china. as an old reporter myself, i particularly took comfort many how frequently tom -- in how frequently tom embellished his narrative with references to insider things he learned from, quote, internal memos, unquote, and unnamed, quote, chinese interlocutors. the problem is an age-old one, but this book is brand new, having been published just two weeks ago. i'm delighted that ipi has such an early chance to showcase it and its distinguished author, thomas j. christensen. [applause] >> thank you very much, warren. it's very great, it's great to be here, it's great to see so many people out on a lovely evening, and i really appreciate you coming to hear me talk about my book. my book really addresses two major challenges that i see that are attendant to china's rise, and china's rise i see as very real and the economic fear, the military sphere, the diplomatic sphere. but i don't think that china is going to replace the united states as a leading global superpower anytime soon, and i don't

-china relations. then, afghanistan operations commander about the training of afghan forces and other challenges in the region. later, a discussion on the future of mexico. : ur attention to u.s. china relations. we want to welcome robert daly, who served as a cultural exchange officer. he now serves as the director of the kissinger institute in china and the u.s. at the wilson center. a state visit, his first official visit to washington, d.c. what can we expect? play toirst, for him to the audience at home. this is important to americans. it means a great deal to the and the chinese communist party. it is the first featured item of the nightly news. if you want to broadcast to china a sense that he is welcome -- welcomed as a respected major leader, so the primary audience is at home. he would want to speak with president obama and audiences but primarily china. people in china almost demand state visits. very important to the rest of the world. america is an outlier. we do not wonder who is here. b

is ite just hearing really that people's bank of china china jet more market? just trying to inject more into the market? trying to kill two birds with one stone. it has been struggling. this has helped a really important sector of the economy. hand, it wants to join. it would be helped if it makes it more market based. it is certainly taking a step in that direction. how much are they willing to tolerate the market? guy: how far will they let this go on for us to happens tomorrow? they said there is no economic or financial basis for the currency to continuously decline. it seems there are a lot of underlying and the mental's that should support stability. at the same time, we are in if theed territory market really will be determining the yuan value. markets themselves are very .ervous potentially a vicious cycle. caroline: we will wait and see. think you very much indeed. the currency saying it will fall continuously. it is worth repeating. it is something to think about over the next few days. get chinese retail sales. all of those numbers are coming up. we

on the china point, china has been for years buying about 45% of the world's base metal. so we sometimes think the weakness in china already priced into these stocks but this is a dramatic shift in growth expectations given the slow down in that country. >> the world's largest metal consumer. they have a massive say with regards to what's taking place but we're still seeing buyers in the mining today. >> at least in today's trade. >> so everything thrown out yesterday and everything being brought back up today. indiscriminantly. >> yes. >> let's discuss more on china and it's fate with phillip shaw joining us here around the desk. good morning to you. were you able to watch the market moves we saw yesterday without freaking out? >> everyone had a sense of trepidation about it. some people saying they've never seen anything like it before. i'm not sure that's true. >> never seen a 1,000 plus drop in the dow. >> percentage-wise it wasn't that dissimilar. in 2008 the drops were taking place against a massive change which was the risk that the financial system was imploding.

china. as an old reporter myself how frequently he embellish the narrative with references from what he learned from the internal memos and the chinese interlocutors. this book is brand new published two weeks ago i am delighted to showcase its airbus -- and the author thomas christensen. [applause] >> it is great to be here to have so many people eyelet on a lovely evening. my book addresses two major challenges with china's rise is very real with the economic sphere but i don't think that china will replace united states as a global superpower any time soon pretty common the espouse the united states trying to drive the amount. ottman the security front there is a challenge to settle the many differences with the use of coercion and force. even though which trails the united states across the board even during the same period of time already in east asia it can cost to allies that could destabilize the region for the rest of the world but so that china is not a competitor of the overall po

demand ishat china's slowing, that could help germany. china is important less. when you look at the trade deficit this year it is twice what it was for the end of 2014. some mixed data, not quite sure how to price it. it looks like the sentiment is optimistic. brendan: nick wadhams is in beijing. hans nichols is in berlin during his first non-greece hit in months. jason trennert with us. let's look at these two engines of the global economy. days and longer drops if you look back a month. the u.s. engine, if that is only have rely on, is it running? jason: the u.s. has a current account deficit, it detracts from gdp. consumption at 68% of gdp. government spending 20%. good in actually looks comparison to the rest of the world, largely because it is self-propelled. the consumers, u.s. consumers, have a lot going for them. ,ages seemed to have bottomed housing is an engine, savings rate is high. americans are saving. oil priceave lower and lower commodity prices, which are going to lift real discretionary income. brendan: the consumer who wakes up and sees this, i

you go to china a lot. you know that china is not what you think. manytunately, i saw so chinese experts here that only go once a year or less than that. they become the experts. now in the world, among the top of courset companies, we can do better. the communication. communication, make the young people understand each other. this can make the world better. i am not a push -- not a politician. i speak like businesspeople. i understand my customer. i understand my competitor. the business world is not the other people. you win. even if the other people die, you may not win. you should learn to work with your competitor, learn from the competitor, focusing on the customer, focus on the future, focus on the on people. this is what i believe all time. politics, it may be the same. i don't know. moderator: hugh described in your remarks how different your company is from ebay and how uniquely designed it is or was for success in china. as an investor in the company, many people complain to me that the chinese government does not allow u.s. participants

, china. i almost can hear him in my sleep saying the word china. china. of all the things we have to worry about, like a ridiculous tax code, corporate tax rates, you name it, entitlements, he's railing on china? >> but you know what, he's resonating with americans because they are worried about us running up our debt and getting in bed with a country with questionable practices. >> i'm not saying donald is a demagogue but demagogues do this all the time. >> talking to me or -- >> she just pointed. >> she was looking at me. asking a question. >> sorry. i wasn't looking at her looking at you. >> katie. >> yes. >> you get the last word. >> i think china can be a positive force and a negative force and i think it's a concern they hold so much of our debt and people are concerned about china because they're being blamed for market crash in the united states over the past week and people want answers on whether that's true or not. and we've discussed that here today. >> it's simply not true. the t

china economists say that this, china has to move to regain global credibility.uest: i think he is right on the mark and expecting further cots in rates. the point which i thought which was significant in what he said earlier in the morning, the fact that the banks are his to lend in china because they don't understand the credit standing of the companies. that is what we found in the united states after 3008 -- 2008. hashort, monetary policy its shortcomings and it cannot achieve what you need in terms of structure and changes in the chinese economy. that is what you need rather than monetary easing itself. it is not going to do the trick. scarlet: it is almost seen as a crutch since the financial crisis. central banks have come in and flooded the markets with liquidity and try to create some level of stability. china is trying to do that right now but do you think it is more about structural reform than monetary policy that needs to happen? much so.ry if you look of the countries that have done it, the united states, japan, the european central bank, all of the

over $800 million have left china. that it isstory costing china. china is trying to do a lot at once. what does it do in terms of reversing slowing real growth? patrick: they are treating china as if it were a deficit, debtor country where its output -- it's consumption was dependent on its output. example, greece, when its output falters, it can consume. china is in the opposite position. it is a surplus country. it is a creditor country. they can afford to consume more than they produce. this burning through of the reserves is actually unlocking net demand, which is precisely what the global economy needs. this is what rebalancing looks like. it looks very contractionary on the outside of the chinese economy, but what we should care about, how the chinese economy influence the -- influences the global economy, is demand. this process other people are worried about, i see as part of the necessary adjustment to a more sustainable global economy. scarlet: how do you measure that? do you look at first and second tier cities? patrick: part of the prob

promoting democracy around china is an important way to promote democracy within china. taiwan, for instance, provides a powerful model for how traditional chinese culture can indeed coexist with democracy. my second goal is in relation to china is of particular relevance this week. that is protecting the american economy. until recently china has experienced impressive economic growth, by copying parts of the capitalist model. at the same time, it has damaged other economies, including our own, by bending and breaking the rules of economic trade to achieve its own ends. it has subsidized exports, devalued and manipulated its currency. it has restricted imports and stolen technology on a massive and unprecedented scale. as president i will respond to chinese economic misconduct. not through aggressive retaliation which could hurt us as much as them, but by reinforcing our insistence on free markets and free trade. this means immediately moving forward with the trans-pacific partnership and other trade agreements that strengthen strategic ties with our partners in asia. w

going intoeven china. we are focused on the middle west asiafrica and and southeast asia and we will be in about 70 countries over the next few years, but we're not even looking at the u.s. or china at this point. ok, our bloomberg news reporters are sticking with me, and adam, we will be watching your reports for more tidbits. speaking of apple, ceo tim cook's goal for apple pay is to reach one .5 million u.s. -- 1.5 million u.s. locations by the end of the year. they teamed with pay anywhere to reach that goal. >> we are the only company in the united states that allows .uyers to pay with apple pay so as a business owner, if you want to accept apple pay on your iphone or ipad, your only choice is payanywhere. reader will be available exclusively in apple stores next week. the amazon fire phone never caught on with consumers. now the e-commerce giant is dismissing dozens of engineers who worked on the device according to "the wall street journal." the exact number of cuts is unknown. amazon is not comment

exports to china are 1% of u.s. gdp. >> josh, people watching tonight want to know about their investments here in the u.s., if they are investing in china in one way or another, especially the multinationals who might derive a lot of revenue. apple, i can think of, or other companies like that. does this give you pause or do you buy bargains at this point, do you think? >> i think you've got to look at it on a company by company basis. but overall, there are some companies that are more exposed, to be sure. i think the overall impact of the u.s. economy and u.s. markets, once the dust settles on this, is not likely to have a round of competitive devaluation or trade wars that could upset markets more. i think we're going to fall way shy of that. i think chinese authorities are going to tread pretty carefully here. in the coming days, things will settle down and we'll focus back on the u.s. domestic fundamentals, which are not great, but they are improving. >> and paul, why don't you take theinal word here. do you t

so i just got back from china late saturday night. i spent a lot of time in china. as you know, it's a passion of mine. >> rose: you speak the language, spent some time over there. >> i spent a decade in china. i think this is one of the most misunderstood geographies in the world. now and probably in the future because they're bad communicators, author tearian communities aren't generally good in public relations which we have seen with the stock market and most recently with the deliberallization. but what is really happening in china is it has had unimaginable progress. i mean 20 years ago it was a desperately poor emerging economy. even at the turn of the century a $1 trillion economy. today it is a $10 trillion economy. this year it will be an $11 trillion economy. it is a very powerful dynamic country. and i think what is happening is part of the misunderstanding about the economy is that china is gos through enormous change. the last decade, 15 years have really been about twin engines. the first of course is integration to the world trading system. so all of

two, being pessimistic about china -- out of tune, being pessimistic about china. wrong?lationship that failed to produce a single success. angie: divorce. firm, thousands demand the resignation of the malaysian prime minister over corruption claims but he remains defiant. pragmatic politics. modi backtracks on a land plan after a backlash from indian farmers. plus, mixed messages. china plans to display growing military might while proclaiming commitment to peace. all of that and much more in the monday edition of "asia edge." i am zeb eckert keeping an eye on the asian markets, stocks are down broadly. china, concern about the u.s. interest rate hikes, all factoring in and certainly profitability t

this morning the big story was china devaluing the yuan. that celticomakers china fell. airlines with dollar-denominated debt got crushed. all aroundly day for the world. lots of interesting stuff to talk about. stuff tointeresting talk about and you've got some stuff on the bloomberg terminal. joe: it was not an all ugly day. one of my favorite data points -- the small business survey where they ask small business people bunch of questions about the state of business. this white line here, this is the percentage of businesses that say they are giving workers higher wages. that is a really nice uptrend. still not as high as it was a couple months ago, but there was a lot of monthly noise. the point is, that is a really nice uptrend. the averageine is hourly earnings growth. everyone talks about how flat that has been. that has not changed. the hope is the two lines will converge as more and more businesses say they are giving workers higher wages we will see it in more official data. scarlet: normalization. joe: exactly. scarlet: come in my bloomberg terminal. dollar goi

this is china. is this china exporting deflation? the bond markets for you and the same story in the u.s. we're seeing lower yields. >> we talked about it many times in the past. it is an acceleration of that. in a sense the domestic economy is growing far more slowly, but your exports have been rising reasonably comfortably against backdrop of subdued world trade and maybe reaching a saturation point in terms of the world trade and having to deflate that more. i think there is some lodge nick the way the markets are working. dropped from 50-plus to 40. it is right. maybe it is all this silly season trading as well. francine: i'm sure that is a technical term. china has your confidence at the moment. what do you think we'll see from policy makers next? >> i'm sorry. i departments hear the question. francine: so far you're confident that they are on the right path. what do you think we can expect from the chinese government or policy makers next? >> i think china just needs to focus more on creating more confidence in financial system

and china. it's a much bigger deal if it starts to affect owl world markets and slows those markets and begins to slow our foreign trade. so i think overall yes, the fed should probably sit on the side for a while longer, though sooner or later they've got to do something. >> tyler, what's interesting here is the fed and even mr. fischer remembered to inflation as transitory for six years. oil crashing, commodities are down anywhere from 30% to 50%. sugar is down 50%, copper down at a multiyear low. you see commodities falling like this, it's hard to suggest that its headline inflation at the very least will accelerate. it's very difficult in the months ahead to see the numbers go higher >> ron, to your point i think the treasury market is backing that up. dramatic fall in the treasury yield, interest rates are coming down. nothing in the commodity prices, basic materials or interest rates suggest we have any kind of recovering or expanding economy, or any whiff of inflation anywhere. >> let me

sandra: and make it a look at china's economy and the economic slowdown in china's largest e-commerce company reports quarterly results this morning. lauren: this wicked exceptional reasons for those reasons. expect it to decline 57%. first of all are they paying off? $4.5 billion in a physical electronics retailer. and then a billion dollars into the food delivery company. then the reagan military pressure. they been clamping down on internet finance. in general china's economy is slowing down. what are the implications for alibaba. they did hit an all-time low yesterday and since they peaked in november, more than $90 billion of market value, it has been wiped out of the company entirely. we will dig into these numbers at 920 eastern this morning. sandra: sales will be the lowest in 16 years. the profits don't look so worried at the moment appeared sandra: we will have the interview with jo ling kent today later on fox is number. here is asia, markets following to radically overnight as the chinese currency continued its decline, shanghai and nikkei down more than 1%. hong kong is t

china? the merging market issues? >> i think it is monetary policy and china.luences of different variables and then there is the currency. we see those other two things that we're spending the most time on. manus: your largest treasury holding is in u.s. treasuries. that has been a tough quarter. you have made some adjustments. are the bond markets really ready for the rer received liftoff in rates that we might get from the fed and dare i ask whether you're a september or december man. what do you think to have bond? >> is our wealth going to be our place -- on future development and monetary policy. my experience is yes, i think you can generalize and say that. manus: interesting. the world getting ready for liftoff from a zero point world. are we prepared for that? where will that volatility come from? in the equity space or the bond space or the h the currency? >> it is hard to say of course. the market is difficult to redict volatility. equity markets have been flying for the last two years. . w it seems like it is slow there is some uncertainty out there

of governance in china. not been well governed. charlie: but he continues to believe that it will be governance by the party. justin: by a monopoly party. the principal mandate is to preserve a single party state. charlie: the biggest fear they have is what they consider a threat to that. justin: correct. charlie: india, is modi changing india in a positive way? justin: i was there when modi was elected. i was there when modi was coronated. there was this almost religious view that modi is shown in white robes and jesus christ like, he was the savior of india and will save the problems that the congress party had failed to do. it's not really easy, as we've discovered. india is a much less centralized country than china is. it is an unruly democracy. maybe a democracy somewhat ahead of its time. and the underlying things need -- that made to happen in order to restart india's economic hindu rate ofhe growth, are very difficult to do from a constitutional perspective. that includes land reform and labor refor

take a look at what he had to say about airbnb's expansion in china. >> china as a country is growingaster than any other country in the entire world as a source for travelers. incredible growth. and you know it's an amazing , thing. there's a growing middle class and the first thing they want to do is experience the world. many of them have not left the country ever before. china is number one in terms of international tourism expenditure. it was $100 billion in 2013 and they estimated it would double again over five years. put that in comparison with the next two highest, the u.s. and germany are tied at 80 billion. the future of international travel is the chinese tourist. emily: what is interesting is they are looking for a ceo in china and they are looking at these venture capital firms. china broadband and sequoia. we don't know the other guys. who else have they help to get into china? guests: china broadband has been a pioneering entrepreneur. it is linked with sequoia here in the u.s. emily: do they have government connection that airbnb needs? guest: the process of making be

is part of the overall in china. so this is the best play in china for e-commerce and you need to be in this. a little bit of momentum came off. there's a direction going on but that's fine. at the end of the day this is the best way to play the e-commerce. >> the biggest e-commerce player in china. will today's results for the company be an important read through for the country as a whole? >> yes. it will give us some indication of what the sentiment is and where the market is going but not overall. i think e-commerce has such has not been impacted overall and the foreign exchange is really -- and this is a company that has 90% of its sales in china. i don't think the exchange rate should impact them that much. maybe in alibaba.com where you have the international sales. but that should help when the currency is devalued. that should make it cheaper to sell more but overall, 90% of the sales come in china. it's a very china sen trick company. you will get some indication, i think more than the numbers i think the c

was now even with china.where near china, and i would have guessed that we would be way ahead of india. we are now just slightly ahead of india. structureet particularly in india, and brazil is also up there, is still not great. what is driving the change? is it phones? candace: it absolutely is phone. in 1995, less than 1% of the population had internet conductivity. today it is 40%. the united states is at about 9%. china is at 25%. india is at about 8%. there are tons of investments that come out of this internet. brendan: such as? the sharing of the economy -- all of those things are not possible without an internet connection. brendan: how does it change when you are looking at a place like india, that still just has 2g phone access, but cheaper and cheaper smartphones where you can perhaps have one per family? what does that sharing economy look like? the big opportunity in india will be e-commerce. if you look at india right now, we are looking at a 36% compound annual growth rate in e-commerce over th

china has to do more and china has become a vast market for asia, for many asian countries, so chinaey in the whole system here. we think the government will do more. there will be more rate cuts coming through, rrr cuts coming through. but it also looks like the transmission mechanism has been broken. the money is not ending up where it should. what they have to do is fiscal stimulus. we are pretty sure they have the willingness and the tools to do so. angie: is this the same china we are talking about? the first half of the year, it was great. there was pressure on policymakers to put the brakes on and they did, perhaps to the chagrin of a lot of people internationally. year, how half of the does china play out for you? >> we stay neutral on china. the problem was at the beginning of the year, it was liquidity-driven but fundamentals pointed in a different direction. we think fundamentals still matter. we see some light at the end of the tunnel. we expect some acceleration in terms of growth and stabilization in the fourth order. for the third quarter, growth still remains quite fr

rules, one dependent china, or to china's.but if taiwan take off these proposals, it's a difficult to achieve, kind of feasible solution. if china can pick up or to launch some new thinking beyond the current system, that will be an interesting development for the two sides to consider. but i'm not quite sure about taiwan, whether we can achieve any kind of domestic consensus, for any kind of commonwealth as you suggested. >> in light of what you just said, you mentioned china branch. what they think of -- [inaudible] going to shanghai and what he would say about one china, all those things, consensus? they think this provides the flexibility is more pragmatic way because china is giving him recession. so do you think this will work? is this a modality both sides can pursuit? >> -- [inaudible] not a warm welcome in china. meaning that could be applied to level, i think of some limitations but you can see that he is very clever in his languages. for instance, he said that the one china principle is not a problem but he didn't s

the slowdown in china.ment saying the china, the uncertainty causes -- currency wars do not help the black or grace wants. important. it is it is more exposed. let's dig into china a little bit more. concerns there. overall, china is the world's second-largest advertising market. the dpp has the biggest exposure. -- wpp has the biggest exposure. nevertheless, they remain unabashed bowls of china. they talk about their geographical superiority in their position. concerned for the current time, but long-term all bets on china. interested in seeing what executives are saying about china right now. statementssome mixed coming from the mining ceos. two other stocks to watch, paddy power -- those companies are due to merge. these two businesses are not very dissimilar. >> it is interesting. deeply as we have heard talk that we could see a slowdown in mergers and acquisitions given these concerns over china with stock valuations plunging. paddy power and bet fair merged. this is a wave of consolidation in the gami

this weektalk early that china cosco and china shipping could be combining.to face a much stronger competitor? be the will maximum third largest carrier if they combined and generally our attitude is that we would like some commendation to happen because it would be good for the market. but the rates we are working with now if you take into account the slightly high oil price there on the same level as they were in 2009 where we lost $900 million this year. line $1.1 maersk billion on essentially the same competitive situation. we become a much stronger company and we feel very confident that whatever happens uncommon nations and strengthening of individual competitors we will be able to have a very solid business year. guy: we have seen some very ienjinng pictures out of t this morning. probably too early to get a full grip on what this might mean. do you have information you could share with us you go >> we are in the port but we are not in the areas where the explosion took place. it andm is unaffected by that is what is important for us. the -- iis up to

/china relations? it spins out -- what's interesting is this is really reverberated around the globe. the chinese economy is pretty closed. and it's the second biggest in the world. and when the stock market tanked, you know, it was dramatic but didn't affect the rest of the world. that's something to think about. >> there was -- a speculation that maybe they were doing this out of the chinese president's visit to the united states to try to placate our demands that they do something about letting their currency flow to the markets here. they would also like to become an elite reserve currency in the world. is this backfiring on them? or is this the kind of volatility you would imagine they're going to get and try and work with in the beginning stages here? >> yeah, you know, the chinese government doesn't like volatility. they want stability. this is something they're not going to like. you know, it's hard to say what was the trigger. i mean, if you do it now, you have a few weeks till the visit. and

justin: i spent a decade in china. think this is one of the most in therstood your fees world, now and in the future because of bad communicators. governments are not very good with you medication. but what is really happening -- very good with communication. but what is really happening with china, 20 years ago, it was a desperately poor emerging economy. ,ven at the turn-of-the-century it was a $1 trillion economy. a $20de later, it was trillion economy. i think what is happening is part of the misunderstanding about the economy is that china is going through enormous change. the last decade, 15 years have really been about twin-engine. the first has been integration to the world trading system. china, even when i lived there, was a very small part of the exports. and it becomes the biggest exporter in the world. that engine of growth in the last three or four years for many reasons has collapsed. charlie: collapsed? justin: in terms of incremental growth. years, we haver had no growth in world exports. this has many

his china unraveling? is this system around china unraveling?hard: i think they both probably say that there is a risk of unraveling. theconventional wisdom and imf is usually good at the conventional wisdom is that they have the will and the wallet to deal with the challenge. they have the will to address the problems. what is part of the conversation execute the game plan? is there a game plan or just a big wallet with a scattershot approach? tom: stephen roach later. coming up, we have a very special guest for you off the desk at jpmorgan. john morgan will join us. -- john normand will join us next. ♪ tom: here's what you need to know now. futures that -13. all sorts of emerging-market currencies weeaken. right now, our top headlines. vonnie: the fed is closing in on its first interest rate hike in nine years. minutes were released yesterday. they showed the fed is still concerned that inflation is below the 2% target. greece is getting the first chunk of its $97 billion bailout . most of it is already spent. the government is getting $14.5 b

there is no mention of china in relation to the south china sea.: i was interested to see the other day that china said, because it's about land reclamation with a lot of these islands, but a lot of these islands are not really islands. >> china's point is that they are not the first to do it. the runway they are building in the reef will likely be something like 3000 meters long, capable of landing the entire military aircraft fleet. that gives them a lot of range. the other nations don't have that kind of infrastructure to be able to compete. vietnam,hilippines, they just don't have the muscle china has. they all have done some kind of land reclamation. there are a lot of competing claims. rishaad: every time they get together, they are trying to build this regional framework, this free market economy modeled on the early days of the eu. they can't get down and talk about that because of this. making say they are progress. it is supposed to be completed this year so we are running out of time. the focus has always been and always seems to be on t

the and china closed higher.composite of 68 points, 1.7% higher as the government stepped in to devalue the currency. three straight days of devaluing the currency in china. future is looking flat right now. we are expecting to gain gop trading. the big number to watch as the retail sales number to set the tone for investors here. 8:30 a.m. eastern with an increase of .5% for the month of july. 0.3% in the month of june. when he took out other retail sales expected to come in a four tens

antonin: china is different.central bank balance sheet sizes to assets is consistent across the globe. more liquidity equals higher prices. only one which doesn't completely fit the bill. it is very cheap. the authorities are continuing to help. whether it was a bit of devaluation or additional measures, we do think that china is so cheap, it is interesting. china necessarily look at versus the rest of the world? it is still a hard situation to look at. it is still very volatile. mark: and fed rates? when is it going to be? antonin: who knows, september, december. unlikely the chinese devaluation will dramatically change the timing. -- now, we stick to december we stick to september. mark: if it is not september, that will have a big effect. antonin: the bigger question i have on liftoff is, yes, we've had a much stronger dollar, it is continuing to strengthen versus other currencies. once you get liftoff, that's quite likely. mark: great to chat to you, antonin. still to come, we talk gold. the commodity's bigge

maybe now china's stepping in. guest: is this going to be the race to the bottom as china has joined in on this? look at some of the regional currencies and the reaction yesterday. the singapore dollar, the yuan was down 1.3%. singapore dollar down to a five-year low. the global financial crisis, it's down about 12% this year. would you think, of course, it could maybe help exports. but this is not really an export-driven economy. malaysia. so this is going to be a problem. we have one analyst who was quoted on bloomberg as saying, we have a full screen quote, it will start a vicious cycle by different countries trying to depreciate their currencies. a double whammy because we have expected tightening of the fed and now this currency war driving to the bottom in asia. guest: it's interesting because i think for the next few days, they're expecting that we might ctually see the -- see it fall further. angie: then that would not be a one-time fixing rate. questioner: what combsh guest: what they're say something beca

the key thing that turns the news markets into one is china, china, china.h estimates. the red flag is what happens in china. if they do get the downturn they may have to revise their full-year targets. 1.53 percent, a red flag for the commodities market. copper is flirting with a bear market. we are in the green one third of 1% but trading with a 2009 low. it goes higher this morning by 1.21%. the two dollars. it is still in a bear market. the damage is done. going upt that we were in april and may, then it rolled over. in the commodity market and china, when you tie that together what do you get? maybe australia. the rba leaves rates unchanged. .he aussie dollar is up 1.34% it is in the statement. they did not say we need more depreciation of the aussie dollar. when you take out the job on the currency surges, making big moves across europe. 5 thank you. minutes, we are joined from new york. a big part of the show will be focusing on commodities. china had a great day to check their shelling. we saw a bid and commodities. we will synthesize commodities ove

francine: the great fall of china continues. the shanghai composite plunges 7%. $2.7 trillion are wiped off all equities yesterday, european markets go for a rebound. ceasene: bhp village and its full-year profit plunge 52% -- bhp billiton sees its full-year profit plunge 52%. welcome to "the pulse" live in london. i am francine lacqua. manus: breaking news on the eve of this -- , beatingclimate 108.3 estimates and expectations. and the estimate was for 102. francine: better than expected. if my calculations are right -- and they may be wrong -- part of the survey was done in the first couple days. the for the market rout -- bef ore the market rout. expecting to be lower than estimates because of the china factor. but confidence at 108.3. manus: chinese shares have plunged again. routteepest four-day since 1996. the markets europe, have rebounded. we have more on that with caroline hyde in a moment. we also have richard frost. he is in hong kong. what is behind today's rout? richard: yeah, hi. fairly astonishing day giving the h

things terrible in china today that weren't terrible in china on friday. so it's not obvious why today should be the day that you have the big dip, why the dow opened down so far today and then a really big rally. if you bought stock at 9:40 today, you did great. most of the day it's rising rapidly off the very big decline. i can't identify a specific reason it happened today. whether this is a harbinger of a bear market to come or a blip that will be corrected out of. >> susan, what's the government of the united states doing on a day like today and after the drops on friday? >> watching closely. doing nothing probably right now but watching closely. one of the things i'll say to josh's comments, you know, there's a lot about the psychology of the markets. we have two elements driving the markets. one are automated algorithms and people when we opened down 1,000. the other part is individual actors and market sentiment and there is a mob mentality a lot of times in the market. you see people start to kind of pile on to losses. and i think we are seeing a

this move, this is an easy by china -- an easing by china. the reaction has been to hit commodity currencies. na, this is easing by chi which should be supportive of assets in the medium-term. francine: interesting. michael mccaul fair from state street global markets. manus: china has released pictures of the new 100 yuan note in circulation from november. the pboc says it would be harder to forge. but easier for machines to read. the design is select to the 2005 series -- is similar to the 2005 series but has security features and is the largest note in chinese currency. francine: here's a look at what else is on our radar this tuesday morning. greece and its creditors have agreed to terms for a third baailout. manus: google is reorganizing into a company called up about. the new strategy gives the main web operations such as its search engine, youtube more independence while offering investors greater visibility in a plan to expand in new businesses. shares jumped. they are of 6%. thecine: -- has restarted number one sector at its nuclear

china guiding its currency lower. devaluation of the yuan to support the shaky economy roiling world markets. slamming currency and complicating plans to raise the interest rates in the u.s. china's devaluation spree may be coming to an end. let's bring in alison kosik. they hope this is over. >> they do. a different stock picture this morning than this time yesterday. stocks are actually higher. asian shares are up despite china devaluing the yuan. that is driving stocks up in europe and the stock futures here. it has no more plans to devalue the currency. china central bank is devaluing the form. that means a stronger dollar which hurts exports. >>> a lower than expected supply in the u.s. but still a huge supply glut of oil output from opec. the national average for a gallon of gas is $2.61. that is almost a dollar cheaper than this time last year. guess what? analysts are expecting we will see $2 on average by the end of the year. yay. >> i was hearing by halloween. >> i say december. >> let's shake on it. i bet y

liz: you're worried about china? >> china is the model.use a lot of those same governmental strategies to stimulate our economy. if they don't work there, there is a good chance we'll have problems here. >> i don't know why we're set what they did. we did that in the past. we don't devalue our currency on that dratdramatic basis. we can't control them. what are you recommending right now? >> what i'm looking at right now, investors have to realize there is a case to be made for real assets and i know the stock market has done well and there's always an opportunity in the stock market if you're selective, real assets, real estate. i think opportunity is still there. liz: i'm sorry, can i buy a reit? i will not buy a piece of property. how will you do that as an investable suggestion? >> the reit market, real estate trust market is not part of the stock market. liz: interesting you say that. >> more to look more at private equity real estate funds, real estate funds that own hard assets rather than trade in exchange. liz: look at intraday ch

the old china is going away. the new china is emerging.t is about services, higher tech development. for a long time, your weakness and commodity demand from china has been a part of our narrow view of commodities that we have expressed through the australian dollar and canadian dollar. it didn't just happen overnight. commodities have been in the bear market for three years. now we are seeing a capitulation of them which signals the beginning of stabilization. i wouldn't be surprised if most of these commodities find stability here at very low levels and stay there. i am not calling a rebound. these massive dramatic falls is likely. it could be an improvement to sentiment that will help drive a positive view on equities that we will see next year. manus: the euro. i'm looking on a weighted basis. over the past month, where up to .3%. -- we are up 2.3%. i didn't want to get it actually .trong -- actually wrong there is a certain amount of irony. it capitulated and we find a bottom. david: my belief is there is not a safe haven trade. pushi

for the most part, if you are selling in china, you want to be building in china.ota had that attack -- that tack. so any issue with production could be significant for the company. the chinese market has been pretty challenging for foreign makers. what impact could this loss production have for the company's sales from now on? craig: interestingly, toyota recently found its footing in china. there has been plenty of headlines for years about the japanese carmakers having trouble in that market. really since the issues you had with the geopolitical tensions between the countries riling up a couple of years ago. the companies here in japan ever rebounded from that in a significant way. companies like ford swooped in and grew aggressively in china. just in the last few months, you have seen toyota put out these really big numbers in terms of sales gains in china. so any loss of production for a sustained period would be a real challenge, just given the amount of resins i have in tianjin. and the company really can't afford that when it is really just finding its foot

china. the headline over the last half hour when it came to the currency and the money market was the reaction to the cut yesterday so raymond b, -- reminbi, where our way? the weakest level in several years. 640.ix came in at about 64214. from the cut off. there are 649 right now so they are converging a little bit. above saw it weaken to 65127 early this morning. the shanghai composite is all over the place. find its footing it was down another 7.5% yesterday and barely moving. i want to get you a one-day chart to show you how violent these moves are. 2976 is the level. the money markets, i alluded to this that liquidity has been tight and what we are seeing out as a drop in money market rates. day andthe low of the we were at 255 yesterday which is a drop of about 25 basis points. you look at the overnight in the 14 and the one that should be reflected again all this liquidity coming to the market. what you're looking at now is your 270 basis points. down a little bit. that is what is hap

dictate the agenda. >> i'm the one saying you better stop china because china has problems and they'reing us down. >> i don't think anybody would make the case that our economies are coupled. i think what we would recognize is the 21st century world economy, conditions in the world see their economy as more intertwined. >> various data suggest the u.s. is more dependent on china's economy now than when barack obama became president. our trade deficit with beijing is on track to be more than did you believe than what it was in 2009. u.s. trade with china occupies a greater percentage of our total foreign trade than it did then. exports to china make up a greater percentage of our total exports than they did six years ago. chinese holds have almost doubled since 2009 and direct foreign investment by china in the u.s. has doubled under the back home biden watch. carly fiorina, the former hp ceo who has flynn gop polls in weeks told fox business that the wild swings of evaluation as much to do with wall street as global dynamics. >> actually i've been expecting a correction for some time n

china. i want to get the latest on the right action from pboc. kevin hamlin has been a busy man in beijing and he has the details. kevin, i was going to ask how unexpected was the cut -- i think many people expected the trooperrr. yeah, that's right. pressure has been building on china to do something amid the global anxiety. the rrr cut was widely seen coming. most people were a little bit surprised that the pboc also cut rates. jonathan: for you, when you look at what they are dealing, has this got anything to do with the stock market? if it has, it's not really working, is it? it's not soothing investors at all. the second part would be whether it supports growth anytime soon. it gives relief to local governments that have about one trillion yuan this year. that helped. it helps -- the history of interest rates shows that loose investment in the short-term, the problem is that it pushes investment into sectors where there is already overcapacity. that leads to more capacity and pushes pri