. kathleen: in terms of what this means for where the country goes next, is it -- is the pandemic part of the reason this has gotten as tense as it has? is that the leadership of donald trump? where the figures already there in trump's presidency and some of the things he stood for, something that just made it worse? raghuram: i think it is the latter, i think it is not president trump by himself, he exploited divisions that were already there and certainly his behavior has made things worse, i do hope this is a last hurrah

for a chaotic administration and we get a more sensible focus on the significant challenges of covid in the new administration and as that fight gain strength, as we overcome covid, the sense of accomplishment of togetherness in the country which to some extent alleviates these divisions, but i think to get at them, we need to focus on what is needed by the communities being left behind in this country. haidi: how much of a chipping away of the institutions of democracy that we continue to see in the u.s., how much of that needs to happen until investors get to a point -- and i am wondering if you think that that should be the case where we see a risk premium being associated with u.s. treasuries? raghuram: i think we are still some distance from it and i am hopeful that the biden administration as well as

congress will recognize how close to the brink we can and therefore remedy some of that with legislation, for example on conflicts of interest, on reducing some of the excessive bonds of the presidency and so on. i think at this point that should help tremendously, but i also think that the underlying features -- features which existed before the presidency will have to be addressed. the pandemic has certainly increase the levels of inequality in this country which often is the primary source of political friction, so i think attempts to reduce the inequality, provide better jobs, provide better keep villages -- better capabilities, that is something this administration should take on. haidi: again, the problems that existed not just in the u.s. but globally within society, as you

say we have been in the inequality and labor markets, these are just issues exacerbated by the pandemic. what aspect of that worries you the most? in terms of bringing back a healthy labor market, there are jobs that will simply not come back post-covid. raghuram: for sure and i think the worry that we -- the concern we should have is not just about inequality within countries, but inequality between countries. there are a number of countries in emerging markets which have not had a reasonable chance against covid, that have not spent the amount of money in terms of relief, in terms of repairing their firms. essentially, even as the rebound happens in the rest of the world, you will see these countries being left behind even further than they were in the past.

i think as we focus on repairing the problems within countries, we need a much stronger global move to being with the inequality within countries. ensure those countries facing high debt loads that have not been able to tackle the buyers effectively do have a chance going forward. that will be important for demand. kathleen: what about the concern some have that in some emerging market countries, in some developed countries, government stimulus, fiscal spending, central banks have kept companies that were kind of on the edge of over indebted, overleveraged, and barely solvent before the pandemic it may be getting some assistance now? and that when this starts slowing down, that is going to be another wave of stress for the economy and for the market because there are businesses

that maybe even some households that will be in trouble when they don't have -- raghuram: i think that is a serious concern, i think the support initially was appropriately on unconditional -- unconditional. we spent a lot of money on all kinds of firms in all kinds of households, going forward that will become selective and we will see a number of businesses that don't have a business anymore. think about how many restaurants are in the center of cities and if office work becomes somewhat lower, maybe 10% lower, some of those restaurants may not have a viable business model. my sense is going forward we have to accept that there will be a reallocation of resources. a number of jobs will have to come, how to assure the economy

is dynamic enough for that to happen and ensure that change can be -- in the u.s. i think this is more easy now given the nature of the -- i have given. harder in japan and in europe and those countries will have to make sure that as the rebound gains strength, they allow businesses to fail while supporting their workers. haidi: we will talk more about debt productivity in a few more -- moments. the former governor of the reserve bank of india staying on with us. lots more to talk about. this is bloomberg. ♪

haidi: as the pandemic forces governments to provide extraordinary stimulus, asian central banks has been ahead of the curve in using monetary policies specifically debt monetization. the former rbi governor is still with us and also joining us for the conversation is our chief asia economic correspondent. what have you been seeing as the trend in the restructuring of these debt policies around asia? i'm curious as to what the implications are when it comes to central bank independence and the closeness of that relationship between finance departments and central banks. >> indonesia group global

attention last year when they started to buy government debt directly off the government to help finance its deficit. the central bank told investors it would be temporary, that on buying has stopped, but nonetheless there is still scrutiny on indonesia to see where they go next with that policy. in the philippines asked month, the government took out another loan from the central bank, $11 billion u.s. from the central bank itself. all to help finance the deficit and fight the pandemic. together, i think a lot of investors are now watching to see whether indonesia and the philippines go further down that path and whether other emerging markets follow and to see how investors respond. a lot of questions about how these policies of all from here and how investors respond and to what it means for independence. kathleen: commenting on what he

just said, do many of these emerging-market countries have any choice but to go down this path and continue to go down it until vaccine distribution is wide enough to get the virus under control, what else can they do? raghuram: they used to do this a lot, have the central bank financed the government and then as they try to bring inflation under control, they stopped this financing of the government and made their central banks independent. many of them are now seeing central banks work in close cooperation with the government. this is not entirely a bad thing if what it does is -- it just offers short-term support for the government. the government needs to sell a whole lot of debt to deal with pandemic relief. it cannot really set about selling that to the broader market, it sells it to the central bank and the central and has a nice device to force people to finance it called the

central bank reserve, it dumps it on the commercial bank and the central bank finances the government. it can be done in small doses, it can be done for a small period of time. over time, if you do this, then effectively what the central bank is doing is essentially forcing the financing of government debt into the commercial banks of the country. it has a lot of dealer serious effects, possibly the fact that there is no check and balance on how big the government deficit gets. >> could i ask, how concerned are you now about the independence of central banks? you make the point we are in a crisis, but some of these actions are merited, but at what point do we cross the line whereby the central banks and ministries become blended and the independence they fought for disappears? raghuram: i think it is important that these be

decisions taken by the central bank rather than enforced. of course it is very hard for the public to see what the exact relationship between the central bank and the government is, but we should respect the central bank's ability to say no. and when should the central banks start saying no? it should be when we see inflation pick up again. for a number of asian countries so far inflation has not picked up, but inflation picking up is an early sign you are doing too much and you should back off. haidi: i am also curious about the issue of debt sustainability which we touched on earlier, but also debt productivity. china is the cautionary tale as how you get less bang for your buck in terms of stimulus, is that a spiral uc global economy getting themselves in and how does it end?

a recent guest said it does not have to be a lehman moment when it comes to a debt crisis, a new crisis could be much more insidious and incremental. raghuram: the accumulation of debt over the next -- last 20 years has been significant and has been steady. of course economists say it is not too much of a problem given the debt service requirements are not high and interest rates have come down, but debt goes up and has to be rebated. it is a liability on the bank sheet and it also constrains your ability to do things that you need to do in an emergency. in the u.s. we had debt before this pandemic of 80% of gdp, now it has crossed 100%. what if we had a new emergency with climate change in five years, we will not have brought down this debt at that point.

it makes sense, your question is why are we building up this debt? in thought, it is because of emergencies, but in part it is because we do not have a sustainable growth. larry summers'secular stagnation is making it such a that china has to inflate demand, the u.s. has to inflate demand through credit growth and so on. across the growth, that across the world we are trying to push up weak demand with more and more debt. ultimately that is unsustainable. >> this year is supposed to be the year of global economic recovery and one would assume that we might see less pressure on a central bank the fed to keep supporting the economy, is asia vulnerable to a taper tantrum at any point? is it in better order compared to what happened in 2013?

raghuram: i think markets take advantage of the premise of central banks. even though the fed has really promised to stay easy for as far as the eye can see, we are not even thinking about thinking about reducing accommodation. i think markets are taking advantage of that and taking as many liquidity bets as they can. the worry is that even as central banks promise to have liquidity for a long time, markets are leveraging off of giving that promise. when the time comes to swish -- switch, and less it is steadily advertised and markets are -- have time to react, a taper tantrum moment is possible. it is not going to happen this year because the fed has said no chance, but over time i think it

could happen and it is important. this is where many central bankers say we should stop the markets from taking these risks, but we do not have instruments to do that. kathleen: so what are you watching when some of these things start boiling over in a sense? once upon a time we talked about bond market vigilantes in the u.s., we know the in asia, the bank of indonesia and india have had to bow to markets and watch their policy steps so they did not get their currencies overvalued, undervalued, their bond markets battered. is that going to be a sign to you that maybe things are to the point where there is a breaking point, where has gone too far? raghuram: certainly the long-term bond yields are being controlled even in some language, distorted by central banks did they can only do so

much in emerging markets. the initial sign may well be some worries about government bond markets, but even before that, it is possible that the spillover of liquidity into riskier and riskier assets would suggest the first signs may come from the credit markets, from lending drying up to private companies because you have gone out on a limb on the risk spectrum these kind -- companies have leveraged up and the economy has that been strong enough to support that debt and you see an increase. it is -- the fixed income markets could be where it comes but it could be the credit markets that deed the debt markets. haidi: i wanted to pose this question to you, we talked about the scarring when it comes to global markets, the issues of inequality playing out, i am

wondering in what permanent ways do you see changes to global economies once we are out on the other side of this pandemic? raghuram: i do not want to end on a sour note, it does seem to me that some of the advantages that we have -- some of the -- the single lining in this pandemic is that we have made a lot use of technology. it is possible the as we go forward, some of the -- that we have anticipated so long from technology are realized because we have reconfigured work processes to take advantage of the communication technologies we have and so on. people for example may start going to work three days a week rather than five days and those two other days, they work far more productively at home. that would be one example of an advantage and it is created by the pandemic because no longer do you have to show up at the office to show you are a loyal

worker. that stigma has disappeared because we have shown we can work effectively from home. similarly, emerging markets may be able to enter long-distance services in a much bigger way than in the past. now doctors can do some of it and it would benefit the u.s. which has a lot of need for medical services, so those are things that i think could actually happen and make long term positive changes. kathleen: i think you have proven you can be very productive working from home because this is a great conversation and certainly, zuma made it all possible, so thank you so much, the former governor of the reserve bank and professor of finance at the university of chicago school of business. also thanks to our chief asia economic correspondent who brought so much to the table as well. be sure to join into bloomberg

radio to hear more from the days big newsmakers and get analysis from the daybreak team. you can see them write there broadcasting from hong kong. listen via the app or bloomberg radio.com. plenty more ahead, stay with us.

haidi: we have some breaking news on japan machine orders,

beating consensus. we are seeing a gain of 1.5%. we were expecting a contraction of 6.5 percent, certainly moderating from the 17.1% jump in november -- october that was surprisingly large, the biggest since 1996. year on year that number is a contraction of over 11%, still better than expected. we will continue to watch how the new infections in japan and also -- is probably having an impact on investment and spending commitment. let's take a look at what we are watching when it comes to the markets. sophie: we are keeping an eye on japanese stocks on local media reporting the government will suspend business travel from the rising -- 11 countries and regions. local media reporting it will cut work at his japanese factory and focusing on earnings, the stock to underperform.

watching how the winter freeze is affecting utilities in japan as well as south korea, they were not see additional supplies and a rise -- as a rise in demand for heating and feels, keeping an eye on their supplies. the opens are next, this is bloomberg. ♪

kathleen: welcome to daybreak asia from bloomberg or's -- from bloomberg's world headquarters in new york. haidi: asian major markets have just opened for trade. our top stories this hour, president trump is impeached a second time. 10 republicans backing the motion. democrats say the article will go to the senate immediately, although a trial date remains unclear. asia aims to extend --

opec keeps a close eye on inventory. the u.s. updates strategy to keep china in check and accelerate the rise of india. the approach focuses on the defense of taiwan. kathleen: now for a look on how trading is shaping up in the asian markets, let's get over to sophie in hong kong. what is your -- what is on your radar screen? sophie: a risk off coming through in asian markets. tokyo stocks under pressure. the nikkei 225 to a record in darlie -- in dollar terms. the yen staying within range. not too much reaction to the government expanding the emergency area over tokyo. we did have orders for japan for november king up in month on month basis compared to the forecast for a 6.5% drop.

we are going to get chinese trade figures. double digit growth expected for december. let's check in on the start of trade in south korea. samsung on watch ahead of the galaxy event. we are going to be watching for lines from the government regarding its plans for the buying and distribution of the vaccine. the korean yuan at the 1100 level against the greenback. checking in on what is going on with ozzie shares, some fluctuations with sidney stocks this morning. tech gaining ground. banks and mining stocks are under pressure in sydney. we are seeing bullion below 18.50. still staying under pressure. ubs sang gold could fall to 1800 this year on expectations the fed will signal a tapering of its bond buying. there has been pushed back against such talk. that coupled with a 30 year

auction did see treasury yields lower on the long end overnight. u.s. 10 year yields edged slightly higher but staying below 109 this morning. we are seeing some gains here. in this with earnings as u.s. politics is top of mind given we had trump's impeachment and waiting on biden's plans for the economy, which he is set to unveil on thursday. haidi: a lot for investors to digest. the virus, a number of global coronavirus cases have surpassed 92 million. our next guest is optimistic for 2021 as the focus becomes about turning vaccines into vaccinations. as bring in that it executive director of ocbc bank wealth management. that is key, isn't it? there was so much vaccine

optimism going into the year. the actual translation into getting into the arms has been slow and incremental and some would say disappointing so far. does that make you more inclined to try to have a world balance? how much rebalancing are you doing with your portfolios at the moment compared to last year? >> we are actually -- the stock market did not do as well as they did in 2020. 2020 was a good year for the stock market despite the economic misery. 2021 looks positive. getting the vaccine off the ground, making sure people are vaccinated is proving to be a challenge. companies have a tough time increasing reduction. there are some hiccups along the way. that is to be expected. the markets will be volatile. we are not concerned about what

is happening in the short term. we think in the next 12 months, 18 months as more vaccines become available, as more people become vaccinated, as locked down start to ease, as economic activity picks up, as physical stimulus comes on in a bigger way after biden takes office, all those put together will do well for the global economic recovery as well as further upside for the stock market. in the short term, there are a few hiccups here and there, but i think -- there are reasons to be optimistic. haidi: where do you find value when valuations are where they are at? do take a look at the nikkei in dollar terms? it is at a record. not to mention the fast and fear israeli we are seeing when it comes to korean stocks as well. where you find opportunity? >> if you look at the price to

earnings ratio, it seems high. the world index is trading at almost 2.5 times the e sure relative. that seems a bit high. bear in mind interest rates are very low. interest rates are going to stay low -- there is room for valuations to increase even further. tech stocks have been the main driver, -- the value stocks. there is value in that segment. you look at the msc i growth index, that has gone up 33% in the last year or so. the msc i value index has been largely flatlined down 1%.

the recovery stocks, real estate, energy, industrials, this could still play catch up because the underperformed. the stretch valuations. the non-tech stocks are not as expensive. kathleen: that sounds like the beginning of a potentially good buy. you say you like energy. that leads to a certain extent to our question of the day. how far can the commodities rally go? >> i would not be surprised if there is more upside to commodity prices. we have taken on the forecast for oil. we are looking at an average of 56 dollars a barrel. we have taken it up slightly to 62 barrels -- $62 a barrel. opec has decided to deepen its cuts. global demand is going to pick up with more fiscal stimulus. they will become more evident after biden takes office. he may launch more stimulus of

the first quarter of this year. i think that is going to spur demand. economic recovery, increased infrastructure spending, those will do well for the commodity cycle. [indiscernible] kathleen: overweight stocks, u.s., japan, hong kong, singapore and indonesia. we had a guest on earlier who likes china but said after a strong 2020 stock market performance, china is not so much of a pick this year. if you're going to invest in china or rebalance your portfolio, what part are you going to buy? >> we are positive on china. chinese government has a circulation strategy. they want to promote local industries, domestic demand.

the chinese economy grit 2.5% -- grew at 2.5%. the pboc has a lot more rules to cut interest rates, inject monetary stimulus. they are doing a good job in terms of containing the covid-19 infection. are still reasons to be optimistic on china. the chinese stock market has done well. you can focus more on the domestic place in china. there is still opportunity in that area. kathleen: it has been a great opportunity to have you on tonight. let's get to karina mitchell with the first word headlines. karina: two weeks after brexit finally kicked in, regulators are winning that some u.k. financial firms are already resorting to what they call questionable practice to

preserve their single market status quo. the european securities and markets authority say some companies are skirting rules on solicitation, which allow them to work for an e.u. client only if that customer has approached them. the italian government is a step closer to collapse after a jr. coalition member pulled out. the party had just 3% popular support. he is attacking the prime minister for failing to resolve the coronavirus fallout and the wider weakness in the economy. he is said to widen the deficit by 24 billion euros later thursday. a reconciliation panel set up to resolve issues raised by demonstrators in thailand will hold its first meeting next week. both camps rejected the idea when it was first offered last year. it will address demands that the government resign and the constitution be rewritten.

iran has told nuclear regulators it will resume fuel production at its rector in tehran, enriching uranium to higher levels than permitted in the accord. it has been told that the plan, which is part of the islam make republics response, to rising pressure in the u.s. iran has said it will rollback measures if some sanctions are lifted. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. haidi: still ahead, and that west takes a year of two halves in china. economists -- an economist joins us a little bit later and a preview of those trade numbers coming up. plus, president trump impeached for a second time. his most immediate concern maybe whipping up support in the senate.

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kathleen: the u.s. house of representatives has voted to impeach president trump for an historic second time on a single charge of incitement of insurrection over his role in last week's riot at the capi tol. a senate trial is unlikely to begin before trump's term ends on january 20. trump responded by: on americans to unite and avoid further violence. >> violence and vandalism have no place in our country under plays in our movement. mob violence goes against everything i believe in and everything our movement stands for. no true supporter of mine could ever indoors political violence. kathleen: let's cross now to our bloomberg reporter in washington

, laura davidson, for more. we saw the historic signing of the article of impeachment. as you talk to your sources, what is the sense now? is it we won or we have a lot more work to do? laura democrats are pleased to see they had some show of bipartisan support for this measure today. think pleased about impeachment is sort of an oxymoron, but they are eyeing what happens in the senate. the articles were -- the article itself was signed and sent over to the senate. it will be a week or more until they actually begin the trial. there are several republicans who have indicated they would be potentially willing to convict trump in this process. if they were to complete the impeachment, -- he would already be out of office by that point.

they could also vote to prohibit him from ever holding federal office ever again, which is something some republicans, particularly those who have broken with trump say would be a good thing. mitch mcconnell told some of his associates trump has committed impeachable offenses and it would make him easier -- make it easier for him to break with trump. haidi: the timing is going to be key. to we know about this political calculus in between wanting to strike while there is momentum and anger and this is top of mind and not wanting to overshadow the first 100 days of the incoming president? laura this is bo's death is a something both democrats and republicans are looking at. mikasa looking at how does this not the light in's agenda? he needs to get his nominees confirmed and put people in place. you need time in the senate to do that.

there is an impeachment trial taking several weeks, that would waylay some of that progress. publicans are weighing what this means for their political future. we are weak away from the attack on the capital. -- we are a week away from the attack on the capitol. the question is, do the feelings remain strong or will it republicans say i do not want to make any waves with trump supporters were also my supporters and hope this moves past them. haidi: lots of uncertainty to come. already an historic day. our davidson in washington on -- laura davidson in washington on the second impeachment. we'll be watching what is happening in washington, d.c. beijing will be -- beijing will be watching what is happening in washington, d.c. more chinese reaction to the chaos in d.c.

let's cross toward chief north asia correspondent. what are we hearing that is being said? all sorts of reaction, cartoons and commentary in state media. >> china is going to take advantage of this and also point at the hypocrisy coming from the white house and washington, d.c. as the storming of the capital is likened to what happened here in hong kong. they are saying there is hypocrisy and double standards. you are going to get this from state media, especially commentators on state media. whether it is the china daily or the global times. western democracies are an open book. you see the good and the bad. china will take advantage. they will pick and choose what they want to highlight to their people and show that the communist system of government is far superior to a decaying democracy. that is the overall theme. even president xi jinping earlier this week on monday was

quoted in state media saying time and the situation are on china's side. this is where our determination and confidence are coming from the people daily after the storming of the capitol building. the u.s. has to swallow its own bitter fruit should state media commentators and social media as well late the last couple of days have been weighing in heavily on president trump -- the banning of donald trump from twitter and other social media platforms as a cautionary tale of how these social media platforms wield too much power. these comments coming at a time when the anti-monopoly law is being enforced in china and some say that people like the titans of tech in china, big tech is being knocked down a peg or two by chinese authorities who also want to see the power of social media not down. -- media knocked down.

kathleen: what is happening with alibaba and tencent in the united states? are they going to be blacklisted? >> what we are hearing from numerous media reports including the dow jones newswire is the u.s. is expected to continue to allow americans to invest in the three big companies. and that they will not necessarily be put on the president's blacklist. del reporting the trump administration there plans to add those companies to the defense list of companies deemed to be in support of china's military. nine other companies will be added. bloomberg news just last week did report alibaba and tencent were left off a similar list from the treasury department. companies that are linked to a military in china. the ban of the so-called companies would be one of the most dramatic escalations get by the outgoing president given the

sheer size of the firms and the difficulty unwinding the positions in the u.s. and here in hong kong. combined market value of their primary listings of just alibaba and tencent alone are well over $1 trillion. nearly twice the size of spain's stock market. two firms alone account for 11% of the emerging market index. right now, it looks as though they are not going to be part. it is offering lots of caution to investors who are perhaps thinking about the $8 billion or up to a billion dollar offshore bond issuance that alibaba would likely have launched as early as this week. investors are saying all the uncertainty surrounding alibaba, whether it was the possible blacklisting in the unit it states, possible delisting, but because of the uncertainty surrounding jack ma, it may be causing some investors in the bond market to take pause.

kathleen: a once juicy looking investment looking not so juicy. thanks for putting all this in perspective for us. still ahead, to assess where u.s. relations stand with europe. up next, an exclusive interview with the opec secretary general. he says he is focused on depleting stubbornly high oil stocks. this is bloomberg. ♪

kathleen: opec-plus is keeping a close watch on what it calls stubbornly high oil inventories. the secretary-general spoke to bloomberg exclusively about the rally in prices after the recent decision to further cut daily production. >> this is the 1980's all over again. to make sure that we keep our

hands firmly on the driving wheel, the fragility, the uncertainties of this market and the world we live in post-covid requires opec and our partners to continue to meet every month to ensure that this market does not relapse into the huge imbalances we saw last year. >> with that in mind, there are a number of things that could drive the agenda in 2021. one of them is a new administration in the united states of america. writing comes to power. -- biden comes to power. one to 2 million barrels. is the opec group willing to make room potentially for that level of supply in 2021? >> you are with us in 2016 --

you were with us in 2016 when we agreed in accommodating iran, when i ran came back -- when iran came back. we collectively decided to exempt the islamic republic of iran at that time until they restore their capacity. we have established a record of continuously adopting, continuously being flexible and addressing issues. we are following very closely these developments, but the

assured -- very closely these developments. haidi: that was the opec secretary general speaking exclusively to our colleague. more coming up next. we preview china's trade data that is due out later. exports are expected fall in both yuan and dollar terms. we have seen the currency markets looking passable. we had the second impeachment of donald trump going through today. the dollar-yen on the back foot there. the yen still poised for a fifth decline against the greenback in six sessions. a little bit of weakness in the greenback. the aussie dollar trading at 7751. 's getting back some of the pervak we had seen the last couple of sessions. the key we also one of the out

performers in the session. -- the kiwi also one of the upper farmers in the session. you had to -- looking ahead to the fed reserve as glow. -- reserve as well. this is bloomberg. ♪

karina: this is daybreak: asia. i am karina mitchell. president trump has been impeached for an historic second time and will face trial in the senate. the house approved a single charge of incitement of insurrection. the motion was supported by all house democrats as well as 10 republicans. the article now goes to the senate although it's not clear exactly when a child may start. president trump's son-in-law is said to have stopped an effort to sign the president up to fringe social media platforms after twitter and others

suspended his account. jared kushner intervened with the president's social media director, saying alternative sites are not suitable and cannot handle increased traffic. parler is suing amazon to restore its cloud hosting privileges. reports from hong kong's now tv says the national security unit of the police force has detained 11 people. 10 people were jailed last month in shenzhen for their failed escape. all had admitted participating in an illegal border crossing. world health organization experts argued thursday as they opened an international investigation into the origins of the coronavirus. they say they will focus on the initial epicenter of the pandemic in wuhan but it is still not clear what data or studies chinese officials will show them. beijing has resisted an independent inquiry. the team will spend two weeks in quarantine.

global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. haidi, back to you. haidi: let's take a look at how markets are faring the session. sophie, what are you seeing? sophie: asian stocks are extending gains at a record high and we are seeing the nikkei 225 moving to the green after a soft start. softbank, the biggest boost on the benchmark. fluctuating somewhat just ahead of its earnings report. jeffries is bearish on the stock, downgrading it to underperform. in seoul, we are seeing the kospi gain ground as samsung cmt is among the biggest along with -- which is seen benefiting from a global green energy push but moving to the downside, samsung -- and in sydney, miners are under pressure. things are looking mixed. credit suisse saying they are bullish on aussie lenders and

expectations for dividend growth. the asx 200 gaining .1% this morning. markets are assessing varying taper talk from the fed speakers along with awaiting details on biden's economic plan on thursday. we are seeing u.s. 10 year yields hauled below 109 this morning after the biggest retreat for benchmark yields in about five weeks and the dollar, we are seeing some slight moves to the downside but largely holding onto overnight gains. he does see the dollar on a slow appreciation past. ahead of chinese trade data, keep a close eye on the offshore yuan edging towards the 646 level against the greenback. this is the biggest drop we have seen for the currency since november amid efforts by the pboc to slow descent. we are waiting on trade data from the mainland. kathleen: let's get to china.

exports are likely to report a double-digit yarn year increase for the third month in a row in december, the official pmi survey. to discuss what she expects from china's trade data in the next few hours, we are joined by our guest. great to have you with us right before the release pretty much. people have been looking at the recent purchasing managers index, well above 50 for manufacturing, saying they have come down a little. maybe the recovery has peaked. do you think that these export numbers are going to show everyone that a very important source of growth and recovery in china exports still is in very good shape? >> thank you for your question and thank you for having me on the show. we think the pmi survey export orders has been showing very strong expansion although it has

dipped from the peak slightly. -- two or three months. in december, we are still going to see strong growth momentum. our forecast is at 14.8% year on year. that was supported by three factors. the continuous supply for medical and ppe and secondly, the work from home demand that fueled the electronic cycle as well as the developed economies consumer demand, especially the seasonal demand for christmas and new year. going into 2021, we probably are going to see exports muttering slightly because some of the benefits might roll out that we will still see a relatively robust export performance. kathleen: we know china is trying to become more of a consumer driven economy. exports are still so important.

does this show us that even though the rest of the world is still struggling to recover, moving in the right direction, that maybe the strength of the overseas demand has been stronger than people would have expected given so many countries are still struggling with the virus? >> based on china's export sector performance, the fund has been stronger than going into 2021, we expect it will take the growth drivers from export sector and from export sector and performance to more towards domestic demand recovery given that china has been -- the covid crisis. and it is on pass to recover from the pandemic. the vaccine rollout in 2021 may put china in better shape because that allows some degrees of relaxation in social distancing measures and may even

see further pent-up demand for the consumer sectors. haidi: we also see china at the start of this new year with clusters of covid. is there a concern that some of these places have come under renewed lockdown and will impact, particularly as we go into the consumer season in the new year? >> i think the recent localized outbreak in hubei province is raising some concerns about the reverse of social distancing policies, but in my opinion, i think the social distancing policies tightens only in cities that have been affected. the control measures are much more targeted and we do not really see that having a much wider impact on the broader consumer demand recovery. haidi: what about the relationship between the u.s. and china? we have not talked about a trade

war for a wild but we have seen even in the last weeks and days of the trump presidency that the pressure continues to pile onto chinese companies. do you expect and easing in that relationship? -- an easing in that relationship? do you expect that to continue this year? >> thank you for raising this question because i think given that the market has been largely ignoring the progress of the trade war, we want to highlight that china has really been lagging behind in terms of implementation. given a new biden administration, we see some uncertainties in the u.s.-china trade and technology relationship. we think the new administration might be adopting a much more systematic approach towards china which may introduce much more certainty in terms of negotiation and progress in managing the relationship, but

that does not mean the u.s. is going to go easier on china. we do see much more risks coming from especially the tech sectors when the u.s. is trying to leverage his technology advancements and to limit china from expecting u.s. technologies so that might be putting a lid on china's long-term growth potential but it does not really affect our short-term outlook for china rebound in the first half of 2020. haidi: great to have uss. ? it's china economist and we will get more insights onto those chinese trade numbers in the outlook for china's growth with barclays chief china economist who will be joining bloomberg markets later at half past 10:00 a.m. in hong kong. the second impeachment of president trump and a divided political scene in washington seems to be going largely ignored by markets that our global economists are paying attention to the picture.

now professor of finance at the university of chicago school of business earlier told us that a country's political stability is a big factor for setting economic policy. >> we are still a long way for these countries to become fragile politically. but it is one step along the way. markets have ignored this, and typically, they ignore political developments until they are staring them in the face, so while they have taken it in best stride, it's not clear that they will ignore it. >> in terms of what this means for we the country goes next, the pandemic, is that part of the reason this has gotten as tense as it has? is it the leadership of donald trump? were the fissures already there in trump presidency, and what he

stood for, something that just made it worse? >> i think it's the latter. it's not president trump by himself. he exploited divisions that were already there. certainly, his behavior has made things worse. this is the last hurrah of a chaotic administration. we get more focus on the challenges in the new administration. as we overcome covid, there is a sense of togetherness that builds in the country which, to some extent, alleviates these deeper divisions, but to really get at them, we need to focus on what is needed by the communities that have been left behind in this country. haidi: how much of a chipping away of the institutions, of democracy, of governance, that we continue to see in the u.s.,

how much does that need to happen until investors get to a point, and i'm wondering if you think that this should be the case, where we see a risk rhenium being associated with u.s. treasuries? >> i think we are still some distance from it. and i'm hopeful that the biden administration as well as congress will recognize how close to the brink we came and therefore remedies some of that with legislation, for example, on conflicts of interest, on reducing some of the excessive parts of the presidency and so on. at this point, that should help tremendously. but i also think that the underlying fissures which existed before the trump administration and will continue to exist, will have to be addressed. for example, the pandemic has certainly increased the levels of inequality in this country, which often is the primary source of political friction, so

i think attempts to reduce that inequality, provide better capabilities for the people, that is something that this administration will have to take haad-on. haidi: as kathleen alluded to, the problems that existed not just in the u.s., but globally within society, would be in the inequality and labor markets, in other aspects. these are just issues that have been exacerbated by the pandemic, right? what aspects concerns you the most? when it comes to bringing back a full and healthy labor market, there's a lot of jobs around the world that simply will not come back post-covid. >> for sure. i think the worry and the concern we should have is not just about inequality within countries but between countries. there are a number of developing countries and emerging markets which have not had a reasonable chance against covid that have

not spent in the amount of money in terms of relief, in terms of repairing their firms, and essentially, even as the rebound happens in the rest of the world, you will see these countries being left behind. even further than they were in the past. even as we focus on repairing the fissures within countries, we need a much stronger global move to deal with the inequality between countries. the problem of development and to ensure those countries that are facing high death loads that have not been able to tackle the virus effectively, they do have a chance as we go forward. that will be important for global demand. kathleen: that was the former governor of the reserve bank of india, raghuram rajan. do not miss another key interview coming up later. we get the outlook for india's real estate sector with the

india chairman and managing director. that is later on bloomberg markets coming up, tesla has had unprecedented success in china but is it a smooth -- is its smooth ride set to end? this is bloomberg. ♪

kathleen: look no further than surging shipping rates for the latest headwind to the economic

recovery. shots of supply chains are engulfing a wider swath of the global economy, threatening to stifle asia's recovery, and hitting one sector in particular. our chief asia economics correspondent, enda curran, is in hong kong. what is driving the container shortage? this can be a huge deal for exporters, as you well know. enda: it is, kathleen. we have a lot of demand going on globally because of working from home. you have a shortage of containers because of lockdowns imports. these ships cannot get there containers turned around quickly enough. you have the chinese new year demand. it's all adding up to a perfect storm for manufacturers and exporters. they complain that the cost of these containers has gone up anywhere from 2000 u.s. dollars up to $13,000 from shenzhen to europe. >> how long are we expecting that this could last?

enda: well, the expectation is it has got a few more weeks to run. exporters that we spoke to say they want to get over the chinese new year. some of the bottleneck might use. if the vaccine gets rolled out, some of the shipping cruzan containers will be able to get turned around from other countries around the world quicker as restrictions are used. it is all hinging on what happens with the vaccine, but in the near term, the skyhigh shipping freight costs are with us to stay. haidi: and the curtain -- enda curran with us. solving the supply chain in china was one of the key factors for china's unprecedented success. global curbs to control the virus, tensions between washington and beijing, as well as competition in the domestic ev market, all of these factors are raising questions about how long the good times will last. let's get over to emma o'brien, who had a special report about

tesla's presence in china. how did tesla manage to get what it wanted in terms of its foray into china, where of course, we have seen other companies, other automakers, have a much harder time? emma: that is the key question at the heart of the story. it's a fascinating tale for having clear, unwavering priorities on the tesla side and perfect timing. for years, tesla had made carmakers who wanted to have access to this market, they had to go into joint ventures with local companies, often state-owned ones, in shanghai for example, that has tieups with a few of them, including volkswagen. that was not going to work for elon musk and he made that very clear from the get-go. there were lots of concerns about intellectual property and diluting the brand there. you know, it is different to other automakers and companies,

really. it has this very publicly headstrong and attention grabbing leader in mosque and that help -- musk and that helped in negotiations with the chinese. at the same time, they had something that china wanted and that tesla represented the pinnacle of an emerging industry that they wanted to be at the forefront of. electric vehicles, new energy vehicles, and the evolution away. that may china more willing to negotiate with tesla and to give them their terms because the theory was their entry would lift the entire industry and give local ev players something to benchmark themselves to. kathleen: you know, it was also in the interest of the chinese government. you have a great quote in your story that tesla has to be aware that the ultimate plan is for all the advanced technologies to be chinese and that elon musk should have his eyes open.

have the interests of the chinese government changed? emma: i think at the time, as well as this whole idea of teslas on trade benefiting and industry they were wanting to own. i do think that they can gain that access to the technology and the ideas that tesla has. there was also the timing part i referred to that was pretty key to success in getting what he wanted in china. so tesla was seeking to set up this wholly-owned presence in china right around the time that the trade war was heating up and beijing saw it as an opportunity to show the u.s. that this place was open for business, particularly to innovative and eye catching american companies. it very much served a political purpose in china's fight with trump.

that translated into incredible support from the chinese government apparatus, something he would not see anything else in the world really. loans from state banks, advantageous deal is on the land where the shanghai factory is located, help with getting the plant up and running in record time, less than a year is quite astounding to also in the story, even came down to supporting them when the pandemic was at its worst here in china. access to disinfectant that required a regulators license. supplies of masks at a time when there was still questions about whether the doctors were able to get enough of those. all of that meant they were back up and running before other foreign carmakers. kathleen: emma o'brien, thank you for discussing your story with us. she is the managing editor. plenty more ahead on bloomberg. stay with us. ♪

haidi: a quick check of the latest business flash headlines. $20 billion pursuit of -- with the french government opposing the deal. the finance minister, bruno le maire, said the covid crisis highlighted the importance of domestic control of the food supply although he added he is not in favor of the deal. it. some early losses by the close in toronto. cargo is in talks to drop its

business as the top agricultural marty's firm seeks to focus on food processing and meet. -- meat. it is in negotiations to sell its 60% stake in a sugar trader. the deal is inspected to be announced sometime in this quarter. -- raised its annual revenue forecast after raising profit ahead of expectations thanks towards the shift towards digital services. the company expects a rise in sales around 5%. net income climbed 17% in the three months through december. the 710 million dollars. let's take a look at some of the stocks we are watching at the moment. sophie. sophie: onto sports on watch after its results. saying it was a mixed bag and downgrading the stock. and energy shares on the radar after announcing plans to list

on the mainland according to the statement. the parent aims to boost its new energy business through this listing. flipping the page, citi out with reports saying the automobile -- that is a win-win strategy amid the transition to new energy vehicles in the unit is tying up with baidu to make intelligent ev's which prompted jp morgan to raise its price tag. we are also keeping an eye on singapore airlines with trades at 500 million in its debut dollar bond sale, over $1.5 billion. part of those are to go towards buying aircraft as well as to refinance debt. kathleen: coming up, we will hear from e.u. chamber of commerce president -- on where relations stand with europe plus we get the outlook for banks in china and hong kong with jeffries shiyin chen. that is it.

our markets coverage continues as we look ahead to the start of trade in hong kong, shanghai, and shenzhen. standby for "bloomberg markets: asia." -- china open." this is bloomberg. ♪

>> it is 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i am tom mackenzie. david: i am david ingles. we are counting down to the open of trade. let's get to your top stories today. president trump is impeached a second time as 10 republicans back the motion. democrats say the article will go to the senate immediately, although a