♪ shery: good morning. we are counting down to the major market open. welcome to daybreak: asia. top stories, asian stocks dipping. wall street delivered a mixed verdict on big tech reports today. u.s. dance china telecom over national security risks and beijing signals reluctance to

rescue evergrande saying its founder is hiding a fortune. haidi: when it comes to the rest of trading in asia, australia coming online. we have been fleshing looking to have -- inflation looking to ease but what would be expected as higher, the s&p a little bit soft. new zealand seeing downside of .5%. nikkei futures up .1%. we had a pretty good session opener. record highs again, in particular when it comes to tech. we had the drop in facebook. it is pretty unusual with the overall momentum. in terms of what we saw, microsoft had a robust reading.

an 11th straight quarter we are also looking at expectations. kathleen: something near and dear to the heart of anybody in tech is chipped and the supply constraints have hit everyone from automakers t -- automakers to tech manufacturers but it looks like the wee times are beginning to slow. they are terribly long by 21.9 weeks. that is the lois cain in nine months and the power management and electronic chips were easier to get in october while microcontrollers -- you see it is uneven and a very important issue for many governments and certainly for many manufacturers and investors. haidi: we continue to watch the fallout on evergrande.

they had a directive calling on the founder to use his own personal fortune to try and support the company to pay the debt in the property development. it comes after evergrande missed their deadline september 23 for repayment and we watch the calendar of repayments that have been missed. we heard in particular local governments are monitoring their bank accounts to ensure company cash is being used to prioritize finishing up unfinished housing projects and a lot of these properties being owed to wealth holders. people that have brought property in evergrande. we hear chinese authorities are telling him to use his personal wealth to pay down the debt. we will get more than that in a moment. kathleen: we will find out how deep his pockets are. let's find out more on earnings reports from big tech. ed, the readout for microsoft and alphabet, one a lot hotter

than the other. ed: we got the read we thought we would which is double-digit, topline growth. hi double-digit, topline growth for both. it was driven by cloud and enterprise but pretty broad-based. they see across all units, including on personal computing, which includes pcs and game consoles, that is an area that has been subject to supply chain constraints but alphabet, they had a significant beat. there were areas of the business that were cause for concern. ad sales for youtube or softer than expected and so did the cloud unit. the thing about google is the search business and its ad sales are so closely tied to the atomic recovery. as soon as we start leaving our homes, the economy goes back to normal. that is where the strength came from. in other areas, it was weaker

than expected. haidi: supply chain disruptions are always top of mind. to receive the impact? ed: we addressed the issue with emily chang on a conversation after the numbers dropped and she is talking about already much the pixel smartphone. this is a smartphone, the six addition they will launch in time for the holiday quarter. we have been brisk managing the supply challenges. we are working with suppliers and logistics and clearly they are subject to the same disruption as others like apple watch. the interesting part with the impact of supply chain disruptions was advertising, something i had not thought about until the earnings drop. a number of advertisers are themselves facing a disruption. one example is google. with the automotive industry, we know automakers have curbed production and there is not enough industry. why would they spend on

advertising if they do not have the vehicles to sell? i thought that was interesting because it is an area of softness for google. microsoft, they beat in personal computing but it is an area subject to risk and we know from amg's earnings, the consul demand is very elevated at this moment. kathleen: why is there such a big focus? tech is always imported but right now the focus on big tech is bigger than ever as people try to figure out if the stock market rally will continue. ed: look, for investors, the tech sector has been the place to go for arrival -- reliable growth. we have seen the tech stocks sustain that. the issue is the outlook changed. growth is accelerating for a number of these gains and if you look at valuations in particular, when it comes to the mega cap stocks, and it is a

proxy, we are trading above the 10 year average for the next 12 month period. it is 20 times earnings for the nasdaq 100 over 12 months. we are trading well above that. we have rising interest in yields. we have an economy recovering out of a global pandemic and there comes a question from investors as to how long. even if it is double-digit growth, these companies have posted 30 to 50% growth over the course of this pandemic. haidi: ed ludlow with the latest on tech. regulators are voting to chancel -- cancel china telecom's bid to upgrade. national security is a reason that has been given. coorespon -- correspondent: the sec, 4-0, decided to revoke permission to operate in the united states good china telecom

was held for more than two decades and they thought it secured -- concerned security in the u.s. and the chairwoman of the sec said that because it state of access with the heads of the chinese government, this poses a risk of surveillance and misrouted traffic through chinese servers for no reason. that is a step taken today and chinese telephone companies may go through a similar travail with the fcc. kathleen: interesting that the biden administration is following on the footsteps of something that the trump administration started with huawei. who do you see being targeted next and clearly this is something the chinese government is not going to appreciate. todd: i talked to an analyst today who said a big takeaway is

if attitudes remain the same even though presidential administrations change, there is a decision on chinese telomere -- telecommunications inch -- in u.s. networks. the short list includes comnet, part of another company in china. there is a company being looked at by the fcc also. forgive me for i am losing the name of it is just a second. these are the things. i think vision and technology for the surveillance cameras are being scrutinized by the fcc. kathleen: a story that is just beginning or continuing, todd. regulatory reporter todd shields in washington. let's get to the first word headlines. >> the plan from china's cabinet requires some people to deliver

on being carbon neutral by 2060. it has plans for hydropower, construction, and defining. cbs is pushing back against concerns about chinese growth and its plans to keep suspending their. his profits jumped on the back of investment bank returns but it's asian wealth business for almost $2 billion in outflows. the ceo told us he is still optimistic about the business in china. ceo: i am strategically vocal on china. we know the country well and are successful in the country. we have good combination of businesses in it and asset management and plan to invest. >> president biden's pledge to

provide southeast asia with more than 100 million dollars in funding to fight the pandemic and tackle the climate crisis. he made the announcement at a meeting with leaders. is the first time since 2017 a u.s. president has taken part in the meeting. biden has met top white house and treasury --for vacancies at the federal reserve. the president has not settled on whether to reappoint chairman powell when his term expires in february. he is considering vice chair positions including a key banking regulator. global news, 24 hours a day, on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: lawmakers flirt legislation could suffer a repeat of the stock trading scandal as to fed officials resign. we will hear from a banking committee chairman. supply chain pain it -- pain.

joe ramsey on the crunch lasting into 2024. that discussion just ahead. this is bloomberg. ♪

♪ haidi: here the stop -- top stories on that supply chain crunch. the biggest retailer is pushing for critical legislation. it says approving the one point $2 trillion infrastructure package and updating shipping laws will see --- homebuyers across the u.s. and canada may face higher costs due to lumber prices. for the auto sector, where carmakers are having the supply

crunch and semi conductors, they saw a reprieve in october when transfer chips posted their smallest gain in nine months. kathleen: this chip crunch comes across all industries and it is around the world. let's discuss with jew way want, associate partner at bain & co.. you must be in big demand with expertise on supply chain. you saw lumber prices going up again and the u.s.. that will affect many people in the world, certainly in north america. the chip shortage is growing but dire. do you think it is really study or do you think we have seen the peak or has there been a long and it will continue to get worse? jue: that is a great question. the chip shortage, there is no quick fix and also this is unlikely to be the last major technology supply chain

disruption that affects all the industries. when we look at it, most of the semi conductor manufacturing abilities around the world have been running hot since last year. and we believe it will be sometime in 2022 when we start to see signs of easing of the constraints. if we look at the earnings of the last two weeks, we will realize the impact is spreading. it was not alone and now you see it is hitting your pc and smartphones and 5g networks and electronics. frankly, all of us should be concerned about our holiday gadgets this year. what that means is that depending on which categories of electronics we are talking about, you could probably see some of the industries continue to see supply shortage throughout 2023 and into 2024. it is not over. kathleen: what needs to be done for the supply to pick up with

the demand? ? isn't? ? it something government can do? jue: to understand what is the reason why it is so hard, building a leading edge semi conductor factory, even if we are just adding capacity to it, it is easily more than a year. that is why i don't no quick fixes. in terms of what people could be doing in a private-sector, it comes on a few things. there is not much. people are building more roads and scouring their supply chains to prioritize where chips go and trying to redirect customers to products where they have supplied. at what is encouraging is the long-term measures we start to see that both the government and private sector. kathleen: --

haidi: i was just going to ask you about the amount of scaling and investment required for a company, let alone a country, to get the leading edge, what is it for competition with china? jue: the competition of china is definitely an interesting topic and there are massive uncertainties around that that come to a few things. number one, on the u.s. side, obviously semi conductor equipment and materials and manufacturing tehcnologies reside in certain countries outside china that heavily rely on that and there is definitely indigenous innovation happening in china. we see a lot of that in the semiconductor design space but a lot of the properties in manufacturing, equipment and materials, they rely on

international. it was going in the direction to be more self-reliant on the china side. haidi: it is not just chips we are talking about but is there an idea that we need an overhaul? how do you make components so specific to be interchangeable and flexible and scaleable? jue: that is a great question. that is what some companies are doing. if you look within a certain sector, a certian company during better than others, that is b ecause their designs are more modular. less customized components that make it easier to swap in and out. another thing companies are doing is that the supply teams play a bigger role in informing the product design.

reducing the number of parts going into a product or informing modularity going into a product. ultimately, externally, to a company, we need industrywide more of the collaboration up and down with supply chains with reserve and capacity so you have it if you need it. also the private sector for investing. kathleen: one of the longer-term effects of this extreme supply chain constraint and chip shortage results in a disse mination of production around the world. we see some chip companies trying to boost their profile higher. still seeing very concentrated in a few spaces. do you see that changing? jue: yes but it will be a long journey because if you look at

the entire semi conductor and hardware value chain, it is highly complex. when you look at the value chain details, that is in our technology report annually. we see the concentration of each value with an entrenched set of suppliers and economies playing a role so as a result, it is extraordinarily costly. it is extremely unlikely for any country or geography to claim to be fully independent and the supply chain. -- in the supply chain. haidi: we have seen another incremental development with the u.s.-china tech rivalry and distrust with the vote to remove licenses from china telecom from operating in the u.s.

jue: that is a good question. i think this is a general theme around what some people saw -- call a company started by u.s. and china but no longer just them. it is all of the eu, japan, and korea, pouring money into developing technology and the supply chain domestically. any further export control for any country put on the table just really further accelerates the past but we have seen that happening for a while. it will not be the last time it happens. there are lots of uncertainties that remain. it is hard to precisely call which company will be put on the list. on the china side, there are uncertainties around the notion of prosperity, clamping down on national champions. it raises questions on how fast it can happen and how much of

the control will be put in place. haidi: associate partner at bain & co.. great to have you with us and appreciate your time. read a lot more about the pain of the supply chains in our newsletter. that is on nitradenl on the terminal. after posting a miss, we have the details on that ahead. this is bloomberg. ♪

♪ kathleen: more on the earnings report. it's dark plunged below its ipo price. the trading platform fell short of estimates and gardens was muted. joining us now so soon.

it's crypto transactions tumble a big part of this. >> a 78% drop that has to do with loader trading activity. you have to keep in mind for perspective the past year importantly the first half of this year was gangbusters for robinhood in terms of the meme stock. it missed out on crypto and a huge clamor for dogecoin. the drop in crypto trading weighing heavily on the stock. it was down 9% at one point. let's talk about the details on the revenue miss. down 78% from the second quarter to $51 million compared to 230 $3 million in the second quarter. a reminder the company says nearly two thirds of crypto revenue was due to does coin transactions. total revenue of 364.9 million dollars miss the estimate. the company said they expect the

seasonal slowdown they are calling this to persist. this is for perspective crypto revenue rose tenfold or 860% on a year-over-year basis. as for fun jenna pounds -- fun -- a slight decline from the end of the prior quarter. monthly active users over 76% on a year-over-year basis but again, quarterly comparisons are tough. the company pointed out they have over one million customers who joined the waiting list for the crypto wallet. very importantly, this latest news is putting the stock price below what it was when the ipo debuted in late july of $38 a share. this latest quarter viewed very much as a test for robinhood in terms of the re-hit tale -- retail trading environment which has cooled down. haidi: speaking in there with

the latest on robinhood. china is urging the evergrande founder to pay his debts with his personal wealth. we discussed the nation's most indebted developer. that is next. this is bloomberg. ♪

♪ haidi: chinese authorities told evergrande billionaire founder to use his personal wealth. regulators are asking others to prepare for bond repayments. let's get the latest from our greater china executive editor, jean-luc. we saw the stories snooping around by the bloomberg team and it appears this is another sign the chinese government does not want to release publicly being involved with any bailout.

at this point of evergrande. jon: that is right. there is a lot of concern in beijing that if the government were to send the bailout in some form of fashion, that would be advocating the borrowing and the sort of debt buildup that has underpinned the problem at the company. this is housing regulators going to push for any solutions other than that if they can get it. the chairman according to the bloomberg billionaire index is worth just shy of 8 billion u.s. dollars at the moment. most of that money coming from the dividends he has collected from evergrande. he has a controlled stake in the company and has collected 8 billion u.s. dollars over the last decade in terms of dividends. we do not know how he has invested or used it but as we can tell, he is worth $7.8 billion. that is not going to be enough for the company.

evergrande has liabilities of $300 billion at this point. haidi: this would come with prosperity and redistribution of wealth. is he responsible for the debt of the company? john: it does. it speaks to the idea also i think of personal liability and responsibility for what the company has done and i think it would be politically hard to digest for beijing to use taxpayer money to bail out the company at this point. we talked about the reasons why they would not want to but with the party coming up with the end of next year, another reason beijing will try to stay involved. haidi: greater china executive avenue -- editor with the latest. let's continue on the latest out of evergrande. china is signaling to investors that the sponsor of the freedom

on china's emerging markets etf. it is personal and economic freedom metrics as primary factors. the founder perth tolle joins us now. this is intriguing, the idea of common prosperity that the wealth redistribution concern and china. we have watched beijing trying to push forward a policy priority and how concerned should investors be? perth: evergrande is a good example of how state-mandated, debt driven growth has led to this problem. it is now blaming the founder and that is a politically expedient move, as you mentioned, with common prosperity and redistribution being a policy priority. in reality, the state-mandated this type of growth and allowed this borrowing to happen. not only that but the accounting standard used on their books in

this company and an debacle he and china and property and other sectors allowed these debts to be seen as assets until it was too late to know the difference. i think that? a it is going to be an endemic problem in the public sector in china and may also flood into other areas like their supply chains, but i think it will remain contained to china. haidi: even with the regulatory risk and the structural slowdown for hcina, we hear more and more ceos saying we cannot ignore the china opportunities. we are still bullish on china in the long-term. are they ignoring what the medium-term levels of pain could be for foreign investors? perth: that is still a common refrain on wall street, the china is a great story that cannot be ignored. that will probably continue

because wall street tends to misunderstand and miscalculate autocracy risk. we have seen the type of shareholder instruction that can take place over the past year and the slowdown of growth in china. if that continues, more of wall street will wake up to the reality, but until that happens, there will be a miscalculation of risk, which is hard to discount the risk of the government being able to turn to a company and nonprofit overnight and as such, this rule by decree. that will be something wall street will continue to encourage investing in china and until that changes, there will be more output to be found in the market. kathleen: what do we see as a beneficiary -- sorry, haidi, go ahead. haidi: who do you see as being the primary any fisheries and asia?

if you try and take exposure of china out of the oem basket, where do you go? perth: i think we are continuing to be bullish on taiwan and south korea. they have a very strong export sector so key exports to world manufacturing and tips and other things. they are leading the charge in the decoupling from china by moving manufacturing out of china into other emerging and developed markets and indonesia also has a lot to benefit from this. they have a very favorable demographic and lower debt ratios to help them be more resilient in a market like this. indonesia, taiwan, and south korea would be our top three choices to decouple from china. kathleen: in terms of china, i want to come back to the question of what is going on with evergrande but broaden it out because some people look at this common prosperity coinciding with politics.

it this is a way to make sure within the party itself, he is reaching out and getting support for people broadly so that the leaders in the party want to support him as well. is it possible if he does keep his power position next year, he could pile this policy back to say i guess maybe we went too far and need the restrictions he has put in? perth: i suppose that is possible. i think the key to what you said is the whole point of this is to consolidate power. the government allowed these companies to operate in this manner and they allowed it for a long time and now, the common prosperity is the buzz word and it is politically popular. they will crackdown on the top founders in billionaires and

innovators in the country. until that becomes not politically expedient for them, it will continue. i don't know if it will change but it is possible for them to do a 180. i do not see that is something that will return. haidi: quickly, -- kathleen: quickly, when you look with your freedom indexes and asia particularly, where is the best place to put money? perth: i think some of the countries like indonesia we discussed are a key beneficiary in markets. vietnam is a key beneficiary. vietnam, mexico, and indonesia are beneficiaries for manufacturing and lower cost items. countries like south korea and taiwan continue to lead the charge in higher cost items in getting the production out of china into other places that -- so they are not only beneficiaries. their leaders of decoupling.

that is where we place our bets. haidi: always a pleasure to talk to you. cofounder of life + liberty indexes. australia has been shaken lately. with china and diplomatic fumbles with france, i spoke with malcolm turnbull and asked about the government's relationship with some of the biggest partners. mr. turnbull: we're in the fringes as far as beijing is concerned and that has been counterproductive from their point of view. the way morrison dealt with france over the summer was terrible. it was shameful and it has caused a huge amount of embarrassment, particularly in washington and over lighted has publicly apologized to macron for the lack of openness and consultation but if you go around doublecrossing people, it

will undermine your reputation for trustworthiness in australia has always had a reputation for being trustworthy but after this debacle with the submarines, you know, that reputation has been seriously touched. it would be disingenuous to say it has not been. haidi: how do you salvage that with beijing? there is an inquiry into the origins of a pandemic. mr. turnbull: i think with beijing, the challenge really is that beijing has to, if you like, they've got to find an exit grant. when morrison said there should be an inquiry into the origins of the wu hand virus, is that arriving -- revolutionary thing to say? this was a manufactured blob.

i do not understand why they overreacted so much. a big part of china's problem internationally is that it takes over fence all the time. can you imagine the americans reacting the way china does every time somebody criticizes the united states? i hope that common sense will prevail. it may take a while but i think china's international standing has been absolutely undermined by their own belligerent approach to foreign relations. when trump was president, there was a real opportunity for china to be as unlike trump as possible, to be consistent, measured,,, -- measured, calm, to be as unlike donald trump as they could be. they have become increasingly trumpian instead.

it did not work for trump and it is not working for beijing either. haidi: that takes me to my last question. australia's role in the regional echo system -- ecosystem. we have spoken about singapore being a middle country with these relationships. is there a role for australia to do that? mr. turnbull: this is our region and we are multicultural society. the countries of this region, china, india, indonesia, are about as all part of the australian family. we are up osma -- cosmopolitan. where part of the region and we have to build stronger ties. we have to see the world less as a series of spokes going into

the imperial capitals and washington in beijing but rather as a mesh. the object of australian diplomacy should need to build the mesh and not simply rely on the alliance for the united states. haidi: that is the interview with former prime minister malcolm turnbull of australia. why inequality as a failure of trickle-down economics is a top issue for japanese voters in this week's election. more just ahead. this is bloomberg. ♪

♪ haidi: you are watching daybreak: asia. i have the headlines. authorities have called evergrande billionaire founder to use his personal wealth to alleviate the debt crisis. it came to after a deadline was missed. local governments are making sure cash is used for housing products and not diverted to pay creditors. the u.s. rowboat telecoms permission to operate in the country. it says it raises national security and law enforcement risk. the commission faced more steps to purge in the name of security. the sec says --

the chairman of the u.s. senate banking committee says it's panel will hold hearings on stock trading for fed officials. the central bank has limited stock funds after a scandal that led officials to resign. legislation is publicly needed to enforce the ban he says. >> these are seven influential people that should not spend their time daytrading, not to mention the conflicts of interest that present in the appearance of conflicts of interest. two fed presidents have resigned as they should have. i think we need to know more and i'm working on legislation i've been putting together for some time. >> singapore is opening to fully vaccinated people who will not have to quarantine. they will take another step toward reopening. it opened travel with 10 other

countries including the u.s., u.k., and germany. travel will start november 15. 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. this is bloomberg. ♪ haidi: counting down to the start of trade in tokyo and seoul. in korea, a central-bank survey conducted this month so's consumer confidence rising. virus cases continue to go test decline and retail sales are down and friday at the third quarter gdp fell short of estimates and uber is teaming up with chest k -- sk telecom to launch a service november 1. let's move to japan. stock holdings among companies reporting erlang's -- earnings. dating a $75 million funding round. sources tell us bain capital,

blackstone, and kkr are among those adding to acquire a japanese software maker. haidi: in japan, the prime minister has made an appeal for neo-capitalism ahead of the general election which he is expected to win. let's break the economy reporter from tokyo. why is inequality turning into a focus point? we see that regionally but in particular, this is a focus going into the upcoming election in japan. correspondent: japan's prime minister appears to have people more aware of covid. economics has had a limited amount of gains. we are not completely breaking away from japan's core economic policies. we need to rethink it with

distribution of profits and particularly recently, he is trying to say -- haidi: it has become a hotter issue around the world, inequality. how much has it worsened in japan? correspondent: if you look at the gini coefficient, which measures inequality, let's say the u.s. or the u.k., it starts from -- it has been creeping up in japan. it is shot cordially -- shock or relief. only 15% of japanese household wealth is in stocks or other investments. on the other hand, it has hit those in more precarious jobs the hardest. last year, household income fell

at a far greater pace the lower your income bracket. it is something we will be thinking about as they had to the polls kathleen: -- polls. kathleen: looking at inequality and japan and what it means for elections. turning away toward greater diversity and equality on wall street has been an important topic. it's >> you're in a war for talent right now so the opposite works to your advantage if you can get out there. >> i would love it if the lgbt aspect was also there. i just don't take it ever was to any meaningful extent who are being displaced or put in a low priority for one of the other aspects. we need to focus on. it all. >>. if you. are not being part of the solution, you are part of the problem so you should invest in it and build your network and spend more time. >> the bigger challenge is

inclusion. it is the retention piece. again, we can have diversity at all times but they have to feel included and connected. the mission of the company into the teams more broadly. haidi: when it comes to quality and working women, they are saying in one way or another, they are failing working women according to various metrics, ranking -- a ranking with toronto on top and sao paulo on last. these do not measure safety, mobility, or parental divisions. sydney coming in second. new york fully behind along with london, particularly when it comes to safety. there is a terrible story about

being abducted and murdered and that was a rallying cry. she was just walking home so this idea that working women not only have to deal with hard feelings but their safety is not guaranteed and a lot of these top financial harms. kathleen: i have to say i think a lot of men would find safety is an issue for them as well and it would be interesting to see how men would score these but we know something like -- you take wealth and childcare. the safety and being able to hop on the subway if you work in the makeshift in new york city and have to go from there and had into the bronx, that has gotten worse post-pandemic. it is auto interesting in the survey, when women in beijing were asked if they have equity, they scored the highest from strongly agree and just agree than any other of the cities that were in this 15-city study bloomberg news did. you know, i guess despite all

the things we cannot say about china and we see going on right now with others, that would seem a plus if the women in that city feel that most of them, a big number feel they have it. haidi: [indiscernible] women leadership is strong in china. probably the bigger issue when it comes to the provisions, you see they're playing out in the demographic side. very few families choosing to have children or have more than one child at the moment in china because of the lack of social welfare and parental support. lots of interesting aspects in that story if you want to take a closer look. or to come on daybreak: asia. this is bloomberg. ♪

♪ kathleen: quick check of the latest headlines. amg has a stronger forecast indicating market gains in's purpose despite tight supply. with $4.5 billion in a forecast, it is on course to see a gain of 65% for the whole of 2021. this eeoc's supply chain strengths weighing on bp shipments continuing into next year. texas instruments first --

forecast met estimates disappointing investors for concern surge in demand of components is slowing. the company said -- chip buyers have been more selective. it is the largest maker of chips and seen as a bellwether for electronics demand. china's tech giants are playing down their legs to non-fundable tokens on concerns they become the next target of regulators. 10 said changing for entities on their platforms, saying they cannot be used for payments and rebuilding profit. although not illegal, they are considered gray area for crypto trading which has been banned. haidi: setting up for other asian markets in the next hour. we have seen signs of a dip as we get into trading when it comes to the cash trading session in japan.

in the meantime, sidney stocks are up .3% and cpi inflation numbers at the bottom of the hour. new zealand is trading and we see downsides with futures trading in tokyo. kospi futures on the back of the shipment demand seeing -- this is bloomberg. ♪

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>> welcome to daybreak asia. i am kathleen hays. haidi: asia's markets have just opened for trade. investors give a mixed reaction on alphabet. in beijing is reluctant to

rescue evergrande, telling the billionaire founder to tap into his own fortune. kathleen: let us not get how things are shaping up. a little bit of a downturn on the nikkei. but a bit of a rally yesterday, so maybe it is not surprising there is less enthusiasm today. the yen is at 114, a little bit stronger. we will see if that changes with the election. korea, we can see that the kospi is a little lower. apparently this is a little bit of a pullback with risk appetite

returning. the currency is looking a little stronger today. so a slow start to the trading day but we will see how this unfolds. haidi: this is how things are playing out with trading in sydney. one quarter of 1% higher when it comes to trading in the duties session. leadership in the rally, nice gains with communication and health care. declines with consumer staples as supply chain woes continue to plague investors. short-term reit -- short-term yields in australia, it is clear traders might expect an inflation surprise.

but keep in mind this tends to be volatile. kiwi stocks are on the back foot this morning. forecasts look gloomy, sitting at a 12 year low but the next is attractive, the strength is being underestimated. joining us from singapore is james thom. do you subscribe to the thesis that we are in the middle of a start of a profit rigid -- profit revision downturn in this part of the world? >> there is undoubtedly short-term pressure and we are seeing downgrades come through and pressure on the margin front.

so short-term, i share the view. but i just think it is important to remember that notwithstanding that, growth will be very healthy this year. even looking at the couple of years beyond this, earnings growth remains healthy. so i think some of this is a short-term lip reflecting -- short-term blip reflecting pressures around china, which will be short-term. haidi: we keep hearing that china remains a big opportunity that cannot be ignored. where do you see the beneficiary , particularly when people talk about the decoupling of china and the u.s.? >> i would not write off china.

at aberdeen, we see adding to china. very stock and tried to sidestep policy headwinds where you can. but long-term i think it is still an attractive investment destination. aside from china, we have seen excellent numbers coming through from india. it is largely decoupled. there are not many connections from an economic standpoint from china and india. so the economy is in the early stages of what could be quite the upswing. there is a rebound from reopening from covid. there is a similar dynamic,

maybe not as robust, but still dynamic from southeast asia. kathleen: japan does not seem to be on your list. they have an election coming up with a new prime minister pretty much already in place. how do you view japan right now? >> a little bit more cautious on demand from my perspective. there are linkages to china, which is impacting companies. personally, i am more focused on india and southeast asia. i think there are areas that remain attractive from a portfolio standpoint, like the hardware sector and anything on

the line with that structural growth trend remains attractive. kathleen: what about automobiles , particularly electric vehicles? >> that is an exciting area. a lot going on. i think in our portfolios we have primarily played this indirectly in the supply chain area, focusing mostly on the battery makers, whether in china or korea, some of the world's leading players. selectively looking at some oems , although it is still relatively early stage to focus on where that will play out. so for the time being, we are playing it indirectly but it is certainly an exciting story. china continues to lead on the electric vehicle revolution in terms of volume and growth. so that is one area where it is

still very positive. kathleen: a lot of the world is more on fire with electronic vehicles after elon musk joins the trillionaire's club. thank you so much, james. let's get to the first word headlines. >> authorities have told evergrande founder to use his personal wealth to alleviate the debt crisis. evergrande missed an additional deadline. local governments are ensuring that company cash is being used to complete unfinished housing projects. the u.s. has revoked china's telecom permission to operate in the country. they say it raises law enforcement and national security risks.

the fcc says they are fast tracking security reviews of some companies. president biden and his administration are reviewing candidates for the chairman of the reserve. he is considering contenders that include a key banking regulator. u.s. experts say the benefit of the covid-19 vaccine for young children exceed the risks. they voted 17-0 two back the immunizations for children five to 11. making this vaccine available to young children would make -- would mark a major milestone in

the pandemic. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: ubs says they are going full bowl on china despite regulatory crackdown. he will talk with the ceo. up next, we break down a big day of tech earnings. alphabet is getting mixed reviews from investors. this is bloomberg. ♪

kathleen: big tech earnings are in major focus of the markets. alphabet be estimates but we saw lackluster growth in youtube cloud division. let's get to ed ludlow on the west coast.

what are the key takeaways from alphabet and microsoft? >> alphabet was strong. weakness in youtube. the reason investors are more tepid is china spent a lot of money and time investing on youtube and cloud in order to diversify from the search business. the search business is strong. think about the economy reopening. there is demand for travel, retail, and adds. but that will not last forever and things will normalize and they cannot rely on it. microsoft, really strong growth in that cloud business and cloud software. strong demand from businesses upgrading, paying microsoft for

the software. also interest in hardware, personal computing. there are supply chain constraints throughout the pandemic. haidi: we talk about tech being a potential inflation hedge. >> and they fought supply chain constraints but they also saw the opportunity. evidence that small and medium businesses are spending on software to make sure that the supply chain issues do not happen again. on the google side, they have direct supply chains and launched a pixel six in time for the holidays. it is seeing strong demands but subject to the supply chain constraints. google is seeing softness from

carmakers who have limited inventory. why spend money on cars that you cannot sell right now because the supply chain is shut down? so we are seeing these constraints globally. haidi: in terms of what to expect from amazon and apple? >> ultimate supply chain watches. a production of 10 million units , but they cannot get some key components from the likes of texas instrument. so it is about containers. the whole business is based on moving finished product from one part of the world to another. steve cook has talked about how -- tim cook has talked about how unhappy he has with how much apple had to pay. a lot of money has been moved

out of china. and we are going into the holiday season. it's not just a higher cost, but about if they will be able to actually get products on the shelves in time for consumers. haidi: four robinhood, as well. -- for robinhood, as well. growth will probably not be a linear story. >> this is the story of the retail investor. the success of robinhood is because of what happened in the beginning of the pandemic. there was a drop in training that impacted the company's top line.

down 78% from the prior quarter. people are going back to normal. they are not at home all day, spending time on their phone, trading with equities and cryptocurrency. that is part of what they have seen with that platform. kathleen: and a lot of old-timers are saying, i told you so. [laughter] great report as always from ed ludlow. up next, as global leaders head to the summit in scotland, we will hear about how a navy lacks ambition. we talk with malcolm turnbull.

haidi: malcolm turnbull says the

fossil fuel industry and climate change deniers have held back progress on tackling pollution. australia has embraced a 2015 -- 2050 net zero emissions goal. >> morrison has said he projects our reduction is on track to be 35% but will not make any commitment. so the new south wales energy ministry said if you are not prepared to make a commitment, it either suggest you do not have confidence in your projections or you are not taking global warming seriously. most major economies in the world have committed net zero by 2050 but we have to have more action and the sooner, and that is what glasgow is about. haidi: another round of

fractious debate and horsetrading. what does that say about the environment for coming to an agreement? is the hurdle to climate change a vested interest in australia? >> is political. vested interest in coal and gas. fossil fuels are the income. it is likely politics, crazy science denying right wing politics, and the right wing media, mostly own learned that schmidt -- mostly owned by rupert murdoch. haidi: what stopped you from being more ambitious on climate when you were in office? >> the political debate in some ways has become more irrational.

i got as much done as i could but i had ferocious political position from my own wing of the party. it is holding us back. haidi: what do you see is the prospect of major meaningful agreements being struck? >> the concern is there is now widespread agreement that we have to cut emissions, but the question now is how and when. the message we have to get across is that we have the means to do it. you hear people say that we need new technology. new and better technology is always welcome, but we absolutely have the means to do it. we have the means to have

plentiful energy, zero emissions, affordably. that is the big change. haidi: what does it mean for the standing and reputation for australia with what has been announced today? >> everyone will be polite and smile, but he will not be received rapturously. everyone has been encouraging australia to have greater ambition for that 2030 target, and we screwed that up. kathleen: that was the former prime minister talking with haidi about australia's climate ambitions. the president of china, the world's top polluter, is skipping talks in glasgow as he focuses on the meetings at home

where his fate as leader will be tested. dan, set the stage for us. a lot of other leaders have opted out. but it seems to me that the story is how important the next few months are for the leader. he wants to remain the leader and he has to make sure he has all the top leaders in the party behind him. what is he doing? >> he hasn't left china basically since the pandemic broke out two years ago. china has a covid zero policy. they are very politically invested in making sure there are no cases at all. so that is a key reason for his case to stay in power, along with the regulatory crackdown we have seen recently.

the beginning of next month is one of the biggest party meetings of the year. then you have the winter olympics coming up. and then later next year, the party congress, which is the once in five years leadership reshuffle that will determine if she's gets a third term in office -- determine if president xi jinping gets a third term in office. the economy, rises in prices and inflation in china and a downturn in growth, lots of people losing property investments and their savings, a lack of heating because of the

energy crisis, there are a bunch of things going on in china. so concerned leaders from a domestic standpoint. the president has had elevated power over the past 10 years and does not look to have any real opposition with the party. although there are always things lurking under the surface that always pop up ahead of these big meanings. i do not know if we will see anything like that in the next few months or year, it remains to be seen. but right now, he looks to be well on his way for an extension of power in china. haidi: let's get a quick check of the business headlines. and alibaba that retailer has

reached out to prospective buyers to gauge interest and could seek 800 million. the holding company had run into financial troubles and struggled with debt payments. a business enterprise value is thought to be at least $1.9 billion. potential suitors include blackrock and kkr. shares in draftkings jumped after an offer of cash in stock. next, a look at china's economy.

some of the stresses previewing out in the next hour. hui shan

haidi: cpi number is out of australia. a stay on expectations when it comes to quarter on quarter, 8/10 of 1%. year on year, a little stronger

at 2.1%. the weighted quarter on quarter number, 7/10 of 1%. we have seen some dramatic moves in the three year, sparking expectations it would hit levels that would attract intervention. you can see the reaction when it comes to the three year yield. we will give the markets some time to process this. but not the standout that perhaps traders were taking on -- banking on. kathleen: third quarter gdp slowed with many economists

downgrading their fourth-quarter outlook. let's talk with the chief china economist at goldman sachs. do you feel that the fourth quarter will fall short, 3% or 4% instead of 5%, and will it continue into next year? >> we are having high upstream community prices. there are questions about how that impacts margins and profits. because of anemic growth the first three quarters, fourth-quarter, we are cracked -- we are forecasting 3.1%. next year, the key message is there is no need to be too pessimistic.

we think policy makers will address and react like they did with that property market, reassuring the evergrande risk is contained for the entire property market. or energy market where they -- energy crisis when they came out and said increasing coproduction is the top priority. they will do enough not to overdo it. so we forecast next year the gdp growth to be 5.2%. kathleen: so far it looks like risks are contained, but there is a story on the bloomberg putting out that the economic gap between the eastern and western parts of china widened during the crackdown. how do you see this playing out? is it of concern? >> i think covid exacerbated a lot of disparity across the

region, sectors, and different income levels. that is not unique to china. the regional divergence, you are seeing the pandemic and subsequent gradual recovery is impacting the service industry much more than other sectors. so i think there is a disparity and divergence that might be here for some time. haidi: the property market is one key area of concern, not just because of the size, but the 40 plus industries that rely on it and are interconnected. is there a says there -- since there is good regulatory handling over how a slowdown would play out? >> you are right. the property market has many linkages to the real economy

like the construction sector and aluminum and cement and everything that goes into building a house. it is also related to local government revenue, part of that revenue comes from land sales. then consumption linkages, when people move into a new apartment, they buy furniture and home appliances. so it is linked to consumption as well. so everything added up together, we think the markedly -- the market share of gdp would be significant. the question of if the government is able to manage the gradual slow down or if we are facing a hard landing, our expectation is the government will handle it. we did a deep dive in terms of

underlying demands. they move gradually, not job off the cliff suddenly. so it is really credit supply that dictates the speed of slow down and we think of the government can manage the credit part well, it will be a soft landing and slow down. haidi: when it comes to the inflation debate, we have talked a lot about exported inflation out of china but i find it quite industry that -- interesting that there is minimal exported inflation. what does this mean for domestic producers? >> when we look at the data, the pass-through from producer price

to consumer price is smaller. so external demand is still stronger than domestic demand. looking at all major indicators, the only strong point is steel export. kathleen: for the chinese central bank, inflation is not a concern. people are seeing that the cpi is very low but the ppi has heated up. what do you see for china? >> it is very different stabfl -- stagflation from the 70's.

it is policy driven. thinking about energy controls and property sectors, it's something the government has been trying to do. on the inflation part, is contained in the ppi sector but the cpi is muted. what is the pboc reacting to, a very high ppi and potentially they are also watching the financial risk of asset prices. so which price matters to them, i think they have a balancing job to do and currently through the central bank communication, it sounds like they are on hold because of crosscurrents and coming back to the divergent nature of the economy, it is hard to have a broad-based instrument address all of the structural issues.

haidi: do you think the pboc is comfortable with the levels they are seeing for the yuan? how could things potentially change if trade outlook changes? >> we have not seen any communication from the pboc expressing discomfort. right now i think there is a strong trade surplus is playing an important role. the central bank want a two way market and do not want to see expectations only go in one direction. if we saw expectation shift in just one direction and it appreciates much faster, i think the pboc would communicate with the market and corrects the expectation. on the trade front, there is some expectation or assumption

of being a given, which would be positive. so near term, the trade flow picture has not changed. haidi: let's get over to rosalind chin in hong kong for the headlines. >> china has released their official road mark four their net zero emissions goal. new plans for sectors including oil refining. bidens pledge to provide southeast asia with funding to fight the pandemic and tackle the climate crisis. he made the announcement and

spoke with both sides of the region. it is the first time since 2017 that a united states has taken talks for that meeting. >> these are seven very influential people that should not be spending their time daytrading, not to mention the appearance of conflicts. to -- two fed presidents have resigned, as they should have. i need to know more and i am working on legislation i have been putting together for some time. global news 24 hours a day, powered by more than 2700 journalists -- some time. >> global news 24 hours a day,

powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. kathleen: next, ralph hamer tells us why he is full bowl on china. this is bloomberg. ♪

haidi: let's check the markets trading at the moment. australian cpi beating

expectations and traders running away with it, the three year yield but -- yield jumping three basis points, leading the way for an earlier than expected trade increase. nikkei 225 trading a little softer, 4/10 of 1%. kospi off by half a percent. sidney equities, down 2/10 of 1%, giving back some earlier gains. another down day in new zealand, off by 2/10 of 1%. and we are looking ahead to china industrial production numbers to see how that picture is shaping up. kathleen: china is set to have a tax reform.

let's bring in senior editor janet peskin. how much of a role will these taxes play in narrowing china's wealth gap? >> we are waiting to find out. top government officials for years have been talking about different kinds of taxes that would help create more equality. property tax, for example, to stabilize runaway housing market. or an inheritance tax to interrupt the general wealth transfer, especially in recent years when the people at the top of china's wealth, when that number has exploded. but beijing hasn't been able to do much on these fronts. haidi: it is interesting why it has not been done previously. thinking about the policymaking ability, to act top down quickly and efficiently. so why hasn't it happened before? >> i find it interesting.

when it comes to things like crushing political protesters in hong kong or responding to u.s. sanctions, chinese lawmakers move very quickly. taxes are harder. they are just as unpopular in china as they are everyone else -- everywhere else. and even though there is no official opposition to the communist party, leaders still need political support. kathleen: has there been progress? >> there has been a half step. china has been talking about a national property tax for almost 20 years. there is a ton of opposition. governments get a lot of revenue from land sales. most chinese have 70% of their assets tied up in real estate. so they are protective of property values and there is a year that any excessive property

tax would affect the market. so the government announced they would implement a series of local programs. but beijing is going to have to wait. haidi: [indiscernible] spoke about his outlook for inflation. >> one side you see risk, the other side you see investors assessments. to be a little careful around the inflation numbers coming up and then seeing how to best protect wealth against inflation. manus: where do you see inflation topping out? >> looking at underlying

factors, it is supply chain pickups and some friction in the labor markets. we expect consumer spending to move from goods to services. that will lift some tension. but we also feel the supply chain is up and running again, the modern -- model will be lower for those goods and inflation will come down. manus: china, the evergrande exposure is immaterial. has the worst past in china with evergrande? >> they just announced a move to common prosperity.

so i think there are probably more policy changes coming through. this time it was around property market and it will be around health care and about social welfare in terms of unemployment benefits, building a pension system, etc., but i think more changes will be coming to the market. they will be incremental. they will have negative effects and very positive effects. so we have been committed to the mark for a long time and we see it strategically. manus: are you full bull on china? >> strategically, absolutely. who can't be? we know the country very well and are very successful in the business. we have a good combination of

wealth, i.b., and assess management business, and we plan to invest more. kathleen: next, the world's biggest electric vehicle battery maker is set to report earnings later. we will get you a preview of the numbers. this is bloomberg. ♪

haidi: a quick check of the headlines. twitter reported third-quarter sales in line with estimates. a sign that the advertising business is weathering the data collection. tracking changes will almost -- only have a modest impact on sales. twitter depends on brand advertising, which requires less personal targeting than facebook or tiktok. fourth quarter revenue forecast to $4.5 billion and now on a sales gain of 65% for 2021. the ceo leader expects to see supply chain constraints continue for the first half of next year. texas instrument forecast the fourth quarter, disappointing

investors for the surge in electronic components is starting to slow. demand for the fourth quarter has receded, with chip buyers becoming more selective. texas instruments is seen as a bellwether for tech not -- championship demands. kathleen: let's get a preview about why we should watch margins and price hikes in ctl upcoming earnings? >> the biggest -- see atl is the biggest -- catl is the biggest in the world.

margins will remain consistent with estimates. [indiscernible] bloomberg intelligence -- it might ease a bit, but [indiscernible] wide margins have been declining. it has not stop them from rising to a record high. i think stop has more than quadrupled. haidi: we saw asia related stocks jumping this week, despite the purchase of 100,000

tesla. >> catl is one of the biggest suppliers for tesla, as well. so gross record highs. it was the single largest purchase ever and puts the focus of the world on the electronic transportation sector there -- sector. so it is just happening at a rapid pace and that bodes well for the sector. if people are making cars, they are making electric cars.

look how there were a lot of telephone makers and then smartphones came. and now there are just a few, like apple. so the companies like apple will remain and there will be a lot of placement demand. this further strengthens investment [indiscernible] haidi: let's take a look at the asian equity trading session. a fluctuating week more broadly even as we saw a record close of the s&p 500. all action arguably is on the bond market for australia. april 2024 year old hitting the

highest since we saw the covid control and we have had intervention at these levels a few days ago. continuing to watch that. coming up, we will bring in william barr to talk about opportunities in covid's -- in china is prosperity. ♪

>> welcome to "bloomberg markets: china open", i am yvonne man. david: good morning. washington darling up tensions with vision, bedding chinese tele, from the u.s. market. yvonne: ever grants founder told to dig into his own dutch evergrande's founder told to dig into his ownts