recovery. an economist from the macquarie joins us to talk about prospects of pboc tapering. this is bloomberg. ♪ look...if your wireless carrier was a guy, you'd leave him tomorrow. not very flexible. not great at saving. you deserve better - xfinity mobile. now, they have unlimited for just $30 a month. $30 dollars. and they're number 1 in customer satisfaction. his number? delete it. deleting it. so break free from the big three. xfinity internet customers, take the savings challenge at xfinitymobile.com/mysavings or visit an xfinity store to learn how our switch squad makes it easy to switch and save hundreds. (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 with aerotrainer, the total body fitness solution that uses its revolutionary ergonomic design

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♪ shery: this is a picture across asia right now. the nikkei under pressure, down .2 5%, real estates and financials leading the declines. financials big decliners and losers on the asx as well, not surprising given we have bond yields across asia and pressure, tracking treasury gains we saw overnight u.s. cpi numbers accelerating at the fastest pace in 13 years. but still, markets not thinking

it will be a transitory inflation picture. the kospi up .3% as we have export numbers for the first 10 days of this month. spectacular numbers, up for 2.9 percent year on year, a similar picture to what we saw in the previous two months when we saw 40% plus gains for export numbers. kiwi stocks holding at around a three-week i. haidi: we have heard from china 's money market analyst, signaling concerns about a potential liquidity crunch this week. but the pboc is not expected to inject funding because central and local governments' fiscal spending. in the meantime, china' is credit expansion was a study in may, corporate financing slowing. joining us now is larry hu, chief china economist at macquarie group. there is not much tapering going on, when you look at yuan loans.

they are picking up. but the fact we are seeing government bond issuance pickup with corporate financing easing, is this a -- as sweet spot pboc will be trying to hit? larry: i think the pboc tried to taper a bit, but don't want to go too far. as the governor said yesterday, they think inflation pressure is transitory. so why tighten too much at this stage? haidi: will we just just see continued [indiscernible] when it comes to be bringing prices down, and to what extent would that be effective? larry: i think maybe that is true in the near term. shery: where are we headed with the yuan?

we have seen a lot of apeciation but at the same time, policymakers not really happy with how much strength we are seeing in such a short time. larry: i will say that this year, the yuan versus the u.s. dollar, it is mainly about the usd. i would say i don't think the pboc cares that much about the direction of the yuan, they care mainly about the pace of the yuan, because it if appreciates too far, that is going to cause a one-way expectation and that is what the pboc doesn't want to see. for the remainder of this year, second half of this year, the fed is starting to talk about tapering and that may make the dollar strengthened. shery: in the past, we have seen

u.s.-china tensions weigh on the yuan. has that been priced in already? larry: i would say that is very difficult to forecast. we really don't know that. weather sometime later this year there is news about u.s.-china tensions, i would say that is more [indiscernible] but broadly speaking, the yuan is driven by the strength of the u.s. dollar. shery: what about the credit picture? because for the longest time, investors have been waiting for that selloff in the bond markets, but have defied expectations when it comes to the fixed income space. larry: yeah, this year the pboc tried to keep liquidity tighter definitely than last year, but not too tight.

but they tried to strike a balance. but we see the credit, bond markets, liquidity has been a bit tighter. much lower compared to one year before. in coming months, i would not be surprised to see credit risk rising in the bond markets. but i don't expect any systemic risk anytime soon. shery: larry hu, great having your thoughts, chief china economist at macquarie group. the travel corroded door between china -- corridor between china.

♪ su: this is "daybreak asia," i'm su keenan with first word headlines. world leaders including from the u.s., u.k. and e.u. are meeting to solidify alliances and stern warnings to russia and china. they say they will defend themselves from security risks. the european council president charles michelle singled out beijing. >> the approach is clear. china is a competitor and a

potential rival. [indiscernible] or are impractical with our values. su: in the u.k., prime minister boris johnson met with president biden for the first time ahead of the g7 summit. the uk's seeking to protect a strong image after leaving the european union, although post-brexit tensions over northern ireland could be testy. johnson characterized his first meeting with biden as a breath of fresh air. >> america, the united states, washington, u.k., plus the european union, has one thing we absolutely all want to do, uphold the good friday belfast -- the belfast good friday agreement and make sure we keep the balance of the peace process going. su: now the latest on cyberattacks. companies and organizations that are victims of ransomware

attacks should not pay hackers and should quickly contact law enforcement. that is according to fbi director christopher wray, who testified before the house judiciary committee. u.s. companies and government agencies are reeling from ransomware attacks that have disrupted critical services, from a major u.s. oil pipeline to hospitals. finally, the wife of mexican drug lord joaquin guzman has pled guilty to not coptic trafficking and money laundering. she admitted to working for the drug empire for more than a decade. the plea comes on most two years after guzman was sentenced to life in prison. anna coronel was arrested out of virginia airport in february. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm su keenan. this is bloomberg. ♪ shery: we are watching toshiba,

the stock's worst day in more than a month as we hear about an independent probe into the company when it comes to influencing a key shareholder vote. right now, the japan trade minister saying he wants to see how toshiba reacts to the probe. this was an investigation that sought to find out if toshiba sought government help to influence a key shareholder vote. the voting, which went against nominees put up by a singapore-based capital management company, wasn't barely managed, according to the results of the investigation. we are seeing now the stock lose more than 1% and see its worst day in about a month. haidi: the former australian prime minister a's among leaders calling for the g7 group to establish the first integrated approach to health and the environment. he is the-chair of a policy

commission and talks about how canberra should manage its strained relationship with beijing. >> it has to be a wake-up call. we have to work together as a global community. viruses don't respect borders. yes, you can have quarantines and border closures but even then, viruses get through. look at the outbreaks we had recently in australia, despite our very strong restrictions. so if we want to have open borders again, if we want to travel again, if we want international trade and cooperation as we did before. then this must be a wake-up call. what we have set up with the reform for resilience commission which i co-chair with the european commission president and michelle williams, dean of public health at harvard, is a -- is some priorities.

they are these three. first, we must get everybody vaccinated. that is critical. we have got to be making vaccines available to the developing world and we have got to be doing everything we can to combat vaccine has intensity, -- vaccine hesitancy and anti-misinformation. second thing, we have to make sure we share data. we need to know everything about the rise of these pandemics, epidemics that could become pandemics, so data transparency and collaboration is absolutely critical. finally, we've got to build health resilience. we have got to recognize that the healthier we are, all of us, the better able we are to combat pandemics of this kind. and what of the big priorities is obviously the developing world, to deal with obesity.

and this is where a green agenda around combating climate change, having less carbon-intensive urban environments, will encourage people to do more walking come a active transport, which will help combat obesity. haidi: prime minister, when we talk about this right of global effort, it doesn't seem to work without china. when you talk about transparency when it comes to the origins of the pandemic, there is an ongoing investigation called by the g7 on that. how do you bring china into this alliance that is being formed to counter beijing? and i want to bring up a comment a prime minister made overnight to scott morrison, saying dealing with china, you don't have to be like them, you shouldn't expect them to be like us. the subtext might become you don't have to like them but you do need to work with them. is that something australia is failing at?

>> the advice is right. it is advised that should go to china as well, by the way. china's attempt to bully and intimidate australia is outrageous. it is so counterproductive. when scott morrison called for inquiry into the origins of the virus, the overreaction from beijing was extraordinary. it is hardly a revolutionary thing to say, that when some disaster emerges, you call for an inquiry. the affront that was taken in beijing only served to make people think maybe they are covering something up. and the world health organization investigation has been frustrated by a lack of cooperation in china.

everybody has to recognize, and that includes china, that we are living in a global, connected community. viruses travel with the speed of a jet airplane. so we need as much transparency and accountability as possible. haidi: former australian prime minister malcolm turnbull speaking to us earlier. australian prime minister scott morrison stopped in singapore on his way to the summit and bent with the prime minister, who gave morrison advice on repairing australia's relationship with china, urging him to work the country. paul allen joins us now. malcolm turnbull just said this is very good advice. prime minister lee is very pragmatic when it comes to how this relationship with china should be managed. paul: that is advice he has given to the united states as

well. the very brief meeting with prime minister scott morrison the presidential palace during morrison's stopover on the way to the g7 said there will be rough spots on the relationship with china and you just have to deal with that. he said it is better to move forward in terms of a partnership rather than an adversarial relationship where you wind up trying to suppress the of the country. he pointed out one of the biggest policy questions of every major power in the world right now, china. and as you were discussing, he said you don't have to like them or be like them and you don't expect them to like you are be like you either. china is going to be a substantial presence they are and these issues have to be worked through as they arise. shery: paul, leaders are also discussing opening a quarantine-free travel bubble between singapore and australia. when?

paul: when is the key question here. prime minister scott morrison expressed a strong desire to get it done, but would not put a timeframe on it rather than to say it is some time away. but singapore is easing its coronavirus restrictions in the coming week. here in australia, the state of victoria just eased restrictions in the past 24 hours, as the most recent outbreak seems to be coming under control. so the will to get this done definitely exists. but the logistics of making it happen are yet to get underway in the prime minister's -- prime minister lee is pointing out it is going to rely a lot on the rate of vaccination in both countries. but when it happens, there is a desire by both sides to focus on international students first. shery: paul allen joining us from sydney. up next, a chinese billionaire is back in crisis fighting mode

as concerns arise about china's ever grand group. we get the latest. tune into bloomberg radio for newsmakers and in-depth analysis from the team broadcasting live from our studio in hong kong. listen on the outcome of a deal plus or radio.com. plenty more ahead. this is bloomberg. this is bloomberg. ♪

haidi: anthony pratt on the future of the three-generation package and recycling business at 7:40 a.m. in hong kong. gaming giants renew leases at the annual e3 videogame showcase. the event will remain virtual. these are what we are looking out for. >> i cover the videogame industry from new york and here are the top-three things we are looking at at this year's e3 event. ♪ first up, what is microsoft going to shout? last year, microsoft purchased

bethesda games for $7.5 billion. this will be the first e3 since that acquisition. what are we going to see from xbox and bethesda? i expect a large look at the new halo infinite game plan for of bethesda games including starfield, much-anticipated. we should be more coming to xbox game past, the microsoft subscription service. item number two, what is nintendo going to have at e3? we have seen reporting from bloomberg on the switch pro, a hardware revision for the nintendo switch. what will nintendo have to show for it -- new zelda, metroid or big surprises? and what will a virtual e3 look like. traditionally, e3 has taken blake in los angeles -- taken place in los angeles where thousands convene at the l.a.

convention center. this time, online only. will that sacrifice energy and type, or will it be -- energy and hype, or will it be just as good watching at home? we will find out june 12 through next week. this is jason dreyer reporting from new york for bloomberg news. ♪ shery: the e3 videogame showcase begins in l.a. this weekend. eight months after celebrating a narrow escape from a natural disaster, chinese billionaire hui ka yan finds himself back in crisis fighting mode over concerns about the health of evergrande group, a flagship property company, pushing the stock to close at its lowest's of last year. joining us now is our china credit reporter. rebecca, why are investors worried about evergrande again? rebecca: signs of stress hitting everywhere for asia's largest

issuer of junk bonds. investors are really worried about its financial health. we have reports that evergrande has been taken a watchlist by china's biggest onshore credit rating firm. and also, it missed a payment for commercial debt. and once again, we are seeing that banks are being asked to test their exposure to evergrande. so real concern about the broader implication about what financial risk means. if we start looking at any kind of crisis or major problem with this borrow again. haidi: evergrande is the biggest junk bond issuer in asia. our concerns starting to surface? rebecca: that is a key question.

on one hand, we have china evergrande facing stress, china podge of biggest junk bond issuer. and we already had real concerns with another major borrower in the asia honda market, facing inordinate investor scrutiny right now. together, they make 5% of the china market but more broadly, when we think about the real estate sector, the asset management and the financial sector, there is a lot of potential risk here. and the concern as well is not just that investors might panic and good credit could be dragged down with that, but the fundamental question of whether beijing is going to continue to support firms like these that once were considered really systemic and considered essentially too big to fail. shery: what does this also mean for the billionaire himself, hui ka yan of evergrande.

rebecca: there is a lot at stake for him. at $19 billion, we have seen his finances fall by about one third since we had at that crisis in september last year. the other question with him is whether he will be able to muster support from some of his friends. we have seen in the past that when evergrande has run into trouble, he has been able to garner support from high wealth individual friends, either by the stock or support bond prices. so the question is whether he will be able to garner that. shery: rebecca, our china credit reporters. here's a check of business flash headlines. amc's meme stock status lead to a credit upgrade. the theater operator cashed in on a recent share price gains to raise $1.25 billion through equity offerings. that combined with improving outlooks for movies moved a

company to upgrade amc ratings from triple c plus from triple c minus. electronic arts says it was hit by hackers who stole a game source code and related internal tools, but doesn't expect an impact on games, business or customer privacy. hackers named on the cybercrime forum seem to have stolen a trove of data including the original software development kit for microsoft xbox. chinese ride-hailing giant didi has filed for an ipo in the u.s. with intent to list on the nasdaq. the company operates in nearly 4000 cities, counties and towns in 15 countries. didi reported 377 million active users through 12 months through march, but revealed a $1.6

billion loss. coming up, possible outcomes from the g7 summit with the former deputy secretary -- deputy assistant secretary of state. plus, an interview later with a minister of petroleum and natural gas. "bloomberg markets: china open" is next. this is bloomberg. ♪

♪ tom: happy friday. it is 9:00 a.m. in beijing, welcome to "bloomberg markets: china open." i'm tom mackenzie. david: i'm david ingles. inflation in the u.s. rising to a 29-year five. more on inflation here, but

investors are betting the