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haidi: a very good morning and welcome to "daybreak: australia." i am haidi stroud-watts in sydney. annabelle: i am annabelle droulers in hong kong. we are counting down to asia's major market opens. shery: good evening from bloomberg's world headquarters in new york, i am shery ahn. the top stories this hour. volatility grabs the markets as fresh turmoil and credit suisse has investors rushing for safety. a gauge of u.s. bank shares hitting 28 month lows. yvonne: stop getting some relief with switzerland central bank and financial regulators saying they will provide liquidity support if needed. david: other central banks are in focus, too, as bettors but on the pivot by the fed to prevent harsh economic lending. take a look at how u.s. futures are coming online, a mixed picture. it was already a mixed picture in the new york session as well. we were rallying off the session those after jitters around credit suisse. who can blame investors, of

course we are coming off the collapse of three letters here in the u.s. in a matter of days. but the swiss national bank , and talking about liquidity, that send the s&p 500 higher, still negative territory. check stocks losing ground helps on speculation that the fed will not be doing as much, tech stocks. the wti rebounded. oil sinking to new lows given the microeconomic challenges around the world. and growth concerns as well. look at the government bonds race. it was really severn trent yields plunging to new lows. the two-year treasury yield below 4%. this is the september low. perhaps a little bit of some respite coming from data today that, ppi data surprisingly declined after core cpi yesterday came out at the fastest pace of increases in

five months. german 2-year yield and 30-year yield also saw record drops. european stocks, really bettered the turmoil with credit suisse and the broader banking sector. haidi: and we are talking about long-borrowing troubles when it comes to credit suisse, they were in the midst of the difficult multiyear restructuring and they were facing problems for svb. but we have seen this in crisis mode after just a few words from top shareholder saudi national bank, which became the main shareholder of credit suisse last year, saying it would not be injecting any more money above its current state of just under 10%. take a listen. >> the answer is absolutely not. for many reasons, outside the simplest reason which is regulatory and statuary. we now own 9.8% of the bank. if we go about 10%, all kinds of new rules kick in, whether by

our regulator or the european regulator or the swiss regulator, and we are not inclined to get into a new regulatory regime. mark: no wonder we continue to see anxiety in the banking sector whether it is here in the u.s. or europe as well. shery: look at this chart, we have seen the record volume when it comes to trading activity and credit suisse shares, hitting new highs this as we continue to see this restructuring, this is reshaping and credit suisse, now i'm. we have heard from the bank's head asking for patience, but that is not resonating with investors as people are worried about what is going on with the global banking industry. for more, let's bring in our bluebird reporters sally bakewell, emily graffeo, and our global economics and policy editor kathleen hays you have been very busy lately. sally: yes, very busy. concerns about credit suisse

ratcheted up to a whole new level and part of it is credit suisse, it has been mired in a complex turnaround. but part of it is also colliding with this negative sentiment in the market after the collapse of three lenders. and we saw that very clearly in the market. it only took the top shareholder in credit suisse to say that he wants to keep his stake at around the 10% mark. there were reasons for that, regulatory and legal reasons. he spelled it out, but that was enough to spell a whole lot of carnage in the markets. haidi: how are counterparties in other banks seeking protections now? sally: some have been cutting back for a while. reported today that u.s. banks like jp morgan, bank of america and citigroup had been trimming their exposure to credit suisse in the past few months. they are seeing amped up questions from regulators who

want to know about their exposure. but they have been pulling back for a short amount of time. shery: emily, market reaction in the new york session was swift. the volatility, the vix at a four-month high, but really, the discrepancy an divergence when it comes to tech stocks as well. emily: absolutely. we are seeing a pretty big flight to safety with the big decline in treasury yields, the s&p 500 selling off. called up today. we saw that tech outperformance throughout the trading day. we had the nasdaq 100 higher, and that makes sense with lower yields. i was speaking to some sources who said well, technology might fare better better if there is an economic downturn, but when you look at what was of performing even the nasdaq 100, we had the goldman sachs basket of profit-less tech stocks up

7%. cathie wood's innovation etf up about the same. it's interesting. what kind of investor would want a tech stock with no efforts during an economic downturn? that was getting more of a bid than the classic tech stocks in the nasdaq. shery: emily, investors have tried to trade this week end talks. to what extent have they gotten crushed? has there been any success? emily: it has been a volatile week for any investor trying to trigger tech stocks. in the etf flows, there was a big instance of dip and maybe investors getting crushed. you look at state street spider s&p regional banking etf, on tuesday it was up 2%. a big rally. investors piled in. it saw its biggest one-in flowing over a year, $1 billion flowing into the etf, only for the etf drop over 1% today.

so at least investors who are trying to buy the dip in that trade went out today. but it is hard to tell how much of the flows have to do with short-covering and how much is just trading in and out. shery: kathleen, are the problems at credit suisse big enough for the ecb to rein back the rate hikes? kathleen: bloomberg economics raised the question, is credit suisse too big to fail? it is suddenly too big to ignore. it is washing across european banks and adding to uncertainty around the world. so this additional injection of uncertainty ahead of the meeting -- global economics and other banks are saying that it definitely warrants cutting back. some are calling for a pause. you can see how dramatically this is effected in the bloomberg chart we are showing

you. some say, we risk losing credibility. we just saw the latest german number four inflation, year-over-year at 9.3%. it was supposed to come down. there are worries about sticky core inflation in germany and other parts of europe. do they risk losing their information-fighting credibility that they tried so hard to build if they pull back? a former you see the board member was quoted in a dramatic newspaper today saying, that they should delay or cut back on the rate or do away altogether with the rate hike, for now. they can always do it later or's eat it up if there is evidence that there is need for them to do so. at least cut back to 25 points. haidi: have these ideas that the fed is back to normal really evaporated? our repricing in cuts by the end of the year? kathleen: i don't know if we are, but the market is.

the fact is that people are wondering where this goes. if you look at the bloomberg terminal, people are expecting only -- people had thought it would be 4.9%. now people same 4.7%. you can see how the differential has changed between how hawkish the fed will be and how hawkish the ecb will be. the fed is still supposed to have with 50 more-basis-point rate hikes this year. it's not just the credit and financial instability, it's the numbers. recession fears are growing in terms of what we are seeing. the empire state manufacturing gauge for the new york area, for the new york fed, it fell from -0.4 percent of the month before, to -24 percent. it's only one part of the country. even sales came down because

unexpected. people would say it is not just financial instability. may be the fed has finally broken something and maybe it is time for them to cause. we have a good six month or so before we find out if they will cut rates regularly are. haidi: bloomberg's finance team, sally bakewell, emily graffeo, and our global economics and policy editor kathleen hays. you can turn to your bloomberg for much more on this. tliv is where the commentary and analysis from our team of expert writers is. shery: and a reminder for our viewers, exclusive coverage of the credit suisse asian investment conference. we will be speaking with the bank's top executives and key speakers next week, only on bloomberg. belle, what are we seeing for the asian open question mark annabelle: i was just listening to kathleen speaking and it is incredible but a few weeks ago we were talking about whether a soft landing impossible for the economy in the u.s.

now recession is becoming a base case. pretty hard landing. it down to the recalibration around fed rate hikes. the understanding developing in the corner of the market that cuts the needed by the end of the. we are watching the front-end of the curve. the kyiv a two-year is falling dramatically. end of the australian. it is the move away from risk commodities. also the aussie dollar, a commodity-sensitive currency, pulling back in early asian trading. we just showed it earlier, the reporters said this, essentially it is all about the mold back into the safe havens. we are seeing gold rising the most in one month. g10 currencies space, it was the japanese yen that was the best performer. the vix is spiking. futures are coming online. shery: i love when we pull out the chart, the terminal picture with everything that is scary at the moment.

[laughter] the risk assets. thank you so much, belle. let's get over to su keenan with the first word headlines. su: sentiment minority leader chuck schumer -- senate majority leader says strong legislation stopped back of rolling back banking deregulation laws. it had raised the threshold at which banks were subjected to stress tests. his democratic colleague elizabeth warren has introduced a bill that would repeal it. meanwhile the british government is proposing more than $100 billion in tax cuts and extra spending for households that would fuel an economic recovery. that downing street new budget includes $10 million in fiscal incentives for companies making new investments. the chancellor of the exchequer jeremy hunt says, the measures will help prevent a deep recession. >> today the office for budget responsibility forecast that

because of changing international factors and the measures i take, the u.k. will not now enter a technical recession this year. -day forecast we will meet -- they forecast we will meet the prime minister's priorities to lower inflation, reduce debt and get the economy growing. we are following a plan, and the plan is working. su: u.s. defense secretary lloyd austin has spoken by phone to his russian counterpart about the downed u.s. spy drones after an encounter with russian warplanes. he called russia's actions are dangerous, reckless and unprofessional, but says it is key to keep communication lines open. russia, for its part, says it's warplanes did not come into contact with the drone. i am su keenan. this is bloomberg. shery: shery: we are getting

breaking news, the u.s. demanding that tiktok owner bytedance sell a stake in the company or face a ban. bloomberg had already reported that we might have been seeing some moves to consider tiktok being separated from the parent company. that is beijing-based bytedance. they had been discussing the possibility of separating. and now we are hearing from the wall street journal that the u.s. is in fact demanding bytedance sell a stake in the company or face a ban. haidi: and still ahead, sticking with chinese tech, baidu is set to unveil its check chatgpt on friday. we will take a look at the prospects that ai and tech sector sectors in china later this hour. coming up next, investors are still on edge after the credit suisse crisis and the collapse of u.s. lenders. we will assess the risk with

advisors capital management. this is bloomberg. ♪

>> it should be contained to zurich. but again i think just as the fed was, the ecb has to make sure they put enough firewalls in place actually to get credit suisse time, but more importantly, to ensure that there is no chance of this attracting the attention of other banks. >> the problem is that credit suisse by some standards might be too big to fail, but also too big to save.

>> the stock has been a huge downfall for two years. so they are clearly our problems with this particular institution that predated what happened with svb. >> the great financial crisis, there was a lot of this that was about cross counterparty credit risk. that is not what this is about. >> i think this is the tip of the iceberg. i think i think there is a lot more consolidation, a lot more pain yet to come. shery: bloomberg tv voices weighing in on the credit suisse turmoil. our next guest says that while the recent u.s. bank failures are not systemic, their actions do raise the risk of recession's. joanne feeney joins us from new jersey. always great to have you with us. the risk of recession rising in the u.s., but also, how concerned are you about what is happening in credit suisse? and perhaps for the market at least, is it more positive that central banks might think twice when it comes to continuing to

tighten? dr. feeney: good to see you guys. clearly the credit suisse situation is different. the government made a helpful announcement and we will see how that turns out. in the u.s. of this lease should be that the silicon valley bank issue is pretty specific, but what we're seeing now are peers that other banks that also have long-dated assets under balance sheets chart now worth less because of their balance sheets. cynically bank was a key problem. we don't see the counterparty risk we have seen in past financial crises that is why i don't think it is systemic. what we are seeing are the bank's response to concerns about the broader economy and other risks by tightening up banking standards. there's probably makes the tightening of standards more severe than they would have otherwise been and that suggests fewer loans to consumers and businesses.

and loans are an engine of growth. that is where we think things have become a more risky when it comes to recession. haidi: so how do you invest in this environment? shery: do you turn to defensives? it's interesting because now tech stocks are rallying again. dr. feeney: i think it is because investors recognize that in some technology stocks, they are exposed to markets that will likely continue to grow even if there is recession. if there is a slight bump in the road, they still have multiyear growth drivers whether that is microsoft or up or palo alto networks. these are companies that are pretty solid in terms of their balance sheets than their long-term demand in the next few years. i think that is why you are seeing some folks run to those and recognize that is where they will find growth. because if there is recession, a lot more consumer facing companies will not see growth for a little while.

haidi: how useful is it to try to predict the fed trajectory at this point, this idea of financial stability being the mandate, is inflation at this point a bigger threat? four restoring calm the bigger concern here -- or is restoring calm the bigger concern here? dr. feeney: it is tough to call because the fed has multiple mandates. inflation is chief among them, but also financial stability. if it is the case that the shutdown of these banks, crypto-oriented, long-duration asset-oriented his long contained, then we don't see much reason for them to change their strategy. on the other hand, they are seeing more data than we are. the ppi number came in with a decline this morning and that could give them reason to pause. obviously the market is giving that a slightly higher probability than doing event it 25 basis point increase.

we think it is pretty hard to handicap from here. we would not be surprised to see the fed err on the side of caution and say, we will wait for more data to come in. it is pretty tough to call. what investors need to do is look past this and recognize that if they are in stocks, for the dividends, for the cash flow, to survive retirement or to live off of, this is no reason to change fundamentally how they are planning out the next few years of their investment life. haidi: talk to me about your growth pitch at this point. dr. feeney: going back to what you said before, why are investors going into tech stocks, they are usually riskier. during recession, some of these tech companies are still expanding. we look at nvidia, one of the ones that we like, they are exposed to cloud computing, to a.i., high performance

computing. that stock is pretty strong. . we have held it a little while here for clients and we think it has more room to run. in health care, we like a number of medical-device and analytical tool companies. one of themselves that analytical equipment that is helping the medical field and the pharmaceutical field advance, demographics suggestion there will be more spending on that. so again, a little bit less recession-vulnerable. good, solid stock to own for the long-term. shery: joanne feeney, always good to catch up with you, advisors capital management partner and portfolio manager, with her insights into the market. you can get a roundup of all the sources you need to know to get your day going on today's edition of "daybreak." terminal subscribers, go to dayb . this is bloomberg. ♪ when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us.

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haidi: a quick check of the latest business flash headlines. in new zealand dairy giant has raised its full-year earnings forecast an the capital return after the sale of its is nuts in chile. it sees full-year earnings of $.75 a share with net income raising 50% to $340 million. the company has faced a sustained decline in the price of its core product, whole milk powder, but demand for other products has driven strong earnings. adobe shares gained in a trade after it beat estimates on quarterly earnings and boosted its forecast for the year. the ceo says the company is raising annual targets due to tremendous market opportunity. adobe's outlook signals that demand for creative software remains resilient during a broader slowdown in, tech spending. shery: take a look at how u.s. futures are trading, we are seeing a little bit of apside, especially for tech futures -- a

little bit of upside. the expectation is that we will see less tightening moves from the federal reserve. so i bit of upside on the yield-sensitive stocks, but u.s. s&p futures are still flat. let's look at how snap is trading at the moment, this is a social media company that would benefit if tiktok were to ban. it is claiming 8%. we heard from the wall street journal about the u.s. in demanding the tiktok owner sell its stake in the company or face a ban. this is bloomberg. ♪

>> it is too premature to make a prediction for 2021.

>> it's clear that 2022 will be at lower levels the last year. >> thomas and i came to the conclusion that it is better to have new leadership. >> is the company under fire and he is a ceo is under fire. >> we want to go to the transformation of the next three years. >> it will become profitable definitely from 2024 onwards. >> historically low share price, there is a great management team, that is a plan that is convincing the market and our shareholders believe it. >> the results are an acceptable, obviously. >> we said we were going to make a loss, unfortunately this year. that restructuring costs are coming in 2023 before we see a lot of benefits. haidi: former and current credit suisse executives on the bank's struggles in recent years. the saudi national bank has ruled out investing more in credit suisse. the chairman spoke about the

troubled swiss bank and the knock on higher interest rates on the sidelines of the financial sector conference in riyadh. ammar al khudairy: the inflation 's situation is proving to be more sticky than they hope for. they might delay it so that they make sure the ecosystem does not create another svb. but they will have to continue the journey to make sure that they suppress inflation. yousef: coming off the back of a strong set of earnings that beat expectations from analysts, you take that momentum into the end of the year. what are your expectations for credit growth and how will you manage the difficult rates environment globally? mr. al khudairy: it is unfortunate that the globe has to move to some degree in unison when it comes to interest rates, because money is fungible and it is an open economy.

the u.s. has an inflation problem to deal with, and these increases in interest rates, for sure they caused a drag on the ability to grow faster. so this is a high-speed, high-growth economy. would we have grown faster had interest rates varied 2% instead of 5%? yes. but even with a 5% or 6% interest rate environment which we all predict, we will still continue to grow. there are pockets where affordability becomes an issue, we see a decline in some of the mortgage business, for obvious reasons. but in general, i think, yeah we could have done probably 1% or 2% more growth in the economy. because of higher interest rates, that drags it down. but we will still be seeing great economic growth. i am very excited about this year.

yousef: i want to get to your big bets abroad, let's start with credit suisse because that went the other direction, quite a bit negative over the last few weeks. a lot of questions being asked. i am wondering whether you would be open to assisting further if there was another call for additional liquidity from credit suisse. mr. al khudairy: the answer is, absolutely not for many reasons, the simplest reason which is revelatory and statuary. we now own a 9.8% of the bank. if we go above 10%, all kinds of new rules kick in, whether it be by our regulator or the european regulator or the swiss regulator, and we are not inclined to get her a new regulatory regime. i can cite five or six other reasons, but one reason, there is a glass ceiling and we don't need to entertain going beyond it, and we are there now. shery: the saudi national bank chairman ammar al khudairy, with bloomberg's yousef gamal el-din in riyadh. let's get more on the turmoil

sparked by his comments and bring in annabelle droulers. jp morgan is announcing their could be more issues ahead for the banking sector. annabelle: that's right, we had an interesting interview earlier with bob michele, the global head of fixed income and also cio at j.p. morgan. he was talking to us about the amount of criticism they were facing their, that they were extending the duration of their portfolios, issues that were being criticized by others in the industry that were saying that the fed will need to raise rates to up to 6% or 7%. we still see stronger employment figures, wages going up and they were expecting a soft landing. now bob michele says what has happened is this is the effects of sustained tightening. it was not as fast and steep campaign. that cumulative lag is what is catching up. he says he is not particularly surprised by what is happening.

he says yes, there could be more pain to come. take a listen. >> if you think about where we were a year ago, the fed was starting its rate hiking cycle. so over the next couple of quarters, you will get those long and variable cumulative and lag impacts hitting the market further. so i think this is the tip of the iceberg. i think there is more consolidation, a lot more pain yet to come. shery: what are we hearing when it comes to the path forward now for credit suisse? annabelle: morningstar put forward two scenarios. they say the bank needs to issue a capital raise, or they need to break up and sell off certain divisions. talking first about the capital raise, that comes down to the funding costs. morningstar saying they are simply too right now. they are expecting the 2023 loss to commit such an extent that its capital adequacy could be

under threat. so they perhaps need another issue. the alternative is a breakup. they would be looking at spinning off various business lines like its swiss unit, it's both management unit, they could be sold off separately. the bank -- the backstop being provided by the snb does not address the underlying equity concerns faced by the lender. haidi: let's get you the first word news now with su keenan. su: former los angeles mayor eric garcetti will become the next u.s. ambassador to india, after winning a long-delayed vote process in the senate. 's nomination was delayed by nearly two years over concerns about the way he handled the sexual harassment case during his time in office. a handful of democrats argued he was handled. the u.s. is accusing the exiled chinese billionaire of fraud, conspiracy and money laundering.

prosecutors in new york said that go cheated thousands of victims out of billions of dollars through fake businesses and investment opportunities. his financial advisor is also included in the charges. go is an associate of former trump advisor steve bannon, and has been living in the u.s. since 2015. and in pakistan, courts suspended operations to arrest former premier imran khan at his home. police will comply with the court/orders and pause his arrest until 10:00 a.m. thursday. an islamabad court has upheld the arrest warrant against khan, so the reprieve will likely be brief. global news, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. shery: coming up, china's biggest tech firms are joining the race to match artificial intelligence tools coming out of the united states. we will get the outlook next

from industry veteran kai-fu lee. this is bloomberg. ♪ thanks to avalara, we can calculate sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

shery: the global ai raise is digging up steam with the likes of microsoft, google and i do all aiming to create the world's

leading area chatbots. former google china president kai-fu lee told us that while u.s. companies are clearly in the yield, he expects china to catch up soon. >> we are facing a true ai revolution. everything we have seen up until recently has been nothing because ai has undergone a huge change. recently we saw in the number of technologies including but not just chatgpt, but others related to it, the capabilities to think universally, beyond one application or one language, able to think broadly, getting a lot closer to human intelligence. so we are facing both the most intelligent ai ever, and the most powerful platform ever. this will be much larger than the mobile revolution. so we are very excited. stephen: if you are talking about china and the united states being leaders in ai development, those of us leave room for improvement in those relations, but do you think

there is scope for the two governments to find a way to have that collaboration, where we can all have the same commercial benefits? guest: i think both sides have their advantages. today the u.s. is clearly ahead. but don't forget that about seven years ago, the u.s. was way ahead in ai 1.0. china is not as breakthrough innovated as a u.s., but catches up quickly. stephen: can you quantify how much these export controls on chipmaking equipment that has spread beyond the u.s. to the likes of the netherlands, tokyo electron in japan, and the like, how much that will set this evolution in china back? mr. lee: i am not an expert in semiconductors, but most of it i does not require the super high-end nvidia a-100.

there are two workloads in ai. one is training and the other is in france. in france is like running on the server of your phone -- in furtherance. china has plenty of that. training which is taking trillions of pages of data and very quickly training these really smart and large models, usually one would prefer tohave the highest- end shapes. china currently has an existing supply it is using. it will have trouble buying more. there are many possible alternatives in the future. meantime, there is a bit of a shortage, but i think the existing substitutes and future substitutes will make it a nonideal situation for chinese companies who want to do massive training. but it's also not a desperate situation by any means. stephen: what kind of impact do you expect from china's version of chatgpt? mr. lee: i think there will be multiple chinese chatgpts.

baidu is oversee the forerunner. there will be other chinese companies that will build other technologies and chinese startups. i have tried a few of these so-called chinese chatgpt's. i will say they are not as good as chatgpt. certainly you can compare their chinese quality with the chatgpt english quality simply because the english chatgpt was trained on so much more high-quality english data. to fix chatgpt, these companies will also need to get equal or hopefully larger amount of chinese data so that will take maybe a year for that to happen. the technologies, i would have to say, i was quite impressed by a few companies' technologies that i have tried. haidi: ceo kai-fu lee speaking with bloomberg stephen engle. baidu will launch its version of

chatgpt on thursday. it will not be available for public use just yet. let's get more on its prospects and the prospects of china's ai ambitions with regard to gender from new york, and also here in sydney, marina yue zhang. i will start with you. thank you for coming to the studio. i am very curious, when you talk about the ai infrastructure, usually are talking about the open internet, open sourcing. or does that look like for china when there are information controls? guest: that is the largest constraint to china's ai, so-called generative ai development. the reason is, as dr. kai-fu lee just mentioned, it i models require a lot of training. the most important thing in training is quality and diverse data. chinese current censorship on the internet, there is no such diverse quality data in

mentoring trainees so that will be a big constraint for whatever advanced ai algorithms to generate quality content. so that is the biggest concern. to put that aside, i think the chinese government has the ambition to develop next-generation ai so they want to develop this into an interface between machinery and human beings. and china has a large market, including the market that does not need a lot of generative, diverse content. for example in games or in the metaverse. that can attract a lot of participation, and generate a lot of content. that is a big advantage. haidi: brandon ahearn, from an investment point of view, there are a lot of questions not just for china, but for broader ai investment. can you respond to her concerns about developing ai within information controls in terms of

the chinese internet, and also the fact that you hold baidu, you are clearly bullish on some of these ambitions and how do you expect that to be monetized. brendan: we are big believers that baidu will adhere to the local rules and regulations which obviously foreign corporations, historically some have been willing to adhere to those rules and others have left because of the unwillingness. baidu was going to be in the camp of adhering to china's local rules. there were big believers that baidu has very wisely invested its cash flows coming from its core search business into another -- into a number of initiatives. here we see another effort that has clearly come to fruition. baidu has been at this for over four years, going back to the first version of the e rnie back in 2014. baidu historically has been dependent upon the core search

business and you are seeing that non-core search business up to just about 40% of revenue. so we are big believers that wise investment from baidu's management, they are really coming to fruition, and ernie but is one of those areas. shery: that is really interesting because for a while, baidu disappeared from the bat lineup. investors were not convinced when this was going to pay her. so is this the right time to keep adding to buy shares and keep investing in getting to the market how long will it take to pay off? brendan: here seeing baidu get its more jump. certainly the stock is very expensive, you are talking about a p/e ratio of only 14x.

certainly the company believes it is inexpensive. over the last several years and even in the last recent quarter, the increase their share buyback program. as an investor you love to see a company believe the stock is cheap, and baidu is telling investors they think that this will be one of the key growth drivers going forward so they are buying these shares inexpensively, and like that -- and we like that. shery: the invest ability into chinese tech depends largely on what policymakers do, especially in recent years when we have seen tech billionaires go missing and be out of sight for days, adding to concerns about this sector. what are you seeing right now among policymakers about how much they want to support the sector, which also ava labs tech billionaires, what did we hear from the npc for example?

marina: that is a very good question. i have been observing this closely and i can see positive changes in the last few sessions. you can see the delegates to the two sessions actually have been changed. some new company delegates are seeing new sessions. also ai applications, be it automobile, autopilot, and a lot of emerging technology, applications have been seen by the delegates. i think -- has a very strong ambition to compete in the next generation of ai because that is basically the foundation of the future technologies for humankind. the problem is, quite a bit of tech giants have been hurt quite

badly during the past couple or three years. i think they are changing now, especially vis-a-vis chinese new policy called the national innovation system. it will give obviously necessary support in policy and finance to support ai development. but technological breakthroughs require entrepreneurship, not just a centralized budget. so there is a positive and negative in terms of policy for ai development in the future. haidi: some of the difficulties for china, do you weigh into the decoupling and access to technology and equipment, as well as the political aspect, we are seeing here that tiktok is perhaps considering splitting from bytedance in order to update the security concerns.

marina: that is of this being a concern. i agree that ai applications perhaps don't require a lot of high-and an ai chips, but training requires a lot of money and computing power. china currently is short of those capabilities building. so that is the biggest concern. but the market is big. haidi: great to have ufs, along with crane shares chief investment officer brandon ahearn, diversity of technology sydney associate professor for research, marina yue zhang, with us. this is bloomberg. ♪ lutz moorehead. this is bloomberg. ♪ -- lots more ahead. this is bloomberg. ♪ at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com

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haidi: the current turmoil in the financial sector following the collapse of silicon valley bank is turning the spotlight on the importance of deposit insurance, and in particular those countries that don't offer it. one of them happens to be new zealand. paul allen is with us now. this is surprising that new zealand is one of their a few jurisdictions that don't have deposit insurance. paul: and it is weird, especially considering new zealand has been burned before and in recent history -- -- in 2008 a number of institutions collapsed. a lot of people that i know lost money. the bank of new zealand in 1989 and 1990 required a bailout.

a lot of countries have this. 94 countries around the world, developed countries such as australia united states and also developing countries offer it. but new zealand does not have it. new zealand and israel are one of two direct countries that don't guarantee bank deposits. obviously there are some risks here. there could be a stampede, justified or not. shery: considering that turmoil, does new zealand have any plans to fast-track deposit insurance? paul: no. [laughs] new zealand was in the process of passing a law, but it will not be ready until 2023. the finance minister grant robertson says there is no plan to get in place more quickly, because the government wants to get it right. he is offering a degree of assurance, saying that new zealand banks are required to carry very large capital buffers and they do hold significant reserves and the depositors can

have confidence in the system. there is another backstop as well, the big four event banks are owned by the big four western banks, for the australian guarantee might extend to them. but is that something that you want to put to the test? shery: bloomberg's paul allen with the latest. let's now get a check on how currencies are trading. we have the u.s. dollar pricing, snapping four days of losses. a lot of risk-off sentiment given what is happening with credit suisse and european banking sector. the euro sank and fell 2%, touching the lowest level in two months. now we are seeing currencies in asia trading like this. this is bloomberg. ♪

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