david: good morning welcome to

daybreak asia counting down to the major asian market opens. haidi: asian stocks start the week higher with the wall street fear gauge at the lowest since 202. 0. a temporary cease-fire in gaza could extend beyond monday to allow the release of more hostages and prisoners and u.k. prime minister rishi sunak denies economic plans will push the country towards austerity. prime minister sunak: this is the start of a journey. i meant it when i said after we got inflation down i wanted to start on ferguson --focusing on rewarding peoples hard work, growing the economy and responsively rowing taxes. when we can do more, we will because that is the direction of travel now. haidi: china launches the middle investigations into the money management business zhongzhi days after the shadow bank revealed $837 billion balance --

a $37 billion balance sheet shortfall. in sydney at the start of the trading week, a lot of optimism we could see a santa claus rally in december. we are seeing a little softness from sydney stocks. we are watching the aussie dollar in light of the december spike from the weakness in the u.s. dollar, 6584. we saw the u.s. dollar retreating from polite trading session follow -- a light trading session following thanksgiving. a second week of losses for the greenback to the effect of most other currencies. the yen is still seeing a little weakness at this point. when it comes to themes, we are watching miners and energy-related names. we had a report saying australia is on track to cut greenhouse emissions by 42%. new projections will be formally

released later this week. we are also watching the rba, planning to introduce legislation to overhaul the rba following and independent review that will cement the dual priced employment mandates. david: including essentially to make the welfare of the people the priority, a dual mandate includes employment. in terms of what we are seeing here approaching the open, over in austria, a little weakness in futures. flat there. weakness in japanese currency. fairly quiet. in china industrial profits numbers coming out about two .5 hours from now. some trade numbers from thailand and export numbers out of hong kong. it gets busy midweek. u.s. inflation coming out. a couple central bank decisions. europe releases inflation this week as well. as far as u.s. assets are

concerned, slightly off the first couple minutes. bonds approaching the cash market open will probably see upward pressure, not a lot on yields. vix futures. the december contract here. 12.5 was the actual index friday , which effectively takes us back to the lowest level since the pre-pandemic levels. which i guess, in many ways, we saw elevated on the way up, and a very slow grind on the way down. it took us about 3.5 years to get here but effectively we are there. we are on a four week run as far as equity markets go. we will see if it continues into a fifth week. haidi:. a little more calm when it comes to the geopolitical situation as well. the war in gaza with israel and hamas signaled a temporary cease-fire in gaza could be extended beyond monday to allow the release of more hostages and prisoners. president biden has back prolonging the truth saying it

allows the delivery of eight. expectations were so managed to going into this and there were many hiccups as it was negotiated. now it could be extended. mark: on sunday night, or i guess come overnight, really, hamas put out a telegram that it is dashed interested in extending the cease-fire and israel had a cabinet meeting sunday night to discuss doing that as well. to refresh your memory, that would be for every 10 additional hostages hamas releases they get another day of pause. that is positive news. obviously the aid going in there, there are a lot of trucks now being shipped in there. people in --are in a desperate, desperate situation in the south of gaza. it's really positive. the more you see the images, the more everyone is really hoping this can extend longer. the other thing that happens here is you need to think about

israel's psychology. a child was released whose parents were murdered october 7. there are some really horrific stories. hostage relief --release reminds everybody of that and fuels the anger. so, it is very difficult to say this will last. for the moment, every extra day is good for everybody. david: what would be some of the specifics we need to be watching to gauge whether we get an extension? it seems like there probably will be one on a day-to-day basis, though, at this point. michael: i think we are really watching what israel says. if israel is ok to go along with it, it will happen. at the end of the day you have a situation where israel wants the

hostages out, obviously, and israel also wants to get back and hamas. for hamas, the general thinking is they had not anticipated quite the extent of israel's attack on them. previously israel has always tried to do pinpoint strikes in gaza because they were worried about civilian casualties. now they have said that all aside and they are going after gaza. so for hamas, the longer the break, the better it is for them to reorganize. to reestablish themselves. potentially, to get more people out of harm's way. their own people, that is. so, the more hostages israel can get out, the better as well. there is incentive on both sides to prolong it. but i would be watching what israel's cabinet says here. haidi: that's my next question. obviously active fighting would be a break. what are they doing meantime on both sides?

michael: the cease-fire has not been breached is my understanding. what is happening is israel is not letting anybody go back up north. presumably because hamas fighters are going up there as well or there is too much aid going to hamas as well. gaza city more most of the fighting has occurred is in a terrible state, basically uninhabitable. what is also happening is a lot of people are being encouraged to move down to the south to get out of harm's way while the pause is on. people have been arrested along the way there. it is my understanding from the israeli side, the logical reason there is hamas is looking to infiltrate some of its people down into the displaced civilians. because, it is an easier place to hide out and keep yourself out of harm's way from the hamas side. so, that is where things stand there. but the general feeling seems to be it is holding at this stage. there is a lot of shooting. we are seeing in the west bank a

lot of violence. that is the other section of the palestinian people. a lot of that is being initiated by israeli settlers from the reports i have read. that the palestinians living there are under cease. so, it is a really difficult situation. the settlers are obviously part of the israeli government. it is a very right-wing government. there are a lot of people who argue those settlers should not be there in the first place and if you are going to have a two state solution you don't need israeli settlers on the west bank. it is attempts -- a tense region. haidi: u.k. prime minister rishi sunak says he and dems heat -- he condemns anti-semitism in all forms speaking to francine lacqua in london.

prime minister sunak: i don't scrutinize what every single person says that i interact with. of course, i up for anti-semitism. -- i abhor anti-semitism. it's not acceptable in our society and i have personally been very firm about that. it's very sad what is happening. francine: are you condemning elon musk? prime minister sunak: i condemn all anti-semitism, it's not about anyone personality. francine: he has a big platform. prime minister sunak: i condemn anti-semitism in all its forms. it does not matter if you are elon musk or somebody on the street shouting abuse at some buddy walking past you. that's wrong. anti-semitism in all forms is completely utterly wrong and we have strong laws to tackle hatred. some of the scenes we have seen have been unacceptable. the police know they should use of their power to justice. that is what we have been very

clear about and will continue to do. we have made sure the jewish community gets extra funding here to ensure their safety and security and we will continue to do that. francine: what plan do you have for gaza? what you think the fight --when you think the fighting will stop? can the u.k. be involved with peacekeeping? prime minister sunak: we have been clear during the tragedy that israel has a right to defend itself. it should do that in accordance with humanitarian law. we have consistently called for sustained humanitarian positive were aid can get in and also hostages can come out. i am by that is now happening. all of us will have seen some scenes in the past day or two. it is important that everybody on earth --honors the agreement so we see more progress. we will continue to talk to all the partners in the region whether it is americans, israelis, egyptians, guitars, to make sure we can see this through.

francine: is the u.k. for a two state solution? prime minister sunak: we always have been and always will be. i spoke to the palestinian president about this. u.k. will do everything it can to help the palestinian authority. we do need to look to the future of gaza post hamas to actually make sure everybody in the region can look forward to a future where they can live lives of dignity, security, and opportunity. that is the vision i think all of us should have but we have to redouble our efforts to bring that about. david: there you go. the u.k. prime minister rishi sunak speaking exclusively with francine lacqua. we will have other big guests joining us from the global investment summit including the blackstone chairman and ceo stephen schwarzman joining us at 7:35 in the evening here. now, let's turn to china. a big story.

authorities have opened criminal investigations into the shadow banking giant zhongzhi. the company revealed a shortfall just a couple days back of nearly $37 billion in its balance sheet. annabelle has the details on what the police are focusing on at this point. annabelle: that part is a little unclear. the company in the past has admitted there were failures of internal management. we have reported a huge shortfall in its balance sheet. newly at 30 seven billion dollars. they are unlikely to be able to recover a lot of the assets. clearly, there are issues in the company. what chinese policymakers are looking into and who, that part is not clear yet. so, there has been one identified by last name, because chinese police put out a statement on wechat pay at. it makes you think of the founder but he passed away a couple years ago. there are a number of people

that go by the same surname at the corporation working at the same levels. nothing has been confirmed yet. in the context of where we are with zhongzhi at the moment it's clear they are facing a lot of financial difficulties and at a bigger macrolevel this is not something chinese authorities want to see either. they are trying to put confidence back into the country. haidi: do we know about the nature of the investigation? annabelle: this part it's unclear as well. there are a lot of details to come out. we know that criminal mandatory measures are being taken. if that sounds familiar, it's because it was the exact term applied or used recently for the investigation into property development. evergrande and its founder. it's hard to say what the criminal monetary measures could include. it's very broad. it could be summons, released on

bail, residential surveillance, detention, rest. so the scope and shape of the investigation is unclear. who is being investigated is unclear. in the past zhongzhi has admitted failures of internal management and there have been a lot of concerns on the company given it does have some exposure to the property sector in particular around 7% of trust companies broadly related to the center. of course, again, it points to a bigger issue at play. or you have issues in one part of the asset mix that have a spillover effect into other parts. david: i am trying to think of who might be affected. annabelle: wealthy individuals that have parked their money in these trust companies. because you have been able to earn a lot more money historically by investing in these sorts of vehicles under the past. in recent years it has come a little unstopped because there has been a slim down of the industry. china has cracked down on the excessive leverage on these

types of firms and troubles at zhongzhi particular when they started in august. at that point we were reporting on the company failing to make payments to customers on high-yield investment products. so, zhongzhi says liquidity has dried up and the amount that can be recovered from the asset disposals is expected to be low. there are a lot of questions about the health and continuity of this sort of sector into the future. china really came to smooth out the dysfunction in the financial system. haidi: annabelle in hong kong. australia's government is preparing to introduce legislation to reform or modernize the rba. we have details about the overall. plus, investors bracing for russia. on central bank decisions that week. we have a preview of what is to come with oxford economics. this is bloomberg.

she also haidi: you're watching

daybreak: asia. looking at the week ahead on the watch for central bank decisions across tejon wednesday. bloomberg is expecting the bank of taiwan -- thailand. considering the policy rate at neutral. it can support growth while ensuring price stability for you to be ok is expected to hold rates as it tries to curb inflation amid rising household debt. we are on watch for the rate decision from new zealand. the fed referred price gauge super core pce inflation is expected at 0.1% in october allowing the fed to keep rates on hold through year end. other cpi prints to watch for from the euro zone also in australia. the rba warned remaining inflation challenges are increasingly homeground

--homegrown and demand driven. u.s. gdp figures, pmi numbers throughout asia, chinese industrial profits and pmi will be in focus as well as ppi and job numbers out of japan. that's your week ahead. david: a lot to pick from. louise loo is alida economist at oxford economics. thank you for joining us --a lead economist at oxford economics. thank you for joining us. what is top of mind for you this week? louise: yes, a long list that is quite unusual. but, the main thing is what is happening in korea and thailand, the central banks in asia there. nothing really market moving over there. but i think the tone from both governors will be a bit more focused on not just the decisions, but also the narrative, the commentary, all that.

it will be interesting to see if there will be any changes to outlook for 2024. and really get a sense of whether or not they will follow the current view that the fed is likely to cut here. david: right. i mean, who do you expect initiates the easing? which central bank is in the best position to get us to an easing cycle in the region? when do you think we will see that next year? louise: i think the central banks that are more conscious with their currencies, indonesia, the esp, the philippines. to some extent probably also the head of the units expected to move first. there are also other countries that are a bit more vulnerable. we think that economies with

stronger current composition, korea, singapore, to a smaller extent, taiwan, those are probably the economy that have the capacity to stay there longer. haidi: do you have expectations when it comes to china. if that will clearly drive the fate of a lot of economies into 2024. do you think the data this week might more stabilization? louise: we have not had much stabilization in the october data. the first set of november data, it's a pretty mixed picture as well. we usually first get the industrial numbers at the end of the week. i think you should see more or less the usual trend of easing. allowing funds to wrap up. capacity utilization.

we should see that filter through into industrial profit. and i think on the manufacturing side this week, i think it will be slightly below contractionary territory because of where we see that high-frequency steel production data. i think that the wave of the stimulus you have seen since october has not really fed through to the economy yet. so, that might take until 20 24 before we actually see a pickup on the industrial indicator side. haidi: what about expectations for the property sector? do you think the latest measures will be enough? louise: i have to be optimistic on the property sector at this current juncture. the measures we saw the last week, i mean, i suppose markets are happy about that.

but as a matter of expectation, we have seen a reintegration of measures in november last year and also in august this year. following those measures we have not seen a rapid uptick in lending because there is a lot of caution among banks about risky assets. we will have to set aside 150% of the capital. i think the probability the measures announced last week will leave to a meaningful property upswing is unlikely. we have to remember that this is probably one of the options to manage bumpy deceleration downwards. david: the three red lines, do you think those measures worked

too well? do they need a complete reversal? do they need to remove everything they put in place last couple years to control a hot housing market or abandon that completely? louise: i think they can abandon that and probably raise rates. when it comes to returning to the healthy growth model china has, i think a lot of chinese hawks will probably be a little nervous about that. a middle ground that would be, with some of these measures, the micro credential guidelines, you know, really stringent. frankly there is not really been a housing correction in history that is, alongside some of these measures. so it's really hard to see which way this will go. but, some of these measures have been in place for more than one or two years now. the impact it is having on

sentiment cannot be easily reversed even if you abandon them altogether. haidi: great to have you with us louise loo lead economist at oxford economics. there is more to come on daybreak: asia. this is bloomberg. the chase ink business premier card is made for sam who makes, everyday products, designed smarter. genius! like 2.5% cash back on purchases of $5,000 or more, so sam can make smart ideas, a brilliant reality! chase for business. make more of what's yours.

david: welcome back. just about flat here on currency market industrial profit numbers coming out of china today. that we can market going into the open of

>> u.k. prime minister rishi sunak has denied that his economic plan to lead the country to austerity. he spoke to bloomberg ahead of

the global investment summit in london where the government is a $7 billion worth of newton investment -- where the government's unveiling $370 investments. >> it is our welcome to business event. i am also very pleased that we have secured commitments of almost 30 billion pounds, more than doubled if not triple had when we last held this summit it's an anonymous vote of confidence in the u.k. and it comes on the back of the very positive autumn statement we just delivered from their's momentum in the u.k. you're seeing that with tangible investments. >> prime minister, jeremy hunter frank the autumn statement as a pathway to growth, yet the forecast was trimmed for next year. do you think the bank of england is being too conservative? >> the story of the u.k. is an economy with real momentum. i have been prime minister for a

year and during that time, we have harmed inflation as we said we would do. you could economy covered faster than any major european economy from the pandemic and we are still forecast perform major european economies. business sentiment has grown faster than any g-7 economy in the last few years. . if you want to drive growth and productivity economy, you need businesses to be investing. i feel actually very positive about the long-term growth outlook for the u.k.. >> do you think the opr will revise the numbers upwards? are you confident the numbers will coming so you can keep cutting tax? >> when i first became prime minister, not just the bank of england, all of them predicted the u.k. would be in recession year. that has not happened. we put in place the policies to make sure that it didn't and i am delighted that you could economy has outperformed all those and grown better than anybody thought. i have a track record in

outperforming more than anybody thinks. the u.k. economy has momentum. business investment is growing faster than elsewhere. we have commitments totaling over 30 billion pounds for our summit, that shows investors and companies are voting with their rounds and their dollars. it shows confidence in the economy and that is what makes me positive for strong growth. >>. >> but if you look at inflation, if you exclude energy, it is down by 1/5. i don't know how much credit the government can take on that. >> if you look at core inflation, it's pretty much middle of the pack for european economies, forecast next year to be lower than the eurozone. in the u.s., lower. inflation is downwards and coming down faster than its peers in the next 12 months if you look at the forecast. we are making sure we are disciplined with borrowing, ultimately what investors are

looking at to make sure that our fiscal policy is sensible. we are not fueling the reflationary fire. you will see that feedthrough into the economy. we are also improving labor supply. businesses are keen to see access to bring their making sure our labor market remains flexible, that we're are moving people off welfare and into work. all those things contributing to the downward momentum on inflation. >> prime minister, if the obr is right in their forecast, where are for you can find cuts? >> we just delivered significant tax cuts for business, significant tax cuts for everybody at work. that is what our autumn statement last week did, biggest tax cuts in one event since the 1980's. for business, we are making full expensing permanent. we will be the only major g-7 economy where you get a total write off your taxes on capital investment. it's a regime to attract

business investment and comes on top of the fact that our corporation tax rate here is lower than in any other g-7 economy. when it comes to individuals and work, we have delivered of significant personal tax cut that will put a hundred 50 runs extra in the bank accounts of a typical person at work over the next of months which is also good for consumption as well. >> you have to find money in, for example, departments where you know that voters want you to and more in certain departments. so are you comfortable and possibly being the prime minister of austerity? >> that is not the case. government spending in the u.k. is at very high levels, it has grown at very high levels even in real terms after the impact of inflation. i think any commentary or accusation of that happening is the unfounded. we are at a point now, given how people are feeling, given the amount being spent, where i think the tires he has to be lowering the tax burden. government is already spending a lot of people's money. what we need to see going

forward is more productivity in the public sector. i would much rather focus on efficiency and prioritize cutting people's taxes other than government spending more of their money. i am very clear that is the choice you're making. -- i am very clear that is the choice we are making. >> u.k. prime minister rishi sunak speaking with bloomberg's francine lacqua. we have breaking news when it comes to japanese banking, getting news that the smfg deputy president not the shema will be taking over acting leadership at the bank after the ceo has died at the age of six to five. this is according to an announcement from the company, regretting to announce that the president and group ceo of the company has passed away. he stepped down from his position at the age of 55, the deputy president and a second officer will take over from attending. let's get you over to belle.

and key part of the story is the data, we are expecting out of china. one of the plays has been iron ore. it's been interesting watching policymakers to try and calm down this market. annabelle: it was a big effort that came through at the end of last week. tiny officials you had enough with that rally in iron ore prices, it is too high and could cause an issue given that china is trying to push into the property sector crisis. they want to see more incomplete projects finished. that grace of demand for steelmaking and for production ingredients like iron ore, as you have seen, writing about the $130 a ton mark. analysts say that we conceived 140 been for -- before long. they want to see that ingredient

back in china. still clearly want to watch. still raising as we get tweeting online in the poor this morning for that contract. let's change on, because another key will be tracking this week is the price of oil from the brent crude indemnity i both trading fairly flat this morning, we are approaching the end of november and expect to see a second straight monthly decline. compared to where we were in september, a lot of optimism, prices, really driven by supply totals. also the? over the intro, swore and whether it will lead to regional -- over the israel-hamas war and whether it will lead to original conflict. so far, we have seen that feeding and his inventory continued to build. the expectation is that we could see deeper supply cuts coming in. let's change on because we are counting down to the open, 20 minutes now from the opens in tokyo as well as seoul. broadly today in the session,

reappointing higher. it is feeding across from the wall street session, continued optimism. the key central banker watching him sneak his in australia -- are watching this week is australia. paul: starts right, we had expectations that would happen. for details coming to the fort worth coast of the student government introducing measures to modernize the incumbent event, including the measures, a number of recommendations from the independent review this year of the rba. ben westcott joins us now. what is the intent of the new legislation and what are we affected? ben:: and what we have been expecting for a while, the codes although the treasurer did revealed his review several months ago, he said there were some parts he would have to legislate, and this is the legislation will definitely see this. things like landing from the

board, the government board, and the monetary policy board, as well as putting in place those objectives for the rba's monetary policy -- full employment as well as keeping inflation low. this has been long expected and it will be interesting to see if there is consensus on this, because so far the opposition has made it clear they would like to be a bypass on this. it will be interesting to see if consensus can be made for this very important reform. david: that segues perfectly into this next question of how the reforms carving deeds and what is the pushback, if any. -- how these reforms are being received and what is the pushback, if any. ben: there's quite a bit of pushback former rba governor ian mcfarlane and the former

treasurer, what have, to say that they are concerned that these reforms could lead to the undermining of the independence of the reserve bank. important to note that those concerns have been rejected by the treasurer jim chalmers, but also, they have not been echoed so far by the opposition bloc the opposition have said they are keen to make sure that the independence of the bank is not undermined in any way. there have been some urging buddy a position for the government to announce its appointment for the deputy rba governor, but so far, we have not seen that echoed by treasurer. so at the moment, it remains in the alumni australia the economist stricter. haidi: and of course, the fight against inflation, the cost crisis has been putting a lot of pressure on the government. the latest poll is not looking great.

ben: for the past six weeks, the government has been in freefall, in australia's polling, in this latest full confirms that. for the first time since the election in may of 2022, the labour party and the central opposition liberal correlation are drawing even in the po lls. labor: 31% below where it was in the 2022 election. at the have seen from mr. albanese, and the opposition parties grow approval, that comes after a week of major policy headaches on immigration, on immigration and on social unrest as a result of the israel-hamas war. david: ben westcott in canberra, australia government reporter. just about 42 minutes until the session opens in sydney and 18

minutes from the open in tokyo and obama. looks like we will be opening at a 30 year high, give or take food see what happens if the head of you fed, a closer look at data comes -- give or take. we will see what happens. ahead of the open, a closer look at japan, coming up. this is bloomberg. ♪ the first time you connected your godaddy website and your store was also the first time you realized...

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david: it's time for japan ahead. the future and sneak a contract, the singapore one, 33730. that is a region we have been testing for give or take about 10 days we have managed to do that twice in the last 10 days we hit a high of 33,853 on the nikkei 70's back, but we closed lower from that high. yet to be seen whether we will manage to close above that high levels we saw in july. like movies listed that at the open which could open near a 33 year high. haidi:. haidi: what a year it has been for japanese equities. the question is whether the same themes we be be different. the hope between governments and reforms will intensify your free report whether we. let's get to our next guest, for

insight on shareholder activism and how that could potentially drive her performance. from tokyo, nicholas smith is a japan strategist at clsa. always great to have you with us. what do we look to when it comes to performance for japan equities next year? nicholas: i do think optimism will be an important story as we go into the new year of history, on the 20th of december, we have cash coming out -- finally this company will become privatized. the shareholder board is stocked with quite aggressive activist. that money will find a home probably in japan which is a dirt cheap market which is awash in cash. there are other things as well. coal, energy, there is an extraordinary general meeting on the 14th. i think that will finally settle

the situation in regards to the poison pills. last time they run a vote on it, they had excluded the top shareholder with 20% that. the whole situation with regards to poison pills has been very unclear and we will clarify with this. and then, of course, the amazing job done by the jpx leader. starting to name and shame companies that have not produced plans to get themselves above book. after all, it is a puny hurdle. haidi: one of the elements will be the ability to hike dividend. how much of that comes down to one and what we see the boj doing? nicholas: i do think that the problem is much more that, here in japan, we have serious

waterboarding of the consumer with high inflation. we saw the headline on friday coming out at about 3.3%. but the one that the bank of japan uses to really look at domestically driven inflation, d energy, came in at 4%. that is a higher rate, people will be plenty to look for something that generates a return. since the returns on government bonds, for example, real returns a deeply negative, that push them towards two point five percent dividend yield plus what you get from the buybacks. but you have to remember that in japan, they are awash in cash.

56% of companies are net cash. almost 40% of topix men financials have net cash. no one has a good excuse for that. so you have the osmotic pressure of cash on the well-lit forcing out buybacks and dividends, whereas in the u.s., the buybacks were being done with debt and that has been hurt by higher interest rates there. david: do you see the payout ratios going up next year, and if so, by how much? nicholas: that will depend very much on companies. cyclically adjusted, they are paying dearly over one-third. that will have to go up. in my latest report, i looked to what was the cyclically adjusted payout rate, looking for companies that are not paying out. actually it has been the banks. i would have thought that as

rates normalized, japan becomes a more normal country with respect to rates. that will become -- make it easier for banks to make better returns and move their shareholders a little bit better. david: i am curious, part of your report is the exchanges naming and shaming. i am curious what you are seeing on the -- companies, widely held companies. what are your key observations? nicholas: fairpoint. if you look at the -- break the market into large, medium and small, what are the percentages trading below book and which percent has net cash, percent over equity, for example, it is way too high for the medium and large.

but it is particularly an issue for small companies. the temptation was to say that this is a compliant or explained rule. as one sydney bureaucrat said to me, you have to comply, but there is no rule. you could be cynical about it. name and shame is very powerful in japan and that worked out here to be very true, we had a run of buybacks last year within a couple of weeks of the announcement from the exchange about having to produce a plan. citizen watch was producing a 26% share buyback. prepare for fireworks as the new rules come in on name and shame. david: do you think you get to 34,000 on the nikkei before the end of the year? nicholas: every chance of that

happening. it is a dirt cheap market that has a decent growth story when the rest of the world hasn't. david: nicholas smith, japan strategist at clsa. let's stay and talk geopolitics. these foreign ministers have agreed to push for a summit of their leaders restoring a process that has been on hold since 2019 permit for the details reporter isabel reynolds is with us. what do we know about this? isabella: what is interesting to me is that the result of the meeting of the ministers has been vague. south korea has been pushing for months to have this summit between the three countries before the end of the year. but a month before the end of the year, they don't mention anything about when the summit is going to happen. it is just at the earliest convenient date. it could mean absolutely anything, it shows that this meeting among these three foreign ministers has been, a

bit contentious a lot of issues between the three of them especially now that south korea has very much moved towards the u.s. and japan account on a lot of from -- u.s. and japan camp on a lot of fronts. there are questions as to how this process will work out. haidi: what do we know about fumio kishida wanting to meet with the north korean leader? isabel: that is one of the issues that came up during the three way forward ministers meeting. they agreed they were going to tackle this issue of north korea's nuclear weapons together. the leaders from japan looked slightly different -- the readouts from japan looked slightly different at that, so who knows what was agreed. what you need to look at from uchida is his low approval -- from kishida is his low approval rating. it is below 30 percent in almost

every poll. looking back, one of the most popular things the japanese minister has ever done is to bring people who have been abducted by north korea in the 1970's and 1980's. so he wants to follow in that path and hopefully help improve his writing. haidi: politics reporter isabel reynolds in tokyo. this is bloomberg. ♪

haidi: these are the stocks we are watching when trade opens in korea and japan. summit soma mitsui financial group says its ceo junot tohas died at age 65. we are also watching asia related crypto stocks this session. designed smarter. genius! like 2.5% cash back on purchases of $5,000 or more, so sam can make smart ideas, a brilliant reality! chase for business. make more of what's yours. (sfx: stone wheel crafting) ♪

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♪ david: this is "daybreak: asia."

good morning to our viewers joining us from across the region, from hotel rooms, trading floors, hotel lobbies and elevators across the world. we are counting down to the open of major market opens here in the region. haidi: maybe at home, in the comfort of your own home if you are joining us. [laughter] hello and good morning from sydney as we set up your trading week. lots to watch for. albeit a quiet start to the week here in australia. we are watching for these reforms of the rba today. annabelle: yes, big central bank focus, rba, be ok, bot, rbnz are some of the ones we will be watching this week for decisions. the start of trading in cash treasuries, we will be watching the nikkei and do five and, because we are trading around a 33 year high. the question is whether we can meet that.

grace, 33 thousand 750 three would be the line to watch, it would close above a 33 year high. we've heard 34,000 would be possible by the end of the year, certainly within reach. a key technical indicator that tells us that could be something holding investors back is when you look at the level of investor interest, daily value of shares traded on the topics has been on a decline since it reached a peak this month. even though we have seen this little upturned higher, there is lack of catalyst and conviction to tempt more traders into the market. let's change on and look at what is happening in korea at the start of the day. you have the kospi a little higher. it does follow what we saw in wall street on friday, towards

the end of last week, u.s. shares holding onto their advance in that holiday-themed week of trading. as you mentioned, central banks and the bank of korea is due to release its policy decision this week. the expectation is for a hold. . the bok is concerned about rising household rates and that would make it reluctant to hike the key rate permitted look at what is happening in australia. the asx 200, that focuses on the rba this week. we have the government that will be introducing registration to facilitate the biggest overhaul we have seen on the rba in more than a generation. setting up a separate governance board, scrapping the treasurer's power to reverse policy decisions. that is something to watch with that legislation be introduced. still steady ahead of the opec+ decision. we are expecting deeper production cuts, haidi.

haidi: yeah, let's canvas everything we are watching this we can bring in marc franklin, senior portfolio manager for asia a location at my new life investment. this is the time of year we start looking at the year ahead. are you expecting equity markets to continue their strength leaking through the end of the year? marc: we have now gotten through a fed meeting and the message was that they are pretty much on pause, waiting to see whether this interim period of disinflation continues from it do so, there are a limited number of negative catalyst from a market perspective that will force the rally in wiscasset to grind to a halt. that being said, if you look at the medium-term outlook, there is a lack of valuation upside across the board from atop don

perspective -- a top-down perspective. between now and the end of the year, it looks like the markets should have an uninterrupted move and a grind higher. haidi: why do you continue to like japan equities going into next year? and i know that you are not alone, but you fit it into the broader themes that you're watching. short-term, japan is doing well from a valuation perspective. at the same time as you mentioned, there are secular things athlete which japan is a beneficiary from, particularly deglobalization and re-shoring and friend-shoring, japan is attracting foreign direct investment from places like the europe and the u.s., and in the semiconductor complex as well. there is a capital flow dynamic giving industrial momentum a great deal of support in the next few years. david: marc, david here. good morning.

before we move on to fx, one last thing on equity markets. where else apart from japan is touching your attention here in the region, if any? marc: as i mentioned, top-down, there is a broader lack of risk premium, so you have to be selective we. have to look at the secular themes, things like deglobalization, decarbonization, physical dominance. some of those cling to certain sectors such as uranium nuclear energy, cybersecurity. elements such as energy security, diversifying your supply base, and cybersecurity, moving into areas where there is growing mutual suspicion and so companies have to invest in protecting their ip, digital as well as physical infrastructure. david: to follow up on that, how does one play uranium? how are you guys doing that?

marc: you are looking for nuclear energy companies, our generation companies that are vertically integrated, so they also have assets which are producing the raw materials or the refined products either for their own power generation, or they sell to the wholesale market. looking for vertically integrated business models that not only benefit for growing governmental support for nuclear energy generation, but also have scarce resources. david: ok. let's talk about -- i think one of the themes that you have been long most part of this year, if not before that, rates in mexico. do you think those forces continue into next year? apart from what we are seeing in

mexico, does that stand out to you in other markets as well? marc: that is a great question. there are a few factors which are supportive for a shorter duration local currency government bonds. in places such as mexico. emerging market central banks, including mexico have done a, very good job in anticipating the surge in inflation we saw in the last few years. they got nominal end grades into the right place and as a result are sitting on real interest rates in comfortably positive territory. if moderating continues, it gives policymakers room to contemplate monetary policy easing which will drive capital flows into higher-yielding or carry opportunities in fixed income markets. the one risk factor for mexico is we have a general election next year, and to some extent, it is relatively early days. it will require markets to price in uncertainty premium, which

will maybe pause the capital flow we it into the mexican peso assets such as mexico government bond. in addition to that, mexico does play into the deglobalization theme, being a big beneficiary of changing foreign divestment and capital flows from other countries. haidi: that also applies to china as well. i wonder how you play the twin themes of perhaps shorter term, cyclical stabilization in the economy, and in the longer term, some of these deeper structural issues being more entrenched. marc: that is a good question. real estate is a good example. we have just seen suggestions that the banks will be permitted to issue unsecured short-term financing for certain qualified developers. that will be a precedent and would enable them to facilitate debt repayments and recycle their capital. it will be a critical short-term stabilizer which may lead to some periodic short covering in

the hong kong china equity markets. then the circular challenges still do remain, there is still a structural reset required ultimately via real estate prices because there is this imbalance between demand and excess supply. in the short-term, we see the potential for cyclical stabilization in the broader china economy given how important their real estate sector is. but longer term, the potential growth rate of china is clearly lower than it was pre-covid. david: marc, as always, insightful. thank you for your time. have a great week ahead. just ahead, we just ended on china and we will pick up on china coming up. the main story is criminal investigation being launched into the money management business of troubled shadow bank zhongzhi.

ahead of that, our exclusive conversation with u.k. prime minister rishi sunak on why his economic strategy will not deliver a fresh bout of austerity. >> government spending is at high levels historically. it has grown at very high levels even in terms after the impact of inflation. so i think any commentary or a condition that is what is happening is amply unfounded.

haidi: israel and hamas have signed a temporary cease-fire in gaza that could be extended, to allow for the release of more prisoners. president biden has backed the truce, saying it has allowed for the delivery of aid. when you the option to extend was on the table going into this. does that mean it is proceeding as well as one can hope? >> i think so.

hamas has put a statement on telegram and saying they will support an extension of the cease-fire. it is them who have to release hostages. israel's cabinet is meeting and it may approve -- that is one of the issues it could discuss. so it could mean that we are on the cusp of extending this from it if that happens, for every 10 hostages, you get a next her day . that you get an extra day. the increase in aid coming in finau as a result of the cease-fire, it is a critical issue. you have more than 2 million people, two-thirds of the population displaced in the gaza strip with very little fuel, water and food. so it is urgent. . the longer that this cease-fire is extended, the better the humanitarian situation, although it is in such a dire state, it is sort of lifting it from terrible to just very bad.

david: michael, we are taking this day today. what is next? then connected to that, what are the things we should be watching out for you whether or not we are moving towards an extension of this truce? michael: you really want to be looking at israel here. for hamas, the scale of the israeli attack has taken them a bit by surprise and they have probably taken some pretty severe punishment there from it for them, any extra time they can get to reorganize, to get people into new places and get supplies to their people, is helpful for them. they are good arguments for why they are on board. for israel, that obviously want to get there hostages out, but also, they have made this pledge that they want to destroy hamas, and they are preparing for the resumption of war. so the longer this goes on, the

better. it does also give some grounds for hope that perhaps this could be extended into something more than just a day-by-day situation, but the way that israel is talking at the moment, it is sort of difficult to see that. the other thing that is going on is there has been quite a lot of violence in the west bank, the other enclave of palestinians, particularly with israeli settlers who have engaged in pretty aggressive behavior there. it is to-ing and fro-ing in terms of violence. you will find -- you will end up with an escalation in the west bank which would turn it into another front. these are some of the issues we are watching. it's very, very tense as it always is, but it seems like a pause in the war rather than something more longer or durable. haidi: we are also watching for the congressional passing of more aid to israel and ukraine. bernie sanders in that upset ed last week saying we need to end the blank check approach to

providing aid. is that providing currency among the democrats that there needs to be a linkage conditional on minimizing civilian casualties more aid westmark michael: it looks like within the democratic party, there is a push to link it to abiding by international law in terms of war. that is linked to the civilian casualties. it accrued thing to do, but if you live in it up, 1200 people died in the hamas attack. and even if these numbers are slightly inflated by the hamas health ministry, 15,000 people have died in the attack in the six weeks since. it's a stark difference between the two. so i think that will increase. president biden said he is potentially not adverse to that, it's not something immediate for him. certainly when the next round of negotiations, up, if this is the way it persists -- and usually

with war there are always within casualties in built-up areas -- it's quite likely that that starts to get more legs. david: michael, thank you, michael heath in sydney for us, u.k. prime minister rishi sunak has denied his economic plans will lead the country to austerity. he spoke to bloomberg ahead of the global investment summit taking place in london where the government is unveiling 37 billion dollars of new investment. take a look. >> we are excited to be hosting our global investment summit, are welcome to business event. i am also very pleased, as you mentioned, we have secured commission -- commitment of after $37 billion investment, more than triple what we had when we last held the summit, it's an enormous amount of confidence in the u.k., and it comes on the back of the positive autumn statement we delivered, there is momentum in the u.k. economy. you are seeing that with

tangible commitments from investors and we are poised to have a very positive day. >> the obr trimmed their forecast for next year into 2025, you think you're being too conservative? >> that story of the u.k. has momentum. in the year i been for mr., we have halved inflation. the u.k., has recovered faster from the pandemic more than any other european economy. business investment has grown faster than any other g-7 economy in the last few years. ultimately, if you want to drive growth and productivity, you need businesses to be investing. we have momentum for business momentum, more than anywhere else here i feel. >> do you think the obr will have to revise upwards? are you confident the numbers will come in so you can continue cutting tax?

>> when i was first became prime minister, all of them predicted the u.k. would be intercession that your. that hasn't happened. we put in place a set of policies to make sure it didn't and that u.k. has outperformed all of those and grown this year better than anybody thought. i have a track record in outperforming what anybody thinks. the u.k. economy has better momentum now. business investment is growing faster than elsewhere, and we have commitments totally almost 30 billion pounds from our summit, with more than in the past. i think that shows investors and companies are voting with their pounds and their dollars. . it shows confidence in the economy and that is what makes me think we are poised for stronger gore. >> if you look at inflation, if you exclude energy, it's been down by 1/5. i don't know how much credit the government can actually take on that. >> if you look at core inflation,, it's pretty much middle of the pack for european economies.

forecast here to be lower than the eurozone, and i think in the u.s., in the last numbers i checked. inflation is downwards and coming down faster than peers in the course of the next 12 months if you look at the forecast. we are making sure we are disciplined with borrowing, to make sure that fiscal policy is answerable. we are not fueling that inflationary fire. we are being sensible on wage settlements in the public sector and you are seeing that feedthrough to the economy, if i talked to businesses, they are keen to see access to labor and we are making sure our labor market remains flexible, that we are moving people off welfare and into work. all the things are contributing to downward momentum on inflation. >> if that will be our is right in their forecast, where can you actually find some spending freezes or cuts? >> we have just delivered significant tax cuts for business, significant tax cuts for everybody at work. that is what our autumn statement did, the biggest

significant tax cutting event the 1980's. we are making full expensing permanent for businesses. we will be the only major g-7 economy and even broader than that, where you get a total write off against your taxes for capital investment. that is an incredibly generous regime to attract business investment, on top of the fact that our corporation tax rate here is lower than in any other g-7 economy. for individuals at work, we have just delivered a significant personal tax cut that will put 450 pounds extra in the bank accounts of a person at work in the next 12 months, which is good for consumption. >> does that mean you have to find money in departments where you know that voters actually want you to and more? are you comfortable as possibly being the prime minister of austerity? >> know, that is simply not the case. actually, government spending is at very high levels historically, it has grown at very high levels, even in real

terms after the impact of inflation. so i think any commentary or accusation that that is happening is unfounded. we are at a point now given how people are feeling, given the amount being spent, where i think the priority has to be lowering the tax burden. government is already spending a lot of people's money. we need to see going forward a lot more productivity in the public sector, to match what we have seen in the private sector post-covid. i would rather focus on efficiency in the public sector. i am very clear that that is the choice we are making. >> you have also taken a hard line on rising anti-semitism in the u.k. the white house denounced elon musk for what happened on x in the last couple of days. you do the same? >> i don't get in the business of scrutinizing what anybody says who i have interacted with. by a poor antisemitism and we have been critical that that is not acceptable in society. i have personally been very firm

about that. it's very sad what is happening on the streets. >> do you condemn elon mask? >> i condemn all anti-semitism, not just one personality, i condemn antisemitism. >> but he has a voice. >> as i said, i condemn anti-semitism in all its forms, doesn't matter whether you are elon musk or someone on the street shouting abuse at someone who happens to be walking past you. that's wrong in all its forms. anti-semitism in knowledge forms is completely and utterly wrong. some of the scenes been that we have seen have been unacceptable, the police know they should be using the full force of their dollars to bring those people to justice, that is what we have been clear about. we have made sure the jewish community gets extra funding here to ensure their safety and security and will continue to do

that. >> prime minister, what planet do you have for gaza? when do you think the fighting will stop? can the u.k. be involved in the peacekeeping going forward? >> we have been consistently clear during this awful tragedy that israel does have the right to defend itself and it should do that in accordance with humanitarian law. we have also consistently called for humanitarian pauses where aid can get in, but also hostages can come out. i am glad that is now happening. we have seen some of the scene in the past day or two and found that very heartening. it's important that everyone agree and we continue to see more progress. will continue to talk to our partners in the region whether that is the americans, the israelis, the egyptians are the qataris make sure we can see this through. >> his the u.k. for a a two-state solution? >> we are and we continue to be through that we have doubled our efforts towards that. i spoke to the palestinian president when i visited specifically about this, and the u.k. do everything it can to help the policy and authority.

we do need to look to the future of gaza and make sure everyone in the region can look forward to the future where they could live lives of dignity and security and opportunity. that is the vision we all share, but we have to redouble our efforts to bring that about. david: there you go, a wide-ranging conversation with u.k. prime minister rishi sunak, with our colleagues francine lacqua. in the region, slightly weaker on features. also the currency. he inflation numbers are due towards the latter part of this week. cable is a little bit lower early this monday. plenty more ahead. this is bloomberg. ♪

david: welcome back to the show.

one stalk we will be tracking, assuming this trades, and it doesn't seem like we will get a trade in terms of just how wide the bid is on this one. this is a management buyout, the price is at 86 20. substantial premium over the last trade. people watch what happens. broader markets are higher. 33,700 on the nikkei 225. plenty more ahead.

david: david: chinese authorities have opened criminal investigations into the money management -- into the money management unit of zhongzhi

enterprise after the shuttle bank revealed a shortfall of over $36 balance sheet. for more on this worry, belle is your onset. annabelle: we have a statement from chinese police indicating that they were investigating a number of suspects in this. there is lack of details as to who exactly they are investigating, what exactly they are being investigated for, but we know that zhongzhi has indicated it has a lot of problems plugging its balance sheets, and they also admitted to internal issues in the past. the statement on we chat says that chinese officials were investigating the situation at the company after it had it had a nearly $37 billion shortfall last week in its balance sheet. no one identified as of yet, except by the surname of xi. could be one of the founder's's

family members. the founder has since passed away but family members do work as executives in the firm and they do have the same surname. haidi: what measures are being taken at this point? annabelle: that is unclear as well. some unknowns at this point in time. we understand that criminal measures are being taken. criminal measures is a very opaque and broad term in the chinese legislation. essentially they can include someone's, they can include release on bail and residential surveillance, they can include retention and arrest. there's a lot of unknowns as to what exactly could happening with these suspects. of course there is lots of? over the health of this company, it has been one of the ones caught up in the issues in the property sector. looking at this chart that looks at how companies generally invest their assets, you can see

that portion going into the property sector around 7%. so given that broad asset mix, if there is issues in one part of the chinese economy, it can have spillover effects given these trust companies are investing in a lot of different assets. david: there are other issues -- we were talking during the break about this issue. annabelle: iannabelle: think this chart is important. it is chinese dollar bonds that have this fdlc-back guarantee. you can see the run-up in 2022. under that huge plunge. that's a 90% drop for issuance this year compared to last. we have to explain what is exactly an splc-back t-note, it's over that chinese companies look to get funding in the market. that funding of any has been cut at this point in time. sblc stands for standby letter

of credit. it's worth understanding that this type of bond means the bank acts as the backstop so if the issuer cannot repay the debt, the lender does. they have been popular in the past. they had dropped off. but you can see why, because if you are a chinese bank, do you really want to take on the risk of your issuer being unable to pay the debt? there has been cheaper issuance in the dollar bond market. we had seen a drop off in dollar bond issuance of this year, but the drop that we are seeing in sblc-backed notes is more significant than that the client. haidi: as we get set this monday morning in the mainland in hong kong, we had news that chinese authorities are investigating the money management unit of shadow banking giant zhongzhi. yen team joins us with more. how is this likely to play out

when it comes to an already fragile sentiment? lianting: two things. it is big news in the trust industry. one direct impact that investigation could have in the stock market is in the property stocks, because the company has a lot of property assets and that investigation may mean that a lot of those physical assets that zhongzhi forms would have to be dumped into the market to be turned around into quick cash. and with the property market already quite depressed, this is definitely another marginal negative on the sector. another thing that may not directly translate to the stock market impact is whether the investigation means zhongzhi will have to quickly pay back those missed payments to those primarily high net worth individuals. and if they could, that

definitely would have a marginal impact on consumer sentiment because those are big spenders. but again, there's a very uncertain situations right now. david: ok, perhaps -- david here, by the way, good morning. perhaps we could get some certainty in the form of data today at the open, i think we are getting industrial profits numbers. any expectations we should have about that being a catalyst question wishful thinking here. chime in. [laughter] david: typically a market doesn't really react to that, but the expectation is for a drop of six point 8% for the first 10 months on. the year-over-year basis. . people will be looking at a few other things impacting the chinese market. . one is the black friday sales in the u.s., record number of online sales in the u.s. could also translate to a positive sentiment on chinese consumer stocks perhaps. the other thing is that

respiratory illness that has been spreading in northern china among children. some medical stocks will be active again. we saw them again on friday because of the expected rise in demand for medical resources. the-for-there other thing is the property market -- then of course, the other thing is the property market from the last week the property gauge was of the most since july. we just need to continue to see whether that is going to be a sustained rally or if it will overall be impacted by a somewhat weak industrial profit data, and, of course, peoples lingering worries about china's economy. david: dancing too, are asia stocks managing editor laying out the trading session ahead of the chinese market which is just under one hour away. the nikkei 225 which has been having some trouble maintaining itself above this 33,800 level.

still that elusive july high. on an intraday basis, it is above 33,800 permit we were speaking to nicholas with out of clsa and his view is that 34,000 is easy work going into the end of this year. the kospi is up. there is some strength coming through. not consistently across the markets in the asia-pacific. up for four straight weeks is the market in the u.s.. longest streak going back to mid 2022. a couple of weeks -- a little bit of weakness coming through in futures in the last 90 minutes or so. it is really the vix. 14 is giving it away. 12.5 is where we closed on friday, which was the lowest going back to the beginning of the pandemic. 4.50 on the u.s. 10-year.

haidi. haidi: yeah. one of the stories we will continue to follow really is how these global central banks, whether that calculus changes for markets as we get into the end of the year. a bunch of central bank decisions to come this week. we are particularly focused on asia. more to come here on "daybreak: asia." this is bloomberg. ♪

haidi: china's health commissions as a combination of pathogens is causing acute respiratory infections in the north of the country. let's bring in our next guest. the good news is that these are known sources of infections. >> yes, that's right. so far, we are hearing that the surge is caused by a combination of pathogens, a virus which is also here in the u.s. and in europe. pneumonia is unknown pathogen, but it is unusual why is particularly hitting pretty hard in china at this point. this type of pneumonia is also

concerning because it is resistant to certain antibiotics and it is usually treated by antibiotics. in china, 80% of kids don't respond to that kind of antibiotics. it is quite alarming. david: so what is next? what are we watching? >> right now, i know that last month i had a respiratory illness and i know parents whose kids have had walking pneumonia. but the concern is that as it gets colder, we are going to see mutations. right now we haven't really heard about any deaths, right, they are basically saying stay home, go to the hospital and get the antibiotics you need. but it is concerning because

this is an example of what happened several years ago, in 2019 when there was an odd pneumonia that came out of wuhan. we have the medication for it, for the most part, we just have to wait and see whether or not when it gets colder, whether it becomes more than just a recent surge. david: allen, i was actually going to get to that as well. i am wondering what you are seeing and hearing as well as -- as far as how out of the ordinary this is. the other question is, is there anything beyond what we should seasonally expect for this time of year? to your point, the pneumonia that you mentioned that came out of wuhan, we know what happened with that one. not saying that this is the same thing.

allen: i would say the difference now is that we are coming out of a couple of years of --, so we should be assuming that a lot of these illnesses we have been able to miss out on, such as micro plasma pneumonia, they are coming back. because people stop wearing masks. i think that right now -- i can't say that it is under control. i don't see -- i do see a lot of parents talking about it, concerned about sending kids to school and all that, but at this point, it's just back to mask-wearing, and for staying healthy at this point. haidi: bloomberg's allen wan. a quick check on some geopolitical stories we are tracking. foreign ministers of japan, china and south korea have agreed to hold a summit. it had been on hold since 2019

due to the covid pandemic and political tensions. that three countries had drifted apart in recent years as japan and south korea strengthened ties with the u.s. seoul has been looking to hold another trilateral meeting at the end of this year, or in early 2024. kyoto news says the japanese prime minister is stepping up efforts to meet with north korean leader kim jong-un. they say tokyo was to change the status quo and establish relations. japan said 17 citizens were kidnapped by north korea in the late 1970's and early 1980's. five of them were freed in 2002. china is scrapping its requirement for travelers from six countries for visas. it will take effect from december 1 until november 30 next year and will allow travelers from that region to stay in china for up to 15 days without a visa. it's the latest attempt by beijing to facilitate more cross-border exchanges amid its economic slowdown.

the philippines and australia have launched their first joint maritime patrols, days after manila wrapped up a similar activity with the u.s. in the south china sea. they will be conducted within the philippines's collusive economic zone. china claims nearly the entire south china sea, including areas that manila says are part of its own. be sure to tune in into bloomberg radio to hear more from the day's big newsmakers and get analysis from our databricks team there, broadcasting live. from our studio in hong kong. you can listen live via the app, radio+, or bloomberg.com. lots more to come. this is bloomberg. ♪ ♪ the first time you made a sale online with godaddy

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haidi: value and climate change conference cop28 gets underway this week. at the event, nations will be urged to triple their renewable energy capacity this decade. china is on track, thanks to the chinese president xi jinping's strategy to use remote regions to house their energy. talk to us about how this elevates the energy and the environmental credentials and ambitions that president xi holds. dan: haidi, thanks. china has long been planning to try to pique it in missions by

the end of the decade and zero them out by 2060. one of the ways they are doing this is looking at the huge remote, unoccupied desert in its territory such as the gobi, looking at those areas that are sort of unoccupied so you don't have to worry about other, building use building out these solar and wind power bases and connecting them to the big energy-hungry coastal cities to try to bring in cleaner economy, to allow the economy to decarbonize was also taking care of the growth that china and other developing nations see. that is one of the big problems of the world because it is not just replacing fossil fuel energy, it is meeting demand in four countries as they try to bring people up to the middle class. david: so give us some numbers, if you have them in terms of what capacity is china building

in terms of gigawatt hours, if you could? what are we looking at in terms of alert and also wind? dan: they are trying to build 455 gigawatts of wind and solar power by the end of this decade just in these remote deserts. that's more clean energy than any other country on the earth has. it's more total power generation capacity than india right now, which is the #3 power generator, a massive amount. but it's also part of china's clean energy spur. they have huge energy bases in the southwest, they have had enough with rooftop solar, both in homes and factories and cities. their offshore wind industry is almost unknown in the world right now in being quite healthy and continuing to progress. so this is one huge part of it.

but china is doing a lot everywhere to try to make sure the world's biggest polluter, the world's biggest energy user is able to get enough new clean energy every year that it can take care of all the new demand, and also maybe start chipping away at the amount of coal they have to burn. haidi: the story talks about the awkward reality of the role of coal, right, of fossil fuels. how is this i guess kind of awkwardly existing in china? dan: so right now, these huge remote, desert areas are far from civilization and far from that megacities, so the clean energy is being carried by ultra high-voltage lines that can stretch into the thousands of kilometers. right those ultra high-voltage lines are mostly carrying coal power. a lot of regions that mine a lot of cool built power plants nearby and they are transporting

electricity. so these electrons will be mingling with electrons from fossil fuel and that will carry over for a long time. i think the starkest difference between china cut the u.s. and europe in the energy transition, is that what other countries focus on phasing out fossil fuels, china doesn't really care about that at all. they look at more of it as, let's build so many more renewables that it becomes a sort of boa constrictor that squeezes life out of fossil fuels. so in china, there is really not any urgency or impetus to take fossil fuel plants, coal power plants off-line. they just want them to slowly and slowly be used less and less as a backup plan to bolster growing wind and solar power that comes on every year. david: quite some figures here,

dan. china will lift renewables capacity to 3.9 terawatts by 2030. fantastic story, dan martel in shanghai. our energy reporter. highly recommend you check this one out, it is pretty cool with all the graphics. ok, something, back to markets. why not, in case you missed it friday and something to watch movie forward this week is whether this depression we are seeing on implied expectations of volatility in the equity market -- the vix was 12.5. last time we had a handle of that sort is right before the pandemic started and put this thing on an elevator straight to the sun. you have -- we have taken 4.5 years to get back to these levels. we will get inflation rates this week. couple of other things to watch, this is connected to the next one, the vix coming down,

inflation expectations may be moderating somewhat. it has been a fantastic november 4 equity markets. shorts, squeezed or otherwise. it's a fear -- the fear-greed index has swung in favor of greed. in some ways it the balance. wresting control of the equity market. four straight weeks of gains in equity benchmarks. perhaps to juxtapose this with a market that opens up in the next hour, mainland china which had seen, past tense, some inflows on thursday, a big amount going through net-net. that reversed. biggest outflows were from onshore stocks.

you can count this with two hands, i guess, but give or take, we've only had a handful of days in the last few months where we have seen net inflows there. something to watch when this market opens up. haidi: a standard handful. david: five on each. [laughter] haidi: let's have a look at some of the stocks we are watching as we go into the market open on mainland and hong kong, hkx is allowing indonesian firms to apply for secondary listings. also the big miners, copper is said to resume trading. a bit counterintuitive given the economic woes, but that is after the introduction in china of more support for the struggling property market which, of course, we continue to watch for further policy measures which can do more than just put a floor under the beleaguered sector. trading already underway, japan

stocks up about 0.3%. inching higher alongside the kospi up about 0.3% there as well. australian stocks have been more give-and-take, pared an early advance as trading got underway. also, a bit of downside there, about 0.1% there. we saw in the u.s., the s&p 500 having a fourth straight week of gains. the vix gate is the lowest since january of 2020. a pretty flat session there in new zealand. broadly, muted gains, let's call it that, in asia. that's it for "daybreak: asia."

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>> 9:00 a.m. in beijing, and hong kong. welcome to "bloomberg markets: china open."