>> you are watching daybreak asia live from new york, sydney

and hong kong. >> where counting down to the market opens. >> australia has just come online. the atlanta fed chief saying rate hikes will pause after months. the adani family cells stop that sell stock as it tries to recover from the hindenburg disaster. china ramps up its push for domestic chips. >> take a look at how u.s. futures are coming online, under a little bit of pressure. we had a dovish take when it came to raphael bostic's comments today. we had treasury yields remaining elevated. we are talking about the treasury market yields, everywhere now, topping by 4%

level, even the 30 year yield at the highest level since november. we continue to watch the big moves in the treasury space as marcus arbery pricing expectations -- as markets are re-pricing expectations. we saw jobless claims historically low. unit labor cost in the fourth quarter revised upwards. under a little bit of pressure in the asian session. >> optimism around the chinese economy has been boosting australia over the past few sessions. the asx 200 coming online positive.

the rest of the region was lower in the prior session. that is one part we are watching. these moves in treasury yields continuing to see these moving high. a bit of a wait and see mode that is developing ahead of china's national people's congress. this will set the economic agenda. a lot of talk where the gdp will end up. ok in terms of what else we are watching, we do have chinese futures looking for gains. new zealand a bit of an outlier, a bit weaker. >> the federal reserve to the european central bank has a

similar message, inflation remains far too hot and more rate hikes still needed. let's bring in kathleen hays and garfield reynolds. kathleen, the market took whatever was the message from all of the fed speak today as being more dovish. >> i think all those investors and traders were lucky that they did not see what chris waller, a fed governor, getting even more hawkish in remarks he made today. he started in this key part of his speech, saying that if jobs and inflation data that were so hard in january start cooling off, i would endorse a couple of more hikes. on the other hand, if they come

in too hot, the policy target range will have to be racing this year even more, above 5.4, to ensure we do not lose the momentum that was in place before the data for january release. -- released. this is what he is concerned about. this is nothing but hawkish. raphael bostic kept the door open to pausing in a few months. he is going to watch the data. if the data suggest the economy is stronger than projected, he said i will just adjust my policy trajectory. susan collins is still in the camp of i will watch it. when you look at this and you see where the markets are pricing in, yes, they have

gotten more in step with the fed, but the fed may be getting one big step ahead of them again. >> the hawks are firmly in command, potentially intimate. these readings when it comes to core inflation are not helping. >> can you imagine how frustrating it is to be a central banker right now? thinking you are doing everything you can. we heard several ecb board members talking about the possibility of 50 basis point hikes. and then you see that core number going up to 5.6%. the headline number one from 8.6 to 8.5, but it is still too high. the president of the ecb talked about more rate hikes. they can essay how many -- they

cannot say how many, but that is what they are looking at. 41% of boj watchers expect tightening to take place in june not to be done at the march meeting. this is hours before the parliament meeting. there is so much hesitation in japan. we are going to get the jobless numbers, the tokyo cpi. there is still a concern that this economy may be is not quite ready to pull out all of the monetary easing. governor kuroda says as he leaves 3% on average, got to get

to at least there. >> garfield, talk about how this is affecting market moves. we had european rates higher, we had treasury yields at least at 4% level. risk assets also greened -- gained ground. what is happening? >> it is fairly clear what is happening in the bond market. maybe the bond market moves had been held back a bit. there was a lot of resistance at the 4% level for the 10-year treasury yield, also the 30 year. you have a very strong --

longer-term yields rose and the short stay put. that is a longer term outlook for inflation and the rates path. stocks took comfort that if the data turns around or does not get much worse, maybe they will only do as much as is now priced in. it is not a stitch -- a huge step forward, but any softening was enough to have two year yield say flat on the day. it was enough for stocks to grab onto, at the worst may be almost

sober. that also heightens the difficulty for the fed. markets remain very keen on one is the pivot going to come. they expect a pivot, but it has been pushed back and the rhetoric from the fed is that when they hold rates, they will hold them for a long time. the frothiness in the stock market looks -- because of the rates environment. >> china, any meaningful implications for investors? >> the biggest thing investors

need to consider is china is bouncing back strongly now that you have covid zero restrictions out of the way, so that will provide a strong path for economic growth in china. the tone is to what extent, we are going to get a fresh increase, certainly an emphasis that president xi is the person in charge. so then what kind of notes does he strike? are there areas that will get

help? are there areas that are getting out of line with what the president xi regime wants to happen? the less subtle message best china's back -- that china is back. that is the immediate message when you are looking at investing in china. >> some very great insights as always. garfield reynolds and kathleen hays. let's get you to vonnie quinn. >> pakistan's central bank has raised its interest rate to 20% to rein in soaring inflation. the state bank of pakistan monetary policy committee took

it to the highest since june of 1997. antony blinken has spoken with russia's foreign minister at the g20 meeting, urging him to push for peace in ukraine. china's foreign minister also met with lavrov in new delhi. >> if china were to engage in lethal support for russia's integration -- aggression, that would be a serious problem. >> china is investing billions of dollars to boost local production of chips.

the vice premier sun chunlan government needs to mobilize its resources. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> up next, saira ann malik shares her expectations. this is bloomberg. ♪

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playing offense when it comes to

emerging markets. joining us now is saira ann malik, ceo at nuveen. good to have you with us. we have seen uncertainty about where emerging markets are going. >> we like emerging markets for earnings estimates, valuations. earnings estimates much more realistic. monetary policy, in many of these markets they are far more ahead of the curve. china is easing, korea is. we also have indonesia, another country with stable growth. india have benefited when china was struggling. >> a lot of these economies you

mentioned are trade reliant and we saw exports slump when it came to south korea, especially in the chip sector. >> this can depend on a currencies. with china reopening i think trade will pick up more strongly going forward. many of these countries are dependent on the growth rate of their middle-class continuing to spend. with tightening for their among the curve, that will be a positive for them. we will see continuing recovery of the consumer within emerging markets. >> is at the china consumer a story of your betting on? do you prefer to get that exposure directly or through some indirect place? i note the likes of commodities has been played quite

thoroughly, but things like circuses in australia with the return of chinese visitors. >> indirectly and directly or both ways you can play this. luxury goods companies in europe can benefit strongly from the recovery in china. commodities will be strong for many reasons. areas such as copper demand should doubled over the next decade or so. all of that is positive for all of those areas. that is why emerging markets is such a strong play. the valuations, dollar and monetary policy story is less pressure on emerging markets. >> what is your main take away from this earnings season? >> and think u.s. what we saw was earnings looked ok. i am worried about revenue growth going forward.

the question is can they hang down or continue to increase prices? salesforce reported that software companies are more resilient because they are emergent businesses and they are use to lowering prices. revenue growth is an issue. that is why i like the emerging markets story. i think earnings are at risk for the u.s.. margins are going forward. >> saira ann malik, from nuveen. thank you so much. we are getting comments from softbank that they will be pursuing the u.s. only listing according to the ceo, talking about how they will consider subsequent you, listings in due

course. they will in fact pursue the u.s. only listing come up but they will consider a following u.k. listing in due course. we have plenty more to come on daybreak: asia. this is bloomberg. ♪ we're outlawing golf. wait. can i still play? since we work with emower, we don't have to worry about planning for a third kid. you can still play golf... sometimes. take control of your financial future to empower what's next. >> we are starting to see signs

of the bottom when it comes to adani group stocks. let's bring in and about after closer look. we have seen some big block traits crossing the system. >> these came in the first few

minutes of the moon by session opening thursday. adani enterprises coming online to 10% drop and then these block trades started to come through and the sentiment started to recover somewhat. the essential reason for these block trades is something we are not as clear on at this stage. possibly the block trades were interstate transfers, companies change in ownership. the other indication perhaps that it was institutional place -- plays. because of these block trades and also the fact that we have seen adani group stocks closing higher, the suggestion is we have perhaps seen the bottom for a selloff. >> i u.s. boutique firm has

taken positions? >> this boutique firm based in the u.s. has bought up stock from a adani family trust. it is based in the u.s.. the chairman was born and raised in india. he has a deep understanding of the landscape there. he has been interested in adani group companies for years. valuations put him off in the past given that it was so expensive before the hindenburg report. he is showing the prices he about per-share. some quite big gaps to the left close from thursday. at that he enterprises he bought at a 12.2% discount. others at a four or 5% discount. so at these levels some say is a

indication of the desperation from the adani group. >> here is a quick check of the latest business flash headlines. suny is said to be cutting hundreds of jobs. sources said the cuts will affect those in the investment banking divisions. the move comes weeks after j.p. morgan chase, hundreds of mortgage employees. qantas airways plans to add 8500 jobs as the travel industry slowly recovers from the pandemic. the roles include pilots, cabin crew and airport staff. the move is driven by investments in new aircraft and increased flying to meet long-term demand.

bloomberg sources say blackstone has defaulted on a bond backed by a portfolio of offices and stores from finland. the default comes as property values drop in europe. broadcom is seeing brighter prospects ahead despite a slowdown in the chip sector. higher than analysts estimates. the company sees continued strength in infrastructure demand across all of its markets. they supplied chips to apple and amazon. coming up next, china is ramping up a push in the chip industry. details ahead. this is bloomberg. ♪

>> breaking out of japan. the jobless rate at 2.4%, which is slightly lower for the month of january than what was

expected, also easing from the previous month. the jobless rate coming in slightly lower than economists expected. we were expecting for the month of january to see a little bit of weakness, but actually the jobless rate has fallen. looking ahead, we might see job market conditions be a little bit mixed according to bloomberg economics. we are dealing with the new businesses in the services sector opening as the market reopens post-covid. tokyo cpi numbers coming in. 3.3 percent for the month of february, which is easing from the previous month where the

number topped 4%. we continue to watch tokyo cpi very closely given it is a forward indicator for national prices. we see that easing in the core cpi. >> so with inflation, it is billy come found in policymakers. -- it is really confounding policymakers. could potentially be in

gains being driven by this economic reopening in china. we are also seen tech, health care doing quite well in this session. kiwi stocks looking a little bit softer. singapore nikkei futures looking to the upside there as well. s&p futures a little bit softer, a 10th of 1%. we are watching asia bonds as well as effects. -- fx. getting back to china now. the central bank may have new leaders in the coming week. the potential appointments could

further decision-making under president xi. prime minister lee hsien loong >> unlike in the past policymaker lineups, academic or international credentials will not necessarily be preferred. close confident will likely be central to this reshuffle. he is expected to be named party chief of the people's bank of china. the last vice premier who also took a top position had a tough reform style in the 90's. the next pboc governor could be a better and banker and most recently the chairman of citic

group. unlike current governors they do not have reputations as academics. analysts fear the leadership will install them and it could usher in more pragmatic policy. >> as chinese leaders get set to meet, the vice premier sun chunlan the government needs to mobilize its resources. stephen engel joins us now from hong kong. this comes as the u.s. china tensions continue. we see pressure from china coming from u.s. allies as well. what is the latest on this? >> many of the policies that

will be adapted at the annual session of parliament have pretty much been agreed upon by the top leadership. what we will be looking at is signs of policy but have already been endorsed by the top leadership. obviously we can read the tea leaves and read the comments from the vice premier that chips self-sufficiency and key technologies like ai and electric vehicles will be top priorities, perhaps at the expense of the internet platform companies that have been under regulatory scrutiny. what is interesting is that with the vice premier, he has hit retirement age so there will be new blood coming in. she is still a close confident

of president xi and she is saying china needs to mobilize more of its state resources, more money towards these key industries to counter these moves by the united states to essentially limit advanced chips to china. so there needs to be more efficiency. china has earmarked billions towards its top memory chip maker. that is a key concern as well. president xi has called for self-sufficiency and self-reliance. we will be looking for more indications and more signs over the next 10 days ago at the national people's congress.

every five years, they reshuffle the lineup of those business leaders who participate and come and lobby for their interests. these individuals were key to helping adopt policy that shape the platform economy. guess what? they have been dropped from this year's meeting. top chip engineers, top semiconductor and ai engineers have been added. best to tell you where the parties are going forward in this national people's congress. >> the u.s. is not just

targeting chip curbs. this is also a story that has been brewing for some time. but these apps like tictoc increasingly in the spotlight in washington. >> we are hearing that the commerce secretary has led the charge to limit the semiconductor sales to china as well as build up and put more money into the u.s. semiconductor industry as a national security priority. on the others that we have these apps that came under highlight under the trump administration. these potentially our national security threats of fun -- if the chinese companies are collecting data from tens of millions of american phones.

including many people under 35 years of age. >> with what we are worried about being chinese backed companies being on tens of millions of american phones, including members of the military, and privacy concerns, data concerns, misinformation concerns, that does not just apply to tiktok. there are multiple proposals in washington come in congress to perhaps limit these apps, including one led by the house jarrod beck would authorize president biden to banning tiktok -- the house chair that would authorize president biden two tiktok.

>> stephen engle there. let's get you to vonnie quinn. >> the u.s. tribe chief says she is confident progress in talks with the eu over the inflation reduction act. a special task force is working through concerns. >> we take those concerns very seriously as you know. we have been intensively consulting with and working with our partners in europe including through a task force set up. >> taiwan says china has sent the most fighter jets close to the island in almost two months. 21 aircraft entered its airspace . it came a day after the u.s. approved a sale of the weapons

to taiwan, a deal china says damages its sovereignty and security interests. ecb president says interest rate increases may need to persist. they describe the hike as necessary and very likely. investors now seeing the deposit rate be lifted to a peak of 4%. two people were taken to a hospital after fire broke out at a construction site in hong kong. scaffolding around the unfinished skyscraper was engulfed in flames with burning embers igniting objects on the ground. the property developer's building a hotel on the site. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> coming up next, we discussed

the push for greater protections for japan's lgbtq community in the corporate world. this is bloomberg. ♪ when you automate sales tax with avalara, you don't have to worry about things like changing tax rates, exemption certificates or filing returns. avalarahhh ahhh

ahhh ahhh >> japan is the only country

among a group of seven advanced economies without rights to protect lgbtq people. pressure is building out for change. joining us now is motoki okochi, president at kenzo paris japan. i come to you from sydney where we are wrapping up two weeks of world pride celebrations. it has been a time of celebration and contemplation in terms of more progress then needs to be made, especially when it comes to the economy as we look at the around the region, including japan. what has been your experience? >> my experience in japan actually was so fast. my partner is a french national.

we have been living here for 10 years. >> can you talk us through some of the challenges you face as a high-profile corporate leader? >> as a corporate leader, where i work, nobody really cares about your sexual orientation. everybody's really cool. we try to improve our workplace, not only for lgbtq employees.

for example, as a gay couple, when we came to japan 10 years ago we were looking for life insurance because we decided to live in japan. back then we could not nominate my partner as my beneficiary. our relationship was not recognized by japan. this is something we are working at on the moment. trying to change the society. >> i have gay friends in japan

who have gone through similar challenges. how much progress have you seen in the past few years? where can the country do more? >> i think actually at the moment, more and more companies they care about lgbtq employees and they try to support as much as possible. however, we never discussed the real problems. that is why for me, if you ask whether there is any progress, i would probably say no progress because nothing changed that i can see. >> do you see any difference between different governments,

different administrations and officials? >> i am not the right person to talk about that because i am not familiar about what is being discussed with the government. so far, i do not see any difference or progress at the moment. in the media, more and more people talk about lgbtq issues come up but just at a very superficial level. >> you sound very resigned that you do not think meaningful change will come to japan on this front. we were looking ahead to the meeting in may as policymakers were looking to try to get this bill through to promote understanding. already there is a lot of opposition on that.

marriage equality is not even on the table. do you think it is possible for japan to make adequate progress to catch up with some of the other countries around the world? it sounds that to me you think it is almost impossible at this point. >> actually, i hope so. i just shared my problems that i have at the moment in japan. they do not talk about possible problems we can have. we probably have to voice more. for example, for me, a lot of

people cannot associate discrimination with human rights. a lot of people do not think this way. also, for example, even marriage equality, a lot of people think it is going to be a privilege for lgbtq people. they do not think it is actually equality that we are asking for. there is a massive misunderstanding between lgbtq people and the society. >> motoki okochi, thank you so much for sharing your personal experiences, president at kenzo paris.

if you miss any of that conversation, tv is your function. become part of the conversations. do send us instant messages. this is bloomberg. ♪ we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how. just tell us - what's your why? at cdw, we get if your network power goes down, your business goes with it. recording: thanks for calling, we are unexpectedly closed today due to... cdw experts can keep you up and running with an apc smart-ups lithium-ion ups from schneider electric. it offers cloud-enabled remote monitoring and three times the battery life, so you can get the performance and certainty you need to stay open for business. for resiliency at the edge, trust schneider electric and it orchestration by cdw®.

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headlines. losses may leave it with less capital that needs to remain in business for silver gate. coinbase is among the crypto firms that will stop initiating payments through silver gate. ripple ceo said the sec suit against his crypto payment company will be pivotal for the whole industry and he expects a decision this year. she said the sec's recent enforcement actions escape in the u.s. behind other countries in establishing productive regulation. >> it has been 2.5 years since the litigation began. we have tried to move forward as quickly as we could. the litigation is fully briefed and we do expect a decision in

2023. we do not get to control that. i think it is clear the judges clear on how important this case is. >> macy's shares soared after the retail giant reported positive earnings. it was supported primarily by strong sales. total same-store sales fell. taylor swift got -- universal got a swift boost in sales thanks to taylor swift. universal music says the sales were 17% of 3.1 billion dollars in the last quarter of 2022. >> these are some of the stocks

we will be watching. nippon steel is considering a 700 million or green project investment. mike ryan sounds warnings on pricing and margins. -- micron sounds warnings on pricing and margins. coming up, jp morgan discusses the three key market themes they are watching. this is bloomberg. ♪

inflationary breeds. and really the question is, is it just the fact that we haven't seen that transmission lag come through yet, but certainly we're also watching china could be changes at the top of the pack as we get into the look ahead for the npc and whether that really heralds policy tweaks when it comes to economic and monetary policy. let's get you to bill for a look at the start of trading across some of these major markets this friday. thanks, sherry. heidi. yeah we have the open all that south korea and japan and also importantly this started trading for cash treasuries. and we're watching that ten year yield at the open here, still holding above that 4% level. we did hear from some fed speakers in the intraday session, rafael bostic, for instance, for the atlanta fed. he said that there is a case perhaps to pause hikes sometime

this summer. that was something that equity investors at least took to heart, even though we did see those moves still higher in treasury yields. and we're seeing the nikkei likewise coming on in the green in terms of what else are watching today were more signals coming through on what will happen with the boj in the first half. we've just had our latest survey results out looking at the responses from 49 economists and two thirds of those expecting some sort of tightening or policy shift by june. let's change now to korea because we're watching the chip stocks in particular. that's not a trade here given we heard from the micron cfo at an investor conference. he is warning on pricing and margins. that is denting the outlook for tech stocks that we're still seeing that calls back outpacing those gains for the cosby in the early moments of the session. likewise, the korean one is trading just fractionally higher here. we also have corporate stories in focus, in particular, these twists and turns for control of the entertainment giant. entertainment. hybe has now asked sm entertainment shareholders for

their support in an upcoming general meeting of stockholders that is scheduled for march 31. and they've opened a campaign website. sm with

question of whether inflation is going to come down in a rapid pace, you can basically figure out what will happen in the markets. we are all trying to figure out what the answer to that question will be. we had a very strong disinflationary pulse in the u.s. which looked like it would continue, but february turned it around. you had very hot data and all of

that has led to a repricing. so the way we think about. -- think about it is we have three scenarios, a soft landing, a hard landing and the third is we get into a severe recession by the second half of this year. you can calculate the probability of where the market is present in our. if you look at the inflation numbers, they are probably going to remain hot in the february in march prince given what we have already seen in terms of import prices and the fact that rental inflation will not come down anytime soon. it looks like we have been

traveling in the same direction. >> to get conviction in any of those three scenarios, do you have to first decide, why is the data coming in so hot? is it because central banks have more to do? or is it because we are not waiting for the transmission led? --lag? >> that is a much harder question to answer this year than last year. last year you knew there was a long way to go. now we are struggling with all of these questions and even the possibility that some of this data may get revised differently in the next few months. we have significant issues with seasonal adjustments, especially in the labor market data. we could end up in a situation where this data does not look at

hot -- as hot as it does today. we work with probabilities. my baseline assumption is that we are probably headed to a soft landing. if inflation is going to continue to come in hot we probably have more distance to go in that direction. historically on your work with these property scenarios, these properties tend to peak around 70%. >> given the uncertainty, do you go and bet on those sectors that have sold off in anticipation or do you stay away from those assets given a risk off asset that may continue for a while and the reason i ask is who we saw the huge outflow from asian markets in the past month. >> asia does have its own different dynamic going on. if you look at these three

scenarios, you want to own growth stocks, duration stocks. in a higher -- and a deep recession you want on defensive stocks. depending on which way properties are moving and right now they are moving to the value favorable camp and tour defenses so that is the areas i will be looking at in the u.s. coming into asia the bigger picture here is what is happening with china is more important than asia and what is happening with the tech cycle which is important to korea and taiwan. if you get both of those right you still have a chance of overwriting what is happening in the u.s. in the tech cycle have seen the bottom out. convincingly in january we are seeing recovery continue into february. all this excitement with chet gpt, it can at least continue for a while. what is happening in china is it is a very different market from the u.s. the u.s. is very much an inflation driven market.

everything that is happening is based on what is happening to inflation. in china it is about growth. if you do get growth improving like what we saw with the pmi's that is pretty positive for the market. going into the npc would not expect positive outcomes on the growth side. you could see better communication in terms of reforms, regulations. that could help drive earnings upside in china. shery: i want to ask you more about china but i only have time for one more question. i'm going to take the tech cycle because why do we continue to see semiconductor inventory rising in south korea? will that mean for that sector in south korea and taiwan as well? >> when we think about the tech cycle in itself, there are multiple variables that go into that. inventories is one of them. we look at orders quite closely.

orders are starting to jump. if you look at. export orders in taiwan which came out yesterday in the pmi numbers that was very strong and a big jump compared to what was the trend of declining export orders numbers. a second is if you look at the earnings downgrade for the semi camp anti-camp overall we have seen a magnitude of downgrade typical of the down cycle. it matches the fact we have already seen a significant down cycle there. if you look at valuations on a price basis, any of these companies are trading at bottom cycle valuations. there is some variability in the inventory side. i would say it is not straightforward to calculate inventories paid if you look at different companies there is a different picture. if you look at earnings cuts, valuations, the bottom is a much more likely scenario. shery: always a treat to have you on. asia equity strategies at j.p. morgan. let's get to vonnie quinn with

the first word headlines. vonnie: ecb president's guard says interest rate increases may need to persist beyond a planned half-point move in two weeks time. the ecb chief described march's hike as necessary and likely same policymakers will do everything to return inflation to the 2% target. investors see the deposit rate being lifted to a peak of 4%. u.s. secretary of state antony blinken has spoken with russia's foreign minister at the g20 meeting in india urging him to push for peace in ukraine. moscow says sergey lavrov disregarded weblike and said in their brief and unexpected encounter. china's foreign minister also met with lavrov in new delhi. clicking says washington may sanction beijing if it gives russia military aid. >> were china to engage in material legal support for barges aggression -- for russia's aggression or to engage in the systematic evasion of sanctions to help russia that would be a serious problem for

our countries. vonnie: china is investing $1.9 billion in a chipmaker to boost local production. it suggests beijing could be raising production on the semiconductor industry. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. haidi: let's get you to annabelle for some of the movers. you're watching some of the asia chip stocks. annabelle: we are just into the session. we are seeing these chip stocks start to turn negative. we did hear from the micron ceo. he was speaking at an investor conference. giving a warning on the outlook. expecting improving demand but what they are concerned about is pricing trends.

consequently they are expecting lower margins coming into the third quarter than previously expected. this is the outlook or chip players. a few minutes under way into the soul session. something else that can factor into that is yields because we can have treasury markets online. take a look at where we are heading. we do see the shorter duration above the 4% level. we did keep an eye on what happened with a 30 year yield. did pierce the 4% mark for the first time since november. that was after an upward revision to fourth quarter. the 30 year yield up as much as nine basis points. that is something that weighs on tech stocks. another sector we are focusing on is what happens with the latest twists and turns regarding sm entertainment. that stock under pressure. the headline is high is asking sm entertainment supporters for their support.

that is scheduled for march 31. they have started a website to share their business strategy. part of that is increasing the return to shareholders over the next three years. shery: still ahead as china gears up for the national people's congress and we speak with eurasia group about the signals they are looking out for when it comes to progrowth policies. plus what wall street is getting wrong about xi jinping's new money men. our big take discussion is next. this is bloomberg. ♪

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haidi: china's central bank may have new leaders in the coming week following a reshuffle of government positions. they could further centralize decision-making under president xi jinping. steven engel takes a closer look at the likely candidates. >> expected overhaul of china's financial wrigley tory regime would put more decision-making of key economic policies in fewer hands and centralize it under xi jinping. unlike in past policymaker lineups academic or international credentials will not necessarily be preferred. a close confidant will likely be central to the reshuffle. he is expected to be named party chief of the people's bank of china and successor to the vice premier as the economic czar. the last vice premier who took a tell ppo see position was to long g. helped combat high inflation.

the next pbo see governor could be a veteran banker and the chairman of a state owned financial group. they played a role in questioning china's debt manager. neither have reputations as academics or economic theorists. analysts feel the reported leadership moves to install a party official and veteran banker could usher in more pragmatic and less hawkish policy. shery: the prospect of the new economic leadership in china triggering anxiety from washington to the u.k. and japan. fear is the new lineup will only entrench xi jinping's power may be misplaced. the bloomberg economics chief economist joins us to discuss

this big take a story ahead of the national people's congress that begins sunday. so you are not too concerned we could see this lineup of yes-men that could take china deeper into state interventionism not to mention isolation? >> the risks are there. steve set them out in that introduction. you have got folks, the governor of the people's bank of china well known to the international market. you have a reputation for being pro-reform. you have strong economic credentials heading back from the front lines of policymaking. the folks replacing them, folks likely chang who is likely to be the next premier, the next vice premier. they are more noted for their

strong personal relationships with xi jinping and their international experience or economics credentials. so the markets might well conclude this is another lurch left for china. this will entrench support for state intervention, national security over global engagement. perhaps increase dictator risk where xi jinping is surrounded by yes-men and no one can tell him when he is making a bad decision. the case we make in today's take is perhaps that is not the only way of looking at things. perhaps if she seen paying has people under the top economic jobs who he trusts, people who have experience of getting things done in the trenches of china's the rock see, people who are willing to make rebellion -- to make pragmatic decisions and listen to advisors, perhaps that

could be a positive for growth and not a negative. haidi: this is the point that is made in the big take that the a dichotomies of market versus isolation may not be as helpful if the biggest challenge is winning over the domestic, not the domestic vote but domestic approval. >> i think that is a key point. we tend to frame china's policies in terms of these dichotomies. our policymakers pro-market? or pro-state as we believe xi jinping to be. are they pro-global engagement like the open-door policy and taking china into the wto or are they focused more on national security as xi jinping appears to be. the reality is for some of china's most important growth challenges, the markets engagement isolation dichotomy

does not help us understand what is going on. one of china's biggest challenges is demographics, a shrinking working age population. the consequence of the one child policy. if you want to offset the impact of a shrinking working age population you don't need to be a disciple of milton friedman over karl marx. you just need to understand arithmetic and raise the retirement age. haidi: but then do you understand politics and realize how deeply unpopular that is but that is one of the biggest reform challenges. touching on that from bloomberg economics, our chief economist. the biden administration is working with lawmakers to find ways to blend the national security risk from china apps including tiktok. gina raimondo spoke to a bloomberg about these efforts. >> the issues that make>> tiktok problematic although tiktok is

perhaps the biggest of these companies are not just limited to tiktok. if what we are worried about is chinese backed companies being on tens of millions of american phones including members of the military and privacy concerns, data concerns, misinformation concerns, that is not just apply to tiktok. i know many members of the senate, senator warner, senator rubio, there are number member -- number of members in the u.s. senate thinking about what is the right way to protect american national security, american data. we are working with them. we will work with congress to figure out the right way to legislate to protect america from these concerns. i will say what you said in the

beginning of your question about china, last week i gave h -- a speech at georgetown framing the ships act and this is very definitely about investing in america so we can be a global leader and a global leader in technology. which i think is the right way to compete with china. there have been times in america's history of intense global competition with another super power who does not share our values. this is one of those times. in the same way we invested in our nuclear capacity, reinvested in -- president kennedy said we are going to put a man on the moon in the thick of the cold war. it is a similar time so in this intense competition with china it is going to revolve around technology. not just who can make the best

tanks and missiles but who is going to lead with artificial intelligence quantum, etc. and who is going to lead in way that is consistent with our values of openness, respect human rights and etc. i want america to be that global power setting the rules of the road with our allies to do that we have to invest in america. american people, american technology. >> do you expect to take a trip to china this year? >> may. i'm going to india next week. i will be going to africa thereafter. i'm going to go to brazil so i'm certainly going to be sending my team over. probably even this spring. we are trying to work that out. yes, i think probably i would. ng. cheesecake cookies? [together] the chookie! manage all your sales from one place with a partner

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haidi: a quick check of the latest headlines. silver gates was deepened. this scent shares plummeting to a record low with partners cutting off ties to the crypto friendly bank. quinn base and pack size are among the firms that have decided to stop initiating payments through silver gate nippon steel plans on making an investment in a steel project. this may cost an estimated $733 million or more. brighter prospects ahead despite a slowdown in the chip sector. broad come sees a continued strength and infrastructure demand across all its markets. brodd come supplies chips to

apple and amazon. coming up next, we get more on china's npc starting on sunday. eurasia group joins us for an examination of how xi jinping plans to further consolidate his economic power is trying to get set for the biggest reshuffle in decades with a generation of economic officials about to make way for politicians with strong ties to the president. we take a look at the implications for policy. this is bloomberg. ♪ to finally lose 80 pounds and keep it off with golo is amazing. i've been maintaining. the weight is gone and it's never coming back. with golo, i've not only kept off the weight but i'm happier, i'm healthier, and i have a new lease on life. golo is the only thing that will let you lose weight and keep it off. who loses 138 pounds in nine months? i did! golo's a lifestyle change and you make the change

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shery: we are breaking news out of hong kong and singapore. let's start with singapore because the pmi numbers for singapore have fallen into contractionary territory for february coming in at 49 .6.

the pmi in the month of january was 51 .2 but we are back into contraction territory. we have seen the export reliant economy sometimes struggle with those numbers given the export demand globally has decreased a little bit. there are expectations things will improve with china's reopening but we are back in contraction territory after falling to that level in december. hong kong remains in expansion territory. it has risen to 53.9 for the month of february. a significant improvement from the 51.2 number in january for hong kong. haidi: let's take a look at some other pmi numbers we are watching when it comes to the rest of the region. this is the picture for the jip and bank pmi. we get the composite number as well.

composite number coming in at 51 point one. february services coming in at 54. we continue to see the impact of broader inflation when it comes to consumer sentiment as well as his missed sentiment in japan and the staunch view from the bank of japan at this point the top of inflation is still not sufficient when it comes to a significant policy change but we have seen tokyo inflation decelerating for the first time in more than a year. we have seen some government policy start to take effect. a final reading for february for both composite and services seeing an exhilaration of the previous reading. let's take a look at what is going on in market. annabelle: we are ending the week focused on what is happening in the treasury space. the two year yield, the more

rate sensitive one. we are coming online with treasuries flat 30 minutes into the cash market. you can see 80 basis points and a 20 days. we have heard a hawkers message coming across from a lot of fed officials about the need for sustained hikes over the coming few months. in swaps markets seeing the peak in rates coming in at 55 sent in september. some economists saying 6% could be necessary. we can take a look at what is happening in the debt space in asia. you can see the pricing going on in sovereign yields. when you take a look at what is happening in the equities picture it is a little bit different. the focus coming in over what we heard from other officials. raphael bostic saying there could be a case for the fed to cause come this summer. also echoing a view shared by the boston fed president that

any decisions need to be data dependent. we are seeing most equity markets moving higher. other currencies in focus particularly japanese yen. inflation figures and the last hour decelerating for the first time in more than a year and economists turning to share their views of where the beer jay will head next. most economists think some sort of tightening by june. shery: let's get to vonnie quinn with the first word headlines. vonnie: pakistan central bank has raised its benchmark interest rate to 20% to rein in soaring inflation. this comes as the country works to resume a $6.5 million imf bailout. the highest since june of 1997. u.s. trade chief says she has confidence -- he is confident in progress in talks over the

inflation reduction act. it has angry partners in europe and trader who says it is grenades against their companies. a special task force is working through concerns. >> we take those concerns very seriously as you know. we have been intensively consulting with and working with our partners in europe including a task force set up between the white house and president underlines cabinet. vonnie: official data shows some 733 million chinese people were employed last year shared down by around 41 million from 2019. almost the size of the entire german workforce. the pandemic reflects the toll on the world's second-largest economy. two people were reported to taken to hospital after a fire in hong kong. the south china morning post says scaffolding around and finished skyscraper was engulfed in flames.

property developer the empire group is building a 42 story 500 room hotel on the site. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: as chinese leaders get set to me in beijing for the annual session of parliament the vice premier says the government needs to mobilize its resources to reach self-sufficiency in critical tech industries. our chief north asia correspondent joins us from hong kong. this is one of the policy and reform areas we will be watching out for in the next few days. where are we at when it comes to beijing's tech ambitions? >> it comes at a time when the commerce department is coming out with more additions to the entity list, the so-called list that bans the sale of american-made proprietary tech

innovations like chips and chipmaking equipment. i will get to that in a minute when we hear from gina raimondo. simply echoing what top leadership in beijing is emphasizing given these export restrictions by the u.s. and some of its allies like japan. the netherlands with a xml technologies that china needs to become more self-sufficient in the future industries that are going to be driving the 21st century growth. we're talking about advanced semiconductors, the equipment that makes them as well as ai. electrification of vehicles and the materials needed in those batteries and the like. they say they must mobilize more national resources to go to these chipmaking industries. this comes after a bloomberg report wednesday saying china has earmarked an additional one $9 billion to go to the largest memory chip maker.

this is going to be a push. what happens at the npc is probably already baked in or decided by senior leadership at other meetings late last year. it has often been called a rubberstamp body legislature. what we do is we read the signals coming from the leadership and what kind of directives come to kind of see where the top leadership is leading towards. every five years they replace names on this list of advisors from the private sector or from industry. this is very critical because the names that have been dropped this time include top names from the internet platform economy. we know they have been under regulatory pressure for the last couple of years. i'm talking with the chairman of 10 sent. he is no longer on the participation list as well as the npc.

that is him in 20 arriving at the great hall of the people. robin lead of -- robin li of baidu. they have used these positions to promote their industries and have policy adopted to benefit them. they have been dropped in favor of executives and at the chipmaking business, ai and electrification of vehicles. shery: the u.s. is not just targeting chips. chinese apps including tiktok increasingly in the spotlight. what is happening? >> we know tiktok was under the spotlight of the trump administration. the biden administration has picked that up. they have not banned it. there is another review under the treasury department.

this is led gina raimondo in a bloomberg interview had to say. it is not just tiktok. >> what we are worried about is chinese backed companies being on tens of millions of american funds including members of the military and privacy concerns, daily concerns, misinformation concerns. that is not just apply to tiktok. >> we just saw a story across the bloomberg terminal. the biden administration has added a number of new export restrictions for dozens of other chinese companies including activities that are perceived to be contrary to the national security interests adding to the so-called entities list because of the suspicion that these companies are procuring u.s. origin items that could end up in the hands of the chinese

military. these companies that have been added include a state backed server company. they do data centers across china. they are the chief competitor to hp as well as dell. a company that is a cpu maker. they are making a potential alternate to intel chips as well as units of genetics firm bgi research. shery: stephen engel there. as we gear up for china's npc eurasia group is looking at a growth target as a signal on how aggressive officials will be in implementing progrowth policies. with us is a associate of -- the consensus seems to be the target will come in above the 5% level. what will the target tell you about chinese policy? >> thank you for the question.

we see at the eurasia group the pollock -- the target will be around 5.5%. if the actual target announced by the premier and his government during the two sessions will be below 5.5%, that will signal the government is aiming for a more conservative approach in terms of economic growth whereas a target above 5.5 percent will signal an ambitious economic recovery trajectory for china this year. shery: by ambitious i guess that also means stimulus measures to come. >> i think they stimulus is not likely because the economic activity of 2022 was very low. the recovery as we have seen so far based on the economic data, that is already better than expected. in february the pmi data has

shown china's activity has further advanced into expansionary territory so there will be already momentum in terms of recovery in consumption and service activities. i think for officials in beijing they don't see big stimulus as necessary although there will still be continued stimulus in terms of infrastructure building at least for the first half of this year to frontload the economic activity to ensure it will be a strong positive second-quarter growth. haidi: what about the demographics when it comes to the working population? we saw in the past three years china lost the equivalent of germany's entire workforce. over 41 million people fell out of the workforce. do you see reforms when it comes to retirement age and is that a stopgap it comes to longer-term demographic issues beijing will be challenged with?

>> i think in terms of demographics this will be a long term issue for beijing but we will likely see more signals in terms of policies toward the retirement age coming out of the two sessions. this headline about china's labor force shrinking is obviously very shocking but i think viewers should not interpret this as the end to the chinese economy. as i mentioned before china's economic activity has been recovering for the first two months of this year and this indicates a positive trajectory for china's economy in 2023. i think viewers should balance their views about this headline. haidi: obviously i don't think you would say that is the end of the chinese economy but it does point to the long term competitive chinese labor market. i terms of other challenges when

you look at the ongoing tech rivalry between china and the u.s. you see this continuing to widen beyond advanced technology as well as day-to-day security concerns? we just had those comments from gina raimondo about these concerns over tiktok. >> the tech rivalry between the u.s. and china will definitely continue and visits informing china's policy domestically. there have been rumors about the party and state institutional reform coming out of the second plenum of the 20th central committee. this institutional reform this year will definitely focus on finance technology, security and human capital. in terms of this text segment, that means the party, xi jinping himself once the increase leadership over how tech is invested and formulate different investment priorities to advance china's tech capabilities and to

achieve hopefully over the long term a self reliance that will reduce its reliance on western technology in particular from the u.s. i will stop there for now. haidi: great to have you with us. in northeast asia associate at eurasia group. you can catch up on some of the past interviews or watch us live at tv go. you can dive into any of the securities of the bloomberg functions we talk about. send us instant messages during our shows. this is for bloomberg subscribers only. this is bloomberg. ♪

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haidi: the u.s. market watchdog says trading in cryptocurrencies and other digital assets can be compatible with its regulations. the sec chair told us securities laws are designed to protect investors and not hinder exchanges from operating. > there is nothing incompatible crypto in our securities flaws. our securities laws who were brought about to protect investing public against fraud and schemes and manipulation. it was through this idea of

full, fair and truthful disclosure registering with the sec when you are amazing -- you are raising money from the public and the public is anticipating a profit. it is common sense approach to helping the public in investing. this broad field, we have one goal at the sec is for them to come into compliance whether it is the tokens. that is people raising money or offering these tokens and it is also what i will call the storefronts. we can call themselves crypto exchange's or lending or staking as a service or other intermediaries to come in to compliance and ensure they don't mislead the public but also they don't commingle the funds, they don't take the public's funds and do things we don't allow in our financial markets. we don't allow the new york stock exchange to play with the

customers funds and make markets , run a hedge fund, run a dealer, be under the clearing business. we separate out those conflicts. >> thank you for your time. you have set out the goal there and what i want to ask you about are the results of your actions. you have asked a number of names and the crypto industry to register their products with the sec appeared very few have cared any particular those that are most known to us. why are they not acting on your requests? >> the law is the law. they need to properly follow the laws and we will work with them to do that. but in the meantime we will also look out for the investing public. we have been very clear about what is called the lending and what the requirements are there about staking as a service.

we have been rather clear about custody and customer funds. we will continue to do this. of course most suggest they come into compliance. shery: sec chair speaking exclusively with bloomberg. here's a quick check of the latest business flash headlines paired qantas plans to add 8500 jobs over the next 10 years as the travel industry slowly recovers. the role includes pilots, engineers, cabin crew and airport staff cared the move is driven by investments in new aircraft and increased flying to meet long-term demand. a u.s.-based boutique firm has invested $1.87 billion in adani group. they bought shares from four firms at discounts ranging from 4.2% to 12 and 2%.

the chairman says his team met with management last summer and he sees the investment helping advance india's economy. be sure to tune in to bloomberg radio to hear more from the big newsmakers. get in-depth analysis from the daybreak team. listen through the app, radio plus or bloomberg radio.com. plenty more ahead. stay with us. ♪ go. go lights. go big city lights. go spotlights. go stadium lights. emerson software helps clean energy become reliable electricity. go “good night." go boldly. emerson.

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haidi: as the annual parliamentary session in china gets underway investors are looking for direction. if history is any guide a dip as proving to be a buying opportunity. let's get more from bloomberg's asia stuck reporter. i terms of what we have seen in the past how do equities perform during and after the npc's in recent years? >> when you look at how the csi 300 index has done over the past 15 years, there is an interesting pattern. the market tends to rise during the one-month period before the npc in anticipation of measures

to support the economy but the index -- rose only in three of the last 15 years during the annual gathering. after the npc, the market rose again in many years. there seems to be -- the chinese market seems to have this rhythm of rising ahead of the npc ahead of anticipation and taking a step back during the gathering before rising again after the npc. shery: just really quickly, are investors position for what we have seen in the past? >> when you look at how the market has performed this year, it is almost flat over the past one month.

you could say you don't need to worry too much about the market getting too optimistic about policy support. the chinese data was very strong and the market reacted sharply. it was indicated if there was strong data that is a good sign for the economy. shery: robert senior asia stuck with what appeared to have you with us with a preview of how chinese equities might trade during and after the npc. the chinese market opens our next. this is bloomberg. ♪ from a dinosaur, colorado. start an easy to build, powerful website for free with a partner that always puts you first. godaddy. tools and support for every small business first.

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>> good morning, good morning. it's 9:00 a.m. here in hong kong in shanghai and there at the chinese capital in