shery: you are watching daybreak asia coming to you live from sydney, new york, and hong kong. haidi: the top stories this hour, protests against covid control spread in china with some people in shanghai calling on xi jinping to step down. as you opens for trading, the dollar is higher, oil is facing downward pressures. >> this stage is set for a more contentious presidential race in 2024 after the taiwanese president suffers historic losses in elections. shery: we saw little to no change in the previous friday session, a shortened trading session. we are seeing a little bit of pressure at the open in the asian session. of the s&p 500 in the futures,

this is after gaining 1.5% last week. the narrative turned into a less aggressive central bank tightening and we were watching what black friday will be and we have cyber monday coming up. we are watching those results this week. more fed speaking from chair powell and this is as we see favorite rallies last week. we are watching what is happening with oil prices and the expectations as well because we have the biden administration saying that chevron can resume oil production in venezuela. crude is still under pressure after falling down to $80 a barrel level. a change for prices at $84. we have seen venezuela production rebounding but this could actually lead to oil production tripling in the

country. what that means for the global oil markets? annabelle: you have concerns around the demand outlook as well given especially what is happening in china at the moment. we are continuing to monitor the spreading lockdowns in the country but today the focus is on the demonstrations that are happening in reaction. how that is playing out in the session and we are keeping a close eye on the commodity linked currencies. aussie stocks as well or online and we have seen four straight days of gains. this is to the down side and a move higher we have seen in the treasury or bond yields in australia as well. the risk of trading in the session. take a look across the session because it is down to what is happening in china and the concern over how beijing will respond to these protests and given that uncertainty around that we are continuing to see them move into the safe havens

of the offshore yuan looking a bit weaker. futures pointing to a drop at the start. haidi: let us get more on the covid china protests. let us bring in our chief asia economics reporter and a live interpreter. i will start off with you, they were saying how it is not unusual to see isolated protests in china from time to time. the fact this is happening in capital cities and a lot of the anger is directed at xi jinping is pretty unusual? >> this is different in that it is a coordinated or apparently nationwide view. what started it is individuals and pushing back after a

fire, peaceful vigils going into wider protests of people not wanting to be taken away and people pushing back against covid workers. in some cases pushing down testing boost in various cities. university students involved. this is spreading across different parts of society. it does show no signs of abating. it is dependent on how the authorities playthings next. shery: it is interesting to see some of those videos, people holding sheets of white paper, indicating that chinese people and sensors are battling it out. that silence speaks louder than words. tell us what is happening on that front? >> it has been incredible how this has been played out not only on the streets but online

as well and what is considered to be the most heavily censored online in the world. they have had to be creative, you have been people -- been seeing people putting repetitive words on social media like shanghai with a strong protest on saturday. it is censored online. you have seen college students at the university holding up an equation as reference to opening up. people are angry and they are getting very creative when it comes to showing their support. what looks like early movement. haidi: we continue to see the economic far back as the economy continues to worsen. another rrr, the effectiveness of policy is starting to wear

week? >> our own indicators from bloomberg has a reading of three constructions, we see weakness across the board, weaknesses in services, small businesses are being hit, people are taking less flights, car sales are down. production is getting hit. weakness is across the board. 20% of china's economic activity is being hit by the ongoing covid restrictions and everything associated with that. as you mentioned on the policy side, they are pulling levers. it comes back to how to navigate covid zero and that is what is surprising consumer demand. that is obviously critical in how china's economy plays out in coming months. shery: despite all of the monetary policy action, what

else can policymakers do? >> this was the ratio which makes it easier for banks to lend. their is no appetite for borrowing in china. there is no shortage of credit already. is it argue this will not come from the monetary policy side of things. there is a story going on and that is a huge part of the slowdown and the authorities can play a role there. the crocks of the consumer sentiment story is in terms of what is going on activity from calvo to production and it is all about covid zero and the coming weeks or months will be critical tests for the covid zero policy and how it impacts the economy too. haidi: how much of this is a test for markets as well?

the dollar and the risk currencies seeing weakness as well? >> i think it is a major test for risk assets because china's reopening hopes on the back of the new people who came in after the third congress, xi jinping's third term. they made some statements that were taken as signaling, a more relaxed attitude towards how covid zero policies which had been such a weight on china's economy and risk assets in general, especially in asia. we have this flowering of hope that reopening was coming and china's economy would get going. that would lift one of the things that have been holding risk assets back. those hopes are being shredded and we are facing an even murkier situation.

at this date, even if they were to -- state, even if they were to relax, while that mean an acceleration of what is already a major outbreak? in a lot of political uncertainty at a time when people have been starting to think that xi jinping has his third term and his people are in place. we can expect him to take some concrete actions and be willing to do some things that he may have not been willing to before that would have taken as a positive. they were being taken as a potential positive by investors that is one light of what is a two laggard risk --legged risk sentiment. shery: we are seeing a reaction from the china news.

what will be the main driver? when you have u.s. jobs and more fed speak including chair powell? >> i think it has potential to be, if they china still was not going on, there is potential for it to be a rough week because it has been such a good month. bloomberg's global ag is heading for the best monthly gain since december 2008. we also have a bit of the 6% gain. it has been an excellent month for investors and going into jobs and cpi and we get the fed decision, there would be the temptation to take the table anyway. that temptation will be ramped up. we make it a fair bit of volatility this week. going forward, what happens with jobs and with fed speak, what happens with a range of other

risks with the whole russian oil cap situation and the winter over there and what is going over the war, those are areas where investors have been looking for positive outcomes. and we do get those positive outcomes, the china turmoil provided it does not get too bad will be set for one side. the way that the crypto winter has been set to one side. it has not been the main gain. the main gain is what our central banks doing? shery: garfield reynolds, emma o'brien, and enna with are the stories. vonnie: taiwan's ruling party has had the worst showing in local elections. they held onto 13 seats. it set the stage for a more contentious presidential race in 2024 focusing on rising tensions

with china. the president quit as the dpp head to account for the losses. sec pans sales a while and the that products -- the fcc pans sales of huawei and zte products. this began with president donald trump and has continued under the biden administration. european union diplomats resume talks on monday on capping russian oil prices. poland and the baltic states have rejected a proposal that was too generous to moscow. poland is demanding a dimensional -- additional sanctions and a price below the market level. positions remain entrenched. the biden administration has granted chevron to resume oil production in venezuela after the talks with the clinical

factions on saturday with humanitarian spending plans. new drilling is authorized, chevron will be able to repair and maintenance oil fields. u.s. sanctions halted all oil production years ago. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. haidi: we are asking a former professor to see if this could spare any change in the central bank. our next guest says the appetite remaining week, katrina ell is joining us. this is bloomberg. ♪

shery: you are watching daybreak asia. jay powell speaks to the brookings institution and is likely to remind markets that policymakers are not about to pivot from monetary tightening. will get the u.s. top figures -- we will get the u.s. job figures. korea downshifts to a more normal pace of tightening. we will get the gdp numbers and the job numbers on friday. u.s. -- cdp numbers on tuesday and pmi's are coming from china on wednesday. a busy week ahead. haidi: a busy week ahead indeed.

so much focus on china with the ongoing protests. we had the guts to reserve ratios as we saw the protests against covid zero breakout across series -- cities. 20 us is katrina ell, a senior analyst at moody's analytics -- joining as is katrina ell a senior analyst at moody's analytics. >> the fact is that the pboc and fiscal policy as well has been supported in china for quite some time. we are seeing the domestic headwinds in china are significant. stabilization from a domestic demand point of view remains elusive because of the ongoing threat. was a reproduction of movement

controls around major cities. october and november were difficult months for china. we saw that ongoing fiscal and monetary stimulus was being released during those times as well. as long as we are seeing the ongoing covid zero policy, we will not see much of a stabilization and domestic demand unless the government really moves away from its targeted approach and really introduces significant stimulus and i do not think that will be forthcoming anytime soon. haidi: at what point does the fiscal pressure start to come into the picture? there is pressure because of sustaining covid zero, will not be a theme going into next year? katrina: china has benefited from a 80 supported export -- a

d supported export environment. that channel of growth will really wane next year which is going to dampen and hurt china's growth prospects as the domestic headwinds remain. we see that the zero covid policy continues next year and that the exports will weaken as well. it is a double whammy of challenges that china will be experiencing next year. more so than what they did this year. shery: hong kong has its own set of challenges with the hong kong dollar peg to the greenback as the fed gives hiking rates. katrina: we are watching very closely and it is happening as we are seeing if u.s. dollar strength which is being impacted on currencies around the world. in hong kong, the u.s. dollar

strength is coming as the economy is still struggling to reopen and move back the covid curves. higher borrowing costs and higher and tighter liquidity conditions as well in hong kong. as a result of that maintenance of the peg it is an additional headwind for hong kong. there have been other periods of dollar strength that has challenged the peg in the past and i did not see that will be enough to trigger the hkmoa to move away because it does offer broader financial community. hong kong is a huge trading hub and the peg is a huge anchor point for an attractive a rea. shery: many investors are betting against it. when it comes to central bank

tightening, we have another decision from thailand. they have been one of the more dovish in the region. what are we expecting? katrina: we expect they forge ahead with a 25 basis point hike. as you say, the bank of thailand has been dragging its feet when it comes to policy tightening. we have seen that the central bank has emphasized the temporary supply-side nature of inflation. that is coming back to the fact that domestic demand in thailand is due to the demand side pressures. they do not want to stifle the recovery and domestic demand just yet by tightening policy settings too quickly. they are only really starting to reopen international tourism now which will be a critical support for household consumption heading into next year. they are the real dovish central bank of asia pacific at this point. haidi: as we get into cyber

monday deals, we are watching out for australia at retail sales. what is your gauge of retail sentiment going into the holiday season here? katrina: what we are seeing is there is a disconnect between the nominal retail sales and the underlying stripping out of the price pressures. if we are looking at nominal retail sales we are seeing that they are forming strongly and that is a reflection of the higher prices for essential goods like food and energy. if we just look at the volumes data it is still expanding but it is expanding at a softer rate. we are seeing the households pulling back a bit on consumption. we will likely see a weaker christmas spending period than what we saw it last year when it comes to volume. we are also including the price effects, it will be a decent figure.

shery: what we see that in the u.s. as well? we had as a dental evidence that black friday and going into cyber monday that the traffic was a bit more muted? katrina: what we are seeing in the u.s. is about the impact of the fed's aggressive tightening cycle is starting to materialize. what we are seeing is that the financial market impact of fed tightening has already come into play. it is taking time for the tightening cycle to only manifest in the u.s. the labor market has eased a bit, and insurance publications for insurance benefits has picked up. as a result of that, households are getting even more worried and they are pulling back on spending and that is reflecting in the consumption figures that will head into the pollinate season -- holiday season.

shery: you can get a round up of all of these stories that you need to know to get your day going in today's addition of dayb . you can customize your settings you get the news and the assets that you care about. this is bloomberg. ♪

haidi: quick check of the headlines. twitter is hiring according to elon musk. the first slide said we are recruiting with no further details. his restructuring cut the headcount in half. he said twitter had more than one million monthly users in 12-18 months. a food delivery giant in china saw a jump in sales thanks to

surging demand due to covid restrictions. the prophet is after two years of losses. shery: taiwan is set for more contentious presidential race following a big local election loss for the president's party. we are live in taipei in a moment. this is bloomberg. ♪

haidi: i want to sit for a more

contentious residential race focused on rising tensions with beijing after local elections -- taiwan is set for a more contentious presidential race focus on rising tensions with beijing over local elections. this is a pretty shocking result? >> this was a landslide victory. we have to put this into perspective, these are local elections, voting for the mayors and the leaders of the counties across taiwan. it was important for the kmt to regain ground after they lost the last election. back in 2019. this was what happened this weekend, a precursor to the next presidential election where they have to have a leader step down because of term limits. there is more than a year for the kmt to build on the strength

of these election results, they are taking four out of the six top mayor ships. that is a big thing in the more populous northern part of taiwan including taipei and new taipei city. it was good on a local issue level and the economy. the presidential election will likely be focused more on security issues and relations with beijing. the kmt is celebrating. the president has resigned as the chairwoman of the party and says she will take responsibility for the loss which was bigger than expected. all eyes are on the early part of 2024 for the presidential election. we do not know who the candidates will be. shery: what are the implications for 2024? four relations with beijing and

washington as well? >> i think this election was about the local issues and less about the taiwanese peoples' desire for the status quo across the straight. and nothing that is the election results we are wanting to change, the relationship with beijing. and was the misery index and inflation and joblessness in taiwan. there are some local acute issues here. going forward there will be more emphasis on the straight. i saw it in taipei times, these results when they landslide victory is not likely to affect the 2024 result according to the taipei times. right next to it is also a story about the protest spreading across china. that is something that the

people here in taipei from what i have witnessed, they are watching very closely. keep in mind in 2019 when there were protests on the street of hong kong, the president was losing polling head of the presidential election. until they solidarity effect on what happened in hong kong really lifted and gave some under the wings of the president and she won reelection. it will be interesting to see how this will play out in china with protests in different cities. taiwan is watching what is across the straight. haidi: let us get to the first word headlines? vonnie: china's central bank has for the second time asked for money to hold and reserve. this is a continued property turned out. the bank reduced the reserve

requirement ratio for most banks by 25 basis points. this takes effect on december 5 and it will inject liquidity. macau's casino operators have acquired new ratio license. many failed entry into the gaming hub. the decision to eliminate uncertainty and a crackdown on highrollers. the turkish president says he will meet with egypt's sisi asked her -- after they exchanged a handshake at the world cup. turkey and egypt or also on opposite sides of the conflict. global news 24 hours a day, on-air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

♪ haidi: more on the protests in china. shery: is spread to more cities on sunday. we are saying the most confidential -- confrontational china since tiananmen square. professor, you know the subject very well considering how you helped edit the kingman square papers. to the protests -- tiananmen square protests, do the protests help? >> the protests were idealistic, too bad they ended in a massacre. there is a hope in saying nationwide protest of the deaths in a city. those two have to be viewed as vicariously experienced all over

the country. when the students come to the streets in shanghai to protest, it is not because they have friends or care that much about the city, it is about they and everywhere in china people have their own frustrations and went something like this comes out it is a way to express them vicariously. shery: we have been talking about how these protests are not uncommon, there are protests, from all over china from time to time. this is more organized, this seems to be a bit more systematic. do you agree? >> almost. there are protests all over china, according to the ministry of public security. there are a dozen or so every day. strikes and roadblocks and sit ins. they were not politically labeled in the same way that this is.

they are not confrontational with a central authority as this one is. you are right, this one does spread, it is important to note that it does spread. people in shanghai and guangzhou and beijing, all our as they were singing the same song. that has not really happened since 1989 with those protests. haidi: it is not that we are talking about oscars are isolated event as you said, these are network protests in places like in the core of the major cities. downtown shanghai, the middle of beijing. what is interesting to me is a lot of the anger is directed as xi jinping himself. how does that personalized anger informed the way that he under the leadership -- that he and the leadership response?

>> he is the one who has insisted on what he calls the zero tolerance approach to controlling covid. that is what led to the tragic fire in the city and that led to frustrations in shanghai and in other places recently. his personal prestige is at stake in maintaining this zero-tolerance policy. more flexible leader in a more democratic system may be able to back off and say that policy is wrong and let us try another policy and not lose power. in a system like china's, when he admits he made a mistake and loose his face, his own political career is at stake. he may actually lose power. he is not nearly as secure as

his meetings would lead you to believe. he has to worry about bibles who would look for a mistake that he makes in order to pull him down from power -- libels who would look for a mistake that he makes to pull him down from power. haidi: china has an agreement with the citizens to have his health care capacity fully built out, what went wrong? the property market is failing and economic growth installment and the standard of living that is being interchanged is also being curtailed? >> yes. you analyze it very well and i am not sure that social contract is the right word in that sense of the people and the leader have a contract implicitly?

it really is an authoritarian system where the people below need to worry if they are going to be punished if they step out of line. the experience of covid is very interesting because when we first came out of china, it was controlled by a crackdown that said everybody stay in place. the propaganda machine in china was comforting the fact that authoritarianism works and we have to stop covid whereas you and italy which was very avirulent at that time and the united states, they have lost out. our system is better? because of the west, more effective vaccines have come

into play. the chinese vaccine has never been as effective. if people are vaccinated or not in china, does it make that big of a difference and not many are vaccinated! especially among the elderly and vulnerable. by now, this story of how authority was superior -- authoritarianism was superior has backfired and it looks like it is worse than the overseas experience. shery: i do expect the term i want to translate into how xi jinping out of the communist party deal with the -- do you expect the term into how xi jinping and the communist party deals with this? against washington and taiwan? >> i do hope that does not happen but it could. that is when an authoritarian

ruler who is not as secure as he pretends to be comes under pressure suddenly. when it is nationwide pressure and heart to control pressure, one -- hard to control pressure, one tool is to attack. it would mobilize public opinion in another direction. it could happen. your question is excellent! haidi: the university of riverside's in which professor perry with us. we ask sayuri shirai if inflation could hit 4% and whether that would spur any policy change from the central bank. this is bloomberg. ♪

haidi: it is time for japan ahead, we will be getting retail sales for october and on wednesday we are getting the industrial production and housing status as well, capital spending jumped 6.3% from a year earlier.

where getting confirmation of that on thursday with the latest manufacturing pmi's and on friday the bank of japan will be talking about the monetary base after october. the currency in circulation and strength by 7%. shery: are next guest says flexibility is key for the bank of japan as it places -- faces a inflationary environment. we have the professor sayuri shirai from keio university. you are not necessarily talking about the 10-year yield target, it is about the product monetary policy. explained to us by being flexible is important here -- explain to us why being flexible is important here? sayuri: japan has transformed as monetary easing to the target. it was complicated because a lot of things are at stake. i think the first thing that they need to do is have a comprehensive review about the

monetary policy and then i think also they need to have a neutral interest rate. make it clear about the neutral rate which was shown in the interest rate. i think they can figure out what would be proper, the target target range. i think having a more flexible monetary policy in the business cycle is good for the japanese economy and they have to pay more attention to the market participant. shery: they do not think this is sustainable. you expecting inflation to touch on one point, maybe even 4%. sayuri: i think in november and

december inflation may it to close to 4%. japan's underlying inflation is very low. if you look at inflation excluding energy and all food not just fresh food, inflation is 1.1%. i think from this perspective inflation is low. i agree with that. with what they are saying. haidi: 4% is not meaning it is a magic number for any move from governor kuroda? what do you see when it comes to wage gains? sayuri: next year we see a decline in inflation to 2%. in the meanwhile, the nominal is picking up 2%. it is merely dropping sharply, inflation starts to go down and

i hope that the weight picks up. haidi: how much does the yen dampen the outlook for next year as well? we see weakening demand and the export is taking full advantage of the weaker currency? sayuri: at this moment, the end date is inhibiting influence by the u.s. and particularly the u.s. index as well as japan's deficit. this trade deficit and in the u.s. are two main factors, we see decline in u.s. interest rates next year. we may see some upward movement of the japanese yen. it is possible that japan's

trade deficit stays next year. how much our yen stays depends on the deficit. shery: when we think about a week or japanese yen, we think it is going to benefit exporters. when does this become a problem? sayuri: in the case of the japanese case, the yen contributes to the prophet of the manufacturing sector but it does not mean it does not increase in the volume of exports. it tends to increase the profitability. i think that is happening now. at the same time, this community in material prices are building higher and semiconductors.

it is true that the decision contributed to the higher profitability of the manufacturing sector. we have to look at the sector because of higher imported costs. they face the low profitability because it is difficult for them to pass along the increased production costs on their prices. haidi: to expect a change of leadership in monetary policy direction? is there a change of inconsistent policy being applied? sayuri: i believe that japan's rate is really low. because of that, i think the bank of japan will maintain the low interest rate so i do not expect a huge change from current monetary policy framework.

i think more important things are flexibility and keeping to the institution in this chance. i think this is good for japan and the japanese financial center, they go to tokyo, the financial center, i think we have to also pay attention to the function of the market. i want to emphasize flexibility, and changing the framework completely. haidi: is always great to have you with us, the professor of economics at keio university. stay with us for more key interviews on japan ahead, that is every monday, sunday if you are watching in new york. taking a look at some of the financials in japan. annabelle: quick check here, we were just discussing that there

is no expectation for the bank of japan to change while corona is at the helm -- while kuroda is at the helm. you see faang stocks climbing 21% in japan year to date, compare that to the world bank index down 12%. taking a look at the equities picture, we are 10 minutes away from the opening in japan and so far we are seeing for a week, no change on it. all down to covid protests in china against the expanding restrictions and that is the state of play. you can see by the commodity link also off around .9%. this is bloomberg. ♪

shery: saudi aramco's refining unit is going on the saudi stock exchange, the move could raise $1 billion. it is planning to sell 50 billion chairs or nearly 30% stake -- 50 million shares or nearly 30% stake. rb i asked to -- rbi asked do

not on death death merchants and add to the group. haidi: these are the stocks we are watching when traits open in five minutes. shares of apple's agent supplies could be in focus. iphone production could fall. foxconn's she could fall on a protest. alps alpine has the market open, next. this is bloomberg. ♪

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shery: this is daybreak asia. we are counting down to the major market opens. protests across china over covid restrictions leading to more uncertainty in the region. will we see the haven demand in the markets today? it happens next as we haven't seen such unprecedented level of defiance against the government there. haidi: a guest we have spoken to this morning says they have gotten more sophisticated about handling these sorts of unrest. but we haven't seen protests of this sort of scale nor protests that have been so personalized toward the anger toward xi jinping himself for the last decade. let's look at how the markets are setting up for all of this. annabelle: we have the open of japan ahead. we had seen treasury futures rising around this covid uncertainty in china. what's happening with the protests there and how beijing

will respond. we are also watching that stock move into the havens. also seeing the yen trading like this, so higher against most of its peers. in terms of what else we are watching, concerns about the outlook for the economy there. no changes expected in the boj policy but that is down to its happening in terms of growth. the bloomberg's economics team out today saying it is slowing giving the weakness. let's change it with stocks declining with a start to the open we have for korea, starting the day in the red. concerns likewise with korea's economy, given local media their reporting they could lower the gdp forecast for 2023 21%. that would be down from an earlier forecast of 2.5% made in june. some of that is down to what's happening with external demand

drivers and that is playing out with the report from reuters this morning that apple could cut its production at one of its plants there in china. given the covid zero lockdowns and the outlook for iphone demand. so we are watching at the start of trade down -- at the start of trading. also looking at the reaction to the taiwan elections at the weekend. no trading there -- that's an etf that tracks taiwan. we are one in -- one hour into the session for australian socks. -- australian stocks. really down to what's happening in china that is playing out in the commodity-linked currencies, the risk off turn also in the one. haidi: let's get some analysis now from the head of aipac equity research at bnp paribas.

how big a blow is what is going on in china at the moment to risk assets? >> it seems clear the reopening post-covid will be a kind of a elongated, and curb step-by-step process. that is clear from the way the daily infections moved in. it seems clear the administration in china wants to support the economic, not only from the steps they undertook to move out of the zero covid strategy a couple of weeks ago, but also from the recent cut we have seen. the incremental impact of these monetary policies is getting more muted as we progress. it seems a more concerted effort

is possibly necessary. in particular, for the mastic demand. so we are watching this space very closely. for the time, it seems the outperformance we have seen in the greater china region could be capped in the very near term. haidi: how do you position at a time like this as it feels like a lot of strategist are almost fearful to have much conviction going into next year? is next you're going to be another year where you have to be more agile? >> for the first half of next year, certainly. we think the development -- developing economies are going into recession. the u.s., on our estimate, would be in recession over q2, q3. so the equity markets, particularly the emerging-market universe would possibly suffer not only from declining domestic

demand, but also from continued quantitative tightening that the fed is likely to engage in. we think despite the likelihood of a downshift in fed rate hikes 250 basis points in december, the terminal rate is likely to be 5.25% in the first quarter. when i put together all of this, the uncertainty surrounding currencies is likely to continue in the first quarter of next year, possibly until the middle of the second quarter. that would imply what you said just now, the focus on volatility would be the order of the day until the first half of next year. shery: and yet you are overweight in dni t.

the markets potentially headed into a recession, it would not benefit. manishi: i think indian i.t. is being created by the diverse base. we don't necessarily agree with that conclusion. we think the order inflows that have come toward the front line large cap indian i.t. companies are relatively long-term in nature, which gives a certain degree of visibility about the revenue streams over the next one to one and a half years. that is one of the reasons we are more positive on indian i.t. compared to the north asian tech hardware universe. haidi: yet you have seen goldman sachs and socgen talking about an inflection point where you have more attractiveness not only from southeast asia but veering toward northeast asia. has what is happening in china

put a dampener to this call? manishi: i would think partly, yes. our own call toward north asia -- toward north asia has been neutral toward underweight. that's been the case for most of this year. we've had an overweight on indonesia, thailand and hong kong, the latter based on the reopening. we had a neutral on china, korea and taiwan stop at some point in time, given the treat variations -- the cheap variations, that universe would beginning to bottom out and eventually rerate. we have to watch the china policy space and the united states and other demand environments to get a clear handle on that. it is clear that once north asia begins to rerate, the outperformance of south asia and

india would possibly seize at least in the near term. one has to be very cautious and new bull footed in making that. haidi: at what point do you start seeing opportunities in tech, particularly china tech? manishi: very selectively opportunities have emerged there. i'm not talking about the internet universe. i think some of the internet and e-commerce companies are really cheap now. they have possibly bottomed out three weeks to one month earlier. as far as the china policy space is concerned, opportunities are emerging in the tech hardware universe as well. one has to be watchful about the u.s. policy regarding chinese tech on that front. but if i combine these together, chinese tech hardware and internet and e-commerce companies, because of the cheap

valuations and short growth, we have a positive combination and the chinese silo investors can rely on. haidi: great to have you as always. let's get you back to a look at some of the movers. we are watching some of the apple suppliers to see how they are being affected. annabelle: just still in the tech space but looking at some of the apple suppliers in asia, japan at the start, we see a broad drop for the most part given we had a reuters report out saying production of iphones could fall by at least 30% at foxconn. this is down to these protests we are seeing in reaction to these extended lockdowns. also taking a look at some of the apple supplies in korea, among those, lge getting its --

getting 70% of its revenue from apple. that is what is driving market sentiment in asia, the covid lockdowns and reaction to that. changing on one other sector is japanese utility giants. these stocks are lower today. local media reporting these companies will be issued a record high found by the fed trade commission because they are allegedly an acquisition of customers within another companies region and that is against anti-competition laws in japan. haidi: annabelle with the latest when it comes to the stocks we are watching. the latest number is being reported out of beijing at the moment, 3000 860 new local covid cases for november 27.

this as we see cases across the country continuing to escalate. you see these extraordinary footage of protests taking place in the middle of beijing, in these cities as well in china, really reacting against the stringent covid-19 measures that have been in place for so money months and in fact years. we see the latest numbers out of beijing -- 3800 60 new covid cases as we see really watching for how the communist party will react to these ongoing and -- ongoing anger and frustrations growing in the protest. let's get you to vonnie quinn with the first word headlines. vonnie: china's second that -- china's bank for the second time this year, ramping up support for the -- the people's bank of china

reduced the reserve of private ratio for most banks by 25 basis points. the adjustment taking effect will affect $17 billion of liquidity. european union diplomats will resume talks on russian oil prices. : and the baltic states have objected to a proposal they considered too generous. a senior diplomats is poland's demanding additional sanctions. diplomats expected a deal on friday but positions remained entrenched. the biden administration has granted chevron a license to produce oil in venezuela. it follows talks by venezuelans political factions. unknown new drilling is -- though no new drilling is authorized, venezuela will be able to do on oil fields. u.s. sanctions halted drilling activity almost three years ago. the u.s. is banning the sales of communication made by huawei and

cte citing an unacceptable risk to national security. fcc order affects surveillance products made by other companies. it's the latest in an escalation of restrictions on chinese tech that began with president donald trump and has continued with the biden administration. 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: still ahead, a closer look at taiwan following big local election losses for the president party. he thinks the ballot has nothing to do with china. plus the latest from anti-covid protests -- anti-covid lockdown protests. the most significant public unrest since tiananmen square is how the protests are being characterized. this is bloomberg. ♪

shery: taking a look at a live picture of beijing as we got the latest covid cases for november 27. more than 3800. we've seen the protests spreading in the capital, but not just there. protests against covid restrictions spreading in china on sunday. citizens taking to the street, venting anger and frustration. let's ring in the greater china senior editor. these protests not only in the capital, but also in shanghai and wuhan. tell us how we got here and how much worse it could get. >> underlying everything is the uptick in covid cases over the last month or so has resulted in

lots of people being locked down in their apartments, having movement restrictions placed on their daily lives. the specific spark to this weekends protests was the fire at an apartment building which caught a blaze. at least 10 people have died in that blaze. there was a lot of speculation, a lot of people on the internet blaming authorities, suggesting covid lockdowns and barriers could have stopped firefighters being able to reach the building, resulting in deaths. that resulted in lots of people being upset and many going onto the streets, as you have said in beijing and other parts of the country. that fire plus the underlying frustration is what has gotten us to today. haidi: what is unusual other

than the fact that these look quite networked is the fact we are seeing so much anger and frustration is directed at xi jinping himself. how does that inform the way the leadership handles this? john: this is the biggest challenge xi has faced during his decade plus in power. we have not seen anything to suggest it's challenging his grip on power. you will recall just a month ago in october, he ran the table at the party congress, consolidating his grasp of power to an extent we have not seen in many generations. that being said, this is a real challenge to covid zero, which is a hallmark of his governance. at the same time, what you are seeing is the authorities are letting people have quite large protests and are not stepping in to stop them. this is an attempt to let people vent. there's an official recognition that people are tired of covid zero. shery: the question seems to be

for how long they are allowed to vent these frustrations. we have seen policymakers try to support the economy given everything going on right now. the pboc cutting its rrr. how much will this actually help? nobody wants to borrow money at the moment. >> you are right. we have long had this view that the macro policies go -- and support come from the monetary side and come from the fiscal sides, but the crucial easing support to the economy will have to come from the policy orientation, the covid zero policy. at this point, we do see all of this will keep the policy going, put a floor on the economy, but it is support covering the

economy. haidi: when does the fiscal situation become something local governments have to deal with? we know the fiscal cost of covid zero has been extreme. is that going to be a key theme for next year? chang: it is getting harder and harder to sustain at the local level and especially at some lower-level, local governments and widespread reports. going forward, it is vertical, it's not just year, it is quite present. i'm sure there will be a lot of discussions behind doors between the central government and various local level -- lower-level local governments on

the discussion of sustainability of the policy. shery: let me follow-up on the question i throughout their. how much longer will these protesters be allowed to vent these frustrations? john: i think it will at least go on for the next couple of days. it wouldn't surprise me if we had more protests monday and tuesday. over the weekend, people, because they are not working are able to go out more on to the streets. i don't think the government is getting ready to crack down on those protests and over the next couple days, what you will see is mixed messages, not a consensus from the central government on how are what they think of these protests. the system is still trying to digest what to do next. haidi: you can also turn to your bloomberg for more on the covid unrest in china.

get that commentary and analysis from our expert editors. taiwan is set for more contentious presidential rate -- race after the elections had a historic loss for the parties president. david ingle joins us from taipei. this was a surprising set of results amid lobe voter turnout. david: absolutely. i have to caution that when you look at these elections and say they had a landslide victory, yes. usually it is the local elections to lose, the kmt, but this was bigger than expected. i have to caution and say do not read too much into this. the people of taiwan don't necessarily want a change in the status quo. the dpp took a licking in this election and favors a more independence minded approach.

not independence outright. it's not necessarily rebuffing that. this was a chance for the local constituents to say we don't like the state of the local economy. the misery index is at the highest peak with inflation high and joblessness going up, export orders are down, as reflected in the global economy right now. this is going to pave the way for all the early part of 2024 with the next presidential election. this is a good result for the kmt which has lost the last couple of elections. she will not run again because of term limits. we will have two new candidates. likely one from the dpp and one from the kmt and the early part of 2024. that is when these security issues and relations will come more to the four in the debate. believe me, as john was talking about those protests in beijing,

just about everybody in taipei as long as i have been here is watching what is transpiring on the mainland with those protests. haidi: we had heard from a professor earlier today that we could actually see them put a more hard-line stance toward taiwan or washington. how he did could 2024 get given what's happening in taiwan it self the political rhetoric is never that low-key. david: as one younger person we spoke to said i'm worried about the economy, i'm worried about livelihoods, but that does not mean i want to be controlled by beijing. i don't want unification necessarily. they are concerned about the possibility of war. there has been more saber rattling and rhetoric from

beijing, especially after nancy pelosi visited in august and there were subsequent wargames that encircled the island. it did ratchet up the fear. so surely if that was a tactic to affect these elections over the weekend, they are probably sure it worked. but year and a few months from now in the presidential election happens, it will be about the economy, but it will obviously be about the status quo that many people want to keep with the mainland. shery: stephen engle joining us live from taipei. more ahead on taiwan. why then next guest has nothing to do with china. this is bloomberg.

shery: oyo hotels has reported a

loss. shrink from some 50 million the preceding quarter. ipo plans were shelved after the pandemic hurt its growth and forced thousands of job cuts. a food delivery giant site 20% jump thanks to surging demand from china's covid restrictions. it posted a profit after almost two years of lost it -- losses boosted by currency gains and tax benefits. plenty more on daybreak. this is bloomberg. ♪

haidi: we are getting the latest

read on retail sales in australia as we get to cyber monday sales here in australia and in the u.s., we see that falling number. point 2% falling in australia, we were expecting a gain of .5%, so that does not bode particular well for the upcoming key holiday season. taking a look at some of these numbers when it comes to a broader base, we've seen retail household sentiment hold up relatively well despite rising cost-of-living pressures. we did hear from governor phil lowe saying he thinks australia has a better chance of orchestrating eight soft landing than some other economies and central banks around the world. let's get a look at how markets are taking all of this in. lots to contend with at the start of this week. annabelle: there is really one major story and that is what's

happening in china. given we are seeing this continuing demonstrations against covid zero lockdowns, what's playing into it is covid cases because we had the beijing numbers at the top of the hour basically showing and almost doubling of beijing covid cases over the past couple of days. so how that is playing out given the uncertainty how beijing will respond, particularly the one down .7% and across other commodity link currencies like the aussie dollar and more risk sensitive ones. in the equities to cure, half an hour into the trading session for japan and korea, we see decline stress with the risk off tone but the report we had from reuters saying apple could be forced to cut its production of iphones by 30% in china given

worker protests. that sets the stage for interesting trading in the days ahead. if you take a look at this terminal chart, we've seen korea and taiwan leading the gains. we will see if that can be extended into the coming year. shery: i was hoping to see that chart but hopefully we will get there next time. let's turn to vonnie quinn with the first word headlines. vonnie: protests against covid restrictions spread across china on sunday as citizens vented anger at xi jinping, local officials in the comet's party. some protesters called for xi to step down. demonstrations were reported across beijing and wuhan where the lockdown was blamed for

injuries and a fire. new licenses issued to galaxy entertainment, mgm china, wynn macau and sjm. the decision illuminates a major uncertainty facing an industry hit by a covid induced tourism drought. and china's crackdown on highrollers. the turkish president says he will meet with the egyptian president after they exchanged a handshake at the world cup. the nations have had frosty relations since 2013 and the military backed uprising ousted and islamist president. turkey and egypt were also on opposite sides of conflict. 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. shery: we have been dissecting the results of the taiwan elections all morning. let's crossover to taipei where

stephen is standing by with our next guest. stephen: it was a landslide victory for the kmt, the opposition party here. ahead of what's going to be the big presidential vote in the early part of 2000 24. how much should we read into this, that the kmt won a landslide victory, including here in taipei and new taipei city? let's get to a political analyst joining us now. and us trillion specialists on cross-straight relations. what your take on election results must mark a landslide by the kmt but doesn't have much erring on the presidential vote a year from now, year-and-a-half are now? >> one of the questions people had is about how viable is the opposition at the presidential level. especially on the local election level, we seem kmt has been able

to clear the field in a sense that it's proven you can still be a champion, although forces in the status quo and you are in a good position to rally a lot of protest votes going into the election cycle. i think for kmt, that's probably a good thing. for the ruling party, the dpp, they are going to have quite a struggle ahead, more because with losses, a loss like this will mean it will be harder for them to come up with a more clear-cut unity candidate that can represent the dpp and standard bearer going forward. stephen: how much did the threat of possible war with china impact this local election? they had wargames that encircled

taiwan following nancy pelosi's business. did it impact people and say they would rather have kmt in power as they are more conciliatory toward beijing? wen-ti: probably no. presidential elections and local elections are ultimately very different beasts. china policy is slightly in the background for the most part. i think the ruling party has been trying to talk about national level issues like chinese nationalism and the china threat but it's not registering all that well with the electorate, in part because of the simple issue of the nationwide return. by this point, voters are fatigued by the issue and tend to be focused more on local issues like socioeconomic concerns come in general frustration and issues like candidate qualities. stephen: and the kmt brought out a fresh faced new candidate. my colleague has a question.

shery: in your notes, you point to farming votes in southern taiwan. for a reason why this wasn't about china, explain that to us. wen-ti: one would think if chinese intimidation is what influence the vote results in taiwan, then it would be the one to flip because a lot of chinese sanctions target produce and southern taiwan is the agricultural hub. you would think if intimidation is what is working, it would flip. but they are sticking through the dpp with the's local elections now. it's about local specific issues, not really about the china threat and the election should be seen separately from the china threat issue, i think.

stephen: let me pick up here. obviously, i made a reference to the k pp mayor who won. how important is it for the kmt to put forward a freshfaced younger leader? maybe a little too young to run for president in 24, but is he the rising star and would he have good prospects seven years from now? wen-ti: certainly i think the new kmp mayor person, he has the best of both worlds because his family is one of the kmt president and founding fathers, so naturally he has the kmt loyalists. at the same time, he comes across as western educated and

largely stays away from controversial political topics. that gives them both the diehard kmt supporters on one hand as well as centrist leaning candidates on the other hand. stephen: do you see these election results making parties come more toward the middle? the dpp may be lessening its rhetoric -- i don't want to say they are calling for independence, but they are a more independence minded party where the kmt was very much engaged with mainland china? do you see both sides softening their tones? wen-ti: to a large extent, yes. i think the ruling k pp wants to prove it is very conservative on taiwan's freedom. at the same time, you want to prove it is able to work with and find ways to maintain lines of communication with china. so you see from the dpp affairs minister calling for talks again with china as well. on the other hand, kmt, yes.

they have been trying to recalibrate their image. there chinese policy was founded in era when u.s. cooperation was a normal. but now that u.s. competition seems to be the main theme of the day, they are going in a u.s. friendly image. stephen: how closely are you watching the protest sweeping across china? wen-ti: very closely. this is something we have not seen in many, many years. stephen: we all will be, obviously. recapping the election results that happened on saturday where that kmt had a landslide victory. but the races now on for the presidential vote in the early part of 2024. haidi: stephen engle there. very closely we are watching these ongoing protests in china as policy pushback is growing. citizens defining and challenging covid zero. analyst say it may not be the

last test of beijing's ability to adjust. let's bring in our bloomberg opinion columnist. this comes weeks after the robust consolidation of xi jinping's leadership and now we are seeing calls for him to step down. this is a networked set of protests where they criticism is directed at the leader himself. how does beijing handle this? >> i think a couple of things are important to bear in mind, especially when you think about protests and authoritarian systems. one is protests are not as rare and china's we often think they are from the outside but they tend to be isolated. students, workers, livelihood issues. what we have seen here is livelihood issues, which the government tends to tolerate and political questions are coming together thanks to covid and it's creating a situation where we have protests across china come across cities triggered most recently. but this is long-standing

frustration: that is difficult for the government to respond to. you can see it was much easier for them to impose the ciccone and rules that kept covid at zero. much harder to take a nuanced approach today. shery: that is my question. what we have been seeing so far, because we have one leader, one solidified third term president, course correction in a system like this, a centralized system would be easier. why not now with covid zero? i would argue that it's a lot harder. it was pretty hard for many of them to course correct. course correction is hard for any government. it's much harder when it's an authoritarian system where you are never supposed to have anything wrong and you rarely have doubts. it is also hard and highly centralized which makes it much more difficult for local officials to respond to a changing covid picture,

responding to very strict guidelines from the top which tend to be black and wrote -- lack and white. we see the chinese government talking got easing measures but on the ground, the incentives for local government and the enforcement of covid, the intent has not change which makes it very difficult to adopt a modulated approach. haidi: how did we get here? we have had previous guests say china was a victim of its own success in terms of how well it maintained covid zero and the course correction is near impossible because the trade-off, the social contract is there would be no fatalities. clara: which, of course, is unrealistic given this scale. even if you assume it's a tiny percentage, the official death toll is 5200. which when you compare with the u.s. and europe is staggeringly

small. so a victim of its own success, certainly, also a victim of some of its own errors. for example, not adopting western vaccines not partnering with western vaccines and continuing to insist on chinese inactivated vaccine. very difficult to say those things you sold us as a national triumph were in fact an error. shery: great to have you with us. her take on what is happening in china, you can find that column on the bloomberg and turn to tliv to get commentary and analysis from our expert editors. coming up, staff cuts have come to l street but many employers seem desperate to keep hiring. the job market riddle is next. this is bloomberg. ♪

haidi: there is a job market riddle at the heart of the coming recession. we are tech giants and banks are cutting, but many employers seem desperate to keep hiring. the global economy is stuttering, yet that could be a glimmer of good news. our chief asia economics correspondent has today's big take. digging into the data is fascinating.

the low bull market has been so resilient. is there a chance the big headlines of tech layoffs we are seeing, a mood -- a more resilient labor market even through a recession? enda: that's the big question -- will this recession be different to others? we are seeing job layoffs and the banking technology sector, garnering big headlines. we know economies are slowing down and monetary payments are going up. we know western europe is in this extreme great energy crisis but the broad outlook for the jobs market has been tightened. economists are saying there are a couple of factors at work. one is this issue that some economies remained short of labor. this is an institute we see around parts of asia and australia. emerging economies short of service workers, that they never refill the hole in the labor cap the pandemic left in the first place. the second is some of these

companies are reluctant to let go of staff because they know if they let go of staff, when the recovery comes back, they will be back to square one in terms of trying to hire workers and meet their wage demands. the world economy is forecast by several forecasters and we know unemployment is expected to go up. the big question is how high will it go up? shery: tell us how the pandemic change the labor force landscape . we are not only talking about lives lost but many people continuing to suffer from illnesses. enda: obviously the public health effect come in number one in terms of the tallies and the injuring impact of people's houses, but there's a lot of micro changes underground as well. the work from home phenomenon has proven to be quite enduring. yes, people have gone back to

the service economy offices around the world but many have chosen to adopt to the new reality of having the flexibility of working remotely. that is one of the new features. those people are not willing to reenter the workforce unless they get the kind of role where they have the flexibility. then you have the people who left the frontline service jobs, they have not been willing to go back for the kinds of terms. they are looking elsewhere. we've seen something of a change in people's working patterns. labor has had the power on their side versus companies. it is something of a shift going on in the world right now. haidi: the latest on the global labor work -- labor market. we are looking forward to the u.s. jobs markets later this week. more to come. this is bloomberg. ♪

>> they are prepared for this sort of security event. they've got a massive security apparatus. you have to see unrolled in many places. i'd be very surprised if mass protests continued for a long time. >> he's not nearly as secure as

his beaming countenance to the world at meetings would lead you to believe. he has to worry about rivals who would look for a so-called mistake he makes in order to pull him down from power. >> for the time, it seems the outperformance we've seen in the greater china region could be capped in the very near term. shery: the mainland china and hong kong open and just half an hour. for a preview of what to expect, we are seeing risk off sentiments across asian assets. we see it in chinese assets as well. david: more likely than what we are seeing elsewhere. to the point of my niesha. the outperformance gives it a lot of incentive to take profits from what has been -- china has been a good example. on track for the best month

since 1999. there has been an alpha in this market and news on the weekend might tempt investors to book those profits right now as we head into what is going to be a key week. a couple of things -- in the currency market, continued weakness not just in dollar china. look at the yuan against the basket. it's at a multi-month low. measures of implied volatility across china have been picking up. when the cash markets open up, things like the hang seng volatility index, which we are expecting to pop today. we are watching the opening stocks for august. we've started to see that role over. i think this is over the last week or so, down about 8%.

a lot of things to watch and that case numbers should come out nationwide any moment now. haidi: what are you watching? david: nothing that will likely change the narrative. i was listing to the chat that you had with our colleagues and it is really about yes, we had the rrr, we will get pmi data this week which will cement the narrative that there is not a lot of demand for money. money market rates remain well below where the pboc needs that to be. it really underscores this economy that is really challenged at the moment. we will get a lot of that this week. pmi's are expected to come off a little bit from october. official lockdowns really provide you with the same scenarios.

haidi: just after shery and i left. you can get more on your bloomberg. for more on the ongoing covid unrest in china, you can get that commentary right now. coming up next, co-quest tells us why they see synchronize global economic downturn. we will also be talking about the latest efforts with the rrr cut and the stimulus efforts with hang seng's chief economist. that is it for daybreak asia. markets coverage continues with the start of coverage in china, hong kong and shane jen. this is bloomberg. ♪

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