♪ >> good morning. we are counting down to the market open. >> welcome. our top stories this hour. asian investors brace for renewed volatility. the nasdaq slumping to a two month low.

they have to collaborate and confront beijing and munich. crunch time for the olympics. big decisions as the city starts to attend its virus emergency. we are getting final fourth-quarter gdp numbers getting revised upward out of korea. the initial estimate was for a increase of 1.1%. we have a small manufacturing rebound. that is less than the previous quarter. we have had really strong export numbers out of south korea.

take a look at the numbers. we saw fast acceleration of prices. gaining half a percent in february. this is faster than the deceleration from the previous month. the estimate for euro and was accelerated. it is also an acceleration in the previous month. it came in at 1.1%. much below the bank of korea 2% target. haidi: we are bracing for that surge to hit asian markets. >> stocks have had a choppy week. we are watching to see whether tech will follow lower. a lot of the commodity players we have been watching in

australia. there is trade data throughout. -- due out. commonwealth bank saying the target could recover if market volatility passes. the wti is under pressure after jumping more than 2% overnight. it will be fascinating to see where they decide to do that. the 10 year yield jumping this morning. futures lagging.

that is about to run out of steam. not moving much in the face of higher yields. little changed this morning. haidi: let's get a little bit more insight on those markets with our guest. some parts of it look bubbly. evaluations remain the biggest volatility. always great having you with us. we were seeing how tech stocks in the u.s. are at a peak and perhaps ready to pop. back to 2000 level bubble. when you're in this environment,

would you give some -- give up some of those tech stocks? >> absolutely. we have observed the rotation from investors into cyclical value stock. away from growth stocks. i think this will continue with the vaccine rollout. value stocks are very attractive. they offer a certain hedge against inflation. for the growth stocks, the strong headwinds, you mentioned the valuation article. the government is going to focus more on regulations. many investors believe this

could be future cash flow. haidi: emerging markets have been attractive for many investors. they were considered to be cheaper than other markets. at the same time, there was only the caveat that there was a weaker dollar. do we risk getting a stronger dollar that could derail the rally in the end? >> yes. there is a risk. the dollar will likely continue to weaken modestly in 2021. it seems to be strengthening. but a big alert seminal -- bigger stimulus package could lead to a larger deficit. it could put more downward pressure on the dollar.

i don't think the currency risk is very big. haidi: when you take a look at the other positive driver, which markets in asia are you favoring? >> i think companies and countries are exporting strong commodities. i think the agriculture and industrials are what matters most. when the economy is back to the growth trajectory. haidi: what are you watching out for as we get into the national people's congress? are there policy disputes or changes in tone you are watching out for? >> i am based in the u.s..

we pay a lot of attention to u.s.-china relations. i think they will impact the market sentiment. in the short-term, i think those events will create that in the market. shery: what about the long-term? we talk about china we talk about their focus on cleaner energy. that seems to be a global trend. >> that i totally agree. i think that is great to see. whether it is a socialist country or a capitalist country. we are all focused on improving the globe. from an investment perspective, it could be overbought. we do see certain renewable

energy companies in that space. we know this contributes to 80% of consumption. the transition will be slower than most people expect. haidi: always great to have you with us. >> the u.k. plans to keep spending big to help the economy through a pandemic. to help companies and citizens cope. they plan to have bigger taxes on businesses. >> this is fair. we are seeing more of those on higher incomes.

we will ask large businesses that have made a profit to contribute as well. >> governor andrew cuomo has brushed aside calls for him to resign amid sexual harassment claims. >> i never touched anyone inappropriately. >> organizers of the tokyo olympics will see later this month if spectators will be banned. a decision will be made by march 26. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

haidi: we will get more details on those plans for the olympics as the state of emergency is set to extend. china kicks off its biggest political meeting of the year. this is numbered. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

shery: here we go again. spacex will test another high-altitude flight. we actually were expecting this to happen earlier today. were counting down and doing this all over again. but they called off the launch because apparently they had an issue with one of the engines. we are trying again. this is in taxes. this is coming at a time when we had a couple of attempts before.

two's ended in explosions. haidi: that is right. we heard from elon musk earlier that says he has 60% greater success with this launch. we are seeing the launch window coming to a close. it does look like we will get underway and less than a minute. this is something having the ambition of developing a starship with the goal of launching cargo and people to the moon and mars. the last couple of versions each failed in the final seconds of the mission. both of those ended in some pretty spectacular fireballs. shery: that was back in february and december. this rocket, let's try to understand this.

a lot of technical talk. >> 5, 4, 3, two, one, ignition, we have liftoff. please prepare for section 35. >> 30 seconds. starship 10 has liftoff. on its test flight.

haidi: i think we will never tire of watching that impressive feat. after the previous launch was aborted with just seconds to go. the goal of this flight is not necessarily to meet the maximum altitude. but it wants to test key parts of the starship system. it is powered by three rocket engines. they will shut them down one at a time and sequence as this gets closer to the intended altitude level. it will flip itself for what is called a belly flop maneuver.

in the final moments, they will be returning the rocket to a vertical position. it will slow itself down and try to do that landing. that is where we have been seeing things fall apart in the last couple of attempts. shery: you have to put the bigger significance of this. but it really means for the company. what it means for finally sending a starship to mars. it is not just seeing very cool pictures. there are broader implications for spaceflight. haidi: we have heard elon musk sounding very confident. saying he is very optimistic that the starship will be having human transport by 2023. a pretty ambitious goal. this program only began back in

2019. investors are optimistic. in the latest funding efforts. we will continue to track that. a highly difficult landing procedure. back to earth now. it is a pivotal year for president z's and thing. -- xi jianping. tom mackenzie joins us. what do you think we'll be drawing the most attention in this new session? tom: the two sessions get underway today. the big day is tomorrow. laying out the positive --

policy priorities for the next year. of particular importance is the growth target this year. it was dropped last year because of the impact of the pandemic. a reason why they may not want to set the growth target is because they don't want to artificially add to the leverage and debt levels that are already here. that would be one argument for not setting it. the deficit target is set to be reduced. because of leverage and debt concerns. the financial risks are clearly a priority. you expect to see the deficit target. we know those special issuance bonds will be capped at a lower level. this is why this year is such a pivotal year. seeing what is in the five-year plan. it sets the priority for the

next five years. it is seen as a blueprint for technological priorities. in a year when they have been hammered by the trump administration to curb their use of technology and their import of hardware and software. shery: we want to go back for our viewers to the spacex launch. the test flight being held. the last two times we have had this attempt, it did not go very well. we had explosions in the last part of the landing. we are now waiting to see how this dissent will go -- descent will go. they were prior tests in february and december.

haidi: what we are seeing is it is using a single engine to hover just in the clouds. it is looking for that belly flop maneuver before we get into the dissent -- descent part. the timeline of this project is key. someone has already paid for a flight to go around the moon by 2023. we are announcing seeing the spectacular pictures. we talk about this as being incredibly impressive from a visual point of view. but this is very much a commercial proposition. for his ambitions to get people to the moon, a broader kind of

space tourism. being so exciting to watch at the moment. those live pictures. the landing was a little bit problematic last time. it appears to be a successful landing. shery: in texas after the test flight. being able to push forward his business. a successful launch business so far. we have seen cargo for the international space station. they have also taken nasa astronauts. now after several attempts and a failed attempt earlier today when they had to abort another launch because of an apparent issue with one of the engine.

they finally landed this starship after that test flight. and after a couple of failures in the past. that was a tricky maneuver. the landing process. reorienting itself for reentry. an aerodynamic dissent. -- descent. it finally managed to land in taxes -- texas. haidi: that is right. this is the first time they have managed to land this prototype after a high altitude flight. that is really key. the company had landed other prototypes. but those were short flights. spacex confirming, third time lucky. the successful landing of this

rocket. plenty more to come. this is bloomberg. ♪ want to save hundreds on your wireless bill? with xfinity mobile, you can. how about saving hundreds on the new samsung galaxy s21 ultra 5g? you can do that too. all on the most reliable network? sure thing! and with fast, nationwide 5g included - at no extra cost? we've got you covered. so join the carrier rated #1 in customer satisfaction... ...and learn how much you can save at xfinitymobile.com/mysavings. - my son needs this drug, i hope it doesn't cost too much. i hope my insurance pays for it. can you tell me how much this will be? - [cashier] 67. - sorry. - wait, have you heard about goodrx? goodrx finds free coupons to help you save up to 80% on your prescriptions.

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haidi: a quick check of the latest headlines. claims that amazon stifles free speech. they said they were incapable of policing violent content. some staffers are facing bonus cuts. the entire firm will see payouts cut by an average of 15%.

payouts are now set to be the lowest of all the investment banks. the lloyd will pay the malaysian government to resolve all claims related to a scandal. it is the largest payout. this is after a local lender agreed to a settlement where $750 million. coming up next, china's anticipated meetings will be in focus. we wait for the government blueprint for the economy over the next five years. we get an idea of what to expect. this is bloomberg. ♪

>> this is the headlines. it was called the defining test of the century. this was his first speech as washington's top diplomat. he cited the importance of climate change. he also said the u.s. will compete, cooperate, and confront china as needed. >> china is the only country with economic, diplomatic, and technological power to seriously

challenge the stable international system. >> u.s. law enforcement officials are warning a militia group may be planning to attack the capitol on thursday. there is intelligence about a plan to breach the area. march 4 is seen as some extremists as the true inauguration day. the fed says the u.s. economy says businesses are optimistic about the next few months. most districts reported more unemployment. though the increase was slow. the daily count of covid cases fell to its lowest in more than four months. two months into their brexit deal, the u.k. is back negotiating with the european union.

they want to take unilateral action on trade. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. haidi: let's take a look at our asian markets. what are you seeing? >> taking a look at global bond market yields. treasury futures in the red. we saw the push higher in u.s. yields. these are the past four yields. the 10 year could drop below zero.

we could see asian stocks headed for losses. you have nasdaq futures under pressure. closing below 13,000 points. things are falling in sydney as well. energy and financials are among the few bright spots. you are seeing tech heavy benchmarks. this has underperformed the hong kong benchmark in seven of the last 10. haidi: markets will also be watching what comes out of china's high-profile meeting this week. the annual sessions open thursday. china's political elite will use

this to provide a blueprint for economic priorities for the next five years and beyond. >> beijing's goal this year is clear, further institutionalized the president's vision of a stronger, self-reliant china. >> this five-year plan is being comprehensively planned. >> while agenda details are scarce, a list of buzzwords from local legislative sessions tells the story. growth targets and dual circulation. the big question is whether a gdp target will be set for 2021. 5g use and digital currency show a reliance on tech sectors. china has set to overtake the

u.s. is the world's largest economy by 2028. 20 exposed many vulnerabilities. >> we will confront china's economic abuses. >> china must now deal with a new administration in washington that has shown few signs of changing a hard-line approach. key points like hong kong remain. top officials call it an effort to make sure the country is controlled by patriots. investors are watching what this all means for china's private sector. businesses are waiting for more clarity on efforts to rein in big tech.

the president seems more convinced than ever that china must improve its economy now. haidi: let's get more on china's economy. we know that a lot of themes and targets have been reported already. >> good morning. we think china will set gdp targets this year. china did not set a gdp growth last year. we do think it is important for china.

it is the goal for china to create jobs. so graduates can have a job when they graduate. they want to set a target for the country. at this moment, there is not a well-defined indicator. the local government could intervene at the micro level.

it is quite important to solve these social and economic problems. we think this year the government will approve those targets. haidi: what will that growth target be if you had to guess? >> this is something more uncertain. at the provincial level. estimates imply weighted average gdp growth targets are around 7.7%. on the national level, they may announce over this.

shery: what sort of guidance can we expect on this policy? this gdp chart on the bloomberg, we have heard from everyone that the pboc may cut this. where we stand? >> there have been mixed messages. there seems to be rather hawkish stance. the central bank is ready.

this requires it to be stable. it should avoid set interns. we heard a bit more of a statement from the central bank. the latest statement did send stronger signals that perhaps the central bank and regulators will see the rising asset bubble and be ready to act on monetary policy. china will not only look at its

domestic conditions but also to the external monetary conditions. what major central banks in the world are worried or relaxed. if china asked to soon, too quickly to cause overflow for this year. shery: we are seeing governments around the world opening the fiscal taps. what are we thinking about fiscal policies? >> we think chinese fiscal policy will start to consolidate.

this will also decline. we see the demented fiscal deficit. shery: we will be watching the meetings very closely. thank you. there is more analysis ahead of what to expect out of china's meetings. another guest joins us in a couple of hours. coming up, elliptical organizers will decide later this week -- month on one of the biggest questions. whether to allow spectators from

overseas. we will get the latest out of tokyo, next. this is bloomberg. ♪

♪ haidi: here's a quick check on the cake futures at the moment. pointing downwards. we have seen pressure across the board. we see the japanese yen holding steady. this is been the weakest since

july. we are watching global yields very closely. this as we are waiting for more details on the tokyo olympics. organizers facing key decisions and coming weeks. whether spectators will be allowed and capping the number of bands. -- fans. >> we have communicated the timeframe to be spraying on the decision about spectators. this is instrumental to be able to provide a timeline with a common understanding on what will be decided and when. shery: the new timeline comes as tokyo considers extending its virus state of emergency. let's get the details from our tokyo bureau chief. given the controversy we have seen across japan, this sound surprising. when can we get the final word?

>> we should expect to hear a decision on whether attendees from overseas will be allowed by the end of this month. and then the decision on domestic fans will come in april. organizers are having that discussion at this stage. we are still a few months out. there could be changes in the landscape with the vaccination situation around the world. we did see a call from japan's main newspaper saying the government wants to ban spectators from overseas. . they say the government is sensitive to this. the majority want to postpone or cancel them. while the pandemic is ongoing. from a practical standpoint, when we look at the guidelines the organizers have already

released, these people would be fairly restricted. they will not be allowed on public transport. if you try to apply the same rules to big groups of spectators, he could be difficult to maintain the same standards. that is something that will be a point of concern. haidi: is there still the possibility of you be canceled? >> we cannot rule anything out. virus numbers here in japan are decreasing, just not as fast as the local government would like. that is the reason for the state of emergency continuing here in tokyo. there are plans about how the organizers will look after the athletes to try to keep a lid on the offense -- virus. the games could start on schedule in july although they will not look like the olympics week seen.

haidi: our tokyo deaf you bureau chief -- deputy bureau chief. you can get in-depth analysis from our team. live from our studio in hong kong. orem bloomberg radio. we have much more ahead. this is bloomberg. ♪

♪ shery: here's a quick check of the latest headlines. germany's financial watchdog sub -- shut the subsidiary. they found the lender poked assets tied to a key investor. it has unraveled this week. investors cut ties. australia's energy company has doubled a fundraising round ahead of a planned midyear idea. the bitcoin focused stata center secured a $10 million commitment from platinum asset management. the firm hired a ceo. tesla sales in japan appeared to

be charged up after last month prescott. -- price cut. booking a test drive is harder, with wait times of more than three weeks. tesla cut the price of a model three by 24% last month, putting it on par with lower end luxury cars. haidi: staying with elon musk, space-esque -- spacex had a successful landing. let's get the latest. it would not be a spacex lunch if there was not some kind of explosion. but this is a very critical stage of development for them to successfully do. >> you would call it a success and progress.

spacex testing starship, getting it six kilometers into the air and getting it back safely, is an incremental step in getting a craft around the moon and then human travel to mars. to be fair, it did it. it raised 10 kilometers, went through its belly flip, came back down, and we got a soft landing. it did not emerge smoothly. there was some shock absorption. they were not aligned with the pad. this is the image of the explosion that followed. after a few minutes, a fuel line exploded. shery: we are a bit confused because we saw the soft landing and everything seemed fine. but then a few minutes later we heard that it exploded.

>> in the first instance, it looks like a test mission, unmanned, to mars, it could happen by the end of 2023. there is this ambition to take 12 passengers on a full orbit of the moon. we are so excited about this. getting a vehicle up 10 kilometers and back down. if you look at the plant to get to mars, it is infinitely more complicated. they will launch a second vehicle to refuel the first one. while refueling, it will launch from earth's orbit to mars. a mission that takes six months. and refuel. that is why i say this is an incremental step. this is the r&d phase.

it is why it was exciting. they will do many more of these tests. haidi: that timeline is particularly critical. we already have a high profile paying passenger who is inviting different people from around the world to join him. >> i was there in 2018 at spacex headquarters in los angeles when he was unveiled to the crowd. it was the weirdest hour of my life. absolutely astonishing. having this japanese billionaire on stage saying he would put his and others'lives to fly around the moon. there were statements put out by him today saying they are highly confident that with several

successful tests plates, they are still on track to do human transport by 2023. i will not be the first to sign up for that. but they seem confident. shery: the latest on that spacex launch. let's turn to sophie kamaruddin in hong kong with what to watch in the markets. sophie: we are watching chipmakers after earning forecast for samsung. cooperation between chips and automakers. local media and south korea reporting about ebay's korea business. it is valued. they kick off book building for their idea. let's see how markets are faring

in australia. after treasuries fell overnight. the 10 year yield rising about nine basis points this morning. we are seeing a risk on appetite. up more than 1% this morning. the nikkei futures pointing to the downside. we are seeing questions around if there is too much optimism in the mix when it comes to the recovery. haidi: we do have an alert on the bloomberg we are tracking. the u.s. government is issuing an emergency warning on microsoft email software. microsoft was urging customers to download software patches after hackers in china broke into some of the copies of the software for their email contacts. there were previously undisclosed flaws.

we are hearing that the u.s. government has issued an emergency warning on microsoft exchange on premises. we will have plenty more to come. this is bloomberg. ♪

shery: welcome to daybreak asia here: i am shery ahn. haidi: i am haidi stroud-watts. asia's major markets have just open for trade. our top stories, asian investors pricing for renewal about to stop bond utility after -- the nasdaq something to a two month low. china prepares to open its top economic meeting with growth and

hong kong said to be on agenda. america's top diplomat called dealing with beijing the challenge of the century. asia's riches are jumping on the fast been waiting investing in companies that have taken global markets by storm. shery: japan and south korea coming online. let's turn to sophie and hong kong. sophie: risk often coming to for asia's markets this thursday. nikkei225 losing more than 1% this morning while the yen is trading around 107 following overnight highs in the dollar and -- are headed lower ahead of a 30 year option. fast retailing losing ground this morning by more than 2%. the company is saying it will be cutting out of japan credit prices by 9%. we are seeing japanese stocks against the backdrop of whether or not tokyo buyers emergency will be extended which some economists say will be or the

economic hit. we turn to south korea, a final rate of fourth quarter gdp which was an improvement from initial estimates, exports as -- and consumption grew and inflation picked up higher as well. crude prices rose 1.1 percent, driving the drop in your ribs. the tech heavy kospi lower this morning while the korean won is on the back foot testing 127 against the greenback. looking to test its 50 day moving average. australia, tech shares also feeling the pain this morning in sydney, falling or than 1%. nasdaq and yemeni losing ground as well after the benchmark fell to 1%. we are seeing catch fields, 10 year treasuries fairly steady around 149 level after bond volatility jumped overnight. -- saying that will lose seem --

esteem estimates effects fade. he sees the 10 year heading back toward 1% by the end of this year. haidi: let's get other views when it comes to where the bond yield goes. market analysis is next with a jp morgan orchid analyst. always good to have you. it has been a magnitude, the volatility of bond yields rising rather than incremental rise in itself. is it a magic number in the 10 year for example that would see meaningful negative implication for equities? >> good morning. that is the most -- the big question on most people's minds. what do you need for the go to impact the market more than it is now? if you run an analysis, it would be 5% we would see that negative correlation start to take hold

and make the market selloff much more significant a. of 5% in treasury yields seems like a very big number but is near north of 2% to see that take hold and be significant. there is a lot of room to go where the yield tech could rise through and tech we in treasury yields to start to require, you will experience rebalancing so you will see institutions start to look at 2% treasury yields, asked her buyback and we know it central banks may keep borrowing costs low. that will likely start to put downward pressure. i think there is a ways to go before we get to a yield that really is troubling to equity markets. shery: -- haidi: one of the things it says in your notes is that stronger economic growth is likely not to shift the policy. that is something that we saw.

what does that mean for a balanced portfolio? does reflation trade eventually turn into the risk of higher inflationary outlooks? >> you have to break this down and thinking to the nearest and medium term and in the medium-term it feels like markets may be getting ahead of themselves in terms of pricing and where inflation and growth is going to go. obviously we had a very good growth number for gdp in australia, better-than-expected. a lot of that down to the consumption boost and bringing down of savings rate. that is something we will see play out in the world over the next couple of quarters as economies reopened because consumers have had a very robust balance sheet given transfers as i've gone on. central banks are looking to see inflation that is sustainably higher than their target, and it will take some time for that inflation to become sustainably higher. it may fade off but it will be sometime before central banks are starting to move on rates and on balance sheets before

they really think about the need for economic normalization. it is the story for this year and it will be a long time the central banks makes effects. they are focused on keeping financial conditions easing and keeping bond yield writers in check. shery: and those inflationary pressures being helped by the fact that oil is above $65 a barrel. we have the opec+ meeting this week. what do you see on the demand side of things? can we continue to see oil surprises -- prices supported? >> you will see the oil price pretty high. it comes back to whether those reduction numbers continue to whether. it will bring down some of the oil price. you would expect economies open as you expect u.s. driving season demand will pick up and

that will support the oil price. you will see broad-based commodity support across the board given the outlook, and generally these types of assets that do well will be reflationary, so i do not think the oil price will shoot massively higher but i think it can't remain at over $65 a barrel. shery: how will the u.s. factor in especially when we have this rising rate environment? >> the thing about the rising rates is thinking about the growth revisions around the world and those provisions are probably most strong in the u.s. at the moment given the vaccine rollout, fiscal stimulus at the moment, and that will determine what happens with the currency. as the u.s. economy looks like it will be stronger than much of europe or the rest of the world. you may see upward lift in terms of thinking about how the dollar will perform. the story about global growth becomes much more synchronized

across the second half of the year. you are more likely to see the dollar weaken as they look for assets outside the u.s. that are more attractive and more in tune with the uplift places like europe for example. haidi: what are you looking out for as the national people's congress kicks off in beijing there? >> we are looking for a statement from chinese officials at really focuses on where china is going in the future. looking over the last 1.5 years or the last 12 months, it was china that really came to the for in helping the economy. lack of bond issuance, all of these things that are the old way of creating growth in china, these five-year plans will talk about what will drive the company does country in the future, so that will focus around technology, self-sufficiency. we think about semiconductors, a focus on the consumer and

nearing income inequality in china. keeping the unemployment rate low or driving at lower and thinking about how to support the population in china, so a different direction in terms of what we have seen in the past and that will be key and thinking about investment means in china as well. not based on the old way of thinking but some of these newer concepts that will drive china growth -- chinese growth. shery: carrie craig joining us from melbourne. thank you. let's turn to vonnie quinn. >> the u.k. plans to keep spending big to up the economy to the pandemic. the annual budget added more than $90 billion worth of a two up company -- companies and citizens come to the rest of your. that takes little financials to $575 million. as to who will foot the bill, high taxes on businesses and more than 2 million in

individuals. >> freezing tax thresholds is fair. asking more of those on higher incomes, and we are going to ask large businesses who have made a profit to contribute as well. >> two months into the brexit deal the u.k. is back on a collision course with the eu. brussels says it will take legal action as tensions between the two sides escalate over trade rules concerning northern ireland. the british decision to take unilateral action on trade marks the second time prime minister boris johnson has declared an intention to breach international law. new york governor andrew cuomo as precious articles for them to resign amid sexual harassment claims but he sought to contain rolling damage from the allegations. he says he now realizes his last comments and treatments of two employees made them uncomfortable. organizers of the tokyo olympics say overseas spectators will be banned.

limits on domestic -- will start in april. the comments from the organizing committee president comes as tokyo considers extending its virus state of emergency by two weeks. it is set to expire on sunday. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: -- haidi: our guest talks to us about china's deepening relationship with latin america. we take a look i had at the biggest event on china's political and economic calendar. policy will be unveiled and the all-important gdp target will be announced. this is bloomber

haidi: jenna kicks off his weakest political meeting of the year today. the sessions will lay out plans that could propel the economy into the world's biggest this decade. we are curing more rhetoric in the meantime over the rise of china and of deceit the u.s. secretary of state called the relationship with china the defining test of the century. >> china is the only country with the economic, diplomatic, and technological power to seriously challenge the stable and open international system. haidi: let's bring in our asian government managing editor. we talk about this theme a lot, this great competitive relationship of our time between washington and beijing, and that has not changed under the biden administration. which of the themes we are expecting to hear from this year's mpc in terms of the year's roadmap will be most

contentious with the u.s.? >> certainly the five-year plan, the mpc will address these immediate next year plans to get the economy going again. the pandemic, we are expecting measures on consumption there, but for the u.s. it is really the next five or 10 years, that competition to harness the world's most cutting edge technologies, and we are seeing biden continue the trump policy of looking to deny china of certain technologies to make sure that the u.s. retains the edge that it has now, and china meanwhile is pushing back and trying to mobilize a lot of money to develop these computer chips and other ai, these other technologies that are really going to drive the economy over

the next decade or two. shery: what can we see in terms of economic goals and targets? >> the main one is just really computer chips. that is the big thing everyone needs, especially as the world is suffering under a shortage. nearly everything these days seems to have a computer chip in it, and for china, and having the capacity to develop its own advanced microchips is really seen as an economic security issue just as it is in the u.s., so this competition over the next five or 10 years is really about who can develop these technologies, it the markets they need. biden has already talked about getting democracies together and sort of splitting up the world that way, tech note democracies

or techno-authoritarian countries. how that plays out will definitely drive this competition between the world's biggest economies in the coming years. haidi: what are some of the other broad themes or policy settings you are watching out for in the two sessions? >> certainly there is a lot on the plate. one of the major ones is hong kong. we have heard a steady drumbeat of things from state run media at they will do more to they call it improve the electoral system. what that means in reality is that beijing will put in place people up and down the line in hong kong who are loyal to beijing and effectively give the communist party more control over what happens here, so that is one of the major things we

are expecting. they will give the work report tomorrow morning in which they lay out economic goals for the coming year, which could include more on consumption and trying to wrap up measures to help consumers ended the demand side of it. those are the two main things we are watching. of course they will cover a bunch of other things at this annual two sessions. shery: our asian government managing editor, and of course you can find more of the upcoming mpc, watch it live and see life panels on the topic. our interactive tv function is to be go. you can also dive into securities, also become part of the conversation. send us instant messages during our shows. this is for bloomberg subscribers only. check it out, tv .

shery: oil traders awaiting the outcome of a critical opec-plus meeting on thursday. for more direction on how much supply the cartel will bring back to a fast tightening market. let's get more from our bloomberg energy markets reporter. robert, do we get any recommendation coming from the monetary community to the full group? what are our full expectations? >> in the past that group as come back with some signaling as to what was going to happen. this time it has not been as clear. heading into this meeting there was expectation that you get about 1.5 one million barrels a day increase by april, and that would be because the saudi's would voluntarily cut one

million more billions a day in that cut and collectively the group would bring on 500,000 barrels a day in april. it is looking like that may happen but we may get something less than that. something less than that could be very bullish. someone said anything less than 4.1 one million barrels a day it would be bullish for the market. haidi: fundamentally is the market ready for extra supply? shery: that is also not totally clear. we had -- today we saw oil prices increase quite a bit because that was important because the u.s. -- the energy department inventory numbers, which shows gasoline and diesel stockpiles had dropped the most

in decades. this is not at all a big surprise because last week we had that big freeze in texas, which shut off about 5 million barrels a day for capacity. but the amount of stockpiles of gasoline diesel that were taken off the market exceeded the record to build in crude inventory. we are obviously hearing about covert restrictions being or last -- being relaxed in the u.s. texas released -- eliminated most of their restrictions. the vaccines -- the biden administration announced they will be advancing the time in which they would have enough vaccines for everyone in the country. we are seeing demand come back. there are signs of that. on the other hand [no audio]

shery: our bloomberg markets energy reported there. let's get you a check of headlines. greensill bank -- the regulator filed irregularities on how it kept assets tied to key client. -- has seen his finance empire fall this week. deloitte will pay the malaysian government $18 million to resolve all claims related to the schedule. the finance ministry says it is the largest payout related to the case by a firm in southeast asia. in southeast asia. the agreement comes because that what week after a local lender agreed to settlements with almost $700 million over its involvement in 1mdb relations. -- are facing bonus cuts of up

to 80% after trading his bank to the first losing year in decades. we see details cut by an average of 15%. this caps off disappointing gear for the lender after most competitors were able to seize pandemic market swings to deliver big gains. payouts finance to be the lowest among all investment base. asia's richest families and individuals are jumping on the bandwagon investing in these companies taking global markets by storm. let's bring in our asia investor editor. these individuals, family offices not immune to the search for yields. -- surge for yields. >> absolutely, these ultrarich families are showing interest in investing in spac's. we are seeing family offices and a slew of others investing in

spac's. they are very fond of specs sponsored by their fellow billionaires. shery: we have already seen financial centers like hong kong exploring those listings. >> i think the fact that hong kong and singapore are now seeking weighing the possibilities to relaxed listings to fuel the bubble. already this year outlooks are expecting stocks could reach another record year, and the interest is spiking due to the near zero interest rates we are seeing. haidi: what is the risk profile of investing in a spac? in a roundabout way it is almost safer for families to put their money here? right? >> that is what some family

offices believe. relatively well-known sponsors, billionaires sponsors for example can be viewed as safer than bonds. you get your money back. there is a lot of incentive for these companies to go and look for acquisition targets that might be subpar, and that is where the risk comes in. as the number of spac ideas -- ipo's increases in their merry be too much confidence in their skills. shery: our asian investing editor with the latest on specs across asia. china's annual -- is nearly upon us with technology, growth, and hong kong to be on the agenda. what to expect next.

this is bloomberg. ♪

haidi: we do have breaking data crossing bloomberg on the history and economy. retail sales month-to-month up, final number is .5%, slightly weaker than expectations of 0.6% but also easing slightly from the previous month. december, the critical retail sales season playing out there as well. we have trade numbers, imports month on month seeing a decline of 2%, better than expectations of 4% and unchanged from a month earlier.

we see exports month on month coming up of a gain of 6%, better than expectations of 4%, doubling from 3% we had for january. when it comes to trade balancing, just over 10 billion australian dollars, a wider surplus of $7.5 billion australian there a day after we saw australia's economy, the overall economic growth picture, solid footing with household the remaining cast up and spending as well as construction and investment development as well. the gdp number jumping 3.1% in the final three months of the year. looking at those retail sales numbers as well as trade numbers, particularly on the back of commodities, a robust demand for iron ore also looking rosy as well. let's look at the reaction when it comes to the aussie dollar. sophie: dividend from austria,

the aussie dollar holding steady, under pressure sliding, .1 of 1% as the dollar edging higher at we are seeing the aussie 10 year yield after the rbis -- as it opted not to defend its go target, and benchmark gp beat rates are that 13 basis point level i had of a 30 year option. not expecting to widen the trading range in order to trigger a short steepening of this superlong curve. cash treasuries at 149 level. with global yields moving higher ahead had a vague speech from jay powell internet and tech stocks leading the drop in asia along with health care names. chipmakers weighing on the tech heavy kospi, looking to test its 50 day moving average, but financials are getting ground in seoul against the backdrop of higher yields.

turning to stock movers of note in tokyo, ntc losing ground after confirming it ceo died with bureaucrats from the communication ministry, and nintendo under pressure this morning. we have a scoop saying it is planning to intervale a bottle of its which console that will have a bigger led display. retelling moving lower by 3%, the company saying it will cut prices at stores bite 9%. shery: we are headed to the market opens in china as well and less than what our. let's turn to china's two sessions. the political elite are set to use the peasantry to approve a blueprint that was shape the country's economic priorities for the next five years and beyond. ♪ >> beijing's goal for this year two sessions this year is clear,

to further institutionalize president xi jinping's vision of a stronger and more self-reliant china. >> the 14th five-year plan is being governments of a plan. we are accelerating toward a new plan for development. >> while details are scarce, a list of buzz words tell the story. growth targets, and dual circulation highlight the domestic consumption focus, but the big question is whether a gdp target will be set for 2021. carbon peak gives us more details on recent steps to reduce zero emissions. 5g use and digital currency reveal self-reliance -- a focus on self-reliance and tech sectors. -- now set to happen by 2020 according to one report. 2020 also exposed many of its vulnerabilities. >> --

pres. biden: we will confront china's economic abuses, counter its course of action to push back on china's attack on human rights, intellectual property and global governments. >> china must now deal with the new administration in washington that shows few signs of changing its hard-line approach. keys/points like hong kong remain. beijing us signaled a major reform to the cities already limited democracy. officials call it an effort to ensure governance is ferment early -- fervently controlled by patriots. investors are watching to see what this means for china's private sector. the 11th hour suspension of intergroup ipo has pooped businesses waiting for more clarity on china's efforts to write a big check. surrounded by challenges both at home and abroad, xi jinping seems more convinced than ever that china must future proof its economy now. haidi: let's take a closer look

at policies we might see out of the national people's congress as it gets underway today. let's get over to our bloomberg intelligence and regional content leader. for an investor, what should they be watching today? >> good morning. a lot of things to unpack for the whole world actually. if we were going to pinpoint a few sectors, we will highlight technology, clean renewable energy, and domestic consumption. these will be the broad themes from the five-year plan and the two sessions. a couple of numbers we can share with you, our analyst basically believe in the chip production space china is going to ramp up on the idea of self-sufficiency. they want to supply about 70% of their own chip demands versus 50% currently, so in five years they need to jump from 58% to

70%. companies like smic, these are the companies that are leaders in the domestic chip production space. of course there will be concerns about the near term cost, because concerns like skills shortage or r&d spending, but overall these companies are going to be at the forefront in terms of development. we can move down to renewable energy. what does that mean? obviously you have the makes in terms of the field. the share of renewable energy is going to shift to about 21% of energy use in china from 15%. what does that mean? think about wind and solar capacity. it is going to double in the next five years. shery: you set the target there.

what are the trade-offs, the risks if china implements those plans? what companies could be pressured? >> earlier we mentioned the semi conductor space. there will because pressure over there. another area we have yet to touch on is a deed digital yuan. when that transmission is coming through, what happens is it will probably squeeze the bank a little bit, because china is basically going to conduct digital currencies through the pboc, so it of value chains such as payment for alibaba and tencent, they will see a shift in the usage or traffic on the platform. obviously the tradition of industries like oil, the conventional energy space will also get squeezed as well. haidi: are there any developments we are keeping an eye out for that are unique to

china? >> i think the digital yuan is an orphan in that space. what does that mean? they went to serve two goals. they want to smooth monetary policy transmission. right now even though there is a lot of money sloshing around in china, some of the money is not going into dated eight normal citizens, and secondly with all of the trade war inflation's going on, hopefully the digital yuan can reduce friction in terms of cause more trouble. shery: bloomberg intelligence financial demand leader there. -- as beijing and the u.s. take measures to curb the fallout of a global shortage. the semi conductor slowed the production of everything from

laptops to gaming consoles and cars. fixing the supply chain long-term is not --. we are's .1. >> semi conductors are surgical linens and things we use every day made from the material that gave silicon valley its name and they handled -- handle everything from artificial intelligence functions to simple things like an electronic signal. think of them as the brain of a device. what happened? when the pandemic shut down car factories in march, automakers expected less orders for passenger vehicles, so intern cut the orders were chips. at the same time, working from home and 5g drug demand for laptops, cloud services, and data centers some of industries increase their orders. that cause chipmakers to switch production to those areas

whether than pile of chips they could not sell, but what both car and media companies did not expect was a rebound and demand for their products here is the problem. there is an out enough supply to meet demand, and building chip factories take years and because billions of dollars. >> the answer in the near term is nothing can be done in a graduate that can produce a blog. supply expansion takes time. a tradition of new factories. >> chip shortages is expected to about $61 billion of sales were automakers alone, and big chipmakers say the auto industry is not the only sector to get hurt games console makers say things will get worse before they get better, potentially impacting holiday sales. president biden has signed an executive order to look into why the u.s. is so reliant on overseas chip manufacturers.

>> companies such as qualcomm, amd, nvidia, all of these companies that do not have factories of their own and rely on third-party manufacturers and have become extremely reliant on --. how long before supply be up with demand? it is a guessing game but some analysts eight we will not see signs of a turnaround until the second half of the year. shery: we speak to the president of a development bank about latin america's funding gap, china's engagement in the region. our guest joins us next. this is bloomberg. ♪

>> this is "daybreak: asia." u.s. law officials are warning a group may be planning to attack the capitol on thursday. capitol police, security, and the fbi also they received intelligence about a plan to reach the area but did not provide specifics. march 4 are seen by some extremists as the true inauguration day. the federal reserve says the u.s. economy expanded modestly in the first two months of the year and most are optimistic about the next six to nine months as vaccinations bolster prospect for economic growth. facebook says it reported ironic limit levels during the. -- period although the increase

was low. economic outflows are frightened with the daily count of cases in the u.s. polity lowest four month. spacex has excess weight lead in prototype rocket in its third test light before it exploded in a fireball. the sn10 flute to an altitude of 10 kilometers. the rocket appears to be leaning and it did blow up shortly afterwards. the first successful landing signals progress for the program that hopes it when one day take humans to mars. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: let's turn to the latest on the global vaccination, latin america and the caribbean are said to receive 30 million covid-19 vaccines in the coming weeks through the w.h.o.'s covax initiative but the region is

still far behind. the region accounts for 55% of all covid that's in the world last week. a bank as pledged $1 billion to help buy and distribute vaccines and here to discuss is mauricio, corona -- mauricio claver-carone. let's start with how this vaccination, what is happening and let america, and how much is that the late weighing on economies and how much more funding is needed to bridge this gap? >> hugely, as you said let america at 8% of the world's population and one/three of the desperate the correlation between vaccination and fs recovery are complete. we put $1 billion to help finance in the entire echo system, storage, democrat is asian of the vaccines to ensure democratic -- to assure equitable description. it is a democratic nation issue,

the biggest issue of our day is the democratization of vaccines both globally and within countries. the fact that developed countries have reserved production, it is not even a financing issue. they reserve production so it is making it difficult to get to a lot of these countries in the back of mind. domestically was some of the countries our concern is democratization locally and nationally because we are seeing scandals that it does not ensure it goes precisely in an equitable way to the needy populations and add requisite populations. that we are working on these two issues. one of my concerns is with developed nations that some of the members are production of vaccines that may expire, we reserved $1 billion. i am willing to buy any vaccine that is going to expire within 30 to 60 days and send out to the region because that is only event.

putting -- but they have a backlog as well. we are in desperate times. we are even looking to launch a de-risking mechanism to work with pharmaceuticals to prioritize latin america and the caribbean. it is the root no shortage of everett we are really trying to of the region first and foremost. shery: we have seen efforts from individual countries. i am focusing on china. we have seen a vaccine diplomacy efforts across latin america. how much has chinese funding help tear? -- here? >> as we have seen in the past when there is a vacuum in the region the chinese fillet. that is what they are doing with vaccines rate china is a shareholder in the bank. it is with no prejudice i say this word china, but the fact is there are a lot of pharmaceutical companies present in the region and there is a lot of money already financed

through companies. there are some success stories. look at she lay -- chile. and they have been able to get vaccines across the board early. it does that rely on the covax facility are not in the backlog and we need to mobilize with people. it is not. the chinese are filling the gap in that regularly and of the united states have vaccines that are not get approved that are going to be expire in 60, 90 days we will buy them and send them to the region but it is extraordinarily important. if not the recovery will take a long time, and by the way we are facing the worst socioeconomic prices in the region in the last 120 years so it is necessary to get this cut -- recovery started. haidi: you talk about the ibd capital increase about the only plan the region desperately needs. when you talk to members, what suitable perception do you expect to get in terms of efforts to raise capital? >> the reason recognize the

needs. we go to our annual meeting. we seek to get a process where we could do a deeper dive review in order to present to governors within six months. for the first time it history in the united states, members of congress and within the u.s. government are realizing the importance they are realizing in a bipartisan fashion they ignored it, china fill the gap in the region. idb is the lender of choice of the region. you will see a coalition of members of congress asking for a capital increase. at that is never been done before. we recognize we can make a difference in the region. it is a great value for u.s. taxpayers. once i of every one dollar, we can do we can do well. we have presence and all 26 barring nations, and therefore if we do not do it someone else is going to do it and that is now a convincing argument. haidi: what about the economic

diplomacy from china? we have seen chinese loans flowing at a truly astonishing rate. some of that as come down now in light of the pandemic and economic slowdown. what are the concerns there? >> we have seen that across the board in different countries around the world. china is a member of the bank and i speak without prejudice in that regard. what the region once his natural partners, greater volume from the united states and they want u.s. companies to have a greater presence in the region. the reality is that over the last 20, 30 years u.s. companies were looking toward asia and not looking down southward. we have an opportunity to change that. research shows two/three of companies in china are looking to move their companies closer united states. that is a huge opportunity. you simply switch to percent of current exports from china that are already exported from latin america and push them over that,

$70 billion per year. that is a game changer. it is good that it states, good for the region, what they want in that regard. with regard to lending and financing, ibd is their partner of choice. we are the best value proposition for them. our package not only includes not only the money, but knowledge, technical assistance across the board, and innovativeness. we did a hutch -- hedge in the bahamas. this new idb, digital transformation, also includes new instruments. social bonds that were lost. we launch 16 social bonds and seven currencies. there are investors here looking for esg investment throughout the region. where the lender of choice. we just want a tenure bond for my suitable bond and we had the biggest bond offering in 61 years. we raised almost $5 million what we thought we would raise $1

billion because there is a demand for what we are doing and their are great opportunities in the region and that is a win for everybody. shery: you mentioned earlier how chile was a success when it comes to the vaccination campaign. they are dealing with the social campaign that may increase spending. they are trying to work around their spending cap. it is a concern long-term? what you're looking at latin america and the region and you see that fiscal prudence is not in the cards? >> i will tell you what is a bigger concern. we are seeing commodity prices go up, corn, copper, soy, and as usual, and it happens in the past, when commodity prices go up the region falls back into this habit of spending, on short term political populist programs instead of investing in infrastructure, eldercare, etc. with this pandemic all of that

lack of investment in infrastructure, health care was already messed with the pandemic, so what i'm hoping is that that lesson as been learned and we do not repeat as commodity prices go up governments do not become lazy and populous in their ways. if not that will create social strife. also with regard to what we are seeing with vaccine distribution. those are the issues that concern me and i hope lessons of the past have been learned. haidi: it has been so great having you want to talk about those issues. inter-american development bank president there. this is bloomberg. ♪

haidi: let's look at stocks we are watching. sophie: we are watching reaction to the 15th quarterly revealed. -- what leading china overseas. point tech securities after the close on march 19. that is the date with the u.s.-china economic security review commission meets to discuss u.s. investors and chinese markets. saying investors cannot afford to leave chinese assets out of their portfolios as the market liberalizers. ubs forecasting china's equities will return close to 10% in the coming years providing diversification in light of

domestic oriented policies. that is it from "daybreak: asia." i had, the start of trading in beijing, hong kong, and shenzhen . this is bloomberg. ♪

♪ tom: it is 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markes: china open," i'm tom mackenzie. david: good morning. i'm david in glass counting down to the open of trade on the chinese mainland and here in hong kong. top story, markets in the region hitting turbulence as a surgeon bond yields is dragging down