shery: dear watching "daybreak: asia," coming to you live from sydney, hong kong.

haidi: australia has just come online. the top stories this hour. china has economic challenges forced beijing to set a modest 5% growth target this year, as that national people's congress gets underway. markets await fed chairman jerome powell's testimony as policymakers signal that rates will need to go higher and stay there longer. and haruhiko kuroda zero at the bank of japan is coming to a close this week. we will take a look at his legacy. shery: we start with breaking news out of south korea, we are getting consumer inflation numbers for february, easing more than economists expected. the year on year number coming in at 4.8% for february. falling below the 5% threshold. it had stayed above that level since august of 2021. this is a deceleration of inflationary pressures, from 5.2% from the previous month, growth year-on-year. core cpi numbers also grew

4.8% for the month of february. cpi growth on a monthly basis also easing more than analysts had expected, still a growth of 0.3%, but easing from's 0.8% growth level the previous month. this of course following the bank of korea's hikes being paused. the tightening cycle starting next month. again, inflationary pressures in south korea easing below the 5% level year-on-year, for the month of february. annabelle, easing more than economists had expected. annabelle: i bet those policymakers at the bok will be breathing a sigh of relief. that is certainly something policymakers in australia would like to see as well, given that we have seen inflation still looking pretty hot in australia. and we had the rba set to hike rates for a 10 consecutive meeting on tuesday by 25 basis points, even though we are seeing the effects of tightening on the economy.

we are watching the pull back gently in yields following what we had in treasuries in the prior session. there are other key events we are watching in asia this week. in japan, we have the boj governor, haruhiko kuroda, said to chair his last policy meeting at the helm of the bank, stepping down after a decade in that position. we have futures looking to hire start. new zealand is online. we are also watching china. we have the npc underway. stephen engle is here to give us the details. but when you look at the market performance during this gathering and also in the one-month class, we often see declines during the national party congress, five of seven of the last years. shery: and yet we might see some gains. really a roller coaster ride trying to follow the national people's congress in china. let's look at how u.s. markets were setting up in the future session in the open in asia. . we are seeing some pressure after the gains on friday. they were able to halt the

three-week losing streak for the s&p 500. we are watching lots of data points. we had already seen gains for the stock market despite resilience in the services sector, on the institute for supply management gauge that we saw on friday. we are still looking forward to fed chair jay powell speaking this week. cpi numbers on march 14. and the fomc the week after. meantime, we have seen the treasury selloff. a rally on friday, but not enough for bond yields to gain ground in the previous week, so we have the 10-year yield at 3.95%. the crude price right now is holding at the $79 a barrel level. there is a lot of optimism about china's national party congress, growth, and that has led to a bump in the previous session. haidi: let's get more on that because china set a modest growth target this year of 5%, suggesting the government will avoid any large stimulus packages to boost economic recovery.

let's get more with our chief north asia correspondent, stephen engle in hong kong. this is the bread and butter report from china premier li keqiang. what are we expecting in terms of any reaction today? stephen: if you look at the markets, there could be some disappointment because they had been a lot of buildup of expectations that there could be much more stimulus in china going forward for the rest of this year, as it just completed covid zero policy's and started opening up again. and we had very strong pmi numbers in services as well as manufacturing. there was hope that china would spark some buying of natural resources and oil and just feel the economic -- fuel the economic recovery in the world and perhaps inflation. but still this very modest growth target, actually the lowest target they have set on record, of around 5%, shows some caution.

it also signals that there will not be a lot of extra fiscal stimulus as far as some of the shovel-ready infrastructure projects that the -- at the municipal and provincial levels. you have to look at it a number of different ways. on the one hand, you have a new economic team coming in that will be named later this year. a whole new face, new generation of leaders, except for xi jinping at the top. they don't necessarily want to set a high target and then not hit it as they did last year. they had just 3% growth last year, but the target was around 5.5%. granted, there were very strong headwinds to the economy last year, notably a lot of the policies that they introduced, and of course, the property, the platform economy and covid zero dragged down growth. so this year, 5% is the target.

shuli ren, our columnist at bloomberg news probably sums it up pretty well. one take is that setting a low target means there could be more regulation coming down the pike in 2023. we do know that they want more discipline, more party discipline of the economy. will that translate more regulation? li keqiang, as you mentioned in his last report saying, the property sector, they will support the regular growth of the property sector, but there will be more regulation. sector will be regulated more tightly. the government wants to prevent unregulated expansion of the property sector. this is on defense spending, a completely different discussion now, obviously there are lots of geopolitical issues. there was very little mention if any of ukraine. there was a mention of taiwan.

the regular statement and they have always what about tier 1 is that they will aim for the peaceful reunification with taiwan. li keqiang says, as the government has increased defense spending this year by the most in four years, by 7.2%, the government at all levels should give strong support to the development of defense and the armed forces. shery: our chief north asia correspondent stephen engle there. fed officials in the u.s. continue to signal the need to keep policy tight. san francisco fed president mary daly was the latest to say that policymakers will likely need to keep rates higher longer. bloomberg economics and policy editor kathleen hays is here. what can we expect from fed chair powell this week? kathleen: i think of mary daly as a centrist, she is not super hawkish and not super dovish. so when we hear a voice like this ahead of jay powell's important biannual testimony to congress, we listen to it

carefully and we wonder, is this paving the way for jay powell to echo these words that others have spoken on the fomc? it is clear there is more work to do. obviously, hiking rates. in order to put this episode of high inflation find us, more policy tightening and of course, hiking rates for a longer period of time will be necessary. most of them have said rates may have to stay wherever they peak well into 2024. she was talking about the fact that there is all of this uncertainty. inflation is high in goods, housing and other services. how much momentum there is for disinflation just is not clear. larry summers talking to bloomberg television as he does every friday on "wall street week" saying the fed should open the door to the 50 point basis rate hike -- 50-basis-point rate hike. he points out that they have not been this far behind the curve in will over a year. jay powell, here he is on

tuesday to begin to the senate, he will give prepared remarks and then he will be peppered with questions. and of course, inflation is the big story. republicans are expected to pound the table on inflation not only because they want to do something about it, they want to rub it in the white house's face, while progressives on the democratic side may push in on, oh my gosh, you will hike rates so much that you heard the labor market. is always like this for fed chair? before congress. haidi: and in terms of the boj, it is the end of an era. are we expecting one final surprise from governor kuroda? kathleen: it would be great. bloomberg economics, no

matter what investors are looking for, yen bulls, bond bears, they say he is not going to do anything. he would not want to do anything that gets in the way of incoming governors' path of determining the pace of normalization and when it starts and where it begins. no change in negative rates, no change in your car control, keep buying bonds to prevent the 10 year jgb yield from rising. there is also a lot of uncertainty about inflation. yes, it is above 4% year-over-year and we have wages, which negotiations going on, so far so good, particularly wage hikes from companies. a lot of questions from smaller companies. at this point, it would perhaps be imprudent to that and. at the top, really purring officials -- ruling party officials saying that removing

extraordinary stimulus right now would be disruptive to markets. so a little bit of pressure coming from the political side in tokyo, as well. haidi: our global economics and policy editor kathleen hays in new york. thank you. traders will be watching for fed chair jay powell's testimony on tuesday. and we have the unveiling of the premeasured growth target from china. let's get garfield reynolds. what is the bigger driving force for you this week? garfield: the fed is the ultimate driving force and has been for some time because of the impacts yields have on other bond markets, but also the equity setup. and in asia, what is going on with the u.s. dollar. the ultimate message from markets last week was that even in the face of some very, very strong moves higher in yields,

some of them back above 4% for all treasury yields, that pivot narrative is not dead, it has simply been delayed a bit. we saw the way bonds came roaring back. the way equities came roaring back. we also saw the way the u.s. dollar ended up lower, which has sort of defied the expectations that the moves to price in a higher fed rate and a higher treasury yield for longer would support the dollar. instead, the dollar came off. so there is still the expectation that even if the fed is going to bring back one or two more rate hikes than expected, that it is close to the end. that removes all support for the dollar and gives support to risk assets. and then also the market obviously still does not believe any, to any great degree, fed officials, when they say that they will keep rates

high for an extended period of time. everybody will say there is a historical record. historically they pivot within 3-6 months towards rate cats from rate hikes. that is still the expectation and that is helping to keep risk assets supported, and emerging currencies. shery: how counterproductive is that for the federal reserve? i know chair powell has not put that much emphasis on easing financial conditions, but we have seen in the fomc statements and in what was discussed at those meetings that still financial conditions are important. garfield: they are important, but it depends on a couple of factors. one is, what does the data actually show? although the data is not as supportive for the fed's outlook as they might have been, there is still some sign that inflation and inflationary pressures are peaking or they

could be peaking. things are not as hard as they were last year. that is one part of it. the other part of it is that the fed is very keen, jerome powell in particular, very keen on the fact that they want to engineer a soft landing. they don't want to crash the economy and as long as they say we don't want to crash the economy, they are probably willing to live with a slightly looser financial setup then they might otherwise be happy with. shery: our chief correspondent for asia and mf contribute, garfield reynolds. thank you. let's get to vonnie quinn. vonnie: the biden administration acerta be close to competing an executive order. sources tell us restrictions include advanced technologies that could enhance china's military and intelligence capabilities. we learned president biden is preparing to request funding for it in his fiscal 2024 budget. japan is reportedly planning to lift restrictions on experts of

-- on exports of electronic components to south korea. what needs to process the move is part of a deal to withdraw a complaint for the w.t.o. over a trade dispute. the wto agreed in 2022 mediator the two countries' spats over japanese curbs on chemicals used to manufacture smartphone displays, tv screens, and semiconductors. saudi arabia has raised prices for crude shipments to asia and europe as it anticipates demand picking up. state-controlled saudi aramco increased more prices for asia in april, with its main arab brand at $2.50 a barrel above the original benchmark. those for northwest europe and the mediterranean jumped by as much as $1.30 a barrel. another norfolk southern freight train derailed in ohio. the company says no hazardous materials were involved in this incident, which happened in springfield. it is the second train derailment in ohio in a month. the norfolk southern ceo

testifies to a senate committee on thursday on the earlier crash, that spilled toxic chemicals into a rural community. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. haidi: still ahead, a former advisor to the boj governor tells us what he thinks is the greatest legacy of haruhiko kuroda. coming up next, moody's analytics is revising up their forecast for china's gdp growth this year, plus, their assessment of the weekend's npc meeting. this is bloomberg. ♪

shery: let's take a look at the

week ahead. after 10 years on the road, japanese -- bank of japan governor herbert pico kuroda will hold his last meeting. and chair powell will speak to congress. he will lay the groundwork for higher interest rates. he will speak again on wednesday. we will also get unemployment data from the u.s. at the end of the week. on thursday, president biden will release his 2024 budget request, outlining his top spending priorities, including aid to ukraine. the rba is set to raise interest rates for a 10th straight meeting on tuesday, even with policymakers seeing signs of a softening economy. we will also get the bank of canada's rate decision. and will be watching and inflation numbers from thailand, the philippines, china, and taiwan. haidi: joining us is katrina

ell, senior economist at moody's analytics. we are always watching the fed and this week will be dominated by the national people's congress meeting this weekend. what are you watching for? katrina: the most interesting part so far was that gdp growth target for china. the expectation is 5% this year. there were expectations that they would aim higher with 5.5%. shery: they are hoping to surprise to the upside. katrina: exactly, expectations are playing a key role. they were burned last year by missing here 5.5% target so what i think, they will do this year is a little and then try to surprise on the upside. let's not forget that that important export channel, exports account for 20% of china's economy and we are expecting the inevitable slowdown in u.s. and europe to materialize. so they are banking on domestic

demand. that is why they will aim low and hopefully deliver to the upside surprise. shery: we have a couple of months of data around the belt. you have a better idea of what the broader, exported inflationary impact will be on the growth impact on the rest of the world? katrina: that is a good question. you can look at it from two sides. the first site would be supply stresses easing back a lot quickly than expected which is a great thing. on the domestic side of things, domestic demand inflation rate impacts have been a modest uptick so i think we will continue to see modest demand-side inflation pressures build. overall, that will not change the global trajectory of inflation expected to cool globally this year. shery: we are very much watching what is happening on the regulatory front, matter may have some upside on the property sector from the npc. what did you get that could potentially be more supportive of the economy in china? katrina: so, what we did see was

that the fiscal deficit, the projected fiscal deficit as a proportion of gdp, is at 20 to come in at 3% this year. last year it was about -- is expected to come in at 3% this year. we expect to see fiscal support forthcoming. that will be critical because at the end of the day, the property market, for instance, really does need ongoing support, even if policymakers will take a targeted and really restrain approach to that support. i think that is a really important thing, because at the end of the day, we all know the property market accounts for 25% of gdp. they will continue to need support to really help the economy rollback to life in the absence of their covid zero policy. shery: how will that help other economies reliant on china as well, such as australia? we are seeing economic pressures, where the rba is expected to hike again? katrina: i think china reopening its borders, and the expected

sustained lift in domestic demand in china is really positive, particularly for asia pacific, which has a disproportionate exposure to china. in australia, we are already seeing a slowdown in domestic demand as a result of the reserve bank of australia's aggressive monetary policy tightening. with china's reopening and that expected left to's service exports, particularly education and tourism, that will be good news for us slowing domestic demand. haidi: always great to have you with us, katrina ell, senior economist at moody's analytics. much more to come here on "daybreak: asia." this is bloomberg. ♪

haidi: we are counting down to the start of trade in tokyo and seoul. shery: south korea finance

minister speaks in the top of the next hour. we are expecting to see perhaps comments about the economy, we had inflation numbers in south korea easing more than economists had expected for the month of february. bts agency hive is set to release that result of its share offer to buy out 5.5 million shares in sm. and we will track shares of after it was reported that there is plans to build $5 billion on another battery plant in the u.s. haidi: apple supplier foxconn saw february sales fall 11% from a year earlier, despite china's reopening. we are also hearing monthly revenue dropped to 13 billion last month. the iphone assembler says first-quarter outlook is roughly in line with market expectations. softbank chip designer arm is

seeking $8 million in the u.s. ipo. is expected to confidentially submit the pork for the ipo with a listing exposure to happen later this year. valuation is between $30 billion and $70 billion for the listing. more to come here on "daybreak: asia." this is bloomberg. ♪

♪ >> domain projected targets for developing this year are as followed. gdp growth of around 5%, 12 million new urban jobs, surveyed unemployment rate of around five

point 5%, cpi increase of 3%. in the face of the global surge of inflation, we strive to ensure market supply and stable prices, particularly food and energy. last year, global inflation record to a rocker -- rocked to a record high. >> explaining china's 2023 growth forecast. let's get more on everything expected to impact that trajectory. let's bring in bloomberg's greater china executive editor jean-luc. one of the aspects of it comes to be pressure on chinese growth is really the decoupling of u.s. curbs on chinese tech. this will be one of the reasons why we saw a measured gdp growth target. john: it could very well be.

we know that the biden administration is working on a set of restrictions that would effectively limit american investment in chinese technology that is considered dual use. so those that could be used for military and civilian purposes, the biden administration is in the early stages of planning that. it would be the mirror image of scythia's. so setting up a process to review outbound investors from the united states would target semi conductors, artificial intelligence, quantum computing. so really changing the forward trajectory of what economic growth in china could look like. haidi: in terms of taiwan, was it more of the same messaging that the peaceful unification -- reunification i should say? john: the language that we got on taiwan was largely the same as it was last year. an emphasis on peaceful unification.

there has been a lot of speculation that china is moving forward the timeline for potentially some kind of military action when it comes to taiwan. we have heard from the new foreign minister for example saying it is baseless to think china is moving forward the timeline. based on the language that we got, more talk about taking that process peacefully. though there is no confusion that china, that beijing, does want to take control over taiwan. to unify the political system there. haidi: what did we hear in terms of the new backing for coal? john: well, you played the sound of the premier talking about inflationary pressure that china has been under. energy is a big component. china has a lot of coal. it digs up and burns half the world's coal so it is a way as ukraine

pushes up costs of imports, china is spending a world leading amount of money on alternative energy. solar panels, wind turbines. so the country is trying to do two things at once, both to the transition to new energy, green energy, but also to have enough coal that there is not going to be inflation hitting the economy. haidi: bloomberg's greater china senior executive john there. it's take a look at the markets and i'm curious about how elongated or outsized the reaction will be to the work reports. annabelle: picking up on what john was saying about commodities, there is an inflationary concern coming through, playing into other aspects of the market. iron and china is saying that they are worried about the rally and prices. we saw lower government debt sales, that is the backbone for infrastructure investments.

some say that modest figure could be something that puts downward pressure on other parts of the metals and the soft commodities complex. brent crewed is weaker. in terms of commodity linked currencies as well, the aussie and the kiwi dollar are under pressure against the greenback as we do see the appetite for risk coming under a little bit of pressure. let's change over now, because you mention what we will see for chinese stocks. we had seen the reopening rally just stalling over the past few weeks. it reversed and last week we saw the first gain for ms ci china after a four-week slump. that was following pmi data of course that didn't show us the rebound or recovery in china was on steady footing. what could really determine the market dynamic is personnel changes and what we hear from the press conference later in the week. shery: we will continue to watch the npc as it progresses.

let's get to vonnie quinn with the first word headlines. vonnie: mary daly thinks u.s. interest rates will probably need to stay higher for longer. she pointed out inflation remains high in goods, housing and other services despite the central banks aggressive tightening. they're raising rates between five and five-and-a-half percent. south korea may reportedly impose fines of billions onto financial companies over illegal short setting. citing unidentified industry stories, young hub says the meeting will be on wednesday. if the penalty is imposed will be the first case since the revision was made to the capital markets act in 2021. that allows fines of up to 100% of the short order amount. u.n. it negotiators finalized a new international agreement expected to protect and sustain a two thirds of the global ocean. the treaty is a combination of two decades of work and creates a coordinated approach to establishing marine protected

areas on the high seas. this is a critical step towards meeting the goal of conserving at least 30% of the global ocean by 2030. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: coming up next, a former advisor to boj governor tells us he thinks the decade changed how banks made money. this is bloomberg. this is bloomberg. ent caretaker and owner. when covid hit, we had some challenges like a lot of businesses did. i heard about the payroll tax refund, it allowed us to keep the amount of people that we needed and the people that have been here taking care of us. see if your business may qualify. go to getrefunds.com.

haidi: it is time for japan ahead on bloomberg asia. japan makes it -- singapore makes its return to the nikkei since 2012. we will also be watching life insurance, which according to media reports is under investigation by japan's financial services agency over the sale of certain plants. we are tracking progress when it comes to softbank. the chip design unit arm is looking to raise $8 billion from the u.s.. thanks are pitching for a uh in of $70 billion. shery: and of course boj governor kuroda introduced negative rates and he will hold his last policy meeting this week before handing over the reins to ueda.

let's bring our next guest he worked at the bank of japan for over three decades and has known both of them. joining us is professor at osaka university of economics. great to have you with us. should we start with the legacy of governor kuroda? what is he leaving behind >> i think that his reticence is shown in the fed market. i think -- them market and the boj has sent a strong message as a commitment evidenced by the money and also he brought the kuroda, asset and stock prices remain high. but on the other hand, the digression is still modest and under the targets.

roses legacy. shery: you have known ueda since the 1980's. how challenging but would be for him to take away as you said what kuroda put? wataru: i think that ueda has a great challenge ahead because kuroda's main mission for the governor is of course normalization of monetary policy. therefore the future -- i believe that he will try to change the direction very gradually and very cautiously. but on the other hand, the government -- be expanding budget. but i think the deficit would be

expanding. that will be a challenge for the next governor. also this is a big challenge for independence. haidi: in terms of what he could have done differently from your point of view, you talk about monetary policy discipline and the looseness of his policy discipline. and the impact on fiscal discipline, on political discipline as well. and i guess we've seen a political piece come in in terms of not just the impact on the boj, but of course political pressures everywhere coming down on central banks. would you have done anything differently? wataru: i think that he is more academic, so he would have done his policy. what can be explained very logically can be that his policy is backed right economic certainty. this is a strong stance that the party takes that i believe.

that i hope so. haidi: how difficult do you think it will be for the next leader? we've talked about ueda and the challenges that he faces, in terms of being able to orchestrate -- not just a stable policy meaning from here, but also are we getting closer to the virtuous cycle? do you think the ultimate goal of kuroda's past years at the really helm of the boj will eventually be realized? wataru: i think the -- in order to achieve the target, it's a long way to go. and i think that mr. ueda needs kind of the patience. also that he would be prepared for the unexpected, unexpected standard shocks.

the problem is that the japanese economy is very, very weak. so the gross rate still remains very low. so in that case, to see the future, the future iteration. it can take a long time and he needs patience. shery: professor, this week investors are not expecting change from the boj but more and more economists think perhaps some sort of change will happen before june. if mr. ueda does in fact week policy at the boj, how would it be? wataru: i don't know exactly, but ueda-san is the kind of person -- he's watching economic

data very, very carefully. and this is not to change the policy so dramatically. so anyway that he changes the policy, he will change the policy cautiously and gradually. i expect that for him. shery: we know that governor kuroda was very good in terms of reading monetary policy together with politics in japan and was very closely aligned with economics. how well can we expect mr. ueda to play politics in the country? wataru: i hope that he would conduct the policy more independently. of course, he must take care the politics, but prime minister has a different stance from the former prime minister, so that i

think ueda may conduct policy more independently compared to governor kuroda. shery: we have seen governor kuroda's policies also anger some of the japanese population, given the weakness of the yen into the purchasing power being lost. what are japanese people on the ground thinking when they see the boj and where it should head? wataru: it is very ambitious. they expected the boj to continue to support the tasks for the central bank. inflation came down. people are hoping the wages increase in the future. in the near future.

both at the same time. haidi: professor, we've talked a lot about the challenges of the next steps. if you think even beyond monetary policy, would you think the biggest change japan needs right now? wataru: i think that japan or the boj tried to focus on the edgier. boj takes more leadership in the national finance. i am proposing the kind with the idea -- of currency. we know that japan, the economy, without -- economy.

i hope that japan recognizes that we are part of asia and taking real estate into international finance. that's my hopes. haidi: wataru, professor at the osaka university of economics. you can catch up with our past interviews on tv . join in on the conversations and send us instant messages during our show. it's for bloomberg subscribers only. check it out. it is at tv . this is bloomberg. ♪

shery: hewlett-packard enterprises has given a strong forecast for the quarter and boosted annual outlook. the company expects sales to be $7.3 billion in the fiscal second quarter, beating analyst estimates. eeo told --ceo told bloomberg that exceptional results of them confidence to raise the financial outlook for the full year. >> we exit q1 with a record-setting performance. it was the best since 2016 in terms of revenue. we delivered the best operating profit at 11.8% and the highest

ever eps in the history of hewlett-packard enterprise. that is based on the fact that we saw strong demand in 2022. we counted the demand for q1 in our book and we exit q1 with a golden book that is two x historical levels. we see the state of demand in the storage and hbc and ai and unevenness in the computer business with the fact that customers have to digest the purchases that they had last year. we are really excited about our winning strategy with hp, the ar business of green lake group 31%. what is more impressive is that in two years we doubled the amount of total value as a service business from 5 billion to $10 billion. that is why we are very confident about the momentum. that's why we raise to the guidance. >> it is clear that there is a

cushion available to hp, but what happens if we do indeed get a recession at the end of this year? how quickly could the backlog fall apart with orders pulled? >> we have a unique diversified portfolio that romaine talked about earlier. we have a portfolio aligned to the megatrends where spending is shifting. the connected intelligent edge, we are connected with this paramount intelligence group and we had our extremely elevated on the book. that will carry on for the balance of 2023. ai is top of mind for people today and that is a big opportunity for us as a company. >> talk about that, in tonio. it is hard to separate the substance from the hype and there has been a lot of hype around this. how exactly do you integrate that into your product and do it in a cost-effective way?

>> well, you know, this is one of the major inflection points we see in a generational shift, like web, mobile and the like. for us it is an inflection point that is perfectly aligned to innovation with supercomputing. when we think about check tbt -- chat gpt, we have the supercomputer capabilities to do so. so our thinking is we will offer supercomputing as a cloud because it requires unique capabilities no one else has, not even the public labs. that's an opportunity we are going to invest in for years to come. haidi: hp ceo antonio there. let's get a check of the business flash headlines. south africa's s calm is --eskom will remove megawatts from the grill until tuesday morning. more powerplants have been taken off-line for repairs.

sunday march the 64th day of rolling blackouts in south africa this year. lufthansa has joined major european airlines in predicting an earnings boost. this as travel demand swings back from the covid pandemic. they expect a quote significant agreement on the $1.6 billion adjusted last year. summer vacations to countries will be particularly strong. >> looking forward to strong demand for the year 2023 starting with easter going all the way until the summer. very focused on the premium classes. first class, business class, and not just corporate travelers, but to a much larger degree for leisure travel. haidi: boeing ceo dave calhoun has missed out on a $7 million bonus. the company's board decided not to give him the incentive due to the long delays to launch the jet. the jet was postponed until 2025

due to regulatory scrutiny. even without the bonus, calhoun earned 22 and last year, up from 21 million in 2021. chinese genetics firm bgi opposes a u.s. move to stop export on some of its units. they say washington's decision may have been caused by misinformation and it is willing and able to clarify. the biden administration unannounced curves for dozens of chinese entities citing national security concerns. shery: these are some of the stocks we will be watching when trade opens in korea and japan. keep your eyes on japan airlines. it will be added to the nikkei 225 for the first time since it relisted in 2012. tokyo disney, electronics will join the benchmark. watch the stocks that are being cut from the blue-chip dates. we will also keep track on softbank following a reuters report that they are considering

raising a billion dollars from u.s. ipo this year. plus we will be watching moves in timeshares as we await the results of its tender offer for sm entertainment. in the next hour we will discuss attractive opportunities in the chinese market with east spring investments ken wong. plus chief economist 10 wong tells us -- 10 wong sets his sights on a cautious growth goal. market opens in tokyo and seoul are next. this is bloomberg. ♪

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shery: this is daybreak: asia. we are coming down to asia's major market opens in what is shaping up to be a busy week ahead.

we have the fed chair jay powell speaking on capitol hill ahead of u.s. jobs numbers in the ongoing national people's congress in china. haidi: the handful of inflation readings on top of that as well as looking forward to the reserve bank of australia and of course that last eating for the bank of japan. that's what we've been talking about as well. risk events on the horizon. let's take a look at how markets are opening up to deal with it. annabelle: thank you. we are just a few minutes away from the open of japan, south korea and the start of trading for cash treasuries. we've been watching the 10 year yield closely in the open. what else we are watching, a lot of focus on what happens in japan, given we have the boj governor chairing his last policy meeting after a decade. the expectation is for no changes. outside chance of a surprise from kuroda as he steps down but

the 2% secure -- 2% target not secure. we do say that -- see that on hold. as we get the open for japan and korea, looking at softbank shares at the start of trading after the report at the weekend that it is planning on filing for an ipo in the u.s.. that could raise as much as $8 billion. you can see shares of softbank gaining 1.2% at the opening. paperwork could be submitted by the end of next month. let's change to what is happening at korea at the start of trading. we focused on the tussle for control for the entertainment giant sm entertainment. it seems clear for a take over by the label of bts because a south korean court has blocked sm's share sale to internet giant cookout and that was the company's favorite.

we're watching inflation numbers that came through earlier on the eco-front, consumer prices advancing 4.8% in january from a year earlier, so february is slowing from the reading at the start of the year and coming in below estimates, so that does provide some sort of scope or the be ok to keep stimulus where the key rate on hold. we are seeing as well the korean you want to looking stronger with more risk aversion coming into the stock. you can see the kospi up more than 1%. and australia come or focus on the reaction were getting so far to the mpc. broadly risk on, but it is the materials sector that is leading the drop today. that is playing out in terms of what we see with brent crude prices in the red. we also have inflation readings coming out. we are seeing that coming hot in australia. expanding 6.3% on the year and 0.4% on the month.

but very most focused on what is happening in beijing. haidi: that exported inflationary pressure, so much that this depends on the pace of the reopening, the economic growth that can be achieved. they've set a modest growth target of five point 7% indicating that the government will avoid large-scale stimulus to boost the economic recovery. let's bring in our chief north asian correspondent stephen engle in hong kong. we knew big thank stimulus is not going to happen given recent weeks since the reopening has been pretty encouraging. do we expect disappointment from the work report? stephen: there could be, but you have to look at this target more as a floor rather than a ceiling. when they say about 5% they're going to hit that and then there could be room yonder, but it does signal that perhaps -- i had them sing in work report that there will not be large-scale stimulus coming down

the pike. in addition to essentially the big stimulus was the abolishment of covid zero and the reopening of the economy. that stimulus in itself and again of the three economic priorities, likely set forth at the national people's congress, number one being getting back growth momentum. number two, restoring confidence. number three is essentially affording a run up of financial risks again which they spent the last two years trying to combat through regulatory crackdowns including the property market and the economy. they're not going to want to run the risk of stoking inflation that you mentioned as well as stoking asset bubbles and that. that's been a problem in the property sector. the opinion columnist said bloomberg news essentially stating that this goal, this modest goal of about 5% could

indicate that there's more regulatory tightening as xi jinping, you see here at the opening on sunday really consolidates his power with loyalists around him and exerting more communist party discipline over discipline -- over policymaking and that's what we'll see over the course of the week with his appointments, including his economic czar and the new pboc communist party chief and the new premier. there's lots still to be determined going forward but setting the lobar means they can exceed it, it does not necessarily mean that there will be a big stimulus. shery: stephen engle. let's bring in our next guest, who remains positive on chinese equities and expects china to grow by five and this year. with us is ken wong, asia in equity specialist. good to have you with us.

stephen was telling us that around 5% growth target is just the floor. does this give enough confidence to the markets? we could see more room for gains , despite the fact that we've seen a run up until now. ken: potentially that is what we are expecting to see. we do sometimes have moving goalposts in which the if things are not going as well as people are seeing potentially we could see further stimulus. right now what we are expecting to see is less reliance on infrastructure, like what was seen over the past couple of years and in particular more focus on consumption. we look in our portfolios, domestic shares, we are more focused on domestic consumption, consumer discretionary names. specifically health care related names. one key aspect is the fact that text self-reliance, these areas on renewables, these are going to be important aspects.

last year we looked at the renewable sectors in china, they do not perform well. but this year, especially if there is more grown emphasis on tech stuff and reliance, this is one area we are keen it look at further. shery: we have jd.com reporting earnings. what can we expect in terms of earnings recovery in these big tech giants? ken: not necessarily with this upcoming report we are expecting to see report cards, but going forward when we're looking at specifically let's say first quarter numbers, second-quarter numbers, this is where we start to see a push and stronger growth. we look at the earnings growth, it is much healthier, the prospects are much better as compared to the developed market. so there are definitely things that we were expecting to see good results, but more likely the second and third quarter when results will turn more positive.

haidi: do you buy into the domestic consumption exposed trends? we talk a lot about easier pix when it comes to the china exposure story already having been done. and i do one that we have to see -- i do wonder what we have to see as a catalyst as a further part of the rally. ken: this will be a catalyst. we look at the second quarter when things start to come back much quicker online, we will start to see some of these numbers and whether or not growth is sustainable, but what were seeing so far we look at various numbers, when it comes to mobility, when it comes to consumer spending, travel, these are all happening. so as we further analyze the data, we do expect to see a further pickup in the second quarter in the summer months actually. haidi: beyond the china story, what do you find compelling because it is feeling like we

are going into a more difficult few quarters for broader equities. ken: when it comes to rising interest rates, that is the story of everyone having a difficult time sleeping at night. here in asia, we see china is definitely a good opportunity to invest. even within developed markets, we like japan. the fact is when you look at it overall from a valuation expected, when you look from a monetary policy perspective which is more accommodative rise in wages across the board in terms of various sectors, looking at specifically the overall earnings yield that investors can get in japan, we see opportunities when it comes to investing. shery: i have heard lots of people liking japan financials given that they are expecting a tweet from the boj in the next few months. what are you expecting? ken: yeah, japanese financials when you look at value stocks within japan, we see opportunities there.

when we look at 20, it was a value cycle within japan when it comes to stockpicking. but we think there is still more room for improvements amongst value stocks. this will be an area that we will keep our eyes on when it comes to investing in japan. haidi: asia equity portfolio specialist ken wong. let's get you to new york, vonnie quinn has the first word headlines. vonnie: the biden administration is close to completing the executive order that would strike u.s. companies investments in parts of china. the restrictions include advanced technologies that could enhance china's military and intelligence capabilities. we've learned president biden is requesting funding for it in his fiscal 2024 budget. japan is planning to lift restrictions on exports of key electronics components to south korea. the newspaper says the move is part of a deal to with draw a complaint and the wto.

at agreed in 2020 to mediate the two countries spats over japanese chemicals used to manufacture smartphone displays, tv screens and semi conductors. saudi arabia has raise prices for shipments to asia and europe as it anticipates demand. state control saudi aramco increased prices for asia with its main light grade two dollars 50 cents above the regional benchmark. west europe and the mediterranean jumped by as much as $1.30 a barrel. brazil's former president bolsonaro is planning to return to the country this month. he made a comment to nbc news when attending the conservative political action conference outside of washington. he has been in the u.s. since december and is under investigation for involvement in the january attack on the capital. he has denied responsibility for the attack. norfolk southern rate train has derailed again in ohio. no hazardous materials were involved in this incident, which

happened in springville. it's the second train derailment in ohio in a month. norfolk southern ceo has replies to a senate committee on the earlier crash in east palestine that spilled chemicals. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: all right, let's get you back to annabel in hong kong with a look at some of the movers. annabelle: really focused on what is happening in terms of the battle for control of sm entertainment. a lot of twists and turns but at a high level, we have two companies wanting to up their control of sm entertainment. essentially the board of sm entertainment wanted to allow the internet giant to increase its shareholdings in the company. the founder did not want take place. he saw a high and appealed to

south korea's legal system to block a shared sale. if the court has ruled in favor of that happening. that opens the door for a takeover of sm entertainment. you can see stocks just moving a little bit higher. 40% stake. change over now, another company were focused on at the open is softbank, given its company arm. the british chip designer is possibly planning to file for an ipo in the u.s. later this year according to a reuters report this is the company could be seeking to raise $8 billion. where keeping an eye on what's happening on the commodity space with steelmakers, given chinese officials discussing the iron ore surge. we saw weaker government debt sales and that's a background of spending in china. mixed assets in australia. shery: we have an alert right now on the bloomberg.

if you're that beijing is flossing -- pressing to give up passports to be selected for chinese parliament. this coming from the financial times. this is of course according to the reports as beijing is trying to stamp out foreign influence in control of hong kong. officials telling tycoons wishing to hong kong china's top decision-making body to renounce passports or travel documents from countries including the u.k. according to one new delegate and one former delegate and another person briefed on the selection process, talking to the financial times. still ahead, ups investment bank chief chinese economist gives us her assessment of the governments cautious growth target for 2023. up next, a preview of the last policy meeting of the longest-serving bank of japan governor, kuroda. this is bloomberg. ♪

>> kuroda-san's contribution not only to the bank of japan but also japan overall is kind of perfect, especially at the beginning of it. >> he has been courageous and the different means and poles he has used to try to get from falling prices to suddenly a back normal -- back above normal prices. >> he managed to do it before the end of his term, but i think he kept the ship going quite

well and that's quite an achievement. >> the changes in the real economy are not that large. shery: on the boj's policy direction under governor kuroda, it is really a landmark week, isn't it? he is the boj's longest serving governor and is now getting ready to preside over his last policy meeting. our global economics and policy editor kathleen hays is here with the latest. governor kuroda, well known for surprises, are we expecting any? kathleen: he decided to widen the yields control curve. could he do it again or something more dramatic? investors are betting that because he has this history and because many are in agreement that normalization has to start at some point, at the very least, the policy to get to

inflation is 2% as fast as the boj could, that's still in place. could that be tweaked? bloomberg economic sums it up pretty well i would say, because their conclusion is first of all he will not want to take steps that would impinge any way on the ability of the next governor, mr. ueda, to come in, manage policy and normalization of the way he wants to do it. so far, even though inflation right now, key metrics running above or percent year-over-year, twice the target, members of the bank of japan and economists like bloomberg economics as well who are not quite certain that this 2% inflation target is going to be maintained, particularly when we get to a point where commodity prices come down. that's one of their biggest concerns. in the past couple of days, one of the top members of the ruling party in parliament was saying a boj move to eliminate this

extreme quantitative easing right now would disrupt markets. we also know the defense budget is being doubled and has a large budget deficit. a lot of debt to finance and yields on a bonds were to start rising, that could impinge on the cost. they do not want to raise taxes. a lot of things right now are in the pot that suggest approved and thing to do, the logical thing is not to do anything, there's no reason or mr. kuroda to do anything as he steps down. haidi: it's a big week for the fed, jay powell preparing for today's of congress and embracing for a hawkish testimony. kathleen: over the weekend, the president of the san francisco fed was speaking at university. she made it clear she is on board with comments from fed officials saying we may have to raise rates higher than we ought

keep them longer. clear there is more work to do. more work to do is more rate hikes. in order to put this episode of inflation behind us, further policy maintain for a longer amount of time will likely be necessary. it's been signaled by more hawkish members of the fomc or maybe i should say they're more worried about the fact that inflation has stayed high for so long. even after 4 75 basis point hikes, larry summers on bloomberg wall street week was saying he thinks that they should be looking hard after downshifting to 25 basis points, going back to 50. their way far behind the curve . jay powell is expected to continue on this path and certainly pushed on by members of the senate on tuesday, members of the house on wednesday, democrats are pushing not to raise rates so much that he hurts the labor market, while

republicans are going to hammer that inflation is way too hot. can i rub it into the white house that inflation has gotten out of control? one final thing i would say, heidi, the white house will argue if they could, it is the fed that let it get out of control. they have to get it back in control now. shery: bloomberg's global economics and policy editor, kathleen hays bid former treasury secretary larry summers set a soft landing for the u.s. economy is still possible, as long as the fed keeps up with data. >> the fed is behind the curve. there have been six jolts to the fed in the last six weeks. a seasonal adjustment, the cpi took the trend downwards in inflation during 2022 out of the data. the inflation figures for the last several months of 2022 were revised upwards, further taking

any sign of declining inflation out. we've got a cpi number that was very disappointing in terms of how high the level and the core was and that was reinforced by the pce. the information when it came in. all of the indicators for january read strong suggesting that monetary policy has not yet gotten substantial traction in slowing the fullness of the aggregate economy down. though wage inflation numbers as they have been revised no longer show the kind of reductions that we had been expecting for many

had been expecting to see. and you see interest rates move to ratchet upwards with the 10 year crossing and the two-year reaching record levels. put all of that together and i think a reasonable assessment of where the fed is would say that they have not been this far behind the curve for a year or so. once again, the forces -- the arguments made by team transitory have unfortunately looked more like wishful thinking and you can see that in the evolution of rhetoric from

we will have a soft landing towards it is possible that we will have a soft landing. of course, it is possible that we will have a soft landing, but maximizing that limited prospect depends upon realistically assessing the situation. shery: former treasury secretary larry summers. more to come on daybreak asia. this is bloomberg. ♪

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13 billion. the iphone assembler says its first-quarter outlook is in line with market expectations. softbank chip designer arm is seeking $8 million in the u.s. ipo. reuter says arm is expected to confidentially submit paperwork for it ipo in late april with a listing expected to take place later this year. bloomberg reported the bankers had pitched a valuation of 30 billion dollars for the listing. coming up next, ubs investment bank chief china economist joins us.

>> the main projected targets for development this year are as follows: gdp growth of around 5%, around 12 million new urban

jobs, surveyed urban unemployment rate of five point 5%, cpi increase of around 3%. in the face of the global surge of inflation, we strive to ensure market supply and prices, particularly those of food and energy. last year global inflation rocketed to a high and it's not easy for us to maintain a stable price in terms of our cpi. haidi: what was chinese premier explaining chinese 2023 economic growth forecast. that is what traders are digesting as we kick off another week in asia. in terms of words being felt is playing out more and commodities. seeing iron ore fractionally lower. china highlighting concerns in prices. what were seeing is coming across in the offshore yuan

looking fractionally weaker. concerns around the cautious target of 5.5% that was set. we are continuing to watch equities move higher. that is more of a junction of the meeting that we had in the wall street session. snapping three straight weeks of losses. chinese stocks rose given the stronger data that came through and we see the hang seng looking to games at 5.7%. mainland shares looking higher. our bloomberg intelligence team says during the npc we usually do see times of weakness but the best performer is following economic or political gatherings including two sessions in march and then plenary sessions taking place in october, when you look back over the last 15 years

november and april both up. the focus will be on returning to the growth agenda around five point percent -- 5.5%, seen as the baseline case. haidi: more analysis on the target. wong tao joins us. great to have you as always. there has been an interpretation which is that around 5% is the floor that they will hopefully surprise to the upside. but the focus is on the restoration of quality gro wth? wang: the government is cautious, with the global environment and when they set the target last december. chinese economy was in a dire position with a lot of

uncertainty related to covid and reopening. the baseline scenario, i think the government is striving for more and giving space to not stimulate too much and see how the situation goes. recent developments suggest reopening is proceeding quite in lime. even a little better. haidi: when you take a look at the changes we are expecting when it comes to china's institutions as well as the changes what comes to key economic leadership personnel, are you concerned about the risk given that we are expecting a handover from experienced, well respected economic leaders to people who are not so experienced in that area? wang: china's policies tend to

have continuity. so the work report and economic work conference last year was set together with the incoming leaders. very clear this year's focus for the government will be the growth agenda to stabilize growth. i don't think there will be much surprise. also incoming leaders about experience managing local economies and tend to be experienced with big coastal provinces. in the expected vice premier in charge of financial affairs and so on, economic affairs, has also had a lot of experience managing an drc, the most powerful macroeconomic agency. the report is extensive, outlining the policies agenda. there's not a lot of risk in

terms of underperforming. if anything, given the focus of economic growth agenda, there is potentially actually more upside surprise on the policy side. a lot of room to do more. shery: and yet, we have not seen anything large or just brought, wide economic policy support. what other targeted support could we expect, especially the monetary side and fiscal side when it comes to boosting consumption? wang: right. this year's overall policy has been modestly supportive tone and envelope in line with expectation. there's more space in the quasi-schools base, more policy bank lending. that combines credit or monetary policy with fiscal policy. the budget deficit is enlarged

and local government bonds are raised. there are also unspent money on the local government side. probably close to one a true billion rnb. on the monitors -- monetary side, they are pertinent about the debt increase, local government debt and the need to continue to defuse debt risk related to developers. as a continuity policy. on the consumption side, we could see local governments increasing consumption coupons and there is encouragement from the minister of finance to do more on compliances and smart appliances as well as electric vehicles. property in some of those areas. shery: how much can policymakers rely on consumers to release the

excess saving of the last few years? wang: the biggest driver for growth will be consumption in the most four-part is the reopening -- the most important part is resuming economic activities with more services company starting to open up and more employment and better income growth. that will drive the bulk of that. we are already seeing some of that. passenger traffic is above 2019 level in recent weeks. in terms of excess saving, we expect a partial release of that this year. maybe only 20% will be released. more will come next year, so i think it's more of a normalization. of course, some stimulus support from the government can jumpstart that. in the current baseline scenario without a major stimulus, we expect household consumption to

grow by 8% in real terms in more than 10% in nominal terms. that will drive growth which is upgraded the gdp forecast of 5.4%. shery: head of asia economics and chief china economist at ubs. more analysis on china's people's congress. we'll hear from independent economist qu and matthew chan. oriental capital research tells us about the effect of china's tech industry crackdown. for now it's good to vonnie quinn with the first word headlines. vonnie: china has kept language regarding taiwan the same despite heightened tensions over the self ruled a headwind -- island. beijing will strengthen relations with the goal of unification grip the government will oppose any effort that promotes taiwan's and dependence. fed president mary daly things

u.s. interest rates will need to stay higher for longer. she pointed out that inflation remains high in goods, housing and other services despite the central banks aggressive tightening. she supports raising rates 5 or five-and-a-half percent. south korea may impose fines of billions of yuan on illegal shortselling. if the penalty is imposed, it will be the first case since the revision was made to the capital markets act of 2021, which allows fines of up to 100% of the short order amount. u.n. negotiators finalize an international agreement expected to protect and sustain almost two thirds of the global ocean. the treaty is a culmination of two decades of work and creates a cord needed approach to establishing korean protected areas on the high seas. this is a critical step towards meeting the shared goal of

conserving at least 30% of the global ocean by 2030. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead fears over china's private sector crackdown have been reignited following the disappearance of billionaire. we get our big take discussion up next. this is bloomberg. ♪ and it's easier than ever to■ get your projects done right. inside, outside, big or small, angi helps you find the right so for whatever you need done. with angi, you can connect with and see ratings and reviews. just search or scroll to see upf on hundreds of projects. and when you book and pay throug you're covered by our happiness it's easy to make your home an a check out angi.com today. angi... and done. through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund

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haidi: more clues about chinese recovery potentially this week. consumption firms are posting earnings reports and it comes as officials of the national people's congress set a modest growth target for this year, a sign that there are concerns about the broader economic picture. let's bring in breaking news editor felix to talk about this in detail. we also saw in the report the focus on domestic consumer driven growth. what does that mean in terms of what we have seen so far from consumer facing names? felix: yes, i think we can keep our eyes on the earnings of jd.com. fourth-quarter revenue is expected to jump more than 10% from the previous quarter, so jd has a unique position in chinese e-commerce market because it has

its own logistic network. one important thing we have to keep our eyes on is the 1.5 billion subsidy program. investors already worry that it may hurt the profit margin, but analysts are still quite optimistic and saying jd can expand the market in lower tier cities and drive new users and revenue growth. shery: last week, we had a companies like lee auto reporting earnings. does that give insight into what we can expect from ev battery maker ctl later this battery maker ctl later this week? felix: ctl will report earnings on the same day as jd.com. the company reported better-than-expected preliminary net income this year. almost 1% above analyst expectations. the company is offering rebates to ev makers.

in chinese tech sectors, overall, factory demand in domestic and also international markets are very strong. so it is expected that earnings momentum can be extended this year after the fourth quarter. shery: felix with a preview of earnings results to expect this week. of course, we just talked about how beijing could be perhaps turning friendly toward its tech giants, but industry insiders interviewed by bloomberg say investors are fearful of beijing. for more let's go to our asian tech reporter in hong kong. jane, what can we expect in terms of the tech crackdown? jane: it's hard to say. chinese government is likely to give mixed signals in the past few weeks and months. they were positive wants and negative ones. in the positive side, the covid

policy allowed jd to register new users. on the others, there is a disappearance of a start investor of china's tech industry and the chinese government issued warnings about measures to curb young people's excessive addiction to short videos, which will hurt companies in mainland china. so it is really mixed signals. haidi: things might be calm now, but in your interviews, is there a concern that progrowth sentiment might not be a permanent one? jane: there are wide concerns about the economy. the recovery, given the risks

related to the gdp growth target of 5%. that is a historic low. so people expect more might come, especially after there are no clear clues about the disappearance right now and also there are new measures of these curbs and short video platforms. shery: what can we expect for entrepreneurship, for investors looking at china and given the concerns we just talked about? jane: on the ground, people's opinions are divided. some of them are really worried and just scaling back. and investors are thinking about no investment in china this year. but for others, for those who decided to remain in china, they think the worst is over and need to be cautious, but there is lots to do. so people resumed traveling and investors are more actively

sourcing deals. so i think it's really divided opinions on the ground. haidi: bloomberg's asia tech reporter, jane, in hong kong. tune into bloomberg radio to hear more from the days big newsmakers. in-depth analysis from the daybreak team broadcasting live from hong kong. listen live, the app, radio plus. more to come. this is bloomberg. ♪

>> pay read the work report. it's basically where back in business, were going to restart the economy. we are engaged with the world. it was sort of to ensure domestic constituents, including the battered private sector and the foreign business community, telling them they are welcome and they're going to optimize and improve foreign investment environment. >> i think expectations are playing a key role. they were burned last year i missing their five-and-a-half percent target. so what they're going to do this year's aim low and try to surprise on the upside. shery: our guest on daybreak weighing in on china's economic policy. chinese markets could be coming under pressure again on concerns that authorities will go slow on

measures after unveiling a conservative growth target. let's bring in our chief chinese markets correspondent, sophia. 5% around the world is pretty big but when it comes to china, economists had expected a higher growth target. sophia: for china it is the second year in a row that the growth target is cuts. this is a year of transition. but there were -- i would not say expectations but definitely hopes in the market that we would see a higher gdp target. and also that we would get more details as to how china would plan to achieve this. if anything, related to reviving the consumer and really putting a floor on the property market that was keenly awaited. it's disappointing gdp growth for markets. we were expecting a few more stimulus measures but again, it does not really make sense in a

year where china is reopening and we have new leadership, that china would go big on monetary stimulus and fiscal spending. it is a year to repair fiscal consent -- reserves. haidi: what does that mean for the broader risk rally though? because there's a lot of sitting on the sidelines, waiting for the next big catalyst and it is not clear that we would get that, either from the policy data or large-scale stimulus measures? sofia: i think that is exactly right. it's a market looking for direction and catalysts. the bond market was not really believing in the economic recovery, but the fact that we are not getting higher growth in more stimulus plans might be good for government bonds, because were not getting oversupply to really replenish the fiscal reserves for local governments. but also equity markets it was onshore especially that was looking for that stimulus direction from beijing, from the

work report. so it will be a market that will struggle to find a floor and look for a story, what is the narrative after the big be opening trade? that is the question for the rest of the year. haidi: there are a lot of stories and narratives that may not be progrowth or pro-future gains in the markets, right? tech decoupling, concerns that the more open approach to private enterprise may not be long-lasting. sofia: yes, but i would say kind of the flipside of that is the work report actually is really looking at the importance of foreign direct investment, fdi and this has been consistent when china has been saying were open for business. you had a guest earlier on the show saying this as well. in looking to revive not just private investment within china, but really attract more of the foreign investment that it has lost in the past two to three years.

if we get concrete measures, that could be positive. anything regarding regulation, not just on tech but tech investments. the disappearance with authorities really spooking an investor sentiment, it's a tricky time to understand what the next year, what the next five years -- china's new leadership will prioritize for growth going forward. shery: our bets around national security a sure thing, given how much defense spending continues to increase? sofia:sofia: 7.2%, the biggest increase since 2019. it's a kind of china that is looking at the rest of the world as a threat, right? so it does make sense. we're looking at defense shares. let's see if they move. that will be a likely move today at the open. also consumer is a key sector. a focus on growth. but also self-sufficiency when

it comes to technology, ramping up investments on chinese chipmaking abilities. so anything that makes china essentially more competitive with the rest of the world, with the u.s. in particular, the u.s. rivalry, it really poses a threat in china reacting to that. but yes, military spending increasing. but it's also -- i mean china is not the only country that is looking to do that. haidi: sofia, bloomberg's market correspondent. let's take a look at stocks we are marching ahead of the markets opening in hong kong and china as we passed that work report and look ahead to the rest of the npc this week. tech stocks in focus. biden administration closing in on an executive order to resist u.s. investment in parts of the chinese economy. that continues to be a major theme and as we were just talking, the defense spending pace. china will grow by 7.2%. that is the fastest pace since

2019 as we see escalating tensions between washington and beijing. and some of those tensions regionally as well. beijing said the target -- disorder the property sector. we will be looking at how investors interpret that. citi holdings in country gardens are some of the main ones we should watch for. shery: we are seeing broad upside across markets in asia with communication services and tech stocks leading the gains. the nikkei is up more than 1%. the market opens in china are next. this is bloomberg. ♪ that's stitch fix. ...and how can you help me? we do the shopping for you. you tell us your size, budget and style. wait, is it a subscription? no. style for me? for me? for me? always. we'll pick the clothes. you enjoy the great fit. stitch fix.

>> expanding domestic demand, we should get her ready to the