haidi: hello and welcome to "daybreak asia." i am haidi stroud-watts in sydney. sophie: i am sophie kamaruddin in hong kong. shery: good evening from bloomberg's world headquarters in new york. no mood for talking. the u.s. says it is keeping economic dialogue with china on ice as the bite in teams stance hardens. jay powell says the paper debate

will go on with the u.s. economy -- recovery not yet where it needs to be and he warns that inflation will say elevated. netflix taking the next big step , adding video gaming to get ahead of streaming rivals. haidi: let's take a look at what we are watching and markets ahead of the thursday session. sophie: steady open in asia this thursday after it snapped a today gain on wednesday with china and vietnam lee being. vietnam stocks nearing a technical correction over rising concerns over covid cases. in indonesia, we have seen its daily tally top india's. the bok may look to temper his hawkish menace at today's meeting in light of a jump in korea's infections. the doj reportedly expected to -- it's growth outlook. we have the yen just holding below 110 well nikkei futures

are little changed. the rbnz opened the door to tightening the dollar according to ing, holding about 70 this morning and ahead of china's gdp report, local media reporting that the loan prime rate may be cut as the pace of the recovery slows which has ubs guiding for weakness in the renminbi, forecasting the offshore rate -- year-end. dovish support from the pboc and this morning, we have the cnh trading around the 646 handle against the greenback. shery: let's turn to bloomberg's group around china. the u.s. will not be reviving formal economic talks with beijing that were abandoned during the trump era. this as china accuses washington of waging a "sinister campaign" to halt its rise. eric martin joins us now with the latest. tell us the implications of this given the significance of these economic dialogues. eric: there were a lot of people

in washington and a lot of people in the business community encouraging the biden administration to renew this strategic and economic dialogue. it is something the bush administration found help in working with china, something that was continued under the obama administration, and of us was ended under president trump, so a lot of people expecting that a return to normalcy in terms of u.s. policymaking with this administration, the biden administration, that we would see a renewal of that dialogue and this signals, from what we understand, from treasury and secretary yellen, people close to secretary yellen, is a bit of a surprise. there were a lot of people thinking this might be a place where there could be some advances and progress with china, and this signaling that the biden administration is going to continue the more confrontational approach of its predecessor. >> part of that seems to be building this alliance within the asia-pacific region.

we know anymore details about what this potential trade deal could include? eric: there could be things like data, things about artificial intelligence, digital commerce, electronic commerce, but really, this is writ large trying to set the rules of the road for digital commerce and for the coming decades in asia and around the world, so this is a place where, for people saw the u.s. withdrawal from the transpacific partnership at the beginning of the trump administration, when you think about people all on the national security council, like kurt campbell, the asia czar who hinted at a digital trade agreement, looking at ways to assert u.s. presence and to be a player in asia, feeling that there is not only a security agenda that's needed but trade and economics has to be part of the agenda if the u.s. is going

to counter china's influence in the region. haidi: eric martin there. we are going to stay with china, looking ahead to the second quarter gdp figures. data is expected to show china's growth rate slow sharply. let's bring in our chief asia economics correspondent, enda curran. we have the rrr cut. we were talking earlier and saying that bloomberg economics base case is that that was more of an insurance policy. do we expect the members to be quite sobering today? >> that is the broad expectation, that the numbers will slow a -- show a slow down, but not necessarily a hard landing. if you look at gdpr near, it is supposed to slow down 8% from 18%. there is a big base effect in that. if you look quarter on quarter, it may have accelerated to 1%. the more timely readings will come in terms of the monthly

indicators. we get readings for industrial output. those three gauges together are all expected to point towards slowing momentum in the economy and that is coming from the surge in commodities prices, the sporadic outbreaks of covid-19, the government measures to tighten this gone monetary policy and of course some of the headwinds that the exporters have had. the numbers are expected to show china's economy is slowing but not necessarily enough to trigger any alarm bells just yet. shery: enough to trigger more measures coming from authorities? we saw the rrr cuts last week. enda: this is the big debates, shery. there is one view that this was a preemptive move to get ahead of whatever slowdown was coming and others saying this is quite technical. the pboc saying they are sticking with prudent policy. what we don't know -- we do know is that li keqiang said small and medium-sized businesses do

need support. we know that local governments plan to borrow and spend more, and we know now of course that the pboc is not sidelined with this rrr move. there are deliberate policy measures to make sure that the recovery does stay on track and as i say, the broadview at the moment is that there are headwinds out there. the recovery is slowing, but there is some support as well, not least coming from the export side of things. haidi: how much longer is the big picture question of how china can grow the way it has over the past, you know, years, given that we know demographics are really at play here? enda: an interesting point to that will be the retail sales data today. as you know well, the whole story of china's rebalancing is all about consumption but the consumer story has disappointed since covid strong fact has not yet hit the a percent growth rate for retail sales.

it it is expected to moderate again in june. domestic terrorism remains slow. overall, spending on services slowed. the virus has been well under control for so long. if you look at it over a two-year basis on an average basis, growth rate over 4.5 percent would be encouraging, but as i said, nowhere near the eight cent pre-pandemic rate. does that mean that the rebalancing story in china is under pressure? that is one of the big structural challenges they face. it is meant to be the new growth driver. china is cracking down on the tech side of the economy so the momentum is expected to come from spending right now, that seems to be somewhat cautious. shery: enda curran will have more on china's outlook ahead. we will hear from vanguard in the next hour, plus bank of america is economists joining us later. for now, let's get to vonnie quinn with the first word headlines. vonnie: china and india have

agreed to continue discussions over their border standoff. new delhi says the nation's foreign ministers exchanged detailed viewpoints. they agreed to ensure stability on the ground and not take any unilateral action to increase tensions. they last held talks in 2020 after a bloody border skirmish. hong kong may allow vaccinated residents and workers to return from nations that have been at extremely high risk. the south china morning those reports travelers with will require 21 days in hotel quarantine and regular testing. hong kong designated countries including the u.k., indonesia, and the philippines as extremely high risk. south africa's government is sending more serial chores -- soldiers to and riots. minister said they will be boosted to around 5000 to 25

thousand. the protests erected last week after jacob zuma was jailed. more than 70 people have been killed. results president has been diagnosed with an intestinal obstruction and will undergo further tests see if he needs emergency surgery. the presidential office says the 66-year-old was taken to hospital in brasilia after more than 10 days of pickups. the surgeon who operated on bolsonaro after his standing on the campaign trail was called in to evaluate his condition. 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 am vonnie quinn. this is bloomberg. >> still ahead, we will hear exclusively from the advisor to japan's prime minister, yoshihide suga. he will be telling us about a possible stimulus package and institutional reforms being weighed by the government about coming up next, a ceo says that

there is more volatility in asian markets partly due to asian tech regulations. we will get more from her, just ahead. this is bloomberg. ♪

>> inflation has increased notably and will likely remain elevated in coming months. inflation is being temporarily boosted by base effects of the sharp pandemic related price increases which drop out of the 12 month calculation while reaching the standard of substantial further progress is still a ways off. participants expect that progress will continue and we will continue these sessions in the coming weeks. as we have said, we will provide advance notice beforehand for any changes we make. it is a broad range of things including wages, unemployment, levels of employment,

participation, and those things. we have substantial further progress. we said well in advance of actually tapering -- haidi: jay powell maintaining his position that it is too soon to taper. he also maintained the inflation surge will be temporary as -- our bloomberg economics and policy editor, kathleen hays, has more. what did chair powell say about tapering? kathleen: basically, we are not there yet. substantial further progress on boosting jobs, lowering employment, make sure that inflation stays at or above 2% for the foreseeable future. you are not there yet. i think it was and that he said in his prepared statement that we started talking about tapering in june, we have been discussing it, we will be talking about it again at the july meeting. he is not brushing it aside.

a lot of interesting questions about mortgage backed securities. those purchases. how do they market? various representatives saying prices are up and people are getting priced out. we really need to keep buying mortgage backed securities. a lot of things are pushing up housing prices. the mortgage-backed security purchases, seem to brush that off. he was asked a question about tapering mortgage-backed and treasuries and he said they have had roughly the same effect on the economy. it is really kind of the same thing area he seemed to brush off that idea of tapering the mortgage backed securities first. haidi: really interesting when it comes to brushing the concerns aside because a lot of people are saying housing could be one of those sticky inflation elements that could be a problem but they are sticking to the transitory line. kathleen: transitory line and also, it's interesting because we know what he said and he was really adamant today. everyone who is watching it,

they are pretty convinced that u.s. car prices went up so much, they will come down. we will come down closer to 2%. that is not surprising. he also said we have the tools to curb inflation if we need to but it was so interesting, the number of republicans and democrats who ask these questions, not just will inflation get out of hand, but also what about my constituents saying the cost is getting higher, the cost of what i am buying at the stories getting higher? shery: we are starting to feel it. kathleen hays of course here in the u.s., we are concerned about inflation. the market in asia is reacting more to the pickup in covid-19 variants and chinese tech regulations according to sylvia jablonski. great to have you with us. inflation, covid-19, chinese tech crackdown. what worries you the most? sylvia: hello.

wait to talk with you today. i think right now, as it stands, the tech regulation is what worries me the most area it is starting to feel a little bit anticompetitive, starting to really of these major tech leaders are actually being held back in terms of their ability to innovate and grow. we saw most recently with the request to remove the didi app the impact that had on the stark in the u.s. market but alibaba also suffered a massive fine. there are all of these issues that i think have really sort of put a little bit of a stay on the capital markets and china and i think that with that will come a lot of volatility and pullback in the near term. that does not necessarily lead me to get out of these stocks. if everything -- if anything, they could be getting slammed a little bit. i could buy an opportunity but i

worry about the volatility going forward there. shery: is there any way in the asian markets where you could head for volatility where it is a safer bet for those who are faint of heart? sylvia: sure. there are a lot of options. investors could actually use options to hedge their portfolio. they could use inverse etf products to head some of their exposure to names instead of selling out at losses. it could also be taking part of your portfolio and allocating it to these real by on the tip opportunities -- buy on the dip opportunities. haidi: outside of tax, where are you -- tech, where are you seeing compelling opportunities, given prices are high and there is a feeling that maybe the good story when it comes to earnings is pretty well baked in? sylvia: yes, so if you sort of

separate that from tech, tech in the u.s. has done quite well and i think that a lot of these companies are high-quality companies with strong balance sheet that are continuing to innovate and grow. there is the fear of tech regulation in the u.s., too. you're a little bit further away from it right now. we are expecting earnings to be positive there. i love tech as a sector. the two other areas that i really love for investors right now, you know, 5g. 5g is literally the key to everything. there is no industrial revolution 5g. we are talking about the ability to have artificial intelligence as a practical working matter, whether it is for driverless cars or the health care sector. it is talking about connecting rural and urban areas together, digitally shared economies. 5g is the key to everything. the next five years is 70%.

airlines are not open internationally in a complete way yet. they are at 50% to 60% what they were pre-pandemic levels. the airlines and casinos -- haidi: with the reopening trade, are there better geographic areas than others? are you looking at how the delta variant is being controlled and how the vaccines are being rolled out? sylvia: well, i think, you know, europe has kind of opened stores before everyone else so it might make sense for investors. they are slightly behind the u.s. and the u.s. resurgence and pent-up demand has been white-hot. europe is both behind -- i think with the u.s. and generally around asia, it depends -- a lot of the international travel restricted to certain areas and countries so they are not where

they need to be, but i would look at products that give you access to international airlines, you know, and get exposure because the whole world has been shut down so it has been hard. but developed markets will recover. haidi: sylvia jablonski, cio and co-founder at defiance etf's. south korea's finance minister telling us about boosting the nation's space program as it races to stay ahead in 6g supremacy. that exclusive interview, just ahead. this is bloomberg. ♪

>> the u.s. and south korea have agreed to terminate bilateral guidelines that have long restricted seoul from developing

missiles over a certain range and that is opening up the nation's ability to boost its launch capacity both first space as well as defense. bloomberg spoke with south korean science -- the south korean science minister about those plans. >> the artemis program is the standard for moon exploration and space exploration. it determines guidelines for each country that is taking part. with south korea taking part in this, we get to participate in space exploration. we will make an effort to operate in a transparent and responsible way. with artemis, we plan on expanding space expiration related investments and actively revise our foundation so we can lay the foundation for private sectors to participate. >> south korea is expected to launch a satellite using its own rocket engine in october. can you elaborate about the plan? >> korea has completed its

first, second, and third capacity evaluations taps as of this march. we are currently putting together the slight model. we believe if this all goes smoothly and passes the certification tests, we will go forward with this october launch. this is significant because it means our domestic engines part -- engine parts have the seventh most powerful fuel engine with the capacity of 75 tons. this means that korea is seventh in development capacity. we look forward to constant development on the space exploration front where our future generation can expand this activity platform to include space exploration as well. >> south korea was planning to send a spaceship to the moon in 2030. do you still have that plan? lim: we are currently undergoing studies to design our lunar landers that we plan to launch in 2030.

according to our plans, we believe we can start on developing our lunar lander in 2024. the reason for moon exploration is because we expect it to be utilized in the future for not only national defense and the public sector but the economic sector as well. we believe we have to actively take part in the artemis program in order for such cooperation to take ways smoothly. haidi: south korea's science minister, lim hye-sook, speaking with bloomberg's government reporter. a quick check of the latest business flash headlines. nomura is said to have lost three tenured directors. sources tell us the bank's chief u.s. economist and the head of treasury left in recent weeks to join hedge funds. it lost almost $3 billion from trade with archegos. a strategic alliance is the term jeffries are calling their new

deal. the terms include japan -- providing a credit line to the wall street firms leveraged finance operations and certain pieces of investment banking. he will also buy from markets to build up the holding in jeffries. aig agreed to sell a 9.9% equity stake in its retirement business. blackstone for $2.2 billion in cash. the two firms will begin a long-term asset management partnership. that stone will initially manage $50 billion in the life and retirement portfolio. aig will sell affordable housing assets to blackstone for $5.1 billion. america is up beat on retaining young talent. our interview with brian moynihan is just ahead and don't miss out on another big interview. here exclusively from the ceo of the indonesian investment authority. this is a new sovereign wealth fund. this is bloomberg. ♪

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>> this is "daybreak asia." i am vonnie quinn. jerome powell says inflation is likely to remain high in the coming months before moderating. however, he told the house financial services committee that the u.s. economic recovery has not yet reached the central bank's goal for scaling back its massive monthly asset purchases. >> while reaching the standard of progress, it is still a ways off, participants expect progress will continue. we will continue these

discussions in coming years. as we said, we will provide advanced notice before making changes. vonnie: china is pushing back against the u.s. attempts to counter its internal political crackdowns at its growing global trade influence. state media accuses washington of waging a sinister campaign, dismissing a possible u.s. led digital trade agreement in a bid to defend u.s. power in the asia-pacific. separately, beijing condemns the planned white house warning about the risks to american businesses. -- businesses operating in hong kong. the european union says it wants to infuse -- do the first carbon emissions tax. that includes iron, steel, cement, fertilizers, and electricity generation. it is part of a broader package aimed at complying with the new 2030 climate target released by the european commission. johnson & johnson is voluntarily

removing some sunscreen products from the market amid concerns they could be contaminated with a known human carcinogen. it is calling -- recalling aerosol sunscreen lines after testing identified the levels of and seen in some samples. the company said consumers should not be using the affected product and discard them. 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 am vonnie quinn. this is bloomberg. haidi: bank of america announced a solid second quarter of growth although it came up short in topline revenue. brian moynihan joined david westin to talk through the results and how the virus will weigh on the economic recovery. >> there are a couple of things. one is the vaccines, the virus, and the variants. that is the key. the treatment regimens keep coming on and then more and more people get vaccinated, lowering the risk of serious sickness.

that is all great news. on top of that, you are hearing our small business customers. it's all about the virus. in the spring, workers, supply chains. you hear more from people where the support is not being fully open, whether goods and services are not coming at the same rate. that is where you are seeing some of these temporary spikes in prices and availability. as we move to the fall in the united states in particular, the biggest constraint other than the virus pathway itself is going to be the question of can i get people to do the work and can i get the goods to actually sell? that is what we hear from our customers that they are worried about. those are farming customers, cannot get people to work and the harvests are coming up. construction workers, truck drivers, all of the above. we need to make sure we get back and mapped in the jobs and get them the skills and continue to

provide a great career for them but also help the economy grow. david: as you know so well, there is a raging debate about inflation. everyone agrees it is here and that it is coming. we don't agree on how long it will last. are we seeing any indications of a slowdown in economic activity because of higher price is? do you see customers pulling back because of inflation? brian: no, you don't see them pulling back cap. that is the operative word, yet. you are seeing consumer spending rose in the second quarter at a faster growth in a record aggregate amount compared to the second quarter of 2019, basically 20% higher than it was . 10% for two years. that is a big amount at record levels. people are spending money so prices don't affect them yet. they don't get cars to sell. they just cannot get cars to sell and that's why you are

seeing all the ads and used car prices are going up. that will come back out once the supply chain for newcomers gets done and people buy a new car and there comes an old car. used cars are two to three times the sales levels in the united states. there is parts that need some work to get through the system for some of the other shortages. right now, it is probably temporary. haidi: that was brian moynihan, bank of america chairman and ceo with bloomberg's david westin. we are getting new headlines crossing the bloomberg when it comes to australian utilities. they are getting and aussie $2.8 per share offer from kkr and the teachers pension plan teaming up for that approach to spark infrastructure. we are hearing that offer is considered low by spark infrastructure. we are hearing the number of other things including the renewables part of their business energy hub in new south

wales as well. this proposal has been ongoing with that consortium with kkr in that joint bid. expected to value the business at more than $5 billion and we did sparks -- shares rallying to a two-year high. the sparks coming back, saying that that offer is too low. shery: we will see how they trade at the open in about half an hour but let's turn back to the u.s. bid earnings with su keenan. it was another down day four so i guess investors were focusing on the negatives here? su: there is a lot of concern about what will drive prices for these stocks and again, if the good news is already priced in, let's take a look at how the major bank stocks performed, and it was generally in the red. the story for bank of america and sydney, like jp morgan before it, is a story of stalled lending, and that is just one of the concerns for a lot of investors. let's start with bank of america.

again, a solid second quarter profit but it fell short in terms of topline revenue. underwhelming was the word a lot of analysts used. the stock fell the most in eight months. loans, leases, and consumer banks were down 12 cent. net interest income came in at $10.3 billion get two on two citigroup, it rallied on results of the bank handily beating revenue way ahead of expectations of revenue driven largely or at least in part by the 37% jump in equities unit. the fixed income trading revenue on the other hand fell 43% but it is interesting to note that the ceo said in a statement that she expects the trading revenue wallet for the entire industry to actually return to pre-pandemic levels and also set the pace of global recovery is exceeding earlier expectations and with it consumer and corporate conference -- confidence is rising. she saw the in all of her businesses at citi. wells fargo beat analyst at

estimates as well as for expenses. expenses moving up from the other banks -- we did not see expenses moving up for the other banks. a sign that the ceo's sharp turnaround is taking hold. the bank released in $1.6 billion of its loan loss reserves that had not been needed. $1.3 billion of that will go directly to the bottom line. interesting to note that these one-off that help boost results, the release of loan loss reserves is another reason why investors and analysts are raising concerns that this is not sustainable. haidi: morgan stanley is next in line. what are we expecting? su: they are expected to report one of their best quarters ever, it focus on their equities unit because it's skew over fixed income is second only to ubs in terms of its global investment banking peers.

equities underwriting fees also hold up well, analysts say. what is interesting for morgan stanley is we will be hearing a lot of the earnings from a different voice this time around, a female voice. sharon is the new cfo who will be making her debut. her promotion was announced in may by ceo james gorman. it got a lot of attention because it came alongside the announcement of four senior executives who are in contention to be the future ceo, but sharon will be taking center stage on the earnings call that we can look forward to early thursday. haidi: su keenan with the preview. coming up next, -- japan's prime minister, speaking exclusively to bloomberg about a possible economic stimulus package and institutional reform. to strengthen the economy. this is bloomberg. ♪

shery: we are counting down to the start of trade in tokyo and seoul. these are some of the stories we are watching. in korea, watching out for the bok decision in the next hour. the 20 economists that were surveyed by bloomberg expects central banks to hold its key policy rate at .5%. the bok governor will hold a

press conference at 11:20 a.m. local time, so we are watching for any shift in their stance when it comes to the monetary path. south korea's space program says a major boost aims to stay at the forefront of six g communications -- 6g communications. the science ministry plans to launch a mission to the moon. over in japan, jeffrey's financial group has agreed a strategic alliance with a financial group which will see the japanese company provide a credit line to the leverage finance operations to see the lenders joining forces on certain pieces of investment banking business. nhk reporting the boj will lower its gdp growth outlook for this fiscal year and prime minister yoshihide suga continues to face political pressure to come up with an economic package before national elections. haidi: one of the prime minister's advisers says that the government should put

together another supplementary budget worth as much as $270 billion. heizo takenaka spoke exclusively to bloomberg about what he thinks is a need for stimulus. heizo: at this moment, the reserve fund is held by the government, a big number. may be for the time being, the government will spend ¥32 million. by doing that, they will control the economy. management will be down. the election will be here concerning that possibility that the economic package will be created by the government. considering the gdp gap -- decided not so huge concerning the reserve fund. ¥30 trillion for the

supplemental budget will be a reasonable amount. at this moment, it is very difficult to get a concrete number. the other day, the government decided the growth strategy. this growth strategy -- to discuss the spacs system in the securities market and also they decided to strengthen the function of the commission. competition, an important source of competitiveness. combining some stimulus package and also the institutional reform. try to control the economy. it is very important to control covid-19. >> climate change tackling has

been very important for the government. do you think enough has been down on that front so far? additionally, is the central bank -- should the central bank be doing more? do you rate highly what the boj is doing in terms of this new loans program? heizo: carbon neutral. it is in very important thing at this moment. october last year, all of a sudden, the prime minister of korea -- carbon neutral by 2050. this is very timely. after that, president biden strongly insisted the need for this carbon neutral -- also, the prime minister decided to provide to trillion yen of green funds so this should be very efficiently used by the government. of course, this is not enough

compared to the carbon neutral -- in the united states and other countries. quite high investment is expected. -- expenditures to carbon neutrality. on the other hand, this should be supported by the finals. for example, the former governor of the bank of england, mr. carney, insisted the need for neutrality from the financial side, and the governor of the bank of japan would understand that. and now a member of the board of the trustees of the world economic forum, former governor carney was also a member of that to discuss this issue. it is very good that the central

banks and central bankers will understand the need for carbon neutrality and the strong support is expected and will be done. shery: advisor to prime minister yoshihide suga, heizo takenaka, speaking exclusively to bloomberg. staying on japan, the ioc president is promising not to bring new virus risks to the country as it hosts what he calls the most followed olympic games ever. our deputy tokyo bureau chief, sophie jackman, joins us now. days to go until the olympics. what is the mood like in tokyo given we have seen so much opposition so far? sophie: the mood here is lukewarm with a touch of trepidation as well. the olympics are certainly no longer the big party in tokyo and spectators have been banned from the olympic events, almost all of them due to an increasing

coronavirus cases. in tokyo, we will be watching it on tv just like the rest of the wealth world, and the ioc incident has come here to japan to win hearts and minds, convinced the international community and the japanese people that the games will be safe with the measures they have in place. and it comes to the japanese people, he is not exactly winning them over. it doesn't help that he absently referred to them as the chinese people in a each. just a momentary flub but it was seized upon by social media and that conveys to you the mood that we have here. a lot of skepticism about these international bodies saying that the olympics are safe when at the same time on the ground, people are concerned about this resurgence of virus cases here in tokyo. haidi: locals are obviously not convinced that these measures will be enough. what are we hearing? sophie: they are not super convinced. we are seeing that in the polling for prime minister yoshihide suga and his cabinet rate, it's continuing to

decline. they are not super hot on his government at the moment. the measures that the olympic organizers are taking mostly amount to keeping athletes and participants and the general community as segregated from each other as they can. about 85% of the residents coming into the olympic village will be vaccinated at almost 100% of the support staff. the local population is only up to 20% and when they interact, there is that risk for the virus spread, and that is on the top of people's minds here in tokyo. >> our deputy tokyo bureau chief, sophie jackman, as we continue to count down to the olympics. a big interview ahead of that, coming up. the tokyo governor weighs in on the virus situation ahead of these long-awaited olympic games. we have that conversation in the next few hours. ♪

shery: netflix is gaining after hours after it said it will venture into video gaming. it will be netflix it's first big move beyond tv shows and films. for more, let's bring in our media and entertainment reporter. how big of a deal is this? will people be watching tv and

say, i'm bored. let's turn to games. >> potentially a very big deal. as a test, they will roll out a few games in the next 12 months. they just hired an executive from facebook who previously worked at the gaming company electronic arts to take control of game development at the company. netflix's executives have made pretty clear in the past couple years that they see gaming as a threat for attention and entertainment time. they cited the game fortnite as a competitive threat and they are trying to see if there is a way for them to put gaming into the service both to attract additional customers and, to your point, if you are watching something and you want to play a game, or you are playing a game and then you want to watch something, you can do it all within the app. haidi: it would have been great if they had done this before the covid lockdowns. how are they planning to potentially do monetize this? they will -- potentially monetize this?

lucas: the plan is to treat games like another genre. you get standup comedies, musicals, dramas as part of your service, and that is what it is going to be, especially when they are starting with just a couple of games. longer-term, of course, netflix likes to roll out price increases every couple of years in most parts of the world. i think you will see that continue. if they invest enough in gaming, making games is incredibly expensive, you can see more substantial price increases, but it is way too soon to look at that. it depends on how much success and how much they end up funding these games. it remains an open question how much this will be them licensing their titles to other people make games, how much they are doing in-house, and they already experimented with choose your own adventure format so i will be curious to see if they continue to do that in conjunction with making traditional games. haidi: our bloomberg media and entertainment reporter on that big move from netflix. let's take a look at how we are

setting up with thursday's session in asia. a pretty mixed start to trading. new zealand up .1%. a hawkish rbnz to sending the kiwi dollar rocketing with expectations that it will be sort of one of the first to lift off when it comes to rate hikes later this year. sydney looking pretty flat at the moment. we will be watching sydney airport when it begins trading, given the rejection of the $17 billion takeover offer. that's get more on that story. the argument was that it was undervalued, this coming from a consortium of investors. let's get it over to our reporter in sydney. 42% premium to the market value was not enough to get a deal done? harry: no, it sounds like a bump to where shares in trading are. i guess if you look back before the offer, you know, it was down almost 25%, shares were, from 2019, so it goes to show exactly how impacted the whole company

has been by covid, which is one of the arguments that the board will bring forth today. that adds into the home -- the decision by corporate boards. in the leisure and travel space broadly, and in casinos like brown and in gaming companies, both had takeover offers as well and there is that very skepticism about engaging in these relatively opportunistic takeover offers. shery: this is not the end of a possible deal, right? harry: they do leave the door open in the final paragraph of the statement today, but strong words to keep this conversation going. they will have to really demonstrate a lot more, optimism, levers that shareholders had not thought of until now, such as developing

even their assets and more commercial property media as well so they wanted at the pre-covid share price, reading between the lines, which may be a tough one. shery: harry brumption in sydney. coming up, we will get a preview of china's upcoming gdp data from vanguard asia-pacific chief economist, plus more markets insight from j.p. morgan asset management portfolio manager -- the market opens in korea sydney -- in sydney, seoul, and tokyo are next. this is bloomberg. ♪

shery: welcome to daybreak: asia. haidi: taking a look at the major markets opening across asia. our top stories. asian stocks set for a steady start ahead of china second-quarter gdp data. those numbers expected to show a sharp deceleration in growth. jay powell says the taper debate will go on with the u.s.

economic recovery not yet where it needs to be. he warns inflation will stay elevated. a surge in covid cases making indonesia the new regional epicenter. let's get straight to the market open. sophie: we are seeing moves lower for japanese stocks. the yen is trading around a 110 handle. tracking the riser we saw in treasuries. -- rise we saw in treasuries per morgan stanley flooding caution about higher jgb prizes. switching out the board focusing on south korea, we are waiting on a be ok rate decision. -- a bok rate decision. stock index gaining ground. the korean yuan on the front foot this morning. let's turn to australia for the

start of cash trade in sydney. little changed so far for the asx 200. the sydney lockdown will likely weigh on the employment picture in july. we have the kiwi dollar holding gains above 70. this as markets are pricing for a two week height. brent losing a little bit of ground. this as we saw the rise and a feel stuck and we are waiting on a completed deal from opec-plus. still seeing a move for brent above 80 bucks a barrel. we are waiting on the china gdp report for the second quarter. ubs seeing weakness ahead for the rimmon be for the next two months. you have cnh trading above 646. shery: lots for investors to keep an eye on. our next guest says second-quarter earnings may show

signs of margin pressure. joining us is a portfolio manager at j.p. morgan asset management. great to have you back. are you expecting prices could become a concern? are there any sectors across asia were valuations are to stretched that investors -- are too stretched that investors should be concerned about? >> i would not focus on sectors individually. when you focus on quality companies or companies that have strong market positions in any sectors, we believe those companies would fare better in this environment with the pricing power that they have and also with regards to managing the inflation we have seen so far. shery: where are those companies at? where can you find them? >> across industries for our

strategies, we have some companies in the industrial space in machinery automation where topline demand continues to be very strong. there are input cost inflation impacts but we believe those companies are able to manage. we see many auto companies -- the stronger auto oems are able to manage the input cost inflation as well as the semi conductor shortage. when you look at the service sector, this is a sector that is less impacted by input cost inflation as of now and so we are quite positive on those sectors as well. haidi: one of the big concerns for investors is a spike of new virus cases of the delta variant across the region. take a look at this chart when it comes to asia and asean.

just being watchful of the seven day spike of new cases. one of your top investment ideas is india. does the virus situation not play too much on your outlook for equity performance? >> of course it would be -- i don't deny it does impact our investment views in the near term, but when you look at the situation where vaccination rates have risen such as the u.s., europe, the u.k., as the vaccination rates rise, the impact from the variants become less and less on the actual economic activity. for

vaccination rates are still lagging, we do consider this is a matter of when if not -- when not if economic activity does normalize. we are still positive. many of the growth companies we invest in those regions. haidi: another thing investors are scrambling to readjust is taking a look at the risk associated with china tech and china ipo's in general. are you looking at opportunities when it comes to ipo's elsewhere? >> yes, definitely. the recent events have been a reminder that when it comes to investing in china, policy risk has to be one of the key considerations. over the past years, we have had so many positive developments in terms of investing in china like opening up of the asia market, the bond market, many chinese tech ipos coming to market. we as investors have become somewhat complacent of that risk. as you say, we are seeing a host of homegrown tech companies coming to market in markets like

india, korea. even in indonesia. those are the companies we will definitely be doing a lot of work on as potential investment. haidi: great to have you as always. let's get you to vonnie quinn with the first word headlines. vonnie: south africa's government is sending more soldiers to help end a riots following days of looting and destruction. defense ministers said troops will be boosted from around 5000 to 25,000. the protests erupted last week after former president jacob zuma was jailed. more than 70 people have been killed. brazil's president has been diagnosed with an intestinal obstruction and will undergo further tests to see if he needs emergency surgery. the presidential office that the 66-year-old was taken to hospital after more than 10 days of pickups. the surgeon who operated on

bolsonaro was called in to evaluate his condition. the white house says the united states is that a more than 1.5 million doses of the moderna vaccine to sri lanka. the shots are being sent through covax. the biden administration has pledged to ship at least 18 million doses of a mix of moderna, pfizer and johnson & johnson shots abroad in the coming months. the south china morning parsed reports that travelers will still require testing. 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'm vonnie quinn. this is bloomberg.

shery: still ahead, the virus situation in asia. we do have the south korean rate decision do in the next -- decision due in the next couple of hours. treasury secretary janet yellen no plans to resurrect talks with china. more on the bloomberg scoop neck. -- scoop next. ♪

haidi: we're watching cindy airport is one of the movers in their early part of the sydney session. we are seeing a decline of about 1%. we have heard sydney airport has rejected the 16.6 billion u.s. takeover offer from a group of infrastructure investors saying the number is too low on expectations the sydney airport

and assets will recover. we are seeing that decline after the stock has gained almost 35% since the end of last month on expectations of this. that valuation was about 42% above the market value. that offer for this group and would have been the largest on record in australia. that was an eight dollar and $.25 per share. we are still expecting a little more back-and-forth on this deal. we hear the u.s. will not be reviving economic talks with china that were abandoned in the trump era. this comes as beijing accuses washington of waging a sinister campaign. this plays into what we now see as a continuation of the approach to policy on china from washington. what are we hearing now from beijing? >> i think it has been very

clear under the biden administration that team feels there needs to be a rethink of how the u.s. prosecutes its policy with china. a couple of months ago, we have the white house's main security officials say the main time of engagement between the u.s. and china was over. these economic togs were founded by hank paulson during the george w. bush days. that was the prime time for engagement between the two governments. the biden administration is looking for a new way forward should what could -- a new way forward. shery: look at the next opportunity be now? >> we know deputy secretary of state wendy sherman is coming to beijing at the end of this month. there are many things for her to talk about with her counterparts

in beijing. beyond that, there is the g20 at the end of october. potentially we could have president xi jinping and president joe biden face to face summit in rome. without the dialogue, the outlook for a consistent exchange at a high level is a little less sure. haidi: our greater china executive editor. we will stick with china. we have been covering at length some of these issues confronting big chinese tech. in the uncertainty when it comes to their prospects for those wanting to list in the u.s. we have talked about this bring a huge opportunity back to hong kong and making the pipeline even more promising because when it comes to liquidity as well as a stricter screening process, it may be -- maybe these coming home listings will seek to benefit hong kong.

lala move looking to bring to hong kong instead. shery: china's stricter screening for the star board when it comes to these potential new ipos and listings turning to hong kong. the hong kong exchange has risen the most since july out of any other exchange in the world. this as president biden continues to hammer in the tougher stance on china. also sticking to his guns on the monetary side of things, federal reserve jay powell. he is saying it is too soon to taper and rising inflation will be temporary as elected officials on both sides of the aisle press him to explain. kathleen hays is here with more on this. what exactly is chair powell saying? kathleen: he was speaking to the house financial services

committee. he said basically that substantial further progress, not enough has been made on unemployment, on getting more certainty on the path of inflation to begin tapering. he did say they are talking about it. they will talk about it more in the july meeting. for me, one of the more revealing conversations. there were several questions asked about mortgage backed securities. raising the idea of weight -- what would you taper first? on the one hand, he said a lot of things make housing prices go up. supply issues, demand issues. he seemed to brush off the idea that buying mortgage backed securities and helping to keep mortgage rates low as one of the reasons the housing market is so hot. he also said when it comes to treasuries versus mortgage backed securities, it is the same impact on the economy. seeming to brush off the idea

other fed officials have suggested it would be in favor of starting the tabor when it comes on the mortgage-backed securities. haidi: in terms of inflation, is there anything making him concerned it is not just transitory? kathleen: i don't think so. he is very adamant. he realizes he could be wrong. he says there is a lot of uncertainty. this is due to things that stem from reopening, from getting rid of restrictions. the economy is picking things up. here is what he said. >> inflation has increased notably and will likely remain elevated. inflation is being temporarily boosted by base effects as a sharp pandemic related price increase from last spring dropped out of the 12 month calculation. kathleen: i would say members of congress, on this committee, it felt like every other question had something to do with inflation. even a democratic representative

said you are talking about temporary inflation and base effect. what do i tell my constituents worried about rising prices? a republican who hearkened to the days where there was a huge inflation problem, how painful that was for so many people. is he convinced that will not happen? there were many questions about that. shery: a huge issue in this part of the world as well. that is our global economics and policy editor kathleen hays. right in the midpoint of expectations between 15 to $17 per share partly backed by mark wahlberg and pf 45 founder. there has been a pebbled path to getting to ipo. they were initially going to go

through a blank check company. there were some legal issues with competitors. we are seeing that pricing at 16 bucks a share. lots more to come on daybreak: asia. this is bloomberg.

shery: indonesia has surpassed india's daily covid-19 case numbers, making it the new asian virus epicenter. this as the spread of the delta variant 10 used to drive up infection in southeast asia's largest economy. joining us now with the latest is the jakarta bureau chief. the surge has been fast in indonesia. is this all to do with the delta variant? >> that is right. we have seen the more infectious delta variant raging through the country. the most concerning part is

beyond those two islands to the more remote areas. we have seen how the government has refrained imposing lockdowns . the most concerning part is hospitals are overwhelmed and how oxygen is depleted. they have added hospital beds. haidi: what has been the economic impact of this latest resurgence? >> we will see that mostly play in the third quarter. for the second quarter, we were expecting growth to be around 7% .

we might see that there are soon in the third quarter, 4% or even lower. that is what the government has shared so far. shery: where is the government saying about how this pandemic pool player in the next days and weeks? >> the worst case scenario is if the gailey cases reach 70,000, we've already seen 50,000 yesterday. they said to expect high numbers in the following days because they are consolidating a lot of numbers. reporting this means an issue. even as we get the daily cases, it will not be from that day. they said after consolidating the data, the numbers might be high. it is hard to see how the

numbers can get down to less than 10,000, which is what they expected. they have been signaling curbs. haidi: argie cured a deck are jakarta bureau chief. sophie is in hong kong taking a look at the market impact. are we seeing that play out and it comes to sentiment? sophie: citi looking beyond the outbreak. indonesia protecting the stock benchmark will hit 650 by the end of the year. they're looking tech given the ipo pipeline names. also interest from jp morgan asset management. switching out the chart to vietnam where cases are nearing

32,000. the stock benchmark is set to be the world's biggest laggard this month and it is nearing a technical correction. we are waiting for a breach. that could portend more declines from the enemy stocks. hsbc remaining positive as they see more juice in the tank with fundamentals intact. shery: let's turn to the business flash headlines because we are also watching cindy airport shares lower after it rejected a 17 billion dollar takeover offer saying the proposal undervalues the company and is now in the best interest of the shareholders. the offer came from a consortium of investors adding on a global travel rebound. -- betting on a global travel rebound. sources tell us a bank's chief economist left in recent weeks

to join hedge funds. nomura suffered losses from trades with archegos. a strategic alliance is what -- providing a credit line to the wall street firm's leveraged financial operations and collaboration on certain pieces of investment bank in business. a landmark donation days before his trip to space. jeff bezos will give $200 million to the smithsonian national air and space museum. the bulk will fund the creation of the bezos landing area. washington institution says it is the largest single donation sense the founding gift from james smithson in 1846. haidi: coming up next, chinese

gdp. we will get views from vanguard as to whether that will pick up toward the end of the year. this is what we are watching when it comes to the fx front. we have seen the kiwi be the outperformer after the hawkish rbnz statement. expectations pricing in two rate hikes this year alone. that drop in the dollar reflected across most of these currencies. the dollar china trading at 6.43. a little bit of softness when it comes to trading. the bloomberg index is seeing a limit of a pick up a broad decline. the most in about two weeks after jay powell pushing back on those expectations the central

bank would taper anytime soon. lots more to come. this is bloomberg. ♪

>> the domestic demand recovery on the consumption side has not been as strong as policymakers were expecting. >> they acknowledge a slowdown. >> the downward depression the second half this year is bigger than people had thought. >> the numbers may be less than initially expected. it sets china up for a good second half. >> the weakness persists throughout the rest of the year. >> looking to the second half,

we need monetary policy side to support economic growth. ? some chance again. the probability is low. darker we forecast another cut in for by 50 basis points. >> some guest on what to expect from today's china gdp print. investors will be watching more data out. industrial production, fixed assets as well as the headline gdp number. there will be looking for any signs of the post pandemic slowdown. our next guest says she sees another quarter of below trend growth at the rebound is in the cards toward the end of this year. always great to have you with us. you do see a bottoming out of area structural -- of a

structural slowdown. >> i think when you see the growth, the second quarter we are seeing another below trend growth. i would say people will be watching the june numbers where you are going to see i.t. continue to decelerate from may. i am not overly concerned about the growth momentum in the second half. part of the weakness in june is a related to the prescription because of the resurgent infection and some supply chain disruption that is likely to fade pretty soon. even though we expected growth to decelerate down the road, it is likely to remain decelerate -- to remain resilient against global recovery. consumption will continue to recover. infrastructure investment will pick up, which helps to offset

some of the weakness. in the second half, we see the economic growth momentum to stabilize and rebound toward trend growth in first quarter. that is where we see -- i am not overly bearish about china's economy. haidi: let me get to the retail piece of the puzzle. we are seeing retail sales, monthly averages going back to the pre-pandemic 2019 levels. they are not back to levels we are expecting when it comes to the broader upside trend. is this going to be the continued struggle if you take into account the changes in demographics china will continue to struggle with? >> when you think about the retail sales, the pace of a recovery is slower than expected. that is where all the disappointment of the first half is coming together. when you're thinking about the direction, it is still on the

recovery pace. i think down the road what you're going to have is vaccinations will accelerate in china. it will remove a lot of uncertainty or consumer reluctance. we will have this labor market that continues to improve. that can continue to have household consumption in the right direction. this is a global phenomenon. this is where i would say china, not just retail sales but also the overall economic growth is sustaining a structural deceleration down the road. maybe the next 10 to 15 years the trend of growth is 10 to 6%. shery: if authorities wanted to further support the chinese economy, which direction would they go? would it be through more

infrastructure spending? would it be through the yuan? what is the mechanism? >> i think when you look at the reserve, that is providing the liquidity and potential credit that is providing the supply. the more important question is where are the credit demands -- whether credit demands will come from -- where the credit demands will come from. it should be more on the physical side. government still has $3.5 trillion quota of government bond issuance. that needs to be utilized in the second half. they need to accelerate that as well as infrastructure investment. they will continue to inject liquidity to avoid a liquidity squeeze or credit crunch. i don't call that aggressive easing. i would say it is a neutral stance. policymakers in china will be

data-dependent. shery: let me turn to policymakers in south korea. this gtv chart on the bloomberg showing how the three year yield in south korea, the spread over the bok's policy reaching the highest in over 10 years. this coming at a time, the headline dropping. south korea confirming 1600 more coronavirus cases. yesterday was a record. another record of 1615. still very elevated. what are your expectations the bok will do? >> don't think they will do anything today. the bank of korea is like the pboc six or seven months ago. the economy is recovering. then the central bank cannot afford to shift their focus away from growth. even the concern about real estate prices and household

leverage. they will probably be in of the first central banks in the region to hike interest rates. i would say there probably will not choose today to hike interest rates. maybe later this year. today, i would say they probably will stay on hold. haidi: we spoke with an advisor to the japanese government and he was saying japan need to next trip budget of as much as $270 billion. you agree? >> i think at this moment, we actually downgraded the japan focus. the outlook in the near term in the third quarter because of the rising infection cases and another round of emergency. that will be on the recovery of

consumption and service sector. even this kind of weakness in the academy and japan does not really have much room on the monetary policy front to provide any accommodation. the burden will have to rely on the physical side. to that extent, i am not going to be surprised if they come out with a fiscal measure. as long as japan can accelerate the vaccination process, there could be strong rebound's in the economy because of the reopening . shery: our asia-pacific chief economist at vanguard. it's good to have you back. the advisor to the prime minister spoke about the need for stimulus in japan. >> at this moment, held by the

government. pretty big number. maybe for the time being, the government will spend this fund. by doing that, they will control the economy. the election will be here. there is a possibility that a new package will be created. considering the gdp gap, not so huge. the budget will be a reasonable demand. at this moment, it is difficult.

the government decided the growth strategy. in this growth strategy, the government decided to discuss the spac system in the market and also they decided to strengthen the function to enhance the competitiveness. the government will try to control the economy. it is very important at this moment to can draw the covid-19 pandemic. >> climate change has been important for the government. do you think enough has been done on that front so far and additionally, is the central

bank -- should the central bank be doing more? do you rate highly the new loans program? >> carbon neutral is important at this moment. october last year, the prime minister declared career would be carbon neutral by 2050. after that, the biden administration started. president biden insisted the need for this carbon neutral. the prime minister decided to provide to trillion yen of green fund. this amount is not enough compared to the necessary money for carbon neutral and other states. investment is expected.

government should increase this expenditure to carbon neutrality. on the other hand, they should be supported by the finals. the foreigner governor -- the former governor of the bank of england insisted the need of the support of government neutrality from the financial side. i am now a member of the board of the trustee of the world economic forum. the former governor carney was also a member. we discussed this issue. it is good the central bank understands the need for carbon neutrality. and strong support is expected.

haidi: the advisor to the prime minister spoke exclusively to bloomberg. another big interview is coming up. the tokyo governor weighs in on the virus situation ahead of these long anticipated tokyo olympics. that conversation is happening in the next few hours. let's take a look at markets. what is the picture like? haidi: japan leading declines. we are seeing fluctuation off the session lows for samsung. the korean yuan is firming up. the offshore yen. check out the ringgit halting a two day drop below 420. scotia bank saying we could see a move to for 25 government saying that can move to the second stage of her plan in early august.

we are seeing base metals continue to fall. china reiterated its pledge to contain commodity prices. with that you have crude remaining under pressure as we saw the pickup in u.s. feel stuck files. we are waiting on an open plus deal. -- and opec-plus deal. i the bond space, i want to highlight jgb. tracking the move higher we saw in treasuries. we are seeing a widening in the jgb 10 to 30 trade as traders determine the potential. shery: coming up next, china's traditional liquor company gets a makeover. how they are reaching out to young consumers. this is bloomberg. ♪

vonnie: this is daybreak: asia. federal reserve chairman jerome powell says inflation is likely to remain high in the coming months before moderating. he told the house financial services committee the u.s. economic recovery has not met the central bank's goals first going back it's massive monthly asset purchases. >> while reaching this is still a ways off, participants expect

progress will continue and we will continue these discussions in coming weeks. we will provide advanced notice for announcing decisions. -- notice before announcing decisions. vonnie: china is pushing back against political crackdowns. the state media accused washington of waging a sinister campaign, dismissing a possible u.s. led digital trade agreement. beijing condemned a planned white house warning about the risk to american businesses of operating in hong kong. the european union has now also made some blueprints unveiling how it plans to reach 2030 climate targets. it includes hastening the pace of the shrinking tear and making exemptions for the highest losing sectors. it will also adopt the world

first import levies. 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'm vonnie quinn. this is bloomberg. shery: we do have breaking news out of south korea. the bok leaving the key interest rate unchanged. 20 economist surveyed by bloomberg were expecting no change and as expected, half a percent is the level still. this as we watched out for the government press conference. he could be sending out a signal on normalizing later this year, which has been what he has been saying so far. let's bring in kathleen hays. no surprise here. perhaps that press conference is very much in focus. kathleen: let's hope so because everyone is dying to know. at the last meeting, he made it pretty clear that he was ready to start removing stimulus because the economy was picking

up and he is worried about financial imbalances. we also want to know if there were any dissents at this meeting. there was one board member looking for the rate hike down the road or signaling it could come this year, that will be important. the pick in virus cases is coming into this meeting. whatever the be ok may signal about tightening policy down the road, it would also signal they would only take this step not at a time like this but when the virus cases have dropped down. they shot higher and there is a lot of uncertainty. areas around seoul have shut down. we know korean exports have picked up. on the latest reading, they were up 40% year-over-year.

unemployment is down so 3.7%. four straight months in a row of. that is another big plus for careers economy. there are signs that the bank of korea can think about moving in that direction. maybe not yet. that is what we are going to be looking to hear from the governor. we have seen the bond market -- you showed the chart of how the bond yields are pushing in that expectation this year. there we see the key rates at 0.5% to we will see what happens -- we will see what governor -- the governor says about that. the press conference will be steady in about an hour and 20 minutes. haidi: i that press conference, what are the signals you will be looking out for given we have

very few meetings left in the year? investors will want strong signaling. kathleen:kathleen: three more chances after this for them to do something. i think it will be interesting to hear how the governor depicts the economy. the operating forecast from gdp to 4%. inflation up to 1.8%. inflation is above that level. gdp is looking stronger. the bond market is waiting for this to happen. it would be great if someone asked them a question about the rbnz and their surprisingly aggressive move 24 hours ago when they announced they are going to stop their bond purchases completely on july 23. david ingles drew us all a chart. hard to believe we will signal anything that hawkish. we will be listening for signs that he is concerned about the

virus. he is concerned about further damage to the economy. it is something that will make him rethink what he said in may. that it is time to look at financial imbalances. shery: we'll be watching that very closely. we will have plenty more to come on daybreak could this is bloomberg.

haidi: china liquor company is getting a makeover. the ceo spoke about the firm positioning in the market. >> we are somewhat -- we focus on good quality and low price. we sue -- we serve the consumer's basic needs. haidi: let's get more from -- let's get more. you're trying to reach gen z. >> this company valued at $1.6 billion. they are trying to promote to younger customers by using colorful bottles in smaller

bottles so you don't have that social pressure to finish it all and you can share it a friend or two. that bottle, they would be enigmatic phrases. in terms of pricing, they put it at 100 million liter bottles. the company also is trying out more flavors to make it taste similar to cocktail. this is what the ceo told me. shery: i want to try those. those are really cute bottles. what is the plan when it comes to the expansion of their business? >> in terms of the expansion, last or during covid, the business was impacted -- laster during covid, the business was impacted. in the future, it will grow at 20% every year. he said he is going to bring the company to ipo and a three to five years and double his

geographic footprint from the current 30. >> we cater towards the young customers and make products that taste more friendly. creating just a tipsy feeling. i the fruit flavored field, we have many innovative brands good hour for -- and a bit of brands. our fruit flavored drinks range from white grape to peach. >> when they go overseas, they will put a focus on asia to europe and they want to target the local people. that is something interesting to watch if they are coming to your market in the future. shery: the latest on those cute bottles. coming up, we will get more insight on the asian economy and look ahead to china's gdp data.

that is it from daybreak asia. our markets coverage continues. bloomberg markets china open is next. this is bloomberg. ♪ and there you have it -

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