haidi: very good morning. we are counting down to the major market open. shery: our top stories. china calls for more global cooperation. xi jinping tells the world economic forum that confrontation is a dead-end street. janet yellen will be joe biden's

treasury secretary. the senate says that it has the votes to confirm her. workers in taiwan are working to eliminate -- the world has seen as heavily dependent on the island. breaking news out of south korea. we are getting the fourth quarter gdp numbers beating expectations, expanding 1.1% quarter on quarter. the expectation was for growth of 0.9%. of course, we have seen private consumption being the drag for south korea. it's not surprising that we continue to see a contraction. we've seen retail trade accommodation and food services ranking in the fourth quarter. when it comes to manufacturing, it was growth of 2.8%. remember, external demand has

been resilient for south korea, especially when it comes to semiconductors. fourth quarter gdp expanding. joining us for insight on those numbers and the korean economy is crystal 10. -- crystal tan. what are we expecting in terms of 2021? crystal: today's numbers are better than expected. we had expected a weakening in recovery momentum. both in terms of the daily infection numbers. this sets us up better.

there are still risks, but in many ways the economy looks like it is in a good position for recovery. xi jinping campaigned that -- u erd community here. shery: we saw the lab report that we might see cash handouts from the government. how much does the south korean economy need another round of payments? can they afford it? how much leeway do they have? krystal: at this stage, growth is elevated. even though -- have fallen from the peak levels. they're around the 400 level. the precipice is always there.

the risks are off the table. we continue the policy support for market stress. in the case of south korea and the pandemic, strong fiscal balances have set it up well. given south korea's position, a nd the fact that monetary policy -- the best case, korea needs to continue on the outside budget deficit without causing any major economic instability. shery: how would a stronger korean won factor in, especially on the exports of the semiconductor shipments? krystal: they are not particularly -- [inaudible]

when it comes to the semiconductor sector, there are reasons to be optimistic about the outlook. the upcycle --demand for digital solutions to overcome the pandemic. the home phenomena. this up cycle should continue to be fortified by the rollout of -- worldwide. if you look at the semiconductor industry, it's rising by another 8%. this bodes well for the south korean economy. 20% of exports. haidi: when it comes to the vaccine, we see many countries around the world in the middle of a rollout. korea is playing more of a

longer waiting game. is there a risk for this that we don't see the start of vaccinations until the second quarter? krystal: a lot of it depends on whether the vaccines arrive on schedule. we wait for the local health authorities to approve the vaccines before that can kick off. south korea is in a good position to achieve herd immunity this year. we will be watching the vaccination progress. we will see them at 70% by september.

it has been a missing piece oft. haidi: markets are quiet right now. australia day, public holiday and in new zealand we have the resumption of trading after their long weekend. chicago and nikkei futures reverting some of those earlier gains. a modest start. we are looking for an update from japanese officials as the country is halfway through their second lockdown. when it comes to s&p futures we are seeing let session after a topsy-turvy day that ended with a rally. we saw the strong shares with

leadership out of the u.s. with the nasdaq climbing. taking a look at the reaction, another positive session after yesterday's rally where samsung and other electronics makers contributed to their. xi jinping is calling on the world to abandon what he calls ideological prejudice. his speech at the virtual world economic forum was his first in the biden era. >> we cannot tackle the common challenges that divide us as well. it will lead us to a dead end. haidi: everyone was fixated on signaling with the u.s.-china relationship might be.

how essential was this to his actual speech? >> we were all keen to hear from president xi jinping. and any sense if they were looking for change tack. he did not name biden once but the u.s.-china tensions were a central theme. he talked about trying to push back against the outdated cold war mentality. all things and policies, or theories put in place. countries need to abide by international law and should avoid his attempt at supremacy.

he signal that china would forge ahead with its own path and would not buckle to pressure from the united states. he also tried to carve out the ideological differences between china and the west which may not be a difficult sell given the crackdown we have seen in hong kong. it is worth pointing out that this was a speech tailored to the international audience. in a recent speech, domestically he talked about the supremacy of the chinese system. shery: what have we heard when it comes to the biden administration's handling of china? >> janet yellen who is close to

been confirmed by the senate we have heard from both of those official suggesting that the hardline on china will not be stopping. we also heard from the number one spokesperson in the white house saying in relation to the speech but it doesn't change the way the biden administration is planning their approach. they were approaching this relationship with patients. she said there is a review going on in the state department and treasury department into the actions that the previous administration took toward chinese companies. she said the administration would be working with allies. the top line will not change even if some of the strategy and tactics do. the hard line on china will continue under the biden administration. shery: we have breaking news at

the moment. we're hearing that the senate panel has voted in supporting antony blinken for the secretary of state position. that nomination will go to the senate floor. we heard from senator bob menendez earlier that the floor vote could come on tuesday. janet yellen getting the numbers to be confirmed as president biden's treasury secretary. we can see those live pictures of the senate chamber still voting at the moment. we'll get insight into what that means with the managing director at this hour. this is bloomberg.

karina: moderna soared after

saying it will work on new variance of the virus and is planning new studies. they produced antibodies against the new variant reported in the u.k. but was less effective on the south african strain. others are working on -- after early trial data produced week responses. no immediate change in existing policy. the governor told the virtual central-bank conference that the strategy will adjust to economic development and maintain stability to avoid what he calls the policy clip. china reported 2.3% growth during the pandemic, the only major economy to avoid flatlining or contraction. the italian prime minister is expected to resign tuesday, void his seat in the senate, and return to frontline politics. sources in rome say that he

hopes by quitting before being defeated he will offer the chance of forming a new government. the trump era policy of maximum pressure comes to an end. the firms monitoring the output say that outbound deliveries are increasing. sbd international says tehran is boosting international shipments in a softer approach under president biden. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. shery: the senate has the votes to confirm janet yellen's treasury secretary just has the biden administration pushes for fresh economic relief i march. how significant is janet yellen

to biden's agenda? >> first of all, this is an historic moment. the first woman being made treasury secretary after 77 predecessors. this is a big step, not just for biden's agenda, but but the country as a whole. a lot of people are acknowledging that. she is the second person to hold the treasury secretary post and the federal reserve chair post at different points. that is historic as well. as far as biden's agenda, that is one of the major first steps in moving his agenda forward. the first big step is the 1.9 trillion dollar stimulus package and we have already seen the frosty reception that has got,

especially from republicans in congress. having her confirmed will help the admin's thracian put -- help the administration to put more of their plans in moving her forward. haidi: is crucial and how she deals with china and the currencies. what are her priorities? >> one, beside the stimulus package, is china. we saw some tough questions referring to china's abusive and illegal practices. president biden has administered -- president biden has indicated that the administration will not make any quick changes to the billions of dollars of tariffs placed on chinese goods and there are other decisions to be made on technology and other aspects of the china relationship.

that is an important question. yellen has made climate change a priority in setting up a club. there are a lot of other things including tax policy, how the administration approaches the dollar, how it will fund the government, including this large stimulus package and other issues around financial regulation, financial stability and so on. shery: we heard some any questions during her confirmation hearing. the repeal of the cap on state and local tax deductions. do we have any more insight? >> we don't know how much of a personal role she will take, but one thing she did repeat in the hearing and follow-up questions

is that she will study these issues carefully and will come to a deliberative conclusion. even as a lot of what she said were talking points. having janet yellen there, someone who is well regarded as an economist. people know her well from her many years at the federal reserve. we know she approaches issues in a thoughtful way and lays them out clearly for everyone to understand, whether or not you like the conclusions she reaches. we can count on her to come across explaining things thoughtfully and clearly. haidi: we are hearing that janet yellen will be sworn in tonight as treasury secretary after

getting the senate votes. you don't want to miss out on the aib president speaking exclusively to bloomberg markets. he will share his vision for the global recovery. 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. (announcer) do you want to reduce stress? shed pounds? do you want to flatten your stomach? do all that in just 10 minutes a day

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shery: moderna says the vaccine will protect against two known variants of the covid-19 virus. it plans to start studies for a booster shot of a strain from south africa. they spoke to bloomberg earlier. >> the south african strain has a vera lind antibody -- virulent antibody. we believe it is protected.

the thing that we don't know is how this will look in six months, 12 months. what you don't know is how much of the antibody will decay in the bodies of the elderly. we want to be cautious. we've announced that we are launching a new vaccine containing --fighting the strain from south africa. that will be in the -- quickly. as a cautionary step, it might not be needed, but we cannot be wrong. we have to be sure. if it becomes a problem in the fall, we want a single dose to

be given at least to the folks in a high-risk group. >> what is the manufacturing line up when it comes to that booster? but if they haven't received their initial vaccine? how does it factor into distribution and production? >> the main thing about the mrna is the platform. it's the same chemistry between the current one and the new one. it is the same chemistry for the lipid we put around it. it's the same machine. the plan now is to continue to make as many covid-19 vaccines as authorized as we can to supply those countries. we have the experiment on the side so we can be ready in late summer if that strain was required. we can switch the vaccine to the

new one. the boost could be a lower dose. that will increase supply significantly. >> as you say, from a messenger rna point of view, the switch is straightforward. for a regular -- is it the same? >> this is new for all of us. if you look at the flu as a template. the seasonal flu you takes very quickly. regional agencies have agreed to look at antibody levels. you could see a world where we do a boost to phase one. it unlockes 16 last year. we were able to quickly boost the single-dose of the new strain. if it's 25 or 50 or 100 micrograms, we might be good with a lower dose because the

immune system is primed. then, we'll do 4000 participants in phase three. because you can get the antibody within a month, you can see how the time works very well. with this new strain if it is required. >> you mentioned it is successful against the u.k. strain. what about the brazilian variant? >> we follow all of those mutations. we have since last january. so far, they were not important. the virus is evolving and the virus wants to survive. as we get more people vaccinated, the virus will keep evolving which is why we need to keep chasing it in case we need a new vaccine.

haidi: coming up, we speak to tcw emerging markets sd. we speak about the foreign policy implications. this is bloomberg. ♪

karina: china is urging the world to abandon what it calls ideological prejudice. it says it will pursue its own path regardless of western criticism. president xi told the forum that the nation must commit to national law. he said mutual respect is the only possible solution. >> tyhe strong should not follow the weak.

decisions should not be made by showing off strong muscles or waving a big fist. multilateralism should not be used as pretext for the actions of unilateralism. karina: president biden fizzy is open to negotiations on his $2 trillion relief plan. he hopes republicans come on board. he says time is tight and it won't be clear if there is any agreement until the final stages, which may happen in a couple weeks. pres. biden: we can't afford not to invest now. there is a growing realization of that on the part of all but some very hard-edged partisans, may be on both sides. there is a growing consensus. whether we get it done the way that i want remains to be seen, but i'm confident we can work our way through.

karina: the former president will have until february 8 to prepare a defense against charges of inciting insurrection. global news to any four hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. back to you. haidi: you are looking at live pictures of the capital where the vote has been taking place. janet has been confirmed. she will become the country's 78

treasury secretary. it includes fiscal stimulus to currency policy as well. we are expecting the swearing in to happen tonight and on tue sday. joining us to size up the effects on monetary policy of these confirmations -- david joins us from los angeles. a pretty big agenda for janet yellen. in the short term, the $1.9 trillion stimulus package is crucial for markets to gauge. >> thank you for having me. there are important implications for markets. most importantly, we have a treasury secretary who doesn't need training wheels.

she will be a steady hand. she has vast experience. i had the honor of working with her at the san francisco fed. she knows how to communicate with markets. she's known throughout the world, throughout asia. the san francisco fed had a particular focus on asian financial systems. she fully believes in the biden administration's commitment to re-engaging with allies and multilateral institutions. i think she shares the view that the best way for the united states to engage with the rest of the world is to fix its problems. what she made clear in her testimony is that she carries lessons from the 2009 global crisis. first and foremost, go big.

don't be too cautious. focus on main street, less on wall street. it was clear she believed that exchange rates should be market-based. it is clear that the u.s. doesn't seek a week or a -- a w eak or a strong dollar based policy. we'll have less tale risks or market policy risks. less risk of waking up to hear unexpected policies have been implemented. asian currencies can grind stronger. we are still at the short end of the asian rates curve. we are cautious on duration. we will see more fiscal

stimulus, not just in the u.s. but in other countries. haidi: what about the fundamentals of the dollar trajectory? we have seen again from the election results, moves based on expectations that the stimulus package may go through stimulus. what is the growth trajectory looking like? how does that inform where the dollar goes from here? i would be one of the most crucial aspects that we'd be looking at? >> there is a risk that the dollar goes stronger. the u.s. is ahead of most countries in rolling out the vaccine. there will be massive tail winds to growth from fiscal stimulus, even if it is delayed. looking at the first half, we

think we will see a slightly weaker dollar. most importantly, the fed has made clear, and we will hear later from chairman powell, the fed will keep rates lower for longer. there is going to be a cushion between rates in the u.s. and other parts of the world, and that will support other currencies. we're going back to the days of dual deficits. current account deficits. the u.s. will have to raise financing from the rest of the world. will have to attract that financing through a more competitive exchange rate. shery: how about the chinese yuan? we have seen a huge rally. investors seem less confident this week. we saw that the offshore yuan was trading weaker than the onshore.

>> these exports are very strong . the rollout of vaccines not just in china but the rest of the world. that will keep domestic demand and imports relatively weak. >> what about geopolitics? >> i think that has an impact on the yuan, even though the biden administration will take a very different tac than the trump administration. china views that its vulnerabilities have been exposed. its too dependent on u.s. technology.

china is very worried that it is vulnerable to more financial sanctions. the efforts to promote greater international use of the rmb. one way to do that is to have a stable or strong currency. haidi: how much pushback do you expect from the central banks? yuan weakness hasn't been much of a concern. thailand is always vietnam for the u.s. treasury. >> two big questions for markets this year. you seem to be drawing a line in the sand.

they would be happy to have a stronger currency. i expect that it will continue. the other big question is how active are the asian central banks going to be in buying up government bonds. very aggressive buying by central banks that help to take supply off the market. that helps limit the backup in rates from a very big increase in supply. still a lot of supply for the market. a particularly long tenor from backing up. haidi: china's --taking a hit

because of the pandemic. going forward. does it report bigger currency? >> what happens to the yuan has a big impact on economic policies. haidi: pleasure to have you with us. the emerging markets group md at tcw. the chairman at the bank of india says a bad bank would help improve the health of the country ask about financial

sector. he says lenders are seeing some signs of recovery after being hit hard by the pandemic. >> liabilities are a concern. even better than the pre-pandemic levels. when it coems t -- when it comes to that, -- the second quarter also. even after that, we have seen that -- effects continue to go. a pace of growth for the retail sector. >> one of the latest developments is the are b.i. proposing regulations for the central bank. how effective would it be? >> i fully agree. a different kind of -- for them.

in terms of, -- a different kind of -- that causes an aberration in the system. they are divided into various categories. depending on their impact, appropriate controls have been suggested. i would say its a step in the right direction. >> the governor is proposing a bed bank. do they need that to compete with nonperforming loans in the sector? >> as far as bad bank is cooncerned, there is a tradition where the banking system as a whole -- of 70%.

if you really look at it, the bad bank ensures that all sectors are pulled at one pace. one sector -- once the sectors are pulled at one pace, it becomes easier to resolve. it doesn't involve the wasting of time, which is -- the value of any of these effects. arc will aquire these -- plus amc will be the one with the task of operating agency function. [inaudible]

concerning the fact that the banking system has gone -- bcr, banks will be in a position to realize the value. this is a mechanism which is arc plus amc. to that extent, it will help ensuring faster resolution and value. i would like to add, today, the situation seems right. the -- in the system has improved significantly. haidi: the indian chairman dinesh khara. the world is becoming increasingly independent --

dependent on taiwan for chips. we will discuss how much of a concern that is. this is bloomberg. ♪

haidi: the semiconductor chip supplier has struggled to catch up. a recent shortage of chips is exposing a risk in the global supply chain.

the world is increasingly dependent on taiwan. let's bring in isabel reynolds. is geopolitical concern by it is such a worry of the reliance on taiwan? >> that is among the reasons. most recently, for global car manufacturers, it has been a problem because of the boom in sales in electronics has triggered a shortage of chips which has forced major car companies like toyota and volkswagen to halt production. that is highlighting the bottleneck in this process that could easily reoccur, especially given the security around taiwan, which china sees as its own territory. it's keeping up the pressure there that was an escalation of

the kind of military posturing that has become commonplace in the region. it is hard for sectors around the world to feel secure relying entirely on taiwan. from china's point of view, it doesn't want to concede taiwan as part of its territory, and doesn't one foreign governments maintaining official ties with taipei. governments cannot afford to ignore taiwan. we're seeing development like the german government writing to taiwan to ask for chip production to be escalated, increased. shery: tell us a bit more about what countries are doing to diversify away from taiwan. >> we're seeing, read across the world in the u.s., in europe,inn japan, they are trying to bolster the production of chips on their own soil.

that is not something they can do overnight. it is a complex industry. taiwan has built this ecosystem of related companies in the same area. you can't do that over night. for example, there are things on the horizon, like psmc has 12 -- plants in arizona with government help. congress is set to reintroduce a bill called chips for america which will help secure these funds and tax incentives. japan is offering incentives to companies who build essential facilities, which could include chips within the country. there is a report that tsmc is considering building a research facility in japan. these kinds of things are going on in the u.s., in europe, and in japan as we speak.

shery: bloomberg's politics reporter isabel reynolds in tokyo. tune into bloomberg radio to hear more from the days big newsmakers and to get in-depth analysis when the team broadcasting live from hong kong. listen vai the app or bloomberg radio. stay with us. ♪

haidi: delta airlines is bringing 400 pilots back to full flying status. they are expected in the vaccine to trigger a rebound in travel demand. helped by its $3 billion share of federal payout aid. it is expected that they will end daily cash losses in the second quarter with possible profit after. airbus is a step closer. the full jet expected by the end of the year. they aim to handover the plane that is comparable to the -- series. it has yet to carry commercial passengers. it is working in collaboration with a russian partner. the southeast asia -- could rai

se about $2 billion. we are told j.p. morgan chase and morgan stanley are being told to work on an offer by the end of the year. grub is backed by softbank. it had net revenue of -- up 70% last year. the -- only joined noble last march but is leaving to pursue other opportunities. the ceo -- in october. it adds to a string of new management after billions in losses. shery: we are heading to the market open in japan and south korea. we are seeing a little pressure for qe stocks after coming down

from holiday. the first new zealand cases reported in two months. the nikkei is under pressure. they should assess strategy tools and communication according to one member, and the one member talking about the yield curve. they should examine positives and the side effects of easing. we did get the ppi services year on year numbers. contraction of 0.4%. when it comes to south korea, futures higher. more than 2% at the moment. they beat expectations for the fourth quarter gdp numbers, expanding 1.1% quarter on quarter. year on year, a contraction, a smaller contraction than expected. the cost a a record high.

we are waiting for the house to deliver the trump impeachment articles to the senate. president trump was impeached for a second time, unprecedented in american history, for inciting an insurrection at the u.s. capitol earlier in january. you need two thirds of the 100-member senate to vote to convict the former president. that would mean that you need 17 republicans to vote against the president to convict him. a busy few days for congress. we have the appointment and the votes for janet yellen as treasury secretary. we have antony blinken's vote for secretary of state in the committee. we could see the full floor vote as soon this week. this as we wait on the house to

deliver former president from's impeachment article -- former president trump's impeachment articles to the senate. this is bloomberg. ♪

>> welcome to "daybreak: asia." i'm shery ahn. haidi: i'm haidi stroud-watts in sydney. our top stories. asian stocks look set to slide after a choppy session on wall street. china calls for more global cooperation and an end to cold

war thinking. xi jinping snfroion is a dead-end street. the u.s. senate confirms janet yellen at the treasury and now turns its attention to impeachment. president trump is the first american leader to be tried twice. china's top company -- tencent -- shery: we take you live to the u.s. capitol as we see members of the house delivering donald trump's impeachment article. of course, we are now seeing members of the house of representatives in the u.s. delivering president -- former president from's impeachment article -- former president trump's impeachment article. donald trump was charged with inciting an insurrection at the u.s. capitol on january 6. it's also the first time that a person has been impeached twice.

a historic effort, really, by the house, now being sent to the senate. the trial will not begin in earnest till the week of february 8. now, in order for donald trump to be convicted, 2/3 of the 100- member senate need to vote to convict him. that would mean that 17 republicans would need to vote against the former president, in order to convict him. haidi, of course, it's a very busy day for congress. they have a lot of multitasking ahead. it's not just this impeachment trial. there's also covid relief, not to mention the appointment of the new president, joe biden's, cabinet. haidi: we are watching solemn pictures, a historic moment as we get the delivery of this article of impeachment, a second impeachment trial getting started from around february 8.

only the first president to be impeached twice, the first president to be impeached after leaving office. there's a lot we still don't know in terms of rules for the second impeachment, remaining a work in progress, but we are getting that delivery of the article of impeachment, just one article, charging him with inciting the violence in the capitol in january. shery: let's take a look at markets across asia. the nikkei is down 0.4% at the open. it was back at 1990 highs. the topix is losing ground. we had the boj releasing their minutes of the december policy meeting. one member saying that the framework has been working well. take a look at what the kospi is doing. it's under pressure, down 0.25%, despite the fact that we got fourth quarter gdp numbers beating expectations, an

expansion of 1.1% quarter over quarter. the kospi is now falling from those record highs. the korean won had led gains yesterday among asian currencies, but it's currently against -- under pressure against the u.s. dollar. we seen a little more strength in the u.s. dollar -- we have seen a little more strength in the u.s. dollar. the markets, a little disappointed that the fiscal relief package might be delayed till march. let's get more on the markets and bring in sean darby, chief global equity strategist jefferies, joining us from hong kong. a lot happening when it comes to what's going on in washington, whether it's this new impeachment trial or the appointment of joe biden's cabinet. what will be most important for asian markets and asian traders the rest of the week? sean: certainly, i think the strength of the chinese currency has been the most dominant feature for these equity markets over the last six months.

if you look at hong kong, for example, the strength of the chinese currency and also the drop in highball have been the lead indicator for the equity markets. and the fact that joe biden is now the president of the u.s. and hopefully there is less geopolitical tension between china and the u.s. haidi: we have seen significant rallies when it comes to northeast asian stocks, especially given, really, the optimism over the economic recovery and tech giants really rallying. where are we in terms of valuations and 2021 earnings? sean: that's a very good question. we are probably, over the next quarter or so, certainly for china and taiwan and korea, getting to the peak of the year on year earnings growth.

so, it will never be as good as this, purely because the base effects we've had over the past 12 months. however, it doesn't necessarily mean that the equity markets stall from here. two good things are, one, there is no inflation, so there's no likelihood of any central banks raising rates. secondly, companies are actually generating very, very solid results. again, we are probably getting good base effects, but that means only that we get single-digit or slightly double digit growth from here on. haidi: the article of impeachment for the former president donald trump. for market investor purposes, we know president trump is out of the oval office, we have a new era, if you will, under president joe biden.

all expectations are that the u.s. foreign policy will continue to get tough on china. what are the implications when it comes to asian tech? is that a risk, buying taiwan semis or hong kong listed big tech? is that geopolitical story still something that investors really need to worry about? sean: i think it will mean, actually, that we have less of the idiosyncratic risk, which was much more focused on the company's -- companies and that there's a much broader risk on certain sectors which require u.s. technologies. so, if chinese companies, in a broad sense, are importing certain ships or certain programs -- chips or certain programs or protocols, that's much more of a risk than the single company-focused risk that mr. trump's administration tended to follow. slightly different paths and

very different implications for the equity markets here. less of the pressure on the investor in a single company, but much more risk toward certain sectors. haidi: we are just watching these live pictures. representative raskin, the lead house manager at trump's second impeachment trial, who will be leading that trial, gearing up to lead a team of those who will make the case at the former president's impeachment trial, that the senate must convict and bar him from holding public office ever again. when it comes to these valuations that we are seeing, sean, we had a great story that looked at the recent report that said even being a bear means something entirely different in this market. a survey from an association say a bear is someone who's only 75% invested in stocks.

is this just, there's no alternative, a fear of missing out? what are the risks going into the rest of the year that this over exuberance is setting us up for failure? sean: i certainly feel that people who have been bearish have been a rare species today, because, certainly, the markets have been really rallying from early november, when we got the news on the vaccine, and of course, joe biden's election as president. unfortunately, from our work, there's plenty of cash on the sidelines. second, the earnings numbers are still being revised up. what was inexpensive shared today, the earnings numbers -- what was an expensive share today, the earnings numbers look better 24 months out. solvency and liquidity are in a much better position than they were 12 months ago. bear in mind that the u.s. s&p

500 companies have the most amount of gross cash as a percentage of total assets. your balance sheet risk has pretty much receded. for equity investors, it's more focused on the top line growth and earnings estimates than any worries we have on liquidity and solvency, which was the focus, of course, during the first and second quarter of last year. haidi: is that more so especially in japan? we never really had balance sheet issues in the country. we've seen a huge rally for japanese stocks, despite the fact that we have a stronger japanese yen and signs of deflation already. sean: i would tend to agree with you that this -- that there are signs of deflation in japan. the strength of the yen has been acting as a modest headwind for off its -- for profits. japan is a very cyclical economy, very export driven, so you do get the uplift of profits

as the world starts to recover and also the fact that companies do not have any solvency balance sheet risks. i dividend per share growth in japan over the last 12 months has been pretty much flat. companies will not be needing to cut dividends to maintain their cash balances. all in all, free cash flow in japan is pretty much back to where it was almost 12 months ago, so there is some reason why the equity markets have held up at this point. haidi: what about the trajectory of the u.s. dollar? how does that impact your views on how constructive investors should get, particularly for emerging markets? sean: we've dropped on the trade-weighted dollar from the march peak about 10% to 11%. the dollar was fairly overvalued at the end of 2019, so, again, there was a good reason for the dollar to have fallen, even

without the implications from the pandemic. i think the markets are sort of anticipating some form of a countertrend rally, but the reality is that you have this very overvaluation that will act as a headwind. secondly, there's no likelihood of the u.s. raising rates for a good two years to three years. so, for the dollar, it's gotten very little support out there, both on fundamentals and also against other exchange rates, in terms of real interest rates. shery: always good to have you. sean darby joining us. let's get you to karina mitchell, who has the first word headlines. karina: china is urging the world to abandon what it calls ideological prejudice and reject a new cold war, signaling it will pursue its own path, regardless of western criticism. the president told the virtual world economic forum in davos that nations must commit to international law and shun

supremacy, adding that confrontation will only lead to a dead-end. he said that mutual respect is the only possible solution. >> the strong should not believe the weak. decision should not be made simply by showing off strong muscles. multilateralism should not be used as a pretext for acts of unilateralism. karina: staying on china, the pboc says it will balance growth with potential risks, signaling no immediate change in existing policy. a governor told a virtual conference that strategy will adjust to economic development and maintain stability to avoid what he calls policy -- a policy cliff. china was the only major economy to avoid flatlining or a contraction. in italy, the prime minister is expected to resign later tuesday to avoid defeat in the senate and plan his return to frontline politics.

he will host the cabinet before handing in his resignation. sources in rome say he hopes that by quitting before being defeated he will be offered the chance of forming a new government. indian farmers are converging on new delhi again as they step up their campaign against new laws. they plan to march through the capital later tuesday as india marks its republic day. rural leaders say the government 's proposed laws favor corporate agriculture and make family-owned farms unviable. global news, 24 hours a day, on air and on bloombergquint cake, powered by more than 2700 journalists -- bloombergquint take -- bloomberg quicktake, powered by more than 2700 journalists and analysts. shery: we are joined by the wilson center's patricia kim for a look at global powershare -- power shifts and china's role on

the world stage. up next, the second impeachment trial of donald trump. delivering the articles of impeachment -- article of impeachment. this is bloomberg. ♪

haidi: an old -- all democratic delegation of house prosecutors has delivered a single article of impeachment against donald trump, triggering the start of an unprecedented trial. trump is the first american president to have been impeached twice and the first to be tried after leaving office. let's go to our congressional reporter. the trial itself won't start until the week of february 8. why was it set up this way, and how long will the trial last? >> well, in the end, it turns out both democrats and republicans wanted to push the trial off for a couple weeks, though for different reasons. republican leader mitch mcconnell said he wanted to give

trump some time to prepare a legal defense and assemble a legal team. meanwhile, democrats looked at the calendar and said, we actually want to give joe biden some time to start to move on his agenda, to get his cabinet members approved, and also start looking at an economic stimulus plan. they agreed to wait until february 8 to begin this trial, though it's still unclear exactly how it will look and how long it will go for. mcconnell and schumer are still organizing a resolution for the senate, a document to determine how they will share power in a 50/50 senate. this is proving to be a very difficult issue as the two sides are entrenched and arguing over a lot of minor procedural points -- finer procedural points. >> the timing of this was always a concern, in terms of giving president biden an opportunity to start picking some things off his agenda. the fact that the impeachment is likely to run parallel as he wants to get some of these things done -- stimulus negotiations, for example. how does that impact the president's agenda?

>> it's twofold. it will take up time in the senate. during the impeachment trial, the senators have to physically be on the senate floor, listening to the arguments. there can't be hearings or meetings going on. their time and attention is directed elsewhere. secondly, this is likely to inflame partisan tensions. you have a lot of republicans saying that this is pointless, he is out of office, there's no reason to do this. democrats say they want to hold trump accountable for what happened. this is likely to generate a lot of ill feelings between the two parties, where democrats really need republicans to work with them on the stimulus bill. shery: at the end of the day, what's the chance of 17 republicans actually voting to convict trump? laura: it's really going to be tough. 17 republicans -- that's a lot. even janet yellen, who was confirmed as treasury secretary -- she -- it was tight. you saw a lot of republicans break away.

having that many republicans break with trump would be unusual. however, we did see rob portman, who is more of a moderate from ohio, announced he isn't running for reelection. that would open him up to vote for a conviction. it depends on the personal politics of these members, as well as their political future and the future of the republican party, whether it contains trump or not. >> are bloomberg congressional reporter, laura davison -- our bloomberg congressional reporter, laura davison. facing a grilling over the move to freeze assets in hong kong. he will be speaking before british lawmakers later today. we have the details ahead. this is bloomberg. ♪

hsbc head, set to be grilled by british lawmakers about the

lender's move to freeze assets in hong kong. it counts hong kong as its largest single market. joining us, jonas. what are we expecting to hear from the hearing in london today? >> clearly, there's a lot of animus toward the bank. there's both a the public and private part of the hearing, so i would expect the private part to be a bit more exciting. i would expect that hsbc would present itself as following local laws. it's been forced to close a range of accounts in the city, along with other banks. sanctions from the u.s. on local officials have also caused other banks to close accounts, so there's pressure coming from both sides. more broadly, i think the hearing will also include questions on their backing of

china's new security law in hong kong, which we haven't heard them speak much on. more broadly, the business community in hong kong has argued, as has the government, that the law was necessary to propose -- preserve stability. it is compliant with the framework that governs the city. we haven't heard him speak much about why they decided to support that. >> just quickly, what's at stake for hsbc here? jonas: i mean, the bank is just about betting the house now on its expansion in asia, and china is a very important part of this, so it's very dependent on tensions easing on both sides. further sanctions from the u.s. and more ratcheting up of measures from china would put it in a very difficult spot. >> greater china finance editor jonas bergman with the latest on hsbc. we heard about the role of hong kong as an international

financial hub, despite political tensions, and why he sees more stable u.s.-china ties under the biden administration. >> one should expect a lot of continuity, in a sense, in the u.s.-china relations. i think that the form in which these will be administered will be different, with a more multilateral list approach -- multilateralist approach, a more predictable approach that will bring more stability to the relationship. the united states under biden is not going to get easier on china, but i think it's going to try to bring china to the table, together with u.s. allies, to discuss things which are very important for them all. one advantage of this approach is that we're goin gto s- -- going to see much less cause for accidents and misunderstandings.

this is important for the world. i think that this stability will be very good for everybody. >> how concerned are you about recent developments in hong kong ? >> well, hong kong will continue to be a very important international financial center. they are -- there are tensions there, but we have been very supportive of hong kong as a place to do business, and what we hope is that calm can be there for the medium-term, and we will all benefit. >> what kind of recovery are you expecting? it's very difficult to see the vaccination, the rollout, different countries going at different speeds. but are you more optimistic about 2021? >> i do hope that the change

will prevail over the virus. this is not going to be immediate. there will be bumps on the road. certainly, it is divided into two halves from the economic point of view. the first half, because of the health uncertainties, is going to lead to an economic situation which may be not too dissimilar from the one we saw in the last quarter of last year. but as the year advances and vaccination prevails over the virus, i hope that, in the second half, we can see a return to confidence, more private spending, and a stronger economy. overall, i'm cautiously optimistic that we will have a better 2021 both in terms of health and the economy. but at the beginning, it's not as easy as we had anticipated about two months ago. >> that is jose vinals. we will be hearing from plenty more guests to head -- guests

ahead. the vice chairman of pimco will be joining us. coming up next, patricia kim, discussing china's role on the global stage. this is bloomberg. ♪ ♪

>> the strong should not believe the week. decisions should not be made by simply showing off strong muscles or waving a big fist. >> that was chinese president xi jinping speaking at the world economic forum. this is his first address since joe biden entered the white house. patricia kim is a china expert and global fellow in washington.

patricia, great to have you with us. this is the first speech in the biden era. this is about four years since the first speech that president xi made. what to you are the most marked changes in the way the world and china's place in it has changed, and the shedding of a certain type of image that china had been projecting for years ago versus the reality of now? patricia: as you state, this is the second time that xi has addressed the world economic forum and i think his speech echoed many of the themes that were present in his first speech in 2017, which tried to pitch china as a leading force for globalization and a defender of multilateralism at a time when the united states seemed to be turning inward. one major difference is that the global context has dramatically

changed for china. china's global image has really plummeted around the world due to beijing's initial mishandling of the covid-19 pandemic, resistance to allowing inspectors to investigate the origins of the coronavirus, as well as its aggressive behavior in hong kong and towards taiwan. i think his efforts to pitch china as a force for multilateralism would likely be received with more skepticism today. another key difference today is that xi also made a nod to beijing's new emphasis on domestic consumption and innovation. back in 2017, beijing's big priority was it belt and road initiative and the message that china was eager to go abroad and build infrastructure.

i think this has been dialed back a lot, after china has faced criticism for creating loan dependencies, for the quality of infrastructure, and so on. now it is facing even more hurdles. i think the emphasis on domestic consumption and innovation was another major shift. haidi: there was a big focus on ideological prejudices. he went through similar familiar slogans to rise from the economic slowdown globally. he also said something like no two leaves are the same, alluding to political issues. that is not something that is going to happen.

it didn't happen under president trump and it is not likely to happen under president biden. patricia: that is right. a lot of people were interested because it was his first speech addressing a global audience since biden's inauguration. a lot of messages were seen as a direct response to president biden's call to work with allies and partners to confront concerning aspects of china's behavior. but xi made it very clear, without explicitly mentioning the united states, he seemed to be sending a message to washington that these issues should be hands-off, that countries should avoid meddling in other countries' internal affairs. there was definitely a direct response on that. what is critical to watch is how various u.s. allies in partner countries will respond to these

conflicting messages from washington and beijing. haidi: will there be a more clear-cut line between china u.s. economic ties versus human rights and geopolitical issues, or has that line already been blurred beyond the point of no return? patricia: it remains to be seen exactly how the new administration will deal with china when it comes to trade and economic issues. it has made clear that it is not going to rush into anything. it is going to do a long policy review. but what is clear is that the technological decoupling is unlikely to change and that is very much tied to human rights issues and the different political systems.

the united states -- the biden administration has made clear that it wants to set standards in the technology realm and making sure that democratic values are front and center and so on. in that sense, there are some lines that have been drawn there. haidi: what about lines concerning taiwan? we had seen the trump administration overtly supporting the taiwan administration and the government there. we were expecting a more cautious approach from the biden administration, but we are seeing strong signs of support. patricia: i think when it comes to the biden administration, we can expect a lot of continuity from the trump administration. there was a concerted effort to deepen u.s.-taiwan exchanges.

use our visits by high-ranking u.s. officials to taipei. before leaving office, secretary of state mike pompeo lifted rules that restricted contacts between american and taiwan officials. the secretary of state nominee stated in his confirmation hearing that he was in favor of this relaxing of restrictions. i think we are going to see a lot of continuity. having said that, i don't think this means the biden administration is going to throw out the united states traditional one china policy based on the three communiques. haidi: patricia kim, great to have your insight. thank you. here's a picture across markets in asia.

we are seeing downsize pressure across the board. the nikkei is down 0.6%. same story for the kospi which was at a record high. down 0.8% despite the fact that gdp numbers beat expectations. below that 1000 level. kiwi stocks also under pressure. they are back from holiday. new zealand reporting its first case of coronavirus in two months. u.s. futures down after a mixed picture to start the week. coming up, bloomberg's covid resilience ranking indicates the global vaccine drive hasn't done enough yet to make a real difference. a closer look at that, just ahead. this is bloomberg. ♪

>> this is daybreak: asia. janet yellen has been confirmed as the 78th u.s. treasury secretary and the first woman to hold the position. the senate voted to approve the nomination making her among the first of joe biden's cabinet picks to be confirmed. she will be the second to have been both fed chair and treasury secretary and was also the first

woman to lead the u.s. central bank. india is reportedly stepping up its strained relationship with china. mint says tiktok and 58 others will be barred permanently by the administrative electronics and information technology. the list includes some of alibaba as key shopping services. the move will now be permanent. south korea's economy grew more than expected last quarter as a recovery in exports helped offset a winter coronavirus outbreak. gdp increased in the three months from the previous quarter. growth slowed sharply last year, but some exports helped maintain its momentum. moderna soared after saying its covid vaccine will work on reported variants of the virus and is planning new human studies.

elsewhere, merck is holding work on its experimental vaccines after early trial data produced weak responses. global news, 24 hours a day, on-air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. haidi: more than 68 million doses of covid vaccine have been administered worldwide, but it seems the vaccine drive has yet to make a real impact. the resilience ranking scores the largest 53 economies on their success in containing the virus with the least amount of social and economic disruption. let's go to emma o'brien in beijing. we talked about this resilience ranking and the findings are interesting. how does the impact of access to vaccines as well as the successful rollout of vaccines

way into how the rankings come out? emma: it is a little too soon to say. a couple places are trying to roll out with varying results. that includes the u.s., the u.k., israel, and the united arab emirates. what we found is that isn't yet enough to have much of an impact on their position in the resilience ranking, which brings 11 data points together. that means that our top 10 hasn't changed a huge amount. that includes new zealand which

isn't starting to inoculate for a couple months. singapore already started, but nothing near the scale we are seeing in israel or the u.s. and australia also hasn't started to vaccinate. shery: how do you see the rankings shifting going forward and what do you expect to have the biggest influence in turning things around? emma: we've added this new data point this month which does really track the number of doses being given. i do expect that will start to have an impact, but where we will be looking to see it -- if you are starting to see herd immunity in a place, you will start to see that in declining deaths. cases might continue to grow

because vaccines interestingly don't necessarily stop spread of the actual virus, but they do stop people from getting really sick. so you will start to see, hopefully in the places that are really putting their lot in with the vaccination, improvement in those mortality rates, hospitalizations, which should lead to easing of the restrictions that are weighing them down. shery: emma o'brien in beijing. the world bank says that ensuring developing nations have access to the covid vaccines continues to be a challenge. the president discussed the world bank strategy with david rubenstein. >> these are big challenges. what we did in october, with the support of all these shareholder countries, the idea of $12

billion of financing, we can use that money to help set up vaccination systems in poor countries, also to buy vaccines from manufacturers, and also from an international facility that is getting access to vaccines. we are already in the process of deploying those vaccines. we've been working since october to do an assessment and we've got now 96 assessments of their readiness to do the vaccines. the world bank has been involved in vaccination programs for many years, for decades. so the bank is able to help countries. last week we announced our first operation to buy vaccines and begin deployment of vaccines.

>> we are in the beginning of 2021. is that going to be a good year for the global economy? >> one thing that happened in 2020 was, the world didn't slow as much as people had feared. the forecasts for 2021 are being brought down because the starting point was a little higher than expected. i'm pretty cautious on 2021. i think a lot of countries are still in substantial trouble. we thought a critical variable is to get vaccinations done for as many people as possible. that will help in the gdp outlook. both from the education standpoint, also it enables people to be at their jobs,

working if the schools are open. the world bank is very involved in education. one thing i should mention is the inequality of the current world environment. it is troubling. it is actually getting worse. >> are you worried about covid really becoming the dominant economic issue for 2021, in other words, it doesn't go away and it hurts the economies much more than the developed markets? >> there are many aspects of that. one is having ruble -- global growth slow. also, repentance is have been down. that is the money sent back home by workers that are across their borders. that is going down a lot.

new investment has been much slower. i pushed in april of 2020 that we wanted to be in working capital and trade finance. this is the short end of what companies need to keep private sector companies and businesses operating. because the banking system had really reduced its offerings in these poorer countries. we have been successful in that. i think that has helped in trying to build resilience. haidi: that was the world bank president. you can hear more from that interview in the david rubenstein show on bloomberg television. coming up next, tencent is on the cusp of joining the trillion dollar club.

the company has pushed its market cap near the milestone for the first time. we will discuss, just ahead. this is bloomberg. ♪

shery: here's a quick check of the latest business flash headlines. noble is losing its chief financial officer after just a year in the job. just attorney is a former cfo

and only joined noble last march but is leaving to pursue other opportunities. this adds to a string of executive changes at noble. southeast asian ride-hailer rabbit said to have picked banks for a u.s. ipo that could raise about $2 billion. we are told morgan stanley jp morgan have been selected to work on an offering that could happen before the end of this year. grab is back and saw a net revenue rise last year. u.s. listed casino operators showed gross gaming revenue falling last week. jeffries says it was expecting a negative reaction to the numbers

, warning revenue could fall further. new lock downs on the mainland and the resulting cuts in travel will hit casinos over the lunar new year. haidi: tencent is on the cusp of joining the trillion dollar club. a near 11% surge yesterday pushed its market cap close to the milestone. let's go to hong kong. does the scale of tencent's rally this year make sense if you are buying the stock at the moment? >> it makes sense the stock could gain, but a gain of this magnitude is very difficult to justify. its fundamentals and earnings and revenue haven't really changed at all. you mentioned yesterday's rally.

there wasn't really a clear trigger for the scale of that gain. there was the announcement from a video startup company that is backed by tencent, going for an ambitious ipo in hong kong. again, you have the stock now trading at 40 times earnings, really getting to bubble territory. the southbound flows coming in from shenzhen and shanghai, 35% went straight into tencent. haidi: we are seeing the hang seng index close to reversing losses from the virus, the trade war, and the protests. this adding billions to the likes of jack ma. who are the biggest winners? >> the people that have stocks trading in hong kong are adding

more than $60 billion in january. it is not just tencent that is rallying. it is the likes of alibaba as well. the reappearance of jack ma triggered quite a big rally in shares there and added to -- we hadn't heard since the ant ipo was canceled. everyone in hong kong, the liquidity that is flooding global markets, you look at what is happening in u.s. stocks, you see how expensive they are, and that liquidity is now coming to hong kong. it tends to be the mass markets that take that leg up from the ample liquidity being pumped

into the financial system by central banks globally. that is really lifting valuations here. the market here, the hang seng index was one of the cheapest indexes in the world. you see the liquidity not just from china and all the money going into the stock market, going to hong kong and mutual funds, but also in the u.s. and europe where shares are really expensive. shery: china market editor. still ahead on bloomberg television, we speak exclusively to vice-chairman brian goo about the outlook for autonomous cars and the shortage in chips for the auto market. plus, christopher smart shares

his markets outlook. markets coverage continues as we head to the start of trading hong kong, shanghai, and shenzhen. this is bloomberg. ♪

>> it is 9:00 a.m. in beijing and shanghai. welcome to bloomberg markets china open. i'm tom mackenzie. >> and i'm david ingalls. we are counting down to the open. let's get your top stories today. more global cooperation and an end to cold war thinking. xi jinping