haidi: good morning. we are counting down asia's asia market opens. kathleen: welcome to "bloomberg daybreak: asia." u.s. braces for the end of the trump area -- europe with their years in place. and thousands of troops in washington.

awaiting the inauguration, strong data from china amid joe biden's pandemic a plan. beijing-washington tensions rise over will have virus claims and relations with taiwan. we are joined by the former australian prime minister kevin rudd. and the road ahead for samsung. a corruption case has shed new light on big business in south korea. haidi: first let's take a look at how asian markets are faring with the city moment taking place now. sophie: the start of trade, asx 200 higher. real production update. bingo industries in view jumping 20%, rising to a fresh record this after a kalama it made a bid for the waste management company, valuing the company at

$1.8 billion. in australia earnings are picking up. morgan's down late cycle is underway forecasting 20% profit growth over the next 12 months for aussie companies. four japan outlook is up for japanese earnings after a positive start to the season. nomura sang upward revisions continue to dominate despite the sluggish economy which we heard from prime minister sudha today -- suga on monday. outlining his plans for green growth strategy expected to put increase gdp by $1.8 trillion. nikkei futures little change this morning. moving higher .2 percent this after we saw fluctuations following the holidays session monday. markets will have biden's inauguration and a revved up earnings season on the radar. wellington moving to the

downside for a seventh day of losses. kathleen: now to our top story. president trump's final day in office. white house officials are planning a farewell ceremony wednesday ahead of the inauguration of joe biden. trump will be the first living u.s. president in a century to skip the exchange of power. let's get more from bloomberg's white house correspondent. we know that the farewell plans are simple. i am wondering what you and others on the washington team have picked up, in terms of the mood in the white house? and donald trump, after all this, i would think it is rather a depressing moment for everyone. >> he seems to have few people around him right now. many of his staff have already physically left the building or left their jobs altogether. they are rushing out a series of executive orders today, to mop up some of the stuff they were trying to do. but it is, you know, we should not lose sight of the remarkable step that trump has taken by not

participating in biden's inauguration. this has been a fairly sacrosanct part of american tradition. not only the inauguration, but then biden would see him off. none of that is happening. trump is really throwing up in the air, despite what happened to weeks ago with the storming of the capitol, by a crowd of his supporters, which left five dead. that was against the backdrop of people saying, we are worried about a peaceful transfer of power. needless to say, tenuous sixth, was the-- january 6, with the opposite of peaceful. in rejecting biden's inauguration, he is continuing to thumb his nose at the peaceful transfer of power by not letting his own support or legitimacy to biden's victory. haidi: josh, are we expecting

11th hour pardons? >> we are. we just do not know how many and of whom. it depends on who you ask. they're certain we are indications that tomorrow, tuesday, we will get a wave of pardons, that includes celebrity type pardons, presumably other people. quite a high number. as of now it does not look like donald trump will try to pardon himself. note u.s. president has done that before and it is disputed as to whether you can. it also looks iq will not go that route for some of his senior aides who are -- like he will not go that route for some of his aides who are his relatives as well. one thing that continues to hang up in the air, is the senate impeachment trial. donald trump, as of now, does not have a legal team, and it is not clear who that will be. it is not clear there will be a trial or how long it will last. in the waning hours of his presidency, there are a lot of question marks hanging over

everything, and the pardons are one of them. haidi: our bloomberg white house correspondent josh wingrove ahead of the inauguration. our special coverage of the biden inauguration, david westin will anchor a special balance of midnight in hong kong, catch that on bloomberg tv also bloomberg radio and quicktake. let's take you to karina mitchell with the first word headlines in new york. karina: the italian prime minister has won a vital confidence vote in the lower house but faces a test in the senate tuesday, after losing support of a small coalition party. success would let him stay in power, even if the support would fall short of a majority. conte is under fire for the coronavirus, the eu recovery fund, and his plans to borrow 32 billion euros. in other news, china says it has decided to sanction some u.s. officials over washington's reversal of decades of policy

over taiwan. the foreign ministry says the u.s. move to relax restrictions on interaction with the island as well, and measures will be imposed in response. the health secretary alex azar visited taiwan in august, provoking an angry reaction from beijing. china is also accusing washington of lies and conspiracy theories, after the trumpet administration claimed it has new administration suggesting the coronavirus they have come from a chinese lab. officials noticed comments on the virus is full of fallacies and is in their words the last madness of the outgoing secretary of state mike pompeo. australia is unlikely to reopen borders this year even if most of the population does receive a vaccine. the health department secretary murphy says the government will maintain tight restrictions, with international travel, largely on hold. australia is effectively closed to travelers apart from some special exemptions, and all arrivals must compete --

complete mandatory quarantine. global news 24 hours a day on air and at bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell this is bloomberg. kathleen: still ahead, for us trillion prime minister kevin rudd joins us to discuss tensions with china, and the outlook for international relations, as we await the biden presidency. first, the market outlook with invesco's chief global market strategist christina uber, who think the term -- uber -- hoo per, who thinks that 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: when president-elect biden takes the oath of office, it will not just be the government that makes a big transition. the economic recovery may be due for a shift with a proposed $2 trillion stimulus, and treasury

secretary nominate janet yellen, the former fed chair at the helm. joining us for perspective on the recovery and impact on markets is the chief global market strategist at invesco. a year ago early march, i had two interviews with the st. louis fed and dallas fed the day after the emergency meeting. both said in no uncertain terms for now it is all about the virus. for you, as a market strategist, what has it been like navigating, all about the virus? and what you see now that the vaccine is rolling out? >> it has been all about the virus. and as we look to 2021, it is going to be all about the vaccine and the virus. the vaccines, plural, i should say, are a-game teacher for 2021. it is going to take a while -- a game changer for 2021. it will take a while to kick in, and in the meantime the virus

will continue to be a significant issue for markets and the economy. kathleen: we know the vaccine will take a while. the cleveland fed president expect by the third quarter a majority of people will be vaccinated and you will have a strong rebound. in the middle, does the stock market suffer or do yields stay low or do yields stay low order people look at the future and price these advances into what they are buying and selling? >> i think for the most part, markets will look toward the future. but, that does not mean are not going to be days when we get really negative news flow, when we get negative economic data. and, of course, markets reacted negatively. for the most part i think we will see investors looking ahead to that recovery. haidi: what opportunities are there, given that we have seen the market price in [indiscernible] , as it is? >> the market argued lee is

priced for -- arguably is priced for close to perfection in parts of the world, but not all parts of the world. this is a time when investors need to be looking carefully, and ensuring they are well diversified. i am very excited about asia em this year. i think there is a lot of opportunity there. have a head start on this recovery, because they have done such a good job managing the virus. haidi: chief global market strategist at invesco. the eu will consider more fiscal measures in spring to help struggling number economies. speaking exclusively to bloomberg, the european commissioner for their economy says still bowling lockdown submit infections. >> this is our main concern, to try to avoid that the fact we

have a second wave, in the pandemic, brings a second recession. of course, this is connected to the pandemic, not to our political decisions. because we decided not to withdraw prematurely supporting measures. we decided to keep this supporting measures in 2021. so we are trying to avoid this, with our political decisions. but, of course, lockdowns, as everybody knows in europe, are still there. and this is our challenge, and what we will discuss this afternoon. and we will discuss also about the relations in the u.s., having a conversation with

former secretary larry summers. haidi: commissioner, the economy is not back to normal, we are seeing big restrictions. there are delays with vaccine. in the spring you said there would be a conversation about whether to extend fiscal rules which have been suspended. do you believe this will not go back to normal until 2022, that the rules will say suspended for longer? >> well, we are not seeing until now, a scenario, to say a normal scenario. we are still with uncertainty dominating the european environment, and not only the european one. so decisions about what we call the general escape clause, which

is the form we suspend our procedures, some fiscal rules, a decision will come next spring. and it will come according to the evolution of the situation. of course, the fact is that several european countries will not probably be back in 2022, at the level of growth they expected. but even at the level of growth that they already had at the end of 2019. if this will be the case, there will be also a case for further extraordinary measures. that is in the discussion we will have in spring, hoping to have less uncertainty at this time. >> italy is a country going to get the most money from the recovery fund. but politically the situation looks tricky. i have two questions.

in spring italy should have a 10% payment from the recovery fund. if there is a caretaker government, can the access that money? and you worried the political anxiety means the money is not going to be as well? -- and, do you worried that the political anxiety means that the money is not going to be used well? >> the money will come to each of the member states in a higher percentage, because in the discussion with the european parliament, we brought the percentage of financing from 10%--- 214% -- from 10% to 14%. but this will be with each memory stay, it is not based upon -- each member state, it is not upon the quality of their government. as far as the italian situation, it is difficult for us to comment on internal politics, and it is difficult to avoid to do this for me as former prime minister. in any case, i would say that we

hope to have a stable interlocutors, because exactly for the reason you were mentioning italy will be crucial for the success of this european next-generation plan, and we need stable inter [indiscernible] . kathleen: that was the european economy commissioner speaking with our colleague, maria. still ahead, a dramatic setback for the world's biggest electronics company, what happens next after samsung heir, gets sent back to prison over bribery charges? 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.

>> samsung heir jay y. lee is back in prison, sentenced to 30 months for bribery.

let's get to our asia correspondent stephen engle who has been covering this saga since the first conviction. what are the implications for samsung? >> samsung was hoping to put this behind them, a four-year sigh got. we were there broadcasting in front of -- four-year sigh got. we were there-- saga. we were there for the initial conviction, a five year sentence in 2017, which was later overturned and he was let out, and the first gel sentence suspended. the supreme court threw it out and had a new trial which we got the verdict yesterday. 30 months, two and half years. he has already served one year in jail, so it will be one year and a half in prison for jay y. lee, unless there is another appeal and perhaps another suspension of the sentence. it is going to lead to another period of uncertainty, especially for the succession plans. because of course the patriarch of the company passed away in

october. so this was the heir apparent, but that is likely going to be put off for quite some time. and last month, in j widely -- jay y. lee's last real statement before the court, saying he apologized profusely again for this saga, and saying he is not going to be handing over the reins of power to his children. so this could help facilitate a faster transition to a more professional, rather than a patriarchal, succession plan, at samsung. but, definitely a throw some uncertainty. even though, samsung has done fairly well in the previous quarter. the results were below expectations, preliminary results. but samsung had already telegraphed that because of sagging chip prices, and increased competition from the iphone 12. samsung has done well. they have professional managers,

an army of day-to-day operational experts, but it is long-term strategic thinking they may miss for a year and a half or so. >> as someone who knows the company and watches it closely, how much difference does that make? most consumers will not say, oh, the chief is in jell-o on bribery charges, i not going to buy the phone -- i am -- the chief is in jail, i am not going to buy the phone. >> keep in mind, samsung's organization, they have giant divisions within themselves, whether it is the chip division, their biggest profit maker. and the mobile phones and displays. and appliances, and the like. they all have professional, top-tier managers running this divisions on a day-to-day basis, they are doing fairly well. it is a long-term strategic thinking. keep in mind, he can still make decisions from prison, this is not unprecedented.

the biggest issue here, is this is the largest corporate identity of south korea. samsung has lots of competition out there. and they have invested, or at least earmarked, billions of dollars for new projects, including$116 billion dollars into the next generation chip business, including fabricating silicon. they want to take on the market leader, tsmg, silicon for external clients. also, they are investing heavily in 5g technologies, at a time when huawei, the chinese giant, is under pressure with sanctions and restrictions. so there is a lot of strategic thinking needed, and perhaps he will do it from prison. >> we shall see, our chief north asia correspondent, stephen

engle. for more analysis on the applications for samsung of jay y. lee's jailing. the author of sony versus samsung, in the next hour. right now, a quick check of business flash headlines. bmw responded to concern about supply for chips for the auto industry saying it ordered enough components and expect prompt delivery. saying it is watching delivery closely with chipmakers concentrating on demand from consumer electronics companies. audi furloughed staff and will deliver high-end models. tesla has become the first delivery of the model why sub built in china, -- suv built in china, that can run 600 kilometers from a single charge. it has built 720 charging stations and china. strong initial demand for the model y.

the new automaker formed by fiat chrysler andtsa group search on its trading debut in a lot after a two-year effort to combine resources. it rose 7% of the ticker stla, replacing the chrysler symbol. the stock rose and paris listed in place of peugeot. the car giant worth nearly $48 billion. weighing a listing in the u.s. that could raise to million dollars, reuters says the deal is not final, with regional rival gojack in talks. grab ceo anthony tan is resisting pressure from softbank to give control by tying up with gojack. haidi: we are seeing in this market session mild positivity

trading in stocks here in sydney, reversing weakness yesterday in materials and financials up eight -- up .8%. analysts expect further upside for aussie shares, with expectations the consumer recovery will continue. we will watch the minors with numbers looking to cash in on demand from china. we are getting breaking news, california becoming the first state, to top 3 million covid infections, according to the associated press. we will get more details on that. clearly the virus will continue to impact the markets, particularly in the absence of a strong vaccine roll. s&p futures up .25%. no trading in the you as equities on the holiday. kiwi stocks lower. coming up we will speak with the former australian prime minister kevin rudd, on dealing with

beijing. and the outlook for u.s.-china relations under a biden and administration. he will be with us next. this is bloomberg. ♪

karina: this is "bloomberg daybreak: asia" a warning over rollout strategies. it is wrong that younger, healthier adults in richer countries receive a shot for older citizens and poor nations. he adds the world is on a break of catastrophic moral failure as profit is put before people. sinovac is defending its

covid-19 vaccine saying it is more effective if the two dose regimen is a minister over a longer time period. the shot delivered while legally -different- wildly different efficacy results from around the world. president trump's approval rating fell to 34% in a gallup poll monday, underlying a term that had the lowest average approvals of any president since gallup began measuring it under harry truman. washington is preparing to inaugurate joe biden under unprecedented security. thousands of national guard troops= have been sent end with bears preventing access to the capitol at other sites. the u.s. is sending b-52 bombers back to the middle east as tensions with iran continue to rise. pictures of the planes refueling over the region as tehran steps up military exercises ahead of the inauguration. rapid responsys drills will

begin tuesday new the gulf of oman falling surface to surface missile firings in recent days. global news 24 hours a day on air and at bloomberg quicktake. powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. haidi: we count down to joe biden's inauguration this week. the president-elect will inherit major challenges from his predecessor, particularly with regard to china. we discuss that with the former australian prime minister kevin rudd. wonderful to have you again on bloomberg tv. we talk about his legacy, a question we put two neil ferguson in the last hour. do you take a look at the foreign policy aspects of the trump administration and think it is a mixed bag? is there anything that president-elect bryden should carry on -- president-elect biden should carry on? >> i do not think it is a mixed

bag if you apply civil logic to it. as america -- a simple logic to it. is america more powerful in the world that it was four years ago? probably not. our american alliances around the world in as good a shape as they were four years ago? definitely not. and in terms of the state of the u.s. body politic, which ultimately shapes america's power in the world? then we have got to say that recent events at that capitol, and more broadly, divisions in american politics, have been viewed by china and other countries as a huge strategic win for themselves. so i have to say, looking out from the perspective as an analyst, coming from a country that is a long-standing american alley, president -- ally, president biden inherits a large amount of foreign policy wreckage. what can he take out of that wreckage? to give that u.s. administration or president trump one acknowledgment, when they

decided through the national security strategy, led by john a glass or, to check -- general mcmaster, two defined china as a strategic competitor, that formally reflected what i think is the reality of that relationship, it is one of strategic competitors. changing the intellectual frame of the relationship is an advantage that i seem president biden will sustain, albeit with a more systematic policy. haidi: we talk a lot about the great strategic competitive relationship of our time being between washington and beijing. what is a more coherent strategy, going forward? do we return to this idea of a trade war? we have heard probably a number of these trade tariffs will stay in place. what will remain and what is a good balance that president-elect biden could strike with aging? -- with beijing.

>> one of the argument i have advanced over several years is the concept of not just strategic competition, but managed strategic competition. that involves a joint strategic framework between the chinese and american, xi jinping and president biden, assuming it is in their respective interest to do so. what would that mean in practice? there would be a series of areas where the hard limits, on how far each side could go. this, for example, go straight to the core of the central issue in the relationship, which is the future of taiwan. secondly, beyond those hard limits, there are also areas, where the united states and china can engage in full-fledged, petition, across trade, investment technology, talent, the setting of global standards, the wider foreign policy push and shove, as each side seeks to secure its influence in regions across the

world. together with let's call it the underlying ideological bay between let's call it liberal capitalism and authority -- authoritarian capitalism. could also carveout areas of strategic cooperation, climate change, global pandemic management, and global debt and financial management, given where we have got to, in the cost financially and in debt, of not getting our way as world through the global recession drawn on by the covid-19 crisis. kathleen: you mention taiwan and how that fits into the mix. not only from the standpoint of the one china policy which the u.s. followed, something that please china very much, to a being interrupted by president trump, and of course, mike pompeo taking it further before that team leaves office. not only for the u.s. and china, but for australia, for nations in asia, are there pluses and

minuses here? how do you see that? pm rudd: we should never be diluted about one fact. the car engine room of the future of the u.s.-china relationship, is to manage the stability of the taiwan question. this was the major stumbling block which american negotiators worked around, between kissinger's visit in 1970 went through a final diplomatic commission in 1979. it took a long time. what came out of it was mutual understandings about what constitutes the one china policy. and that stability provided by those understandings underpins everything else you can do in the relationship. the problem in the top administration is, frankie, they began to fool around with it. in its most recent statement, two particular ways. one, like cabinet level visits to taipei. secondly, by pale's -- mike pompeo's statement of one minute

to midnight that there would not be a removal of all restrictions in terms of contact with taiwanese officials, as it were, globally. the problem with those decisions is, that they go right to let's call it the absolute most neuralgia point in communist party politics. so whatever the framework is for the future, managed strategic competition as i have described, or other frameworks, this is fundamental to re-stabilizing the bearings of the relationship. it does not equal weakness, to adhere to the one china policy. no one could choose -- could accusing president reagan of being weight, he adhered -- could accusing president reagan art nixon of being weak, they adhere to it, nor were president bush senior or junior, they adhere to it and understood the underlying strategic logic. kathleen: what would you advise when it comes to the south china

sea, the uighurs within china. trump talked about it, not a lot of action taken. is this something that biden should put on the table and move on? p.m. rudd: it has been my habit as a former head of government not to provide public advice to current heads of government. i regard that is impolite. [laughter] except in australia where i'm constantly providing the hosteling prime minister on advice on all sorts of things but that is local football -- providing that australian prime minister advice but that is local football. biden assimilate first-class team. i am not sure the extent to which has been registered across asia. tony blinken, a highly experienced secretary of state. jake sullivan, a highly experienced national secured advisor. it is a team we would describe in australia cricket, as having a strong batting order.

so, when it comes to south china sea, got our range of options on the table. one of the best ways forward is to have, frankly, an early discrete, somatic, eyeball to eyeball conversation with the chinese, about what is except it will and what is not, so that we do not end up in this really game of chicken, between hard assets, naval and air, lots of metal flying and selling around the south china sea, inviting an accident, an incident, and therefore risks of escalation. haidi: what are the implications for other countries? we have had conversations about your disappointing or criticism in a lack of coherent china strategy from the australian coalition government. can they breathe a sigh of relief? to stop seeing a punching bag between -- that canberra may stop being a punching bag between the u.s. and aging if relations improve? >> the responsibility of both

governments. the australian government's posture toward beijing, it seems to shoot first and ask questions later. it thinks that it is smart to talk a lot. and to be engaged in the public rhetorical debate against beijing. because the conservative coalition in australia, a little bit like the trumpet administration in the united states, has always seen that as good grist for the domestic political mill, and appeasing the far-right base of the liberal national party within australia. but none of that adds up to a coherent national security strategy, or a coherent foreign policy. four beijing, -- as four beijing, the actions taken putatively against australia, for example trade related actions are, in all probability, and will judged to be in breach of international trade law. because using a political region

to go forward with an economic measure, and the framework of trade law, is a genuine breach of international standards. so you have these two elements at work. what can biden do? but i have argued for publicly, is that with the incoming bonded administration, there is an opportunity for the u.s. administration, as part of what i think will be its desire to strategically re-stabilize relationship with beijing. and xi jinping's interest to restabilize relationship with washington. there is a difference between re-stabilization and normalization, restabilize. part and parcel of that process of restabilization, will be an individual -- a cessation of individual punitive measures undertaken by china against countries like australia and canada, and also like japan, south korea, depends who ends up in the chinese bin at any time,

another australian footballing term, sorry. haidi: before we let you go, what weakness or achilles heel do you see in xi jinping's leadership? as far as the pandemic, he has had a good year, they got on top of the virus, the economic recovery is going gangbusters. he is essentially watching the enclosed and -- the implosion of american democracy and institutional norms. so what weakness or risk does there exist this year for the chinese leadership? p.m. rudd: let's go back to what bill clinton, or his senior advisor, george stephanopoulos, put on the whiteboard at democrats'campaign headquarters in 1992 in the mesolithic. when i was a young diplomat. it is the economy, stupid. therefore, having that etched firmly on the whiteboard both in washington and beijing is critical.

for xi jinping, what does that mean? yes we have been captivated by the release of public and economic data, 2.3% growth in calendar year 2020 despite covid. although there are now significant reports of the reemergence of covid in hubei province, surrounding beijing and china's north. here is the real challenge, and i think the real vulnerability of china unless they get this balance right. china's sustained high-level growth over 30 years has continued on the basis of can sustain market-based economic reforms in the economy, a vibrant private sector, high levels of business confidence, and entrepreneurial innovation, including in the emerging high-tech sector. xi jinping has prosecuted a strategy now for some years of political centralization, of cut down -- crackdown, against

shall we say aberrant high-level and entrepreneurial leaders, and has presided over some reassertion of the authority of state owned enterprise sector in recent times. so there is a real danger here that in prosecuting an agenda of long-term domestic political control and rater centralization, that you begin to snuff out private sector business confidence. the private sector to conclude, has generated 60% of chinese gdp in recent years. and the vibrance of the chinese sector is, in fact, key to china's future. that is, i believe the keep vulnerability into 2021. haidi: kevin rudd, thank you so much for joining us. kathleen: and for sharing your years of perspective in that u.s.-china and asia china relationship. former australia prime minister and asia society president. our special coverage of biden's

inauguration, david westin will anchor that extended balance from midnight thursday in hong kong. catch that life here on bloomberg radio, tv, and quicktake. next, fourth quarter production results, the latest on rio tinto, and its forecast for chinese demand, next. this is bloomberg. ♪

kathleen: time to check in with

markets in the u.s. and around the world. we go to sophie kamaruddin in hong kong. sophie: trading has been underway in new zealand and australia, a start to the session. kiwi stocks headed for a seventh day of losses while aussie stocks are getting .9%. nikkei futures in singapore opening to the upside and the yen is trading amid one of three levels. s&p futures getting ground after fluctuations monday given the holiday session. the dollar holding steady ahead ofjanet yellen's testimony. a lot of focus on that. switching the board to look at what is going on with trading in sydney. thanks get real boost with remaining from goldman boosting price targets. we are also seeing re-ratings for an infrastructure player as well as domino's pizza, or kari--we carry sayingit was

macquarrie--saying it will see a change to ordering pizza online. and bingo jumping, with a bid for the waste management company valuing it at $1.8 billion. rio tinto coming under pressure, this morning following its production update. rp capital with a note in the wake of that saying they see less relative upside in real compared to elsewhere in the sector. also noting well real' -- rio's guidance does release tension the market does her main tight. haidi: we will start with iron ore and take a close look at rio tinto with paul allen in sydney. there has been demand from china for iron ore.'is rio cashing it? paul: rio has done well, eddie 8.9 million tonnes.

up for the year. 2020 iron ore shipments right in the guidance, 330.6 million tons. robust buying in china. pointing out the industrial sector has pretty much recovered back to pre-pandemic levels thanks to stimulus. rio aiming to ship a record amount of iron ore in 2021, 325- 340 million tonnes. some of rio other products not faring as well, the outlook for copper was down 4% on the air but beat estimates. rio seeing that rising substantially in the coming year. aluminum rose 4% on the air, seen as doing -- year, and that is seen doing better in 2021 as well. these are the first numbers, but the new ceo on the job 19 days. one of his challenges rio tinto

relationship with the indigenous communities after the obstruction of an ancient heritage site. he is working to rebel trust, and call this result a straw dust to rebuild trust and call this performance -- he is working hard to rebuild trust and call this a strong performance. kathleen: things are looking strong today? paul: a four-week high for iron ore, and as long as china keeps this to mila's taps opened the big miners should do well. rio tinto noted in the production report iron ore prices did rise significantly in the second half and they are tightening supply, the world's number two supplier, brazil, is having issues. china on the stimulus bench. it really needs -- binge. it really needs australian iron ore, and it has been immune to diplomatic tensions, steel production search 5% last year, steel production topping a billion tons for the first time

in china effort -- ever. upgrading the price forecast for 2021 for $100 a tonne for the. kathleen: tune into bloomberg radio to hear the day's big newsmakers and get in-depth analysis from the daybreak team. broadcasting live from the studio in hong kong. listen via the app, radio, or bloombergradio.com. plenty more ahead, stay with us. ♪

haidi: a quick check of business flash headlines. vietnam says foxconn plans to invest $700 million in a production facility. hanoi says a $270 million investment has been awarded to foxconn singapore to produce laptops and tablets and a northern prop rinse -- province. total investment capital 1.5 billion as of december. chinese developer ever grant plans to -- evergrand, plans to clear a liquidity plan early, on fabric 10, -and has a rate- february- february 10. it plans to cut its obligations

even further. birkenstock is in talks for a takeover. the investment coming is speaking with the family owners valuing the business at $500 billion. the firm already controls the german beauty chain, douglas. kathleen: now back to sophie kamaruddin for stocks to watch. sophie: in japan we are keeping an eye on retelling. local news reporting the retailer is to at a payment service tuesday. uniqlo pay. carmakers, honda resuming work at malaysia factories, while production was affected elsewhere due to parts shortages. local media reporting clinical trials of novavax in japan next

month. in south korea, a public-private panel recommended the conditional approval of a coronavirus treatment, as it grapples with the increase in virus cases. the government also looking at the rise and as prices yesterday. president moon jae-in addressing home prices, for example. haidi: coming up we will hear from tera joseph about how businesses are coping with a barrage of challenges facing the city, plus plenty had on bloomberg tv, including executives from some of the most valuable i.t. companies in the world. you do not want to miss those conversations. we also have the market opens in tokyo and seoul, looking live at cautious positivity in this asian session.

u.s. markets are closed for the martin luther king jr. holiday. we are seeing dollar strength continuing to play out. new k futures open in the green -- we are seeing nikkei futures open in the green. this is bloomberg. ♪

♪ >> welcome "bloomberg daybreak: asia", from bloomberg's headquarters in new york, i'm kathleen hays. >> and i'm heidi strutt. asia's markets have just open for trade. samsung is one to watch. the fecteau chief, back in jail. -- that the fecteau chief, back in jail. the world health organization's

vaccine makers are putting profit before people. we discussed the rollout challenges. -- we discussed the rollout challenges -- we discuss the rollout challenges. we examine the future of business, as well. sophie kamaruddin joins us from hong kong. how do the markets look? >> after being dragged lower by autos and banks, the topics, gaining ground. the nikkei, also higher this morning by .6%. we had green initiatives highlighted during his policy speech on monday. operating growth, seeing that 10% for the reporting period for japanese companies. the yen, holding steady at mid 103 levels. south korea, where the finance

ministry is to announce the 2021 business plan midday. head of that, the cost become a gaining ground after the worst today drop in mid june, which deepened after samsung was ordered back -- samsung's chief was ordered back into prison for bribery. we are seeing a drop in shares after extended losses into monday. we are seeing -- shares. you have kiwi stocks under pressure, on the course for a seventh day of losses. the s&p 500, raising 1%. the aussie, holding below 77. we are seeing the curve flattening today for a seventh session. the rba, expected to extend asset buying. can crash treasuries are to resume trading today. that shan't cash treasuries are

to resume trading -- and cash treasuries are to resume steady today. the dollar, holding steady, with a -- with dollar shorts building ahead of that. >> joe biden's and molding relief plans -- joe biden's inauguration, with mulling relief plans. we see more turmoil in d.c. i wonder whether there are any risks as we get this hand over. >> there's always people concerned about things. obviously, if we get more disruptions in washington, that will put off some people from wanting to be aggressive with risk assets. in the short-term certainly, there's room for markets to be a little bit more defensive. that is probably part of the caution you are seeing going into this week.

it is becoming more and more difficult to justify the u.s. dollar as being a major haven currency in the world. the evidence is going the other way. reserve managers are reducing their holdings of u.s. dollars in relation to other major currencies, the euro, the yuan, even the australian dollar getting a bigger slice of the pie. the u.s. dollar is being eroded as a major reserve currency. it is still the largest and will be for a while. but if you look at a longer-term basis, it certainly is being detracted. in the near term, when you have a very loose fiscal and monetary policy combined, and the united states -- in the united states, any rally for the u.s. dollar will be relatively short-lived. you can't expect too much until the federal reserve is ready to change short-term interest rates. and for now, that is a long way off. meetings are always closely watched. next week's will be again.

the dock clocks gives -- give us an indication of when the short-term rate is becoming more important. for now, it is 2023. anything that is earlier than that would certainly be good for the u.s. dollar. before they do that, the u.s. dollar is probably still on the long-term downtrend. >> so mark, speaking of currency, the yuan touching .60, is that the end of a stronger yuan? >> probably not. the pboc made it clear they did not -- the pace of appreciation. the use of the daily fixing's to lift the dollar yuan rate to some extent. they are relatively happy if it does go for a priod of -- a period of fluctuation from -- -- a period of fluctuation with

the dollar was dominating at setting the pace for the dollar-yuan. they set the policy based on where the on shore yuan should be, not for anybody else. they will be much happier if they see the dollar against the offshore trading slightly weaker than the on shore. it is beginning to do that. we are seeing at the past couple of days, that the offshore, mostly traded in hong kong and other cities like that, is starting to lose a little bit of traction. that will be something which would reflect what we are seeing for most of the past seven-years -- 7-8 years. it's not to say that you want -- the yuan is going to change sharply. the numbers are very strong in the chinese economy, it is in a good place and will remain that way for some time. the yuan is a strong currency

and will probably get even stronger. >> thank you so much, mark cranfield, joining us from singapore. you can follow more on this story and all the days trading on our market -- the day's trading on our market run-down from bloomberg's expert editors. let's get to karina mitchell with the first word headlines. >> president trump is set to be lifting bands on all un's -- bans on all u.s. citizens coming from brazil. international arrivals are required to take a covid-19 test or provide a negative test to the disease. brendan murphy says the government will maintain tight restrictions, with international

travel largely on hold. australia is close to travelers except some exceptions and all arrivals must complete mandatory quarantines. the two those regiment is more effective if administered over a longer-term period. there are concerns whether it would be effective. the asian president received the -- the brazilian president received the authorization last week. the world health organization is warning governments and vaccine makers globally over the rollout strategies. the director general says it is wrong that younger, healthier adults and richer countries will receive a shot before older citizens and poorer nations. he asks that the world is on the break of what he calls a catastrophic moral failure,

putting profit before people. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg.. -- this is bloomberg. >> coming up, questions on what is ahead for the world's largest electric company. we will be speaking to the chief operating officer of -- who joins us lat 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.

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♪ -- >> let's take a quick check of the latest business flash headlines. hsbc announced plans for a long-awaited overhaul almost a year ago. now, its expansion across asia is even more urgent. hsbc would be confirming areas of focus soon, including plans

to grow the bank's wealth business across south asia. hsbc's strategy is to come with full-year results on february tony third. job opportunities -- february 23. recruitment firm, morgan mckinley, says firms advertise over 60,000 new positions last year. a drop of 49% on 2019, and the lowest since at least 2015. boris johnson's brexit deal is criticized for doing nothing to help financial services work with the eu. birkenstock is said to be in talks for a takeover by cbc capital. we are told cbc is speaking to family owners of the 250-year-old company, valuing the business at almost $5 billion. cbc already controlled a german beauty chain. they launched sandals in the

1960's, with roots back to 1774. moving onto a very big story today, wiley is back in prison this morning, serving 2.5 years for bribery and a new setback for the world's biggest electron a scum. let's discuss samsung with our next chest, professor of business administration at the university of -- the national university of singapore. i want to welcome you to the show. in terms of j wiley going back to prison, different stories, one professor, saying it is a bit excessive, another person, saying 2.5 years is not enough of a punishment. this is a landmark sentence, putting the samsung chief in prison. how do you view it? >> i think we probably have to get a balance.

because he is still in prison. in the bribery case, as long as the people are still in prison, it may be difficult to pardon wiley. the supreme court of korea overturned the sentence into thousand 19 -- in 2019. it is the expected outcome. >> should we view what has been happening as the decline, the end, or is this still endemic in korean business? >> there are always pros and cons. chepo is a family business group

and has been very much instrumental for the development of korea. the government, providing resources to the growth of the funds, made korea what it is now. but there needs to be changed. this is probably the beginning of the transition from the family business to a more professionally managed company. not just samsung, but many of the chairmen went to prison, mainly because of the succession issue. in korea, everybody has to pay 50%, almost 50% tax. if you pay that, it is very difficult to keep the business group intact. so a family heir like wiley has

to do something to maintain control of the entire business. eventually, [indiscernible] >> we have been talking about the reform for years. [indiscernible] >> i'm sorry? >> what makes this a moment where we are going to see significant change in the dominance in korea? >> in a sense, some people worry it may be in battlement and the -- in the korean industry. probably, he has to delegate more his professional management.

i think it is still an important decision, like a big investment, has to be consulted with him, even though he might be in prison. so slowly, j wiley made it clear a couple of years ago that he would be the last heir of the samsung group. like a family heir like him, it may be difficult to continue this structure in the future. so we are going into much more systematic reform on the corporate government structure in korea. so in korea, j wiley is the head of the chair, known to be a group chairman, a group ceo, but

that title does not exist. each company has their board of directors and the ceo and board chairmanship. so the ceo's job should be on the professional manager, and the family owners should be more like a board chairman to monitor the performance of the professional managers. i think that is the shape it is taking now. >> we appreciate your time. coming up next, growing questions over the future of business in hong kong. we discussed the outlook with -- we discuss the outlook

♪ >> we are hours away from joe biden's presidency and his first year in office. u.s. companies in hong kong are cautiously optimistic after the challenges of 2020. there are growing divisional views over the growth of the city. we will discuss this with tara joseph. obviously, 2020 was not exactly a banner year for hong kong. lots of tumultuous moments, be they political or virus related. is it more of the same for this year? is there any cause for optimistic for businesses already in the city? >> well, there is no question that hong kong is at an inflection point. as we go into 2021, there's

still a really big list of worries to grapple with. covid is an issue, like it is everywhere else on the planet. u.s.-china relations, at the top of the list in terms of consents for minnick -- in terms of c -- in terms of concerns for many companies here. and also, there are the political questions. we are really seeing a division sectoral really. where the financial -- in the financial services sector, there's hope hong kong will continue to be a prime services sector. everyone recognizes the importance of hong kong and the liquidity and loads of money that come through this city. for other sectors, for example, the media or academia, there are a lot more concerns about where hong kong is headed and what types of issues there are around freedom of speech, and free flow of data. so 2021 is starting off with a

lot of question marks and also concerns about the city's competitiveness, when there are other places people can do business. >> and it is interesting, tara, you talk about the inflection point. it feels like, is it an inflection point? when it comes to the future of hong kong, under beijing. >> it's not fair to call it that in terms of whether the business community can continue to exist here. there are lots of opportunities, in terms of trade with china. there are lots of opportunities across asia pacific. for american businesses, there's a huge understanding that the asia-pacific region is a developing, fast-growing region, and that trade and relations here are super important, no matter which administration we have in washington, d.c.

hong kong is changing. politically, is different -- it is different than it used to be. it is already studding to feel a lot more like a part of mainland china, in terms of the way business is done, and obviously in terms of politics. so for businesses, it is a question of, how do we constructively work together to make hong kong a very important business city, and how can we continue to live here comfortably, given all the challenges we may face during these changes? >> in fact, one of the questions in your survey is, will your regional headquarters stay in hong kong? about a third said it was not applicable, but 40% said yes. if i'm reading this correctly, a very small number said we plan to move. it looks like people vote with their feet, and their feet are telling them it is stuff here, but we still believing in hong kong. >> i think that is it.

it is an interesting answer, because it goes in so many directions. in terms of the next three years, a lot of companies are telling us, we are going to stay here, figure out what is going on before we make any moves. it is hard to replace hong kong. you just don't take too thousand employees, which is what some corporate headquarters have here, and leave. -- 2000 employees, which is what some corporate headquarters have here, and leave. what would happen if hong kong goes in a direction that doesn't work? they may be moving certain positions out of hong kong, then replacement in other cities. they may be taking units and cost cutting and moving them to other parts of asia, or maybe even out of asia altogether. so in sum, what i'm saying is it's not just one and done and we are out of here, it is

thinking about the long-term and taking some time to think it through. >> presumably, the chinese realized they, too, benefit from hong kong. looking at hong kong's overall competitiveness compared to other cities in the region, how does that look? >> that scenario, where hong kong is truly struggling. there are other cities in asia, singapore, other ones, but also kuala lumpur and other cities, tokyo and other examples, that are really trying to compete now and pick up some business where hong kong may be losing out. the other thing is, let's be honest, hong kong's image has really suffered over the last couple of years. the scenes of violent protests here, the u.s.-china spat and hong kong being in the

middle, the end of the special relationship between the u.s. and hong kong, all of that has hurt hong kong's image trim and asleep. -- image tremendously. so this is an area where across all businesses, we would like to partner and column the hong kong government to recognize it needs to maintain its competitiveness. it cannot rest on the great city it's been on the past, it really needs to get moving and work with us to make hong kong competitive in change that image. >> tara joseph, thank you so very much for joining us, the amcham hong kong president. very interesting survey. still ahead from hong kong, we will examine the fintech environment in the city. welab offers virtual banking services. the cofounder and ceo joins us

exclusively. plus, we speak exclusively to the chief operating officer of tcs joins us next. this is bloomberg. ♪ ♪

anchor: this is daybreak: asia. i'm karina mitchell. china has decided to section some u.s. officials over washington's reversal of decades of policy over taiwan. measures will be imposed in response. health secretary alex azar visited in august, provoking an angry reaction from beijing. china is accusing washington of lies and conspiracy theories after the trump administration claims it has new information suggesting the coronavirus may

have come from a chinese lab. officials say a state department notice on the virus last week is full of fallacy. in their words, it is the last madness of secretary of state mike pompeo. meanwhile, the u.s. is sending b-52 bombers into the middle east. tensions with iran continue to rise. tehran is stepping up military exercises ahead of the biden inauguration. response will begin tuesday. following surface to surface missile firings in recent days. in other news, the telling prime minister has won a vital confidence vote in the lower house. another test in the senate on tuesday after losing the support of a small coalition party. he will be able to stay in power even if it is short of a majority. he has been under fire over the coronavirus recovery fund and

his plan to borrow another 32 million euros -- 32 billion euros. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. kathleen? anchor: karina, thank you so very much. the outbreak continues to weigh on an company's bottom lies throughout the world. the i.t. industry may be a bright spot, thanks to the shift towards digitization in this pandemic. asia's largest software outsourcing provider and world's second-most most valuable i.t. company in terms of market cap has forecast a return to double-digit growth. very great time then to have joining us now, also goes i n g f. thank you for joining us today. you had some terrific earnings beating expectations. forecasting double-digit growth.

it is interesting because the pandemic has hit so many of us hard. but we have to admit there are silver linings in this dark dark cloud. the need to work from home, the need to adopt all kinds of things we specialize in that your company specializes in. >> absolutely. thank you for having me. i'm happy to be here with your viewers. the pandemic hit us and we often -- we opted for stay-at-home. think of the families, the communities. and then, they had constant charity. in addition to the dues that we have. on that, and terms of listening to our customers. ensuring and making them see how they would like to support their customers. and then their growth and

innovation agenda. anchor: in terms of the other side of the coin, working from home. you've a great number of your employees working from home. in terms of one of our stories i read on bloomberg, 96% of your employees, and you are experiencing very high productivity. you have secrets to share with other companies? a lot of people see that but some find it is not working so well for them. what is the answer here? >> we have a workforce of about 400 sunday 5000 people. 96% of them are working remotely. sometimes we underestimate the ability to -- the ability of human potential. the minute we rolled out all of the tools and collaboration and flexibility, what defined us was

to have that flexibility. they are learning ability has gone up significantly. their ability to collaborate with mentors and peers and customers has increased. all that has contributed to an increase in productivity. we have also realized that employee engagement is the key, so we launched an initiative within the company, tools to figure out normal behavior of a person versus an abnormal behavior. we proactively engage with them. for example, in the last month alone, we had 22,000 one-on-one connections with employees. the system tells us employee engagement is the key, make sure they are cared about and understood. we need to understand their

issues. we need to make sure they contribute. anchor: what emerging technology do you see as staying in high demand after the pandemic is over? >> i think the pandemic has proven beyond a doubt the inability and reverse this of the internet and cloud technology. what are -- what our customers are typically looking at, they want to make sure employees are working remotely. from the perspective of what the paradigm is, employee experience, customer experience, growth, innovation, and all these aspects, technology is the solution. the net context, the overarching demand for cloud and moving to

cloud is a big thing, that means a significant shift. whether a private cloud or moving to a public cloud, the cloud is the big thing. the second aspect is automation. automation has been in the game for the last two years. artificial intelligence is for real. that novation is something people are wholeheartedly adopting. machine live -- machine learning to. a self learning mechanism for technology that they have rolled out. so businesses can be resilient and actually grow and launch new products during this pandemic. beyond this cloud and artificial intelligence, the focus is really about the employee

experience, improving the customer experience, seeing how they can boost systems and partnerships to complement their own capabilities. so they can be resilient. anchor: i want to get your view on the vaccine rollout. both across india, locally it is an endeavor underway, going out as soon as possible. what is the most effective strategy when it comes to rolling out a vaccine to put an end to this pandemic? >> i think they, in india, the government took a very pragmatic approach, because, you know, they collaborated with the oxford variation of the vaccine. one of their manufacturers is in india, it will be very difficult

to manage. it requires very low temperatures, so the government has taken an informed approach in ensuring that the largest will be something. with two variations of the vaccine here. one is called covid shield. the government took a chance to actually pragmatically go vaccinate people. in india, it is coming under control. everyone in the government -- the government is taking a stance to vaccinate people as soon as possible, because

everyone says that india is in wave two. very important. the variation we have taken means that any person can administer it, because the approach of exiting is the same. they do not have to learn new ways of admission trading at. anchor: one of the reasons for your great results has to do with deals. you have inked a lot of good deals. what is in the pipeline now? what kind of companies are you looking to acquire? what will drive it in the next two quarters? >> quarter three, one of the finest in the world in, approach. $6.8 billion in banking financial services contributing to $2.4 billion.

especially the u.s. contribute to about $84 billion. the demand for cloud, automation, artificial intelligence across the industry is tremendous, as i explained before. i think the customers are also looking at unlocking some of the values they have and are interested in that they would like to see because there was a. of time for a specific purpose, be it for processing payments or so on and so on. the new approach means that they have a new set of capabilities. they would like to actually sell out some of those captives. the deal we did recently with

postbank systems in germany and one in ireland with prudential from america, both are. more often, it is a significant opportunity, and the number of startups looking for us to come and see if they can help us and taken to the industry at large. anchor: are these acquisitions really key to maintaining your competitive edge, because you do have competitors, of course? when it comes to the outperformance of your stock, a lot of analysts are saying it will be a tall order to add more margin growth for the rest of the year. >> we have taken an approach, an organic -- organic and inorganic growth. we are quite -- we are acquiring

and integrating companies. but traditionally we have emphasized the fact that organically we should grow. opposition is not just in terms of acquiring people and skill sets, but as long as it is the right price, as long as they have products and capabilities, health care, life insurance capabilities, there are many candidates that we keep evaluating, waiting for the right moment and price. anchor: we cannot let you go without asking about joe biden becoming u.s. president. last summer, your ceo spoke out against president trump's visa curves curbs -- visa curbs. that affects occupations like i.t.. what are you hoping to see from joe biden when it comes to your company, when it comes to india?

>> from our industry perspective , the aspect like the u.s. elections and brexit, there is uncertainty, so customers delay their positions. it is key for our success. with uncertainty over, customers will be happy to take new positions and go ahead. business is all about operating within the constraints and we have always done that. the bided and missed ration coming in will be a fresh perspective on many things and uncertainties will be over. the biggest agenda for them will be to come up with distinctive solutions and complete vaccination. it is fairly widespread in the u.s. right now. that should be the priority. the second thing is, they will

certainly throw lots of incentives to business. they will help the industry in the economy significantly. -- and the economy. anchor: we really appreciate your time. we will be speaking with the world's most valuable i.t. company just ahead. coming up next, the car industry facing a damaging shortfall of ships. we will ask manufacturers how their supplies and calculations are somewhat out of sync. this is bloomberg. ♪

anchor: president trump has stepped up his campaign against china in the final days of his administration. as joe biden prepares to take over, the question is whether he will preserve his predecessor's strategy, relax them, or rethink u.s.-china relations entirely. anchor: the trade war, delisting chinese companies, just some of the policies joe biden must decide whether to overturn when he takes office. among his decision-making team, incoming secretary of state has already indicated the pressure on china will continue. at least as long as there is a crackdown on democracy in hong

kong. mainland mouth east global times and trade rep nominee catherine hein, a fluent mandarin speaker who wants to confront china over trade practices. joe biden is sent to want unity among western powers amid concerns beijing could divide them instead, i offering preferential market access. we could have a tough time convincing traditional allies. the eu is the latest to reach its own investment deal with china. in response, beijing says the plan is to ease tensions. foreign minister -- the foreign minister is looking for dialogue to restart and a high-ranking diplomat will be sent to washington to explore areas for cooperation. fus restrictions are not of repealed, beijing is ready. the government can for him at the applications of foreign companies. joe biden says he is not

planning any immediate moves, aside perhaps -- assign perhaps that the moves trump is made towards china are still on the table. >> do not miss our special coverage of the bided inauguration. our analysts and reporters will assess what the new president's policies mean for walls per -- for wall street, and what challenges joe biden will face in the white house. catch that live here on bloomberg tv, bloomberg radio, and bloomberg quicktake. reporter: kathleen, we are seeing asian stocks rise. kimi dollars leading a pack. over in tokyo, japanese stocks are on the rise, the nikkei adding more than 1.2%. tokyo electron providing the biggest boost there. over in sydney, it is industrial shares leading gains for bingo

industries. let's look at what is moving in south korea. the cost be adding 1%. this after the benchmark saw its worst to j drop since mid june. this coming from after authorities talk about the risk of the financial bubble. auto stocks gaining ground, gm motors jumping 10% this morning. the battery supply chain -- kia motors jumping 10% this morning. in seoul, we are seeing fluctuations for samsung up nearly nine tents of a percent. we have prices surge amid a global electronics boom. customers pay big premiums for

metals to be imported. this is given the increasing demand for chips across sectors. anchor: maybe one sector you do not think about as being necessary to ship availability is carmakers, globally complaining about a shortage hitting their pert -- hitting their production. it is a blow from panic -- pandemic induced shutdown. there are been warning signs for months. the vice president of industry, labor, and -- joins us now from michigan. we talk about the leadtime for these things, the time it takes for chips to make their way to the car industry, about six to nine months, how did the industry so badly underestimate the demand side? >> i do not know if it is in

underestimation. the auto industry's comeback much stronger than many would have expected. the last half of the year was very strong. at the same time, we had an increased need for chips and other sectors. consumers and -- consumer in particular. children across the country and the world needed computers for online school and new electronic devices that people wanted to have area the new iphone was delayed because of the chip shortage. auto does not pay as well as the other sectors. especially compared to consumer-electronics. we are really fighting it out with other sectors. anchor: what needs to be done to reduce this bottleneck we are seeing? what is the ultimate downside for some of these automakers? today miss the wave way when it comes to the demand you're seeing in the recovery?

>> i do not know if they will miss the wave, but it will be difficult to get everything to the consumer being demanded right now. they expect the shortage is going to cramp production outlook for the first quarter, maybe into q2. after manda still there, they can make that up this year. they are reverting -- converting chips that are selling the highest. anchor: how much of the shortfall now is due to the fact that so many of these chip companies hold back really sharply in early 2020 when they saw demand falling back so much? we have electronic vehicles coming on mind that need these chips and more consumer use. all kinds of uses, people working from home, kids schooling from him. is it a permanent shortfall?

>> i think it will take a few months to adjust. a quarter, a quarter and a half. there are about 150 chips in a car. they control everything from the touchscreen to engine emissions to safety. even to your windows and your heat. there are chips all throughout the car. we need a lot of them. we are still getting some, is not the volume we had expected because demand came back much stronger. anchor: i will appreciate the heat much more none time i get into a car. in terms of opportunity, though, if you have more electronics and all these things will need more advanced chips, does that mean in other countries outside the top chipmakers, new producers can come on board, take the low end of this market, and produce there and make money, and keep pace with the demand? >> i think there is absolutely

opportunity for new chip capacity, we will just need more and more for the auto industry. you mentioned electrification in the vehicle, it will take more chips than we currently have. the auto industry is going to need more. we are moving to a much more digital world in manufacturing, in our personal lives, chips are everywhere. anchor: one more question, i was reading something that said they are building a new fab, estimated around one billion u.s. dollars, up to three or $4 billion. is that accurate right now? has the cost gone up? will that be an obstacle? >> it is not an obstacle if there is demand there. some of their are up to eight or $10 billion for a new fab. there are some plants right now and efforts in the new admin's

ration i just heard you talking about to bring more to the u.s. shores. there will be incentive to building chips here. anchor: thank you kristen. big interviews coming up ahead. we have the cofounder ends ceo -- and ceo us exclusively. for more market analysis in the next hour, we bring an spring investments. also someone from jp morgan. that is it for "darybreak: asia." market coverage continues. stay with us, "bloomberg markets: china open" is almost among us. this is bloomberg. ♪ tom: it is not :00 a.m. in

beijing and shanghai. welcome, i am tom mackenzie. david: and i am david ingles. we are counting down to the open of your sessions. let's get your top stories today. the u.s. is bracing for the end of the trump era, with barriers in place and thousands of troops in washington. the