haidi: a very good morning. we are taking down -- we are counting down to asia's major market opens. shery: our top stories, asian traders face headwinds to start the week, goldman sachs downgrading u.s. growth forecasts and hawkish signals from the bank of england.

taiwan's president says the island will defend its sovereignty after xi jinping repeats calls for reunification. advisors for every grand office -- evergreen's offer creditors -- haidi: let's catch up to the start of trading in sydney. we are watching out for a key number of stocks including gaming stocks. star entertainment responding to that blockbuster report in local media with allegations of money laundering activities, foreign interference. we have seen that statement saying they are concerned about a number of these allegations and will formula a response. sidney trading down by 0.1% and that staggered open. we are seeing a listing of restrictions today after 15 weeks of lockdown with a returned of in person retail, and person dining, and other nonessential services. new zealand up about 0.20 5%. nikkei futures looking a little

more positive. stocks facing potentially a rough open. we had the comments from the bank of england saying potentially a damaging period in inflation. that is what we heard from andrew bailey. also pretty surprising to the downside, jobs numbers as well in the u.s. a lot of this is feeding into concerns about a stagflation. shery: it does not help that we continue to see concerns over the credit space in china, especially with the real estate sector. we are now headed for the property sector being the source of more than 30% of the record $27 billion in corporate local bonds so far this year in china. interesting to see that we continue to see that decoupling when it comes to china's junk bonds from high-grade by the most in a decade. perhaps a signal that this is still contained in the real estate sector. haidi: we continue to watch

forever grand. -- four -- for evergrand. we see the end of this massive property development boon and impacts across the broader sector. in the meantime, we are focusing on the founder in this report out later today. really looking for a way out. we have talked about his highflying, wealthy bodies, fellow founders, fellow entrepreneurs who have bought stakes and try to support evergrande. a lot of them have sold out of their stakes as well. what could potentially be next in terms of the government wanting a soft landing for this cost me -- for this company? shery: we continue to have those deadlines to meet. we are also watching the geopolitical space, china and

taiwan the in out different visions for the future of the island which plans to defend its sovereignty. beijing says unification bill be achieved. >> those who forget their heritage betray the motherland and seek to split the country will come to no good end. they will be's. by the people and condemned by history. >> we hope for an easing of relations and will not act rashly. there should be no illusions that the taiwan people will bow to pressure. shery: let's bring in our executive editor for greater china. where does this go from here? >> this is one of the most hotly watched areas in the world because this is the place where, most likely, even though it is very unlikely, it is the place

where we could see some conflict between the u.s. and china because the u.s. has this commitment to protect taiwan. obviously, beijing claims taiwan is part of its history, part of its territory. this is why over the weekend we had these speeches harkening back to 1911 when the dynasty was overthrown in china and the creation of both of these parties, the one that rules and taiwan now and the one that rules the mainland. haidi: how unusual where those comments about reunification from over the weekend? john: this is sort of a long-held stance by both sides, the thai and her party and taiwan seeking to carve out a space were sovereignty, to make its own decisions, to avoid this unification with the mainland. here, xi making the commitment to unify the two sides. what has changed recently is

there has been more tension an additional five eyes by the chinese into the taiwanese air defense zone. we have had the usa openly admitting that they have military personnel helping to train the local defense forces. that is ratcheting up the tension. haidi: our executive editor of greater china there. the other big story, evergrande. the prices appears to be coming to a head for the markets. let's bring out our asian markets live editor. it feels like for western investors at least, it has taken a step back from the panic we had a couple weeks ago. is the wording of evergrande over? -- worry of evergrande over? >> no, it is going to drag on for some time. i think the panic has shifted to resignation for a lot of them, now the question is, how much

will be get back if there is a restructuring and a restructuring looks likely. the biggest concern is going to be with us until probably at least january, february of next year because what happens now with evergrande, how that resolves, that says a lot about how open the funding markets are going to remain for evergrande and for other chinese companies. there is a huge wave of refinancing they need to carry out early next year and if the funding markets are shuttered, that could actually be when the meltdown comes. shery: it seems to be the consensus that evergrande is not have a systemic risk but could dampen economic growth in china more. is coming at a time when we are getting these growth forecasts downgraded for the u.s. as well by goldman sachs. we have central banks raising interest rates already.

how does this bode for the earnings season coming up? we continue to see those revisions downwards. can earnings offset these other concerns? garfield: earnings results have shown the capacity to offset those concerns before so that is always possible. the key concern is that i think everybody has been getting used to the idea that china is not going to save the global economy. it is not going to be the dynamic driver for global growth that it has been. the question is, will it turn into a less dynamic driver or turn into a drag on growth? evergrande can play a role in that if that hurts property because property is a big part of the chinese economy. the other thing is what goes on both internally and externally as far as our credibility with china's government. can they get a resolution that

attains some credibility that makes people reassured that even if some sectors of investors and in china, people and businesses, do get hurt, that the chinese government knows what it is doing, it has a plan, it can carry out, added can -- and it can reinforce so that damaged not -- so that the damage does not spread too far. how does the chinese government come out of this? shery: let's now get vonnie quinn with the first would headlines. vonnie: treasury secretary janet yellen says she expects congress to sue take action to bring the u.s. into line with a global minimum tax agreed to last week by dozens of countries. she told abc she believes the measure will be included in a spending bill democrats are preparing.

an overhaul of taxing multinational companies took a step forward friday as 130 six nations agreed to enforce a mineral corporate rate of 15%. the international monetary fund executive board has planned meetings with the managing director and a law firm as it pushes to finish a review. sources say the rare sunday meetings were to take place privately. the ims board met on friday to discuss an audit done by bloomberg hail to the world bank which accuses it of pressuring staff to minute delay data which he was a top official. the czech president has been taken to hospital in a developer that may slow government negotiations after its allies suffered a shock election a few. the 77-year-old will play a key role in talks to form a new government. a political ally unexpectedly lost the election to conservative opposition

alliance. the man known as the father of pakistan's nuclear weapons program has died aged 85. the plan minister tweeted that he is saddened by the death of the scientist to provide security for pakistan against its larger nuclear neighbor. he was arrested in 2004 after consenting to selling uranium enrichment machinery to iran, libya, and north korea. he was later freed in 2009. 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 vonnie quinn. this is bloomberg. haidi: we are watching star entertainment. the first knit or so, we are seeing huge plungers, as much as 16% lower for the trading of star stock in sydney. what we are seeing is that reaction to that damning reported saying they are being

enabled of suspecting my laundry, rhyme, large-scale fraud, and interfering with casinos. star entertainment operates casinos in sydney and brisbane. they gave me giant has come out this morning saying they are concerned about these allegations, a number of them saying it is difficult to speak to the individuals involved but they will be pursuing this and responding by the appropriate state and federal regulations, but we are seeing that reaction now extending the loss, 17.5%, the biggest fall we have seen since march 2024 star casino. we are seeing that, jeffrey saying it us risk their application for 1002 electronic gaming machines at a sydney casino. his coming as the broader tourism, gaming, hospitality sectors really starts to try and

recover with the lifting of restrictions today in sydney. still ahead, a big interview. who are you speaking with today? >> we are excited about our upcoming interview with carrie lam, chief executive of hong kong. hong kong faces a slew of issues from a closed border to a housing crisis to a serious -- to a series of new laws. that is begging the question whether hong kong can continue as an international financial hub as opposed to a chinese financial center. we have heard from the likes of the economist that are saying members are wondering whether to move their operations from hong kong to cities like singapore, saying recently that lobbying for reopening of the border is like talking to the wall. hong kong is facing a slew of issues. investors mulling over operations.

we are bringing these issues to chief executive carrie lam very shortly. shery: looking forward to that conversation. next, why j.p. morgan asset management says inflationary pressures are largely transitory. we speak with current -- we speak with kerry craig just ahead. this is bloomberg. ♪

>> there is a supply issue in terms of labor. >> what held workers back is the delta variant. >> the demand for labor is high, there is just not enough people coming back in the labor force fast enough. >> i think it keeps the fed taper on the table. >> i don't think this what deter the fed at all, or shouldn't because the fed does not modulate supply of labor. >> the message from the market to the fed is go ahead and taper. >> they should go and begin the

taper as soon as possible, including in the next meeting. >> the question is what are they going to do with the funds rate? >> some of our guests reacting to the u.s. payrolls report and a week of economic reports around the world gets underway, goldman sachs has downgraded its 2021 and 2022 u.s. growth forecast. kathleen hays is here with a look at what it means for the federal reserve. goldman worried about consumer spending. why? >> you have a delta variant, you have supply constraints, have all kinds of things that are not the kinds of things that the federal reserve controls. no policymakers could control this, but the economy gets hit by it. gdp, 2021, they were looking for 5.7%. that has been shaved a teeny bit lower. next year, a bit more of a downgrade. let me remind you, it will still be twice with the fed sees as of

the economy's potential growth rate. what they are looking at is the virus's continue to drag on the kinds of services spending that are sensitive to the virus. restaurants, going into a store and buying shoes. speaking ahead of this, retail sales will be out, they are expected to be down in the month of september, but that is largely because there was a 6.7% drop in car sales, not because people don't want cars, because there is a chip shortage. inflation, let's look at this. because this is the big focus when it comes to investors, when it comes to figuring out the taper. that 520 percent year-over-year on the cpi is supposed to be seen for a second month in a row . that is way high above the fed forecast and how can you call transitory when it keeps climbing? if you think about the fed taper, let's pull up another chart. i'm going to couple the inflation looking out the key

measure, the core deflator in the pce, and compare that with the on employment rate. the unemployment rate tumbled. you almost never see a decline that big and we are showing again this number that is above 4%, twice the fed's 2% target. this is why the people think the fed is going to announce the taper for november. the fed' a september meeting this week, that is expected to show, for all the comments they distill for the fomc members, we are ready to taper. they will wait a little bit longer. we are looking at this, central banks around the world more and more, the fed is not the first want to get there. look at the bank of korea, we are going to start removing stimulus now. on friday, our b.i. joined the club. they said they did not change their policy but they stopped their bond purchase program. there is something in the wind and i with call it -- i would

call it inflation that is not going away. haidi: kathleen hays there. our next guest things inflationary pressures are still transitory, that these problems will gradually ease. joining us is kerry craig. how do you feel that way? is that would markets are feeling at the moment, particularly in light of this confluence of crises we are seeing from supply chain issues to energy? kerry: good morning. i think the high inflation we have seen from higher inflation in general and i think in the case of inflation being transitory, high levels for example, plus 5% in the u.s., i going to moderate as some of these issues fade away. we will be met with higher inflation in the economy then perhaps we are used to where we have seen over the last decade when central banks could not get

inflation back above target. they are pressures for inflation in the economy. inflation rates would probably be closer if not above 2% in the coming years. that does not mean we are going to be seeing 5% inflation levels forever and that is the difference when we think about transitory inflation as we see supply and demand come back to the energy sector and labor market in the coming months. haidi: dressing jobless numbers, we are also seen concerns from the inflation as well. is stagflation -- and then we have growth forecast being cut as well. is stagflation something that investors need to worry about in terms of how they construct their portfolios? kerry: i think stagflation is important in thinking about the construction of your portfolio today and right now and we have this environment, we have

expectations for inflation rising and growth falling. i do not think we get stagflation becoming entrenched. it will pass because we can see growth coming back up, as we look at the ability for companies -- we see households with strong job potential. we can see that building on growth sides whereas on the others, we see maybe pressures in the industry, some of that demand for goods easing, shift back to services, easing of supply chain pressures, inflation numbers will come down as well. we will see more growth and less inflation, unwinding stagflation fears in the coming months. we also had central banks tightening rates back then and that is not the case now.

we have tapering in a central banks, but overall, very accommodative monetary policy. shery: given these concerns about inflation, the question is for how long? we are expecting the u.k., canada, brazil to raise rates by the end of 2022. if you combine that with inflationary concerns, wouldn't you have tightening liquidity faster than was expected? kerry: the markets are trying to figure out what central banks mean when they begin tightening and tapering. this is going to be a slow normalization process for the growth outlook. central bank's become more reactionary to stronger growth inflation numbers and tighten faster. right now, the inflation is caused by the supply side, not the demand side. i think they will be cautious about the pace of hiking. at the same time, they want to

start the normalization process. shery: are you worried about the demand side of things? we have seen goldman downgrading u.s. growth forecasts because of consumer spending, then you have the holiday season and golden week in china. consumer spending was pretty sluggish. would you factor that into the markets especially when it comes to specific sectors like retail? kerry: you're seeing expectations come down a little bit. the forecast numbers have been revised down. but they are still thinking about a global economy that is going to expand over the next year. take the low market numbers that came out in the u.s., the market is tightening. it does start to restrict growth potential and it does start to weigh on the numbers. they are thinking about why growth will be lower in places like the u.s.

they are taking about why growth will be higher in other markets while it is still recuperating from covid-19, particularly in emerging markets. i think there are opportunities out there. shery: kerry craig, it was great having you on, thank you. haidi: next, don't miss our interview with hong kong leader carrie lam, we will discuss reasons for the declining population with the biggest exit is in 60 years. this is bloomberg. ♪

>> chinese markets continue to be under pressure with risks coming from the property sector. we have evergrande concerns. not to mention the power crunch as well. this chart showing hong kong and

mainland markets diverging from their u.s. peers. we will be talking about this and asking how policymakers are weighing the slump in our conversation with hong kong chief executive carrie lam, that is in just over an hour. plenty more to come. this is bloomberg. ♪ (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs and to strengthen your back. do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out.

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>> if we have open borders, potentially it will be virus bringing into hong kong and if they open to hong kong, there will be linkage, virus outbreak spread to china. >> you cannot avoid it, looking at the restrictions. covid has been a catalyst in general for companies to restructure. >> we have always been connected between the rest of the world in china. that will change.

-- that will not change. shery: some of our guests weighing in on hong kong's covid policies. it will be a focus in our conversation with gary lyman under an hour's time. we are also counting down to the start of trading. two former toshiba executives say a disputed shareholder meeting was held properly last year and a report supported by an activist investor was misleading. we will have more on that and a second and nissan has unveiled a high-tech green factory to build new generation electric vehicles. the new japanese prime minister's policies are in focus with his plans on a capital gains tax keenly awaited. haidi: he said he is going to prioritize other aspects of his policy agenda. our politics reporter joins us

now from tokyo. japan's party called for a capital gains tax earlier. we know what is happening there? >> he has been calling for this for several weeks now since before he was elected prime minister. he said this was part of his policy of focusing on the middle class, trying to bolster the middle class, make a larger, anti-take away from the people perhaps seen as getting too much gains from japanese economic growth. he talked about it for several weeks but the reaction was not good. we saw in trending on twitter. a lot of people talking about how this could affect the markets. we saw high-profile businesspeople come out against it. he gradually started to distance himself from it. he did not mention it in his big policy speech on friday. over the weekend in a television

interview, he said this is not going to be a priority, it is something that might happen down the road but it is not going to happen for the time being. shery: do we have any idea when it does happen, what that new capitalism could look like? isabel: this new capitalism thing, to be honest, it sounds a little more like the kind of old-style japanese capitalism that many people are familiar with from previous decades. but he has talked about is things like how the benefits of a company should not only go to the shareholders, they should be shared with the employees and even with the subcontractors, which is slightly a different angle on what they said before. no other policies he has talked about and one of the most high-profile is paying more to public-sector workers, especially those in the caring professions. he has talked about nurses and people who care for the elderly, those who work caring for

children. he thinks they are not paid enough. there is going to be a review of that. i noticed in a poll this morning in the newspapers, that is a popular policy. that is something he might want to push ahead with. he has other things, for example, promising tax base for companies that pay more to employees and he has talked about the government supervising the relationships between large companies and smaller subcontractors and that is something that perhaps might not be welcome in japan's corporate world. shery: is the reynolds joining us from tokyo. let's stay with japan's corporate world. two former toshiba executives, a disputed meeting with shareholders last year held properly and independent reports supported by an activist investor was misleading. let's bring in our senior editor. give us background of what this case is about. what are they talking about?

what is the shareholder meeting and why are these executives speaking out now? >> this is the latest chapter in a tumultuous two years for toshiba. if you recall, last year, there was a shareholder meeting held, essentially to appoint new directors. some of the more opposed by a singapore based activist investor, and what came out afterwards, according to an independent report of the commission, was that other executives at toshiba, with the help of the japanese government, had influenced the vote. once it was pursed into the open, it was like open warfare. it resulted in the chief executive officer and board chairman stepping down earlier this year. as you have seen with the

latest, it is continuing, these two executives came out today to basically say, another report that is coming out should reveal the truth and be independent investigation -- and not invented -- and not independent investigation was [inaudible] haidi: why is there so much turmoil surrounding toshiba? reed: it is around the control of -- this goes back even further by several years -- toshiba had an accounting scandal. they took billions of dollars of losses from their ill-timed and ill mentioned foray into the nuclear business and then sold off the ground jewel, a memory chip business. now we have other activist investors coming in saying

essentially toshiba needs to either be bought out and rehabilitated or broken up or at least sell a controlling stake to an outside investor. also, it is one of the first times that a major japanese business like this is kind of vulnerable. so you do have a lot of investors coming in to see where they can make some money in terms of reshaping toshiba. haidi: reed stevenson there. some of the stocks we will be watching when it comes to the tokyo session. this is how we are shipping up in australia. this is a day where we see sidney emerging from some lockdown restrictions after 15 weeks of lockdowns. still brought downside trading, off by 0.7%. in new zealand, pretty flat trading. interesting price action when it comes to the kiwi trading. the dollar, the u.s. trading

next against most of those g10 peace. singapore nikkei futures down. s&p futures are suggesting we will see another start for u.s. stocks after that a job support upended market expectations. there was that cut to the growth trajectory as well as broader concerns about sticky inflation. those comments from the boe not helping sentiment either. taking a look at one of the movers, star entertainment is one we are watching, falling the most in 19 months on this look a media report about potential allegations pertaining to this company. star responding this morning but we are seeing losses hold at about 19%. let's get to vonnie quinn. vonnie: thank you. taiwan's president says the island is facing unprecedented challenges and will defend its sovereignty. xi jinping declares reification

with taiwan will be achieved. the comments from both sides follow a tense week in the taiwan straits with china sending military planes into the air defense zone while the u.s. held military exercises nearby. goldman sachs economists cut their forecast for u.s. growth for this year and next claiming a delayed recovery. goldman sense they expect growth of 5.6% on an annual basis in 2021, down from 5.7%. they protect 4% growth next year . to the bank of england, and imminent rise in u.k. interest rates to current inflation. marjorie policy committee member suggested in remarks over the weekend that investors were right on rick heights. andrew bailey warned of damaging inflation unless policymakers

take action. the man known as the father of pakistan's nuclear weapons program has died, aged 85. the prime minister tweeted that he is saddened by the death of the scientists who provided security for pakistan against its larger nuclear neighbors. he was arrested in 2000 four after confessing to selling uranium enrichment machinery to iran, libya, and north korea. he later recanted and was freed in 2009. 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 vonnie quinn. this is bloomberg. >> coming up, we hear from jeff hsu on how he is trying to drive innovation and one of taiwan's oldest conglomerates. catch that conversation. this is bloomberg. ♪

shery: far eastern group is one of taiwan's most diversified conglomerates with 200 companies ranging from textiles, cement, and shipping. jeff sue went on an unconventional career path prior to joining the family business. he is a former u.s. marine who

want to design school before moving to taiwan in 2013 and becoming the group' of chief innovation officer. he spoke about shaking up the 70-year-old family business. >> i think everybody knew the digital transformation was going to need to happen. there are too many things you can do in data and i think it is going to be the driver for the next industrial revolution for the next 15 to 20 years. i just think that covid radically made us speed up. there's no excuses for dragging our feet. >> far eastern group is one of taiwan's oldest conglomerates. part of it success comes from stability. not necessarily that the group is keen on risk-taking or over

investing or high-growth ventures. your businesses are in the middle of the pack. as a chief innovation officer, how do you innovate in that environment? jeff: very carefully. you have to pick your battles. you are actually using the design process properly and incorporating it into your business, it actually reduces quite a bit of risk. i don't see stability and innovation having to be separate. i think they can be -- they can go hand-in-hand if properly executed. yvonne: of all industries and companies that you have under the group, which areas do you think are right for disruption to is there something on the top of your list -- out -- disruption? is there something on the top of your list? jeff: i think our telecom

industry is going to become more important. not only the digitizing of taiwan's industries, but also it is the gateway into emerging fields, like artificial intelligence, like edge computing. yvonne: one of your projects that you spearheaded, partnering with ericsson on a new digital fleet management platform using connectivity. can you tell us more about this technology? jeff: global warming and climate change has made the overall shipping environment much more dangerous. we just took some of the lessons that i learned from being on the board and we used to that to

digitize our operations and focus a little more on safety and using data, using artificial intelligence to help improve our situational awareness of our fleet. as a result of that, it has paid off dividends in helping us lower our fuel cost, being more sustainable, and improve overall safety and operations of our fleet. yvonne: you have a unique background. after a stint in finance, you decided that you wanted to join the military, you were a lieutenant for the u.s. marines, you served in iraq, you have been to design school. it seems interesting to hear someone in your position want to enlist. what was the motivation behind that? jeff: i wanted the leadership experience that you get given when you join the marines.

there are very few jobs out there when you are only 26 put you in charge of 15 marines and millions of dollars worth of equipment. and let you go out and kind of try and change the world. i had something to prove to myself so i wanted to get through that obstacle on my own. it was kind of a family tradition to do military service so i did not want to let that tradition die. yvonne: your grandfather, the founder of the group, he instilled prudence as a defining characteristic and your father, he added that western-style innovation. you are a little more of the east meets west philosophy as well. tell us what lessons have you learned from your family. jeff: if you want to create something great and meaningful, you have to work hard. my dad was always working. i knew my dad was always focused on generating his business and

making it stronger. he was also focused on trying to give back to taiwan. that did not leave a lot of time for him to stay with us and my family. i also knew that if i wanted to learn and get my leadership experience, i needed to go out and find it on my own. yvonne: how do you see your role evolving in the group in the next five to 10 years? jeff: whether or not i take a leadership position is still judged largely on what i'm able to contribute. nothing is going to be handed to me on a silver platter so i'm going to have to earn my place. the chairman is giving me a position in which i can drive innovation forward and that still at the end of the day is my passion. applying the design process to complex problems, finding solutions, help transforming and

elevating the group companies so they can last another 70 years. i know it is not going to be easy, but i think it is a worthwhile challenge. as long as i can keep going down this road, i will be here as long as the group requires me to be here. yvonne: what do you want to do next? jeff: i want to get us to this dark time now that we are going through with covid and trying to figure out what the new normal is. i also want to pursue my own ambitions of empowering the group, developing our technology companies and also helping our own businesses reinvent themselves. what works over the last 70 years may not be what is going to work for the next 70 years. have to help those companies

make that change transformation. haidi: jeff hsu speaking to yvonne man. you can catch more of those interviews on generation next monday on daybreak: asia. coming up next, we will be discussing hong kong's plans for an anti-sections law, a top adviser for carrie lam is almost certain that a local version of the legislation will be enacted. this is bloomberg. ♪

>> also talk into the financial sector and to understand how best we can try to make sure we won't have a direct impact to the financial companies in hong kong. i think the law is going to be passed, it is going to take more time. we have to make sure we are taking every consideration before we enact the law. haidi: that is a top advisor to hong kong's chief directive -- chief executive. fear from the businesses in the city on that possible law and hong kong's future will be a

main focus in our conversation with carrie lam. let's go to our correspondent for southeast asia. so much to talk about in this conversation. >> that is right, including the anti-sanctions law. there has been concern among the investment community that they could be cut -- caught between a rock and a hard place. if this law were implemented in china back in june, other implementation in china -- in hong kong has been delayed. some are saying, is it on the back burner, is a data? the clearest indication that it will go through. what can it do to businesses in hong kong? that government can seize assets, it can revoke visas, it can impose restrictions on operations in the city. that is why businesses are pretty jittery about it. the law was implement it in china and they are talking about how it may impact hong kong. no one knows for sure at this

point in time. there are suggestions that hong kong and china feels it is more important at this time to align with wall street that are hit back on beijing. the u.s.-eu implement in sections on carrie lam herself as well as a dozen other officials in hong kong and china. it is a tool for china to hit back. it is a matter of when, according to bernard chan. haidi: i had, a great conversation, we are half an hour away from that interview with carrie lam. join us, you definitely don't want to miss that. let's get you a check of the latest headlines. star entertainment plunged in sydney trading after reports alleged it enabled money laundering, fraud, and organized crime. the company said it was concerned by misleading assertions within those reports. in a statement, it said it would

take appropriate steps with state and federal regulators to address all allegations. [indiscernible] will spend $1.2 billion on technology upgrades to make its global factory screener and ready to produce ev's, i spent two years revamping north of tokyo. adding vr trading systems and alternating parts of production. other plants will get a similar treatments. nissan is set to start production this year. reliance has acquired a norwegian solar panel maker and engine builder of projects as the conglomerate pushes server into alternative energy. the deal gives the company a $771 million enterprise deal. aco planning to remain

independent of preserved create freedom at expecting global sales to return to pre-pandemic levels this year. alfonso says that labor was struggling to overcome a setback in china. it rebounded 20% from last year but remained lower from a bungled attic campaign years ago. shery: a look at the markets now, we are seeing drawdown pressure with qe stocks losing ground for a fifth consecutive session. the new zealand dollar is under pressure, even after we have that rate hike has to be. it seems the chinese economic slowdown not being felt well across kiwi markets. the asx 200 at the weakest in about a week, tech and consumer discretionary stocks leading the declines. nikkei futures down 0.4% after the japanese yen hit a two year low. we have korean markets away on

holiday but we are watching the korean wan after a decline. u.s. futures down 0.5%. we have the market open in tokyo next. this is bloomberg. ♪

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shery: welcome to "bloomberg markets asia." haidi: asia has major markets just open for trade. asian trade is having headwinds to start the week. hawkish signals from the bank of england.

they're working on contingency plans as interest comes in on more of their dollar bonds. anchor: i will speak live and exclusively with hong kong chief executive. we will discuss the covid policies reopening policy as well as plans for a northern metropolis to counter a housing shortage. that is coming right up at 8:30 a.m. hong kong time. shery: have japan coming online. korea away on holiday. we are seeing tech and health care leading the declines after the just but -- japanese yen holds that 100 of level after falling to that year low to the u.s. dollar. we have plenty of data to look out for including south korea's bank of korea deciding on rates on tuesday as we see their currency at the moment. unchanged at that haidi: haidi:

anchor: haslinda: after -- shery: that weighing heavily on their minds. the looming pound permits including that from mainland china notes with stupid 50 million dollars outstanding -- 250 million dollars outstanding. that will be there note maturity by three months. we continue to see these trickle of headlines coming from chinese developers, trying to really put off some of those bond payments they have upcoming as we continue to see those distressed firms across the country. haidi: the calendar do is something they are focused on on this per the world. let us look at how we are trading here in australia. it is a day when sydney emerges

from some restrictions after 15 weeks. we are seeing broader downside. in fact, the only trading sector in the green is energy. the biggest decline is across consumer and information technology stocks. star entertainment is letting 20% after we saw the report say that the company is suspected with organized crime and money laundering. they will respond and work with federal and state regulators to address some of those allegations that they are concerned with. the australian dollar we are seeing a downside of 72.99. strengthening with the kiwi dollar on this covid outlook. new zealand is a 10th of a percent lower. shery: let's turn to our next guest who says stagflation places are misplaced. let us bring in our chief

investment strategist from lgt bank. great to have you with us. tell us about your concerns over reinflate and but not necessarily about growth. we have seen the latest downgrade when it comes to u.s. growth, not to mention consumer spending becoming sluggish in the u.s.. not to mention in china during golden week as well. >> we are in a sensitive, tricky situation. the narrative that inflation is transitory still holds. freight costs around the world have skyrocketed. at some point, that has got to give or we will have a more complicated situation where demand in the world gets depressed. to make a long story short, the federal reserve will still look

for a november tapering announcement. the payrolls were very disappointing last friday. shery: in the meantime, howdy position in the equity markets? you are saying you have upgraded if you sectors, including global healthcare. why? >> health care hits all the boxes for where you can hide in an environment where prices are going up those companies can pass on those costs be on to consumers. the other nice thing about health care is that the volatility of the earnings is very low. with higher uncertainties across the board in many areas, health care offers investors comfort. you know more or less on a global basis, on average what they will earn. at least on a historical trend basis. haidi: we will talk about ever

grand. it is not just about them being a poster child for this broader potential not systemic but systemic within the properties of our part of the world. what you most concerned about as an outside investor? is it the impact on growth or exposure to these cross defaults? stefan: more broadly speaking, the impact on growth. 2021-2022 will lead to much slower growth than anticipated as the chinese economy absorbs these shocks. we gotta talk about spillover. it can go as far as german capital goods exporters to china. luxury goods. you can have a long list of companies that will feel the brunt of that but in the end, we think that ultimately, they will

be a policy backstop that will kick in that will not make this a systemic issue but rather, a slowdown in terms of overall economic growth. haidi: that is just one piece that we see is a confluence of various crises, right? you look at energy, whether you look at the inflation set of things when it comes to supply chain issues. we are getting downgrades to economic growth. does that not add up to a high risk of a stagflationary scenario? is that something investor should be hedging for? stefan: we will challenge that. definition speaking, stagflation is low growth or negative growth. we have almost an excess of demand and not enough supply. that is complex. though supply chain issues need to be worked out but it's not that we don't have enough growth in this world. as long as we can see over the

next 2-6 months, the costs come down. energy costs are a tax on to the consumer. we see some of that materialize in a more softer fashion then i think we are haidi: we are. vonnie: treasury secretary janet yellen says she expects congress to soon take action to bring the u.s. in line with the global minimum tax agreed to last week by dozens of countries. she told abc that it will be part of the spending bill they are preparing. it is a big step forward friday because 130 six nations agreed to enforce a minimum corporate rate of 15%. the ims executive board has planned meetings with managing director and a law firm as it

will finish an ethics review. our sources tell us theme meeting were to take place privately. the board had met on friday to discuss an audit done by the world bank that -- accuses them of pressuring staff to manipulate data when she was a top official there. the czech president has been taken to a hospital in a development that may slow government negotiations after his closest ally had a shock election defeat. he unexpectedly lost the election to a conservative opposition alliance. he may play key role and hopes to form a new government following the vote. australian prime minister is in talks with the new south wales state government in a bid to accelerate a plan to open international travel. the aim is to allow home quarantine for vaccinated historians via sydney and allow them to travel overseas.

no timeline has been given for reopening the international order. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: we will get more analysis on china's handling of the ever grand crisis with andrew from ort capital research. we will be speaking exclusively to hong kong chief executive carrie lam on their policies and reopening prospects. this is bloomberg. ♪

haidi: let us get more on our top stories. ever grand facing 150 million in payments on monday. our next guest says they're encouraging a soft landing for

their debt the managing director from orient capital research. always great to have you with us. the anticipation and excitement gets taken out from watching these due date deadlines when they just keep passing with no apparent repercussion or reaction from either policymakers or the company itself. what the amid when you talk about a soft landing? how is that responsibility going to play out? andrew: the whole situation has been a big surprise. if you had told people a year ago that they would default and central government couldn't step in, there would be a gasp of surprise among investors around the world. this case, central bank is not sent -- stepping in. they are forcing local governments to essentially negotiate deals on a province by province level. therefore, try to do what i call local recapitalization. it would avoid this because they

have to do that. that is part of their mandate and local provinces. but also provide enough capital to prevent a complete collapse in their property operations within each province. this is the central governments way of saying that you created this. you're sucking up the money from land sales and now, you can handle it. the president is confident that this is not going to lead to a financial crisis. haidi: even if it is off beijing's balance sheet, we know that historically, local governments have had a terrible track record of managing debt, right? what is the long game here? do you just end up with a pile of unproductive assets that grind down on growth potential? andrew: more or less, that is correct. each province will have to figure out the best way to unload assets at some sort of valuation and getting of capital from local resources that include some state-owned firms,

local banks, and local branches of the s oe banks. it was interesting to watch that it was purchased by a portion of that government. i think that debt workout will happen. the end result is that each province knows that if they don't do enough recapitalization, will have a real problem i their hands. protests on the streets and so forth. they gotta work out a deal to do this. yes, it is not good for the long-term except the one advantage is you might get some realistic evaluations were some of these property assets and take the air out of the bubble. shery: what does this do with the long term efforts from beijing? andrew: beijing is serious about this. they are worried about a giant collapse they cannot control and so far, they decided they can control this.

it says a lot about his own personal authority and the strength of the party that they can pull this off. this massive deleveraging campaign focused on a single company. long-term, they have to switch to new sources of growth and move away from the property bubble. it fits in with this common prosperity theme for the average citizen. shery: markets think this will contained to the property sector, right? how china's junk bonds are really decoupling from high investment grade. we are talking about the spread going in a decade or so. if you have the property sector being an important part of the chinese economy, how will this effect the broader economy? we saw the holiday tourism number during golden week showing sluggish consumer spending so what are the repercussions for the broader

economy here? andrew: to your first point, they have been successful at telling people that we can know separate the bad from the good. the property market might be difficult but the bond market and so forth are relatively healthy. in terms of the impact on the macroeconomy, there will be a real economy. it is 30% of the economy gdp, the property sector. they keep talking about new sectors but that takes years to gear up your semiconductor industry. they squashed the service sector, tencent, alibaba and so forth. less they reallocate capital and take it away from the s oe's, phil have a real problem on growth and the gdp will trend downward quickly. haidi: the market and economic woes do not seem to be curbing much of the geopolitical ambitions, right? is that battle for dominance in

parts of asia really something we need to continue to monitor? andrew: i talk about china's global ambitions geopolitically? haidi: that is right. andrew: if china is economically weaker internally, that will negate the ambitions that they have to have -- become a power in asia. he is focused very much on trying to make sure that china, internally, is stable. the party is in control and that is what he cares about. they don't have a crisis that will cause the legitimacy of the party. they can keep the party in control. so far, they have been relatively successful. we will see how this plays out shery: especially when we see more developers. they are seeking to extend their notes maturity. are we going to see this wave of default and what would that mean for the leadership? andrew: if this becomes a

massive default among dozens of property developers than the central government will step in indirectly. i so reports that the pboc has told banks it will increase their lending to the property sector. there is no official announcement and we don't exactly know how much cash they are talking about. basically, instead of doing a front door bailout, they can do a backdoor sort of mitigation of the pain of the property sector. that is what they are looking at. they can step in if things get really bad. shery: always great having your insights. thank you. coming up. do not miss our exclusive interview with carrie lam. we will discuss how property is important part of the common asperity and what that means for the city. this is bloomberg. ♪

shery: vietnam is facing an exodus of factory workers that could worsen global supply chain concerns as they grapple with the covid outbreak. joining us now for the latest is our vietnam chief. what is happening on the ground and how could this impact global brands and the holiday shopping season? reporter: good morning from vietnam. last year, they could handle the pandemic fairly well. this year with the delta variant , it is hit hard. the government in the south, southern investment area -- industrial area put in tough antivirus restrictions. part of them were shutting down these factories. they are unable to set up tent cities on their factory force.

they had to shut down. one month later, they are opening up again but you have a lot of workers who have been having tough times while adding back to their homes. the government estimates 2 million people heading home. the companies are reopening and they are concerned about not having enough workers. to provide everything from nike sneakers two shirts from gap. there is a great concern about what these companies can put these company -- parts on shelf or shopping season. haidi: what are they doing to ease the crisis? reporter: in vietnam, the government is doing everything from sending text messages, begging them to come back. they are setting up a bus caravan to bring them back from world areas. some of the factories are offering bonuses for workers.

a lot of workers still, are not going to get those calls. they have been trying to shift some of the work to other parts of countries. that is difficult. to suddenly gear up for so much added work, let alone getting workers in those countries to take on those new orders. haidi: let us quit you a quick check of the business flash headlines. french growth has acquired another company. this would value them at 21 euros per share or $19 billion. talks stalled because management and to -- share holders claim it was too low. it is unclear if negotiations will be revoked. missing a crop of their income team leave including their veterans.

this is the firm's global debt team restructures. at least eight people left last week. they say they're adding a responsible investing team as part of those changes. they have rejected an independent report alleging they colluded with japan's trade ministry, trying to influence a broad selection. toshiba tried to unfairly influence a vote, blocking a proposal from its biggest shareholder. toshiba has been locked in a dispute over the direction of the company. shery: we are heading towards the opening in mainland china and hong kong. we are watching those markets closely. they are really trailing with the global market upside we have seen recently, especially against the s&p 500 or the nasdaq. this as we see those concerns over strict border restrictions when it comes to quarantine

travel. the pandemic in the city. we did see hong kong developers surging on the chief executives northern metropolis plan. that was a big relief to investors in the property giant. haidi: we could see another leg up for that rally. we are hearing from local reporting that carrie lam will meet with the real estate developers to talk potentially about these land supply for housing in tech innovation as part of that northern metropolis. trying to get some rejuvenation to the economy and attract new talent. a lot of these concerns over the border closures. hong kong falling in line with the restrictions that china has put when it comes to covid related closures. what does that mean for its vibrancy and attracting the business and talent from abroad.

shery: at a time when we hear from business chambers from abroad. we heard from the chamber of commerce talking about these restrictions having an impact on their supply chains, how they carry out business but we watch everything to do with the property sector as in the mainland with the ever grand crisis, not to mention other developers, starting to hint at potential default. we continue to watch the credit distress across the property sector. it will be in extensive important conversation coming up. don't miss that exclusive interview with the hong kong chief executive, carrie lam. that is next. haidi: let us take a quick look around the markets. we are seeing a mixed picture there. after u.s. stocks dipped. u.s. futures continue to retreat. we are seeing further downside when it comes to australia.

off those sessions, every segment in the red is trading a bit higher. new zealand, seeing some downside as well. we are seeing a pullback in the queue. as sydney lifts some of these

haslinda: welcome back. we want to welcome viewers and radio listeners all over the world for a very special interview. 18 months into the pandemic, hong kong's reputation as an open financial hub suffers from strict travel restrictions. uncertainty remains on one those restrictions may ease. join dust joining us exclusively is the chief executive. good to speak with you again.

carrie: good morning to you. haslinda: i want to talk about the type order controls. despite having no new cases. hong kong remains shut at a time when cities are opening per what would it take for hong kong to open up its borders. chief executive lam: i have said in public that the parity now is to resume some normal travel with the mainland. this is the common aspiration of the hong kong people including international business and hong kong. if i ask them, your choice of having headquarter or in offices in hong kong was because of the assets to the mainland market. if i open up the border for the international arrivals but at the same time, you cannot travel into the mainland. that is not really the best

arrangement for our business people. we have a good and positive meeting between the two sides. we have agreed a set of parameters based on which weekend move onto the next stage of discussing how we can resume -- haslinda: what are those parameters? is it 80% vaccinated rate? what are you looking for before you open up? investors are concerned. we have had some likes saying that its members may consider moving out of hong kong to places like singapore. chief executive lam: first of all, our latest company survey showed that the number of overseas and mainland companies based in hong kong has not dropped. in fact, it is a record high in terms of the overseas mainland officers and in particularly

with startup. we are in close discussion for parameters. one would say it is the same thing. high vaccination rate, which i'm sorry to say, we are lagging behind. my original goal of reaching 70% by the end of september was still not achieved. we are still not up to 70%. we have to do better in terms of vaccination. particularly, amongst the old people. they are very vulnerable when there is an outbreak. the second is of course, the infection control measures in terms of arrivals and in terms of venting the spread in the community. the third will be contact tracing. just in case there is a local case, how effective is the contact tracing regime in order to prevent the widespread infection in community. another factor is just in case there is an outbreak, what is the mechanism to suspend it?

there are several things we gotta discuss in detail and i hope we will have a second meeting soon. haslinda: just to be sure, when you reach 75 percent, hong kong opens border? chief executive lam: no. i did not say that. we have to adhere to a strict target of vaccination before opening up would have to look into all the circumstances but i would say that is very much a condition that hong kong should meet. haslinda: hong kong has said they want to align their policy with china. what exactly does that entail? chief executive lam: that was from the mainland perspective. the practices adopted in hong kong should be as aligned as possible with the mainland practices.

we are also operating under a very different regime. the discussions between the two sides are meant to find a way forward in identifying the differences in the systems between the two places that could be assurance that we will not be the weak link in terms of covid-19 control. haslinda: i am just wondering, does that include adopting china's tracking application? is that something that has been considered? chief executive lam: no, that is not possible. i've said in public that is not possible. we do not have that system in place. it would not be possible to put that system in place. just because of a public health crisis. haslinda: we know that hong kong is one of the few places in the world without a case of the delta variant.

you think this is sustainable on a longer-term basis? if not, what measures are in place, should delta make its way to the city? chief executive lam: we did have cases of delta. mainly imported. as i now speak to you, another case of local infection. probably because of dealing with air cargo. there's always that risk. the delta variant is highly infectious. most of the cases infected are asymptomatic. if one of those cases one into the community, there is very high risk of an outbreak. let me put it that way. when you said hong kong is one of the few places that have very stringent rules, while very low cases. hong kong is also on the places

where everybody resume to normal activities. going to concerts, sports activities and very soon, we will relax more on the gym operations. we rank very high in terms of normalcy index. people are enjoying their lives in hong kong. haslinda: for hong kong to remain a financial hub, it has to be open, not just to china but the rest of the world. are you concerned perhaps that your competitiveness will be impacted? singapore is opening up and there is great competition between the two cities, might hong kong lose its competitiveness. chief executive lam: of course, i am concerned. we are working hard to resume normal travel inning gradual and orderly manner with the mainland of china and overseas places. as a chief executive in hong

kong, i am duty-bound to protect my people. any fatality or increase in fatality will cause a major concern incident site society. in dealing with the public health crisis, we have a lot of factors to take into account it cannot just be a single factor of a financial sector that center. i think bloomberg knows better than everybody that we are doing very well, right? are ipo in the first six months is better than the same time last year. we issued more bonds and into dazed time, we are welcoming first want to be issued by a city in the mainland. the turn over good. currency is very stable. thanks are doing well. we are not going down the drain in terms of our financial services industry. haslinda: the market activity is

slowing down. i will up on that later it i want to bring attention to the housing crisis in hong kong. you talked at length on your policy speech about the metropolis you are intending for 2.5 million people. talk to us about one construction will start, what it will cost taxpayers? chief executive lam: the northern metropolis is an existing geographical area and hong kong, consisting of two administrative district called a north district and a another district. when a northern metropolis is fully developed in accordance with this development strategy, it will be 2.5 million. at the moment, there been almost one million people living in these districts. the northern metropolis is trying to put together in a very coherent, strategic and

visionary way how we want this 300 square kilometer area develop. that is about one third of the landmarks. right next to this northern metropolis is the dooming city. -- booming. we are looking beyond the border showed -- so to speak to find a synergy between hong kong and sins and -- construction is right now is on with some of the housing projects. it is not an entirely new piece of land. it already has one million people living there. it has 110 jobs now in the northern metropolis. we are building on that basis but as i have said, anymore

coherent and strategic vision. very much with it in mind. also wanting this area to integrate better into the mainland development. haslinda: investors and analysts are not convinced that this will lead to lower housing prices. people are saying that they could rise up to 15% how comfortable at you -- are you with the rising prices of property in hong kong? chief executive lam: in tackling the housing problem in hong kong, my housing policy is we try to provide public housing to a larger proportion of the population. for years ago, i started to review the housing policies. and now, we have a housing lever that provides subsidized housing up to the middle income or higher than that. in terms of what i call the starter home.

in a way, you can say we are moving closer to the singapore model where they account for much larger than the population. in our case, we are looking out hopefully, up to 70%. the public housing accounts for this. morland we produce another metropolis or in the artificial islands off there will be allocated for public housing. whether it is for sale or for rental. haslinda: the key issue is pricing. if prices continue to escalate, are the measures you would put a -- put in place to put a lid on it? chief executive lam: this government has demand measurement. if there's a strong demand for public housing in hong kong as in the case of new york and

london, the government's responsibility is to look after those who could not afford to buy in the public market. in the public subsidized market, pricing is low. i have lowered it further. for the latest batch of homeownership sector we sell, we are trending 6% lower than the previous mechanism. i've lingered from the private market subset the prizes -- prices that are bet on the affordability of my people. as long as i can take care of that big portion of the hong kong population, i would and should not control everything in the private market because we are a free economy and we prosper and being a financial center where a lot of investment wants to come in. haslinda: you are looking at 2.5 million from one million currently. if you calculate it, you expecting one in five hong kong

euros from outside that area to be gravitating towards the northern metropolis. is this a fair assumption or are you looking at a population growth to meet 2.5 million people there? chief executive lam: it is always difficult to project or predict population growth in hong kong. by the current projections, we might reach up to 8 million or 8.5 million in 20 years time. perhaps we don't need one million flats for that increase in population. hong kong people are living in a congested living space could i am sure you've heard about it. i have an aspiration to provide more spacious living environment for my people. if we knock down the old congested urban units then we will have the more spacious months to live in. since you mention 2.5 million residents, i may as well have said that we aim to produce 650

thousand jobs in the northern metropolis which is more than the current jobs provision. the intention is to spread out hong kong. it so that people for the north don't have to come south to the south for their job. why do the dogs -- jobs come from? it is innovations and technology. we are building a more techno- place like silicon valley. we are moving some government offices into the northern district and we are building a modern is in center with them. haslinda: we know it is an ambitious housing plan. you said that you ensure that you implemented properly and make it your rarity. is that a sign that you may be

running for another five-year term to ensure to ensure that the northern province comes to fruition the way you envision it? chief executive lam: that is not a sign of anything. my experience tells me that because we are not a government of political parties. the policies are consistent in hong kong. once a chief executive has laid out policy, a blueprint welcomed by the people, the chances that is been implemented despite a changing government and leadership are very high. i am not worried. especially if we have a solid service to do the actual implementation. haslinda: at the height of the protest, you volunteered to protect -- resign. will you stay on, or run for another five year term beijing wants you to? chief executive lam: i don't

answer those speculative questions. you tread it a few times. i'm still giving you a no answer. haidi: [laughter] of all the worries for international investors. a lot of speculation has been delayed whether or not it is on the back burner or if it is dead. talk to us about what is happening with the anti-sanctions law? chief executive lam: first of all, the anti-sanctions law is a piece of national legislation. there is a mechanism for national distillation to be applied to hong kong by inactive inclusion to the basic law congress standing committee. secondly, nobody could dispute the extension to hong kong if needed.

this whole round of sanctions by the u.s. arose out of hong kong. i am a sanction officer. i'm still being sanctioned. the time will come if hong kong is put in that sort of situation. of course, we will follow the central authorities direction to implement any anti-sanctions measure. haslinda: what you're saying is that the law will be implemented in hong kong? chief executive lam: i am telling important point. it is that i have been given to understand the at a national level, it is a toolbox. and extending a toolbox to the hong kong administrative region, they will take full account of hong kong's unique status. especially the status as an international financial center. i have no timetable.

haslinda: is it fair to say, executive carrie lam, that all of these laws are outside of your hands. it is in the hands of the government in beijing? chief executive lam: of course. it is a national legislation. we must not forget that hong kong is an inalienable part of peoples are public of china. i have a duty to them. if there are national interests at stake than of course, hong kong is a part of the people's republic of china will follow the national instruction and directive. again, as i've said, the central authority attaches huge imports to the success of a country with two systems. whatever they do, they will be

very careful in making sure it will not undermine one country with two system or arouse speculative issues about hong kong practicing one country, two systems and preserving their unique things. haslinda: when we spoke two years ago, you said beijing had no intention of tightening its grip on hong kong. how did that change? chief executive lam: that has not changed. we are alive and practicing one country to systems with rights and freedoms being safeguarded under the basic law. i may just add that there will be some -- i spoke with some overseas chambers recently and they all said it is no longer something of their concerns. they're concerned about opening up for travel. haslinda: i want to touch the market since he touched on it slightly earlier. what is it about hong kong that

makes it an international, financial hub and not a chinese financial center with perhaps, just a bit more freedom? chief executive lam: we have a lot of traditional strengths. one is our open economy. we don't have any capital controls. second is our rule of law. third is of course, the independence of the judiciary. fourth is that hong kong is a safe city. fifth is that we have a large pool of talents ranging from financial talents to legal talents. six is our connectivity with the rest of the world and being a very international place where we can easily link up with the outside world. we will have very strong regulatory regimes in many sectors.

all of these could not be easily matched by a mainland city. haslinda: does hong kong have any freedom at all to set its own policies? chief executive lam: of course. of course. i've been at this job for four years and three months. i making my policies under the high degree of autonomy. somebody speculative that this northern jobless development strategy. because it helps hong kong integrate into the mainland. it enhances collaboration. i can tell you 100% that this northern development strategy was formulated in hong kong i me and my colleagues. on a shirt to beijing and them a couple days before release. haslinda: as far as the market

is concerned, all eyes on evergreen. how is hong kong preparing for a possible contagion from ever grand and what are you hearing from the authorities from beijing about them? chief executive lam: i cannot hear you now. what are you talking about? haslinda: we are talking about ever grand. all eyes are looking at how the ever grand fallout may impact hong kong. how are you preparing for the possible contagion and what are you hearing from authorities in beijing? chief executive lam: i can only comprehend part of your question. i will try to answer based on my inadequate pump retention because the equipment. you mentioned something about contention. i think hong kong is very proud of our own regulatory system. we have strong safeguards. we can stand any pressure and

interference from outside based on our own systems. if there are things about the relationship between hong kong and the mainland, we will make sure that the hong kong system remains as robust as ever. there is a very vibrant capital market in hong kong. it is very beneficial to the deepening and opening of the mainland capital markets. this is been acknowledged by the senior officials from central government and put in practice by out this connectivity schemes that we have. one after another. stockinette, bond connect, wealth connect, maybe they will be other schemes that will be announced. haslinda: speaking of interference, technological interference right there. thank you for joining in.

thank you so much for your time today. haidi: shery: if you missed any part of that conversation, tv is where you can watch us. you can send us instant messages during our show. this is for bloomberg does -- subscribers only. across the markets, we are seeing a mixed picture. we are seeing some upside for the nikkei which is gaining 1%. energy discretionary leading the gains. the topics gaining more than 8% at the moment. as we see the japanese yen at that two-year low versus the u.s. dollar. we are also sing the korean -- seeing the korean wan holding onto that level. they are on holiday as we see downside pressure on them and the kiwi stocks as well. tech and consumer discretionary leading the decline.

kiwi stocks falling for a fifth consecutive session. u.s. futures are down 3/10 of 1%. haidi: coming up, we will get more insight on markets. the global head of asset management will be joining us and talk more about these ever grand risks. shery: that is it from daybreak asia. we have a lot to watch out for including tons of ppi numbers this week. u.s. ppi and china ppi. the focus this week will be on inflation as we head towards that open in china. haidi: especially in reaction to that surprising jobs number out of the u.s.. what could this mean for central banks and the fed trajectory. asia investors still trying to get that around their heads as well. we are seeing that outperformance when it comes to japanese markets amid a lower scenario overall. do stay with us. china open is up next as we talk about this ever grand story.

that schedule of payments were due not just for this high-profile property developer but for other developers in the sector more broadly. we will get more analysis with the latest news and markets up next. this is bloomberg. ♪

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>> it's 9:00 a.m. in beijing and shanghai. welcome to "bloomberg markets: china open." i am yvonne man. david: i am david ingles. let's get to your top stories this monday morning. hong kong's chief executive defending the cities tour it pandemic border controls in the face of the schism.