arover 20 exercises to choose from. get gym results at home. no expensive machines, no expensive memberships. go to aerotrainer.com to get yours now. >> good morning. welcome to daybreak: asia. we are counting down to the major market opens in asia. >> i am shery ahn. >> the top stories this hour, the u.s. says it won't force allies to choose between them and china. the secretary of state antony blinken vowed to rely on innovation, not automation.

investors rotate away from companies that thrived during the pandemic. the prime minister may be considering a cabinet reshuffle over treatment of women. >> we see u.s. stocks falling, led by tech and pressure on stay-at-home trades. zoom and pelaton following. we do have that seven-year auction option left as well. oil jumped. under a little bit of pressure. that plus signs of stronger gasoline demanding the u.s. -- demand sent crude in the u.s. higher. >> that is where we are at the

comes to the sentiment of trading in asia. you hated -- new zealand is up by just shy of 25%. -- .25%. we heard from the deputy governor, saying they are continued to be positively surprised by the unemployment given that we see jobless numbers continuing, better than expected. emerging-market stocks and currencies also posted some steep declines. the steepest decline in two weeks as pandemic lockdowns brother mark around on risky asset. -- assets. we look at the reflation trade and just the feeling that we might be on the precipice of a

thematic change in these markets, where you see the impact playing out? >> we are thinking that the reflation trade will have further places to run. we are seeing higher interest rates as trends continue. that will be beneficial for emerging markets. when we look at regional performances, asia stands out from every other region. >> with higher treasury, better performances in u.s. treasury as

well as the implication, are you concerned about the outpost of the emerging-market? >> there are some obstacles that we have been seeing for chinese markets. i would actually be taking advantage of that. in the long-term, investors need to be aware that there are two themes that are playing out in china. be aware that ultimately, china is concentrated on having high-quality consumption. the second is take by digitization.

post pandemic changes in consumer behavior. valuations have come down a little bit. investors can take opportunity when you think about those two things. online retailers, tech, insurers . >> we continue to see the news flow on that crackdown in china. the latest blue brick has learned is that we might see an end to data from tech giants -- two tech indices. -- end to tech indices. >> we need to see how it will

play out in china and other non-asian indices that are very heavy tech. >> what about the weight of the u.s. dollar strengthening? how are you factorin in? this chart on the bloomberg is showing how options work are favoring the dollar. indicating dollar weakness, that has been very appealing in the end. >> as you have pointed out, there have been treasuries, particularly from japan. we are seeing a regime shift in the u.s. dollar. this is a shift on fiscal policy making. this is giving more room for u.s. dollars to stay weaker

longer. i think that will continue in the next few years. having said that, it is true that the u.s. dollar is acting as a barometer of global financial health. i'm not saying it will not be volatile, it will not be a straight downward trend for u.s. dollars but think about more long-term trends we are seeing in the u.s. dollar. we will see this weakening trend in the u.s. dollar for the rest of 2021. >> we are getting some breaking numbers out of brazil which has struggled in his pandemic management. this is a pretty awful milestone, now surpassing 400,000 covid-19 dents. we had brazil reporting daily deaths of more than 3000 for the

first time. this is obviously an economy and health system that continues to be overrun by the pandemic. we know that bolsonaro has played down the seriousness of the disease and the pandemic. how likely is it that we will see a bifurcated recovery from these emerging markets that are failing to handle the next stage of recovery and rebuilding? >> i think the pandemic has changed the risk reward balance. you need to take into account that there are idiosyncratic factors that are playing out in similar emerging markets. i would put brazil into the buckets. what we are seeing in brazil is

poor policymaking both from a health perspective but also from an economic perspective as well. the market reaction to that has been putting a lot of pressure on their tax -- tech markets and equity markets. think about them as one big as a class. there are factors that are moving in these countries. as an investor, you need to be aware of what is happening, which factors are moving and which factors are determining the economy a look for these emerging markets. >> thank you for helping us figure that out, lale. let's get over to vonnie quinn. vonnie: the european union and united kingdom are working on a win-win situation.

the joint statement came as the u.s. tightened curbs on exports. the u.s. government is under pressure as spikes leg -- and vaccinations lag. angela merkel made a rare public apology after she was forced to abandon a widely criticized five-day hard lockdown over east europe. this was after a hastily arranged video conference. the withdrawal means germany remains under restrictions that were gradually loosened earlier. >> the idea of an easter lockdown was a mistake. in such a short time, it was not possible to implement well enough. >> the latest private surveys have found that the services sector only improved marginally in the first quarter.

that is despite abroad rebound, indicating consumptions remain week. the growth shows there is still reason to be cautious on china's recovery. more than 3100 firms were surveyed between january and march. the heads of facebook, google and twitter have outlined different positions on policing content ahead of congressional testimony. mark zuckerberg is trying to overturn a decades-old law that monitors content. jack dorsey will defend his company's handling of information. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> still ahead, the container

ship stuck in this canal is paralyzing trade. plus, being kicked off exchanges. this as the u.s. begins to implement a tough law from the trump administration. this is bloomberg. ♪

>> the biden administration will demand that its allies make a choice between the u.s. and china. that was the message from antony blinken at this part of a european -- the start of a european visit. let's go to tom mackenzie. how did he frame this china challenge? tom: this was another repudiation of that four years of america first and another

attempt by the biden administration to rebuild these alliances with their european allies. the message from blinken is we want to out innovate china. we understand that the message was that you need to have trading relationships with china but you have to be aware of the risk. it is not going to be about us or them. in terms of the risks, he pointed to 5g technology. he said that is a surveillance risk when you look at the chinese technologies. he suggested countries like finland and sweden, south korea and the u.s. can come together and build out an alternative. many european countries are very uncomfortable with the idea that you have to choose between beijing and washington simply because of the economic impact that choice would have.

>> we see that the sec is putting in a policy that is causing many chinese companies to delist. >> it was signed into law. they are starting to implement that gradually. what they are telling the auditors of these overseas companies is you need to open up the books. this is something that china has pushed back on for years. they refused to allow this because they cite national security concerns. lawmakers in the u.s. say if we don't get proper access, if our inspectors can't have a look at the audits, it exposes u.s. investors to potential fraud. that is why this law was signed off and that is why the sec is -- fcc is acting now.

that is because alibaba and baidu are both listed in the u.s.. they will have to open their books for three years and if they don't do that, they face being delisted on the new york stock exchange. >> china domestically tightening its own grip on the internet as well as tech giants. what do we know about this? tom: this is a bloomberg scoop. we have some details about a plan that is still in the early stages. it is being led by the pboc. it was to the state teaming up with companies to set up a joint venture to hold this incredibly lucrative data that china's tech firms have accumulated over the years. we don't know yet what will happen legally. they will probably have to change the data privacy law here. we don't know what will happen

in this joint venture but it would be a major step, a major escalation. >> we do have breaking news at the moment. japan is saying that a missile was fired from north korea. this was a ballistic missile. remember this after north korea fired two short-range cruise missiles. we had heard from president biden, reacting to those missiles saying that the north korea missile test is business as usual while we are hearing the japan coast guard. this after a couple of short-range cruise missiles were fired over the weekend. >> let's get the latest on that

canal situation. work to dislodge that large containers are blocking the canal, more than 180 ships are gridlocked around the waterway. it is one of the busiest in the world. they have not indicated when traffic will start. we are hopeful that the process of re-floating the ship was going to be able to get started but it seems they are all having challenges in being able to move it on. >> that is exactly right. we have been following the progress of the rescue teams here. the vessel is longer than the eiffel tower. it has been a very difficult job. the weather conditions have really disrupted the process. we have nearly 200 ships just

waiting to move to the waterway. including 17 crude oil tankers. this is threatening to disrupt the crude oil supply chain. we have been hearing from ship brokers that there has been more interest in oil companies looking to book tankers with the option to -- the main alternative would be to sail around the bottom of south africa. we will be watching to see if we have more ships traveling this way instead. >> how long until ships can travel along that route normally? >> we are seeing if this operation will be completed, we will see if they try the re-floating operation on tuesday and depending on how long that could take, it could be several days.

the tide has something to do with it. they have to wait until a certain point in time to even attempt this again. we are waiting to see if the weather will improve. >> you can get more on the blockage and other stories that you need to get the day going. bloomberg best drivers -- subscribers will be available on the bloomberg anywhere app. this is bloomberg. ♪

>> intel's ceo says he expects the global chip shortage to last a few more years. the cup and has unveiled plans to ramp up semiconductor manufacturing. that puts it in competition with asia's chip giant. >> i am committed to the best product in every category we

participate in, the best cost structure and the most resilient supply chain. we see this ability to leverage the industry but also become a major supplier to the industry. the world is demanding more semiconductors than ever before. we were getting more digital and then covid happened. we to step into this in a big way. our strategy is uniquely positioned for intel to invest in. >> we are talking about production deadlines that were missed over years. what makes you so sure that you diagnosed and solved the manufacturing problems? pat: we are moving to a yearly cadence of processes following that. we are not -- we are trying to not only fix the issue but sustained leadership into the future.

the path that we are on, we look at the data quite extensively and came to the conclusion that -- as i have declared, intel is back. >> indeed, you suggested, he like apple and qualcomm could be customers. why would they be your customers if they are your competitors? why should a fierce rival work with you? >> i believe that you have written about cooperative -- c oopetition. you can be customers and competitors as well. there are few companies that can step into advanced semiconductor technology. something we have only used for internal needs at scale before but now we are saying we will open wide for the industry.

customers are saying i only have samsung and intel as the leading choices and only one of those is a western u.s. -- on western u.s. and european soil. i want to have at least two suppliers of my advanced technology choices and intel is saying we are going to be that. there might be some skepticism because we have somewhat halfheartedly tried some of this in the past and we said we are boldly going down this path. our unique 3d packaging technology and we will be making all of the intellectual property available, including this course for customers. we are going at it with the best intel has to offer and the world needs more semi conductors. the world needs a more balanced supply chain. we are one of the few companies

that can step into do that -- in two do that -- step in to do that. you invest well before you have that foundry capability up and running at scale. that said, we are seeing extraordinary demand signals from today's industry for these products. we expect that we will run a factory network that has some optimized for our products and some flex in between because we do be at scale across the business but we do think it takes a couple of years to build this out as designs take time to be committed to a new process. but we are underway. we already have some existing foundry customers. this business will get underway.

we are going to earnestly pursue a meaningful portion of that. >> let's more to come on daybreak australia -- a lot more to come on daybreak australia, this is bloomberg. ♪

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>> you're watching daybreak australia. jerome powell says the muted forecast for unemployment is actually disguising highly desirable gains for the labor markets. he sees participation expanding in a good sign. policymakers see the jobless rate at 4.5% by the end of the year. efforts to dislodge a massive container ship longer than the eiffel tower in this canal and one of the world's most crucial

waterways. the authority has communicated when traffic will resume. the u.s. has started amending a law that could see china's company's kicked off -- chinese companies kicked off of u.s. exchanges. alibaba and baidu are among firms not complying with the demand. the biden administration is maintaining it will be tough on china. >> anthony bacon says the biden administration is not demanding allies adopt an us or them mentality. the speech is part of a visit with nato. >> the united states will force our allies into an us or them

choice with china. we will lie on innovation, not ultimatums. -- rely on innovation, not ultimatums. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. >> we have more on that breaking news on north korea. south korea saying that they have fired an unidentified projectile into the east see. it was fired toward waters between korea and japan. this follows 2 short-range cruise missiles fired on sunday. those were fired between korea and japan. we have heard from the japan coast guard saying that north korea has fired a ballistic missile. this would violate the united nations ban by north korea.

we have her president biden react to the cruise missile firings over the weekend. saying that this is business as usual. we have yet to see reaction from the united states. japan is confirming that the missiles did not land in the exclusive econome of japan. let's turn to china. this shows a chinese recovery that has become healthier and less uneven. it is good to have you with us. what does this mean in terms of the chinese economy and its recovery? how sustainable is this path. >> we saw the chinese economy improved for a fourth consecutive quarters since the downturn. the good news is the recovery is

becoming less uneven and healthier. the economy was improving steadily. we are seeing far-flung parts of china catch up to the bigger cities and major metropolitan areas. we are seeing private firms start to do better than state companies. we are seeing growth reappear at a faster clip for smaller companies. we are seeing retailing finally take the lead. some of that is because of spending over the chinese new year. the recovery continues. things are not as strong as they were before the pandemic but the results are seemingly very positive. >> what did you see in terms of the business sector? -- services sector? >> services are not doing as

well as retailing. we are seeing marginal improvement over the entire order but not blockbuster growth. there remains a cost -- cause for concern. if this will lead chinese economic growth then we need a stronger, more powerful services recovery in the coming months and coming quarters. >> we also see weakness from that rep or in the property sector. is there a concern that increasing restrictions will becoming? >> the coffee market is going to slow down. we are starting to see that. a sector you're starting to see struggle is construction. also, transportation construction. as beijing was trying to revive

the economy, we saw the transportation construction sector doing qui well. since then, it has lost quite a bit of steam. the market is starting to soften . >> do you expect mean anything -- meaning full spill over the stimulus package? -- meaningful spillover over the stereo's package? >> the stimulus should have a continued positive effect on the chinese manufacturing sector. they did quite well throughout the january and february and march time.

higher demand will have a continued positive impact on the chinese industrial sector. >> in terms of all of the deleveraging talk -- what would you say in terms of all of the deleveraging talk? >> this may be one of our consensus findings this quarter. we are seeing overall corporate borrowing declining to a two-year low in the data. borrowing fell to the lowest levels ever recorded. you see a massive gap there between the private firms, what they are reporting. one quarter does not a trend

make. we have to see this continue over the next several months and several quarters for it to be conclusive about whether there is a real deleveraging. the signs are starting to emerge. >> great to have you with us. it is time for the morning call ahead of the asian trading day. we want to stay with china. slashing the rating on chinese stocks. equities are no longer cheap. the sounding part of the economic recovery is over. china is a later cycle economy compared with the rest of the region. haidi: we are zeroing in on one particular chinese stock. that could be seen as a possible catalyst to that. the product releases and overseas development situation

are also going to drive rapid growth in the first part of the year. china's regulatory crackdown on large platform companies dominated tencent's conference call with media analyst. -- analysts. our guest is joining us out of hong kong. despite the impressive numbers, analysts want to know what the future holds. what jumps out at you? >> the earnings were good but it was largely due to a one-time gain. i will get to the numbers in just a second but what dominated the analyst and media call was this giant wet blanket sitting on top of tencent as well as alibaba and any of the big tech platforms. there is a lot of regulatory uncertainty as china goes after risk in syntax -- sin tech.

compliance is the key. one thing i've noticed between tencent's response and alibaba's response is that tencent has been right out in front. since early last week, when bloomberg reported that tencent could fall into the same regulatory scrutiny, tencent was out with a statement saying that we will comply with all regulatory changes. i paraphrase. jack ma kinda went quiet. you are seeing martin lau saying compliance is our lifeline. he prefaces this comment by saying i'm sorry, i will give you the boring answer and that is compliance is the key to tencent. he said he expects usual impact to his operations from that

compliance to any kind of regulatory changes that may be coming down the pipe. tencent acquired hundreds of startups. they are poring over all of the details of the past investment to ensure they comply with any antitrust requirements. syntech is a big alibaba's revenue. the biggest concern that investors have is whether that can be sustained. 29% year-over-year growth on a quarterly basis can be sustained with so much regulatory uncertainty. sales were slightly above consensus, pre-much in line. net income, coming in at 55.3

billion. a one-time gain, more than half of that profit in mobile gaming. that is what they will have to rely on. they have 43 new titles coming down the pipe in 2021. they will have to rely on that. >> how did they fit into that compliance and wrigley torrey equation -- regulatory equation? >> this is the new oil in the 21st century, data. we are hearing the chinese government led by the people's bank of china have proposed to setting up a joint venture with these large tech platforms. this is a tricky topic because this data is the competitive advantage that alibaba has, that

tencent has, that we chat has. the tricky thing here is the existing rules on data privacy gives the users the right to decide how information is used. this is likely to require some sort of law change in china, if the government will be involved in that joint venture in those -- with those tech platforms on how they share data. >> coming up next, prime minister scott morrison could be reshuffling his cabinet as he tries to lift his government out of political crisis. this is over sexual harassment and rape allegations. the details are ahead. this is bloomberg. ♪

>> we are starting to count town to the start of trade in sydney -- count down to the start of trade in sydney. we will be continuing to watch those numbers. we will also be watching west bank again. it is weighing his options, including a potential sale of its new zealand banking business after coming under wrigley torrey pressure there and scott

morrison is inspected to announce a cabinet reshuffle as soon as this weekend, potentially removing two ministers who are at the center of rape allegations. paul allen joins us now. what do we know about what the prime minister is looking to do here? >> let's start with the attorney general question. he is taking defamation action. this revolves around the accusation that he raped a woman at a contest in the 1980's. the woman has since died and never mind all the scandals, the conflict of interest now as they are taking action against the national broadcaster, this has made a bad position for christian porter.

he is likely to remain in the cabinet but in what role, we don't know. linda reynolds, the defense minister also on leave over handling of claims that a staffer was raped in their office by another staffer after a late night drinking session. she has withdrawn from that trip but it does highlight just what an important role this is. this is also likely to be giving -- given to someone else. >> will this be enough for the prime minister to move on from all of the scandals? >> probably not. scandals seem to keep on piling up. male staff was engaging in what let's call the conduct around the desk of a female mp. more keep coming up.

she is now a media commentator and she was threatening to lift the lid on even worse allegations. the government just can't get clear on this and the next round of opinion polls are likely to make for some pretty sobering reading. scott morrison raised the idea of quotas to improve the representation of women in parliament but that idea does not seem to be getting traction with the liberal party either. the culture problem for now does seem to not just be persistent but determinate as well. >> the chairman of the transmissions -- transitions commission, they say the road has not lost momentum on climate change action. he spoke to bloomberg at the asian investment conference.

>> i think going into glasgow, there is a lot of good momentum. we have a lot of countries around the world making commitments to get to net zero by mid century. we now have america, thank god back into the global climate immunity under resident biden, making that commitment, the eu has that commitment. china has made a commitment. this is a very strong, self reinforcing cycle going on at the moment. i think there will be a lot of focus on santa countries you have made that good commitment to get to net zero by mid century but you can't just leave it until the 20 30's and 40's. we have to make some progress in the next 10 years. >> many developing countries in asia and elsewhere say it is

expensive. the retort to that is it is more expensive not to do anything area the fight against climate change has to be both supportive and couple mentoring to that developmental process. how can you make that work like that? >> the cost of producing electricity from solar is down 85 or 90%. batteries are down 85%. when you put that together, you put together -- you realize it is impossible to build electricity sessions -- systems that are zero carbon at costs below the cost of fossil fuels. there is no conflict here. china or india could become fully developed rich economies but they can also be zero carbon economies. when you run the figures and say how much it will cost countries

like china be -- china to become a zero carbon economy, the order of magnitude is maybe 1%. these are very small costs and the great news is that is possible because of these technological breakthroughs we have seen. >> you say this is a self reinforcing cycle between technology and government which feed into each other. >> what we have is increasing confidence that the technologies enable us to get cheap zero carbon electricity, that we know how to produce steel using hydrogen. hydrogen we can make from zero carbon electricity. we have rising certainty of the

technologies. that man makes the countries willing to say that we can commit to get to net zero. we know this will not cost our economy anymore. within that, you get companies saying we know our country wants to get to know zero but we know that the technologies are there. companies may commitment. once the companies start saying that, that gives more company -- countries the confidence. it is business people actually run businesses that are confident that it is technologically possible and we can make that commitment. that is how this reinforcing loop works and it has been more effective over the last two or three years. >> has the pandemic been a recess? has it brought climate issues to the floor?

my second question is has it lowered -- have low carbon solutions been a priority? >> i think when covid-19 broke out -- last year has been one of good progress and commitments. i think the biggest issue has been what are the stimulus packages which government use to come out of the covid-19 crisis and have they got a green bias? on the whole, the news has been relatively good. in particular, i think the huge do miss package that president biden has introduced in the u.s. will have a significant low carbon element to it. both in r&d and infrastructure

and wrigley torrey pressure -- regulatory pressure. the recovery from covid-19 seems to have a bit of a bias toward reinforcing progress on the climate side. >> that was the energies transmission commissions chair. bloomberg tv is the elusive media partner -- exclusive media partner of the asian investment conference. this is bloomberg. ♪

>> here is a quick check of the latest business flash headlines. blackrock was the focal point of a clash between janet yellen and elizabeth warren during a senate banking community -- committee. warren wanted to know if they would push this. yellen argued that the focus should be on the risking -- risky activity rather than singling out companies. the move follows departures during the pandemic, the

payments are said to be between 100000 and $200,000. coming up in the next hour, we will be discussing the post-covid economic scenario with jim sweeney. this is bloomberg. ♪

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may have insulin resistance. to learn how to reverse insulin resistance and lose weight effectively, go online to golo.com. once again, that's golo.com. >> good morning. we are counting down to asia's major market open. >> i am shery on. -- shery ahn. looking to daybreak asia. antony blinken vows to reply -- rely on innovation, not ultimatums.

set for