tv Bloomberg Markets Asia Bloomberg March 4, 2021 9:00pm-12:00am EST
set for the centenary of the people's liberation army. we will enhance the political narrative of the armed forces, strengthen them through science and technology and capable personnel, boost major training and prepare across-the-board. and we will improve the layout of defense-related science, technology and industry and enhance the defense mobilization system. we in government at all levels should vigorously support national defense of the armed forces and conduct extensive activities to promote support between civilians and military. [applause] fellow deputies, we will stay true to the letter and spirit of the principal of one country, two systems, under which the people of the hong kong
administration and macau administration would cover their region with a degree of a tommy. we will improve mechanisms while enforcing the constitution and basic laws, and implement the laws and mechanisms for those regions to safeguard national security. we will guard against and deter external forces' interference in the affairs of the regions and support them as they grow their economies and improve people's lives so as to maintain long-term prosperity. we remain committed to major principles and policies on work related to taiwan to the one-china principle in the 1992 consensus and to promoting peaceful growth of relations across the taiwan strait and taiwan's unification. we will remain vigilant and deter suppers to activity seeking taiwan independence. we will safeguard the well being of taiwan compatriots and ensure they enjoy safe treatment on the chinese mainland as local residents. we will promote exchanges,
cooperation and element across the taiwan strait to bring a brighter future. china will pursue an independent foreign policy of peace. we will actively work to develop global partnerships and promote the building of a new type of international relations, and a human community with a shared future. we will pursue the policy of opening up in cooperation and work to make the system of global governance fairer and more equitable. we will continue to deepen international and regional cooperation and actively participate in international cooperation to prevent and control major infectious diseases. china remains committed to pursuing peaceful coexistence and development with all other countries in accordance with the principles of mutual respect, equality and mutual benefit. china will join hands with them to meet global challenges and work to promote world peace and prosperity. [applause]
fellow deputies, as we shoulder have your responsibilities, we much forge ahead with greater resolve. let us rally more closely around the party central committee with conrad xi jinping at its core, hold high the great banner of chinese socialism characteristics and follow the guidance of xi jinping's thought on socialism with chinese characteristics for a new europe and push forward in a concerted effort to complete the objectives for this year, and celebrate the centenary of the communist party of china with outstanding achievements. to build china into a great modern country that is prosperous, strong, democratic, culturally advanced, harmonious and beautiful, each and every one of us has to keep making tireless efforts to fulfill the chinese dream of national rejuvenation.
[applause] >> from their li keqiang at the chinese people's national congress, releasing the 14th national plan, which we have just been listening to. we have them setting and economic growth target of about 6% this year. they are improving mechanisms for managing financial risks as well, going on to say they will be ensuring no systemic risks here as well. that is what we have coming out of beijing. we can head to beijing and joined coanchor tom mackenzie.
tom, a conservative tone being set. tom: that is right. if there were any surprises, and there weren't many, it was that a set a p target, as he said, about 6% after scrapping it last year amid the pandemic and the impact on the economy. it is conservative because most economists we speak to, the survey suggest they could be looking up at between 7% and above a percent growth for this year. but bloomberg's economics says this is about signaling that the focus is not one quality growth. they reiterated that this time. longer-term, they want quality growth and they want to get that point where they are a middle-income economy by about 2035 as they tried to tilt out the middle class. to get there, you are looking at 5.5%, 6% growth. so the target aligns with the
longer-term -- longer-term perspective. the language didn't change in terms of a prudent monetary policy response. we know there is going to be more support for smes, but they are going to scale back the special issuance bond quota put in place last year to support local government spending. the deficit target was set at 3.6% last year. they reduced that target three point percent this year, slightly more generous than some economists expected in terms of monetary and fiscal policy, reintegrating lines we have heard before. in terms of the relationship between beijing and the u.s., they talked about the need to promote trade ties on the basis of usual respect, premier li keqiang. and there has been focused on antimonopoly drives and their were words that suggested they
will continue to strengthen those efforts on the on-time analogy -- anti-monopoly push and crackdown on the fintech sector as well. china has set itself this very ambitious goal of being carbon neutral by 2060. we got a few more details on that. the premier said they are going to map out a plan this year to reach peak carbon emissions by 2030. they are also going to look to cut carbon emissions per unit to gdp by almost 20% by 2025, that is the plan. so trying to double down on commitments in terms of climate change. he also pointed to risks domestically, globally as well. he talked about local government budget issues. he talked about the need to improve innovation and capacity around innovation to secure longer-term growth. he talked about challenges around the environment, said they haven't done enough yet, they need to continue to tackle pollution. we have very high levels of
pollution in beijing. auntie pointed to risks and he pointed to risks in the global economy. haslinda: tom mackenzie in beijing, hang tight. our u.s. trade executive in beijing engaged closely with the chinese government. joining us is michael harrison of eurasia group joining us from new york. -- joining us is michael hirson of eurasia group, joining us from new york. michael, key takeaways? michael: a fairly cautious approach from beijing in terms of growth. setting a growth target. the fiscal deficit is going to be a bit larger than i was expecting, even three point 2% instead of 3%. it shows beijing really was looking to have that balance between starting to cast
attention to long-term financial risks and the emphasis on sustainability, but a recognition that this recovery risks losing momentum, thus needing to support growth over the course of the year. haslinda: is this a reflection of a more confident beijing? it is no longer what the other economies think, it is about longer-term goals. michael: that is exactly right. the theme of this year's npc is very much on long-term strategic goals. it is on the five-year plan, which is really a 15-year plan because it is laying out an agenda to 2035. 2021, a discontinuity. and xi jinping is really working to shift the system to focus left on a hot -- focus less on high-growth and much more on strategic opportunities and a longer-term agenda. rishaad: the fiscal targets they
suggest for this year, does it suggest they could be tapering? michael: they are tapering, but it is gradual. you look at soft spots and the economy, it is consumption, the household sector and employment. and those are all areas the premier highlighted and it is areas where you do need fiscal support to keep things going. i think it shows tapering is going to be quite gradual this year and very much dependent on conditions. they are giving themselves a lot of flexibility. 6% growth is not going to be difficult for china, even the lopez from last year. so it is quite conservative and i think they will do better than that if they can't come a but they are giving them flexibility that -- giving themselves flexibilities that they don't have to stretch too far if they are worried. rishaad: how ambitious is this
five-year plan compared to others you have listened to? michael: it is very ambitious in the sense that this is the most geopolitical of any of china's five-year plans. i don't think it is ambitious in terms of growth targets, but what china is trying to do, promote innovation at the cutting edge, it will reduce reliance on the u.s. in critical areas of technology. these are very ambitious goals. and the question here is going to be, how aggressive is the geopolitical push when it is in tension with economic pragmatism? it is not easy to quickly reduce reliance on u.s. technology. that is the balancing act. it is going to be very difficult. rishaad: also, let's move to other parts of this. one thing i found quite interesting was li keqiang saying they will actively
consider joining the cpttt. this was in the aftermath of the transpacific partnership. we have at the moment somebody in the white house that is taking a much more multilateral approach already. how does that sit with this? michael: it is fascinating. this shows beijing looking to avoid being isolated by the biden administration. they know the biden playbook is going to be to try to build coalitions against china to keep the pressure up on trade and technology policy. and beijing has moved aggressively to head this off, pushing through a deal last year, even more so pushing through the investment agreement with the eu, and cptpt is still a long shot, still an aspirational goal, but it really shows beijing is determined to be outflanked and isolated, and wants to position china to be able to meet high-standard trade
deals in coming years. haslinda: speaking of goals, michael, let's listen to what premier li keqiang had to say about goals. >> our development goals for the year were accomplished, and major headway has been made in china's reform, opening up, and the socialistic modernization drive. haslinda: we talk about modernization of the chinese economy. from what you gather from the speech so far, five down years -- five years down the road, how will china look? michael: five years down the road, much will depend on how they implement this plan. i think we will see china moving into a lower growth mode, being willing to accept lower growth, and i think structural restraints on china's economy, including the demographic wave,
or going to dictate that. so lower growth that clearly more focused on balanced development, environmental protection, quality-of-life issues and innovation. there are going to be challenges over this next five-year timeframe in terms of controlling debt, being able to have new growth drivers replace old growth drivers beijing is looking to shed. so i think it will be a challenge. i am not expecting a hard landing, but there could be great challenges. rishaad: michael hirson, eurasia group head of china and the northeast. we should see him later. let's look at the market. it is about fed chair powell setting the cat amongst the pigeons and roiling markets. off 2% right now.
seeing weakness and hang seng but off the lows of the day. the shanghai market, 1% down, no clear reaction taking place with regards to the speech being made by li keqiang. looking at other asset classes, the u.s. 10-year bond, you have a 1.55% handle on that the moment. price of crude oil, a barrel toward the $65 level. opec-plus deciding not to relax supply curves even if the global economy is out of the slump. there were expectations the group would open the taps more. we go from one point -- 1.57% the yield on the 10-year moving higher. overall, the commodities complex taking a little bit of a hit even though we have seen crude oil move to the upside. gold under pressure, 2% up.
and operating systems as well as artificial intelligence. this is a backdrop of them wanting to build a coterie of tech companies of the likes of intel and taiwan semiconductors. we have direction from some chipmakers here. we have specifics not really emerging right now, but the playbook is making do over the next five years with aging semiconductors that are essentially adequate for base electric cars and even some luke perry applications. -- some military applications. let's bring in chief north asia correspondent stephen engle to discuss hong kong, featured in premier li keqiang's speech. stephen: it didn't take up a lot of the speech and his comments, but had a significant impact here in hong kong. because it was the national people's congress last year, which was delayed, that they
introduced the national security law which, within a couple months, was ratified and promulgated onto hong kong as law just before july 1. this is another step for beijing to solidify what they want to do, and that is bring what they say is stability to the hong kong sar. the pro-democracy campaign, which is in pretty much disarray right now after resigning en masse and having former lawmakers, even barristers who worked on pro-democracy initiatives, being arrested. now, 47 of them are facing a new trial in the biggest roundup under the national security law of pro-democracy advocates here in hong kong. so they are definitely under threat here but li keqiang in his speech, definitely doubling down and saying, listen, we need
to bring stability to hong kong and the external forces influencing policy and anti-china forces, he said they will continue to implement one country to systems in hong kong, ensure implementation of the national security law, suppress foreign forces interfering in hong kong and improve hong kong mechanisms enforcing the basic law. he said "we will resolutely guard against and deter against external forces'interference in hong kong and macau." reports saying anti-china forces have been colluding with external forces and measures need to be taken to knock them out once and for all. haslinda: essentially, it
questions the future of opposition parties in hong kong? stephen: it doesn't look very good, does it? at least under the name of pro-democracy. the basic law in the mini constitution here says, the basic law says the post-1997 handover was supposed to be toward democracy. but with the resignation of all the remaining pro-democracy candidates in the legislative council at the end of last year and now persecution and prosecution, if you will, of many of them, the pan-democratic camp is looking in disarray. you have to use air quotes here, there is other "opposition parties" but again, most of
these are pro-beijing, pro-business, pro-establishment. obviously, the opposition is going to look very different. yvonne: chief nor they circle -- haslinda: (announcer) back pain hurts, and it's frustrating. you can spend thousands on drugs, doctors, devices, and mattresses, and still not get relief. now there's aerotrainer by golo, the ergonomically correct exercise breakthrough that cradles your body so you can stretch and strengthen your core, relieve back pain, and tone your entire body. since i've been using the aerotrainer, my back pain is gone. when you're stretching your lower back on there, there is no better feeling. (announcer) do pelvic tilts for perfect abs and to strengthen your back. do planks for maximum core and total body conditioning. (woman) aerotrainer makes me want to work out. look at me, it works 100%. (announcer) think it'll break on you?
gains for the year. the ark has fallen 24%, putting it in the red for 2021. but the $23 billion fund is still one of the best-performing u.s. equity etf's. bloomberg named wood the best stock picker in 2020. owing is seeking a new credit facility from a group of lenders led by citibank. the plane maker has leaned heavily on banks for financing the past year medical of a slowdown in travel. the grounding of the 737 max and now flaws in the dreamliner, sources say the plane maker has options to increase the size of a two-your facility to $6 billion. ♪ rishaad: let's get it to markets quickly as we head toward the tokyo close, looking at what is going on air and also movers. this is the regional picture,
off the lows of the day, china shanghai, down .6%, hang seng down, in tokyo, a look at the topix and nikkei as we head toward lunch break and the yen at the lowest level we have seen against the dollar since july. the 10-year yield is marginally higher. quickly going for movers, kirin, in tax, rising in line with the oil price. this is bloomberg. ♪
♪ >> everyone is expecting a withdrawing fiscal policy, but to what extent? how much moderation would we see in the fiscal deficit? >> we believe they are focused on growing both domestically, as well as through exports. >> infrastructure spending, stimulus, all these things that are sort of the old way of going growth in china. >> some with gdp growth targets. >> china does not have an
alternative through the indicator to set a target. >> if they do happen to put out a growth gdp target, it may be lower than what many analysts are expecting. >> the tom-tom out of china it we will have one. >> that's because we have the base factor, which will bring a lot of volatility into the growth profile. ♪ rishaad: some of our earlier guests on what they were watching out for at the china's. in terms of the growth forecast. -- china's conference. we got a lot in terms of the growth forecast. we got more on where relations between washington and aging may be headed. -- beijing may be headed. >> china's done a pretty good job of tailoring, asking
questions to the circumstances. china's hunkering down a little more. u.s. is trying to protect its supply lines. i think we'll see china moving slightly toward an e currency, ever so slightly. clearly, they would not like to dominate world markets quite so much. that will be interesting to see, how far they will go. on the u.s. side, clearly this administration, the biden administration, is going to be doing a reset. look at all the sanctions and try to figure out which of these are effective or which of these are not. some of them are not very effective. they hurt people in china more than they are americans. in some cases, xi jinping doesn't care. so, you'll see this
administration look at all the sanctions, try to figure out which ones work and which ones don't, and to find out which they're affecting. haslinda: -- >> we're also expecting to hear more on references to the situation. you've said before the under president obama, the u.s. didn't have any leverage to really do anything about that situation or potentially what's happening in hong kong under president biden. what leverage is there in terms of some of the sanction reviews that you're saying will take place? max: i think, frankly, some great leverage is a reputational risk that china suffers if they don't address hong kong, especially king john. it's difficult for sanctions imposed by the united states or
other countries, say the u.k., to have real direct effect in trying to change behavior. that's why i think biden's going to try to do a reset. on the other hand, the more the united states stands up for human rights, and the western countries, that some are embarrasses china. xi jinping, his legacy, he wants to be a country that's respected. and when the united states stands up for human rights, it empowers a lot of people in china, wherever it is. it gives them faith. it gives them hope. do it appropriately. don't do it personal way. don't try to embarrass china, but still be very strong. shery: there have been high expectations about this coalition of like-minded democracies. is it a concern for you that perhaps we may see this from western democracies, in cases
like myanmar we had sanctions on generals, but asian countries not joining in the effort? max: no, asian countries are very much caught between the two elephants, china and the u.s. i was talking to a southeast asian ambassador. they plead with me, the united states, to stay with the tpp. i asked why. they said we want to play you off against china, whether vietnam or singapore. we're there so those countries can play as of against each other -- off against each other. they don't want to stiff arm china either. haslinda: that was max baucus. we're keeping track of the meetings, new headlines coming from there.
china will revise election rules for hong kong and china to revise the chief executive rules. he says china is seeking people to advocate china's 70 over hong kong, som -- sovereignty over hong kong. china will revise election rules for the hong kong ledge co., and to revise the chief executive election rules. still with us, michael harrison. he joins us from new york. michael, your take on what's been delivered so far right now with regards to hong kong, china revising election rules as well as the hong kong chief executive rules. kind of expected. what do you make of it? michael: i think, as you say, this is largely expected.
there has been a fair amount of signaling that beijing was considering this. and the practical effect, this is going to further sideline the political opposition in hong kong. in terms of what it means for international pushback, you know, i think there will certainly be political attention to this from washington. the i think th -- but i think there aren't attractive levers the u.s. or u.k. or other governments can use to increase pressure, so it will be more of a political spotlight. i don't see these changes likely to have an impact on hong kong political or financial stability. haslinda: speaking of the tensions between the u.s. and china, we heard how china is looking to push r&d, in particular in advanced chips. this has to do with china's goal of being independent when it comes to semiconductors.
how will this play out? and how will this impact the rest of the world? michael: well, i think the question is going to be how quickly can china move? there are real limits to what you can do in semiconductors, depending on the area that you're talking about. and beijing is going to throw everything in the toolbox at this issue, but i think there will be limits to what they can accomplish. overtime, this push for self-reliance in critical areas of technology, i think is likely to exacerbate u.s. china trade tensions because semiconductors are one of the key u.s. exports to china. and i think it just shows you how much momentum there is right now in this push by both sides to achieve a greater degree of self-reliance on technology. it's coming from the u.s., where you see the u.s. turning to a more active industrial policy. so, decoupling can oversimplify
it, but certainly these pressures for fragmentation of the u.s. and chinese tech ecosystems, i think a really baked into policies in washington and beijing right now. rishaad: michael, i just want to dial back to hong kong. how far does china want to subsume the territory in its entirety, legally speaking, it's every -- etc.? because ultimately, they want the territory to still have financial stability, still have the hong kong dollar, still perhaps have the sense of illegal system, which is different. in other words, to be able to be able to have their cake and eat it too. how far can they push it? michael: i think you're right. the goal is mainly on the political side. there are, in terms of actual letter of the law, there's not a real push from beijing. the question is these cannot be
completely separated. a truly independent legal system means it is independent of political influence. and so i think the question is going to be, as beijing sets down a very clear line on politics, to what extent does this bleed over into the legal system and to the business environment? i expect it to be a creeping process. i don't think it's going to be binary, where one-day day hong kong's legal system is gone, so i think it's a gradual evolution of hong kong further into capital hub to and from china, and less of a global financial hub as hong kong's identity and political context changes. rishaad: right, but we were listening to this speech. i think you were looking at the scattering's of words, which could be interpreted by taiwan. we're looking at how they would react to what they said about
china. he didn't mention much about taiwan. did we get anything on belt and road initiative's, and also this vaccine diplomacy that's occurring? michael: i didn't see too much that's new on those foreign policy areas. taiwan, i think the language may have been slightly stronger, but in terms of guarding against any effort of independence or splitting away, but you know largely in keeping with what i expected, bill vaccine diplomacy, i think -- belt and road vaccine diplomacy, i think is relatively low-key in terms of the tether here. so, i think it's largely status quo in terms of where beijing is signaling its international priorities. right now, the focus is on shoring up mobility's in the economy, these self-reliance themes in technology, setting up longer-term strategic objectives.
that's the focus. haslinda: with regard to taiwan, china says it will remain vigilant about taiwan's independence. hey dear expect them to be responding to this -- how do you expect them to be responding to this? michael: right now, neither side is really looking to fundamentally change the status quo. for the time being, i think the main risk here is a miscalculation. between china and taiwan, the militaries between the u.s. and chinese militaries, that is the big risk here. overtime, the political risks involving taiwan to grow. we saw this week that party in taiwan, which leads more toward the mainland, has had one country, two systems, has no market in taiwan, which i think
reflects the outcome of the situation in hong kong. this further moved to the public and taiwan away from support for reunification with the mainland. so, taiwan is a flashpoint. it's going to remain a flashpoint. i don't see the risks as particularly acute in the near-term. rishaad: perhaps the most important reaction, speaking globally, has got to be the state department. this is a day after antony blinken, secretary of state, said that the relationship between the united states and china was the defining one for this century. how are they going to be looking at it? michael: i think beijing accepts that same premise. the two sides are looking at this for a rivalry for global leadership, and to some extent, systemic competition. china feels less comfortable saying that openly. for a number of reasons. but i think the premise of this
relationship right now is competition for global influence. absolutely, that is the name of the game. haslinda: michael hirson. now, let's get the first word headlines. fed chair jerome powell says he will be consigned by disorderly markets, but stop short of concrete action to rein in rising long-term interest rates. he told the wall street journal webinar there's a lot left to do before the economy heals, signaling no policy tightening is on the horizon. treasuries extended losses and inflation expectations reached new highs. >> i would be concerned by disorderly conditions in markets or persistent tightening that threatens the achievement of article. i would be concerned if those things were to happen. haslinda: opec and allies have shocked the market by keeping oil output unchanged, setting
prices to two-year highs. the alliance agreed to hold production study in april. saudi arabia says it's in no hurry to bring back supply. the saudis dismissing concerned about -- concerns about overheating markets and rising inflation. >> i don't care about prices. i care about discipline. i care about bringing inventories -- once the levels are in control of 2015, 2019, that is comforting. haslinda: the japanese government recommended extending the state of emergency for the tokyo region by two weeks. the restrictions were set to expire sunday. japan is trying to maintain a decline in trend in inflect infections -- infections. under the emergency, bars and
restaurants must close at 8:00 p.m. at three prefectures. italy blocked a shipment of astrazeneca's coronavirus vaccine to australia. it blames europe and says australia is considered a non-vulnerable country. the european convention did not object -- commission did not object to the decision. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. rish? rishaad: more headlines coming through from the people's congress and mechanisms of finance, if you will, looking at china improving its mechanism, saying they -- and this is a
mentor they reiterated on several occasions. they will be promoting the opening up of financial services, as well. that's a couple of lines crossing the bloomberg terminal. there you go. staples on the embassy or 300 -- csi 300, a little green there. oil prices are rising. tech sectors did pull down. the nasdaq and s&p 500, we've got in hong kong, a lot of pressure on these tech names, as well, such as tencent. plenty more on the way. you're with bloomberg. ♪
which has made this a star fund and made cathie woods a star, as well. some might say you blame it on inflation fears. they got caught up in the broad-based selloff we saw in the pricey parts of markets. tech caught in the cellar for more than a week now. it was down 5.3% at the close, this flagship fund, and that wiped out the $22.9 billion fund gains for the year. another setback for one of wall street's hottest products. now, the next generation internet etf fund also took some heads. it is curious why the pullback -- again, the most natural reason, a lot of the tech stocks which were hit the hardest, all part of the fund. but also, the overarching concern about how all these
stocks have done very well in a low rate, low inflation, low expectation, low gdp environment. it spikes -- so, the ark etf has taken it on the chin, as well. has? haslinda: even with the losses, it remains among the best performers in the u.s. year-to-date. su: yeah, that cannot be argued. if you just take a look at a two-year chart, you'll see ark, the flagship fund, its performance over the year, remarkable by almost any measure. 20 was relatively flat. but you get into 2020, the flagship fund was up since the march lows almost 12 months ago, and assets have been ballooning from 1.5 billion people pouring into the fund. so, for the most part, investors have held steady despite this
retreat, and what we saw friday and monday was a combined 611 million people adding to the fund. so, it looks like a lot of people are going to hang in again, this is a market that's been difficult, but clearly when we saw the bond spike, it had a dramatic reaction and the ark etf was a part of that. back to you. haslinda: su keenan in new york. let's look at where markets are, no change, pretty much read across the board, markets in asia stumbling. the msci index down i more than 1%, extending today's decline. china looking like this on the back of the meeting. in the bond market, yields expanding, traders sending yields higher. still, we get financial
haslinda: a quick check on the latest headlines. shares fell and after hours trade after the company's main chip division reported it just missed estimates on expectations. it expects six by $5 billion for the current quarter, which is largely in line with estimates. the coc's revenue games throughout -- the dealmaker is ramping up its push into investment banking. china renaissance made its name advising investors -- investing in startups. but now it's taking on blockbuster listings. it's currently working on a 13 ipo deals globally and wants to expand its team of about 30 bankers. baidu has secured approval for its second listing in hong kong
and could launch as soon as next week. in january, bloomberg reported the new offering could raise as much as $3.5 billion. jet engine will join a wave of chinese firms flocking to the city, with $17 billion raised in hong kong last year. suez is said to be in advanced talks to sell its australian business to clean away waste in a deal that could value the asset at $2.4 billion. the proceeds would help it as it seeks to fight off a hostile takeover. the deal is uncertain. rishaad: our coverage of china's congress continues. we've got these great guests on the way. we'll also be speaking to a defense analyst, a consultant, about tensions between beijing and delhi.
♪ haslinda: it's friday, almost 11:00 a.m. in shanghai. i'm haslinda amin. rishaad: i'm rishaad salamat in hong kong. china is setting a conservative growth target, above 6%, telling the national people's congress in beijing that many economic risks and challenges remain. haslinda: the nbc also sends a warning, promising to suppress
foreign interference in hong kong and remain highly vigilant against taiwanese independence. rishaad: all this as asian equities sell of and treasuries hold their declines after jay powell refrained from pushing back against the recent surge in yields. haslinda: and in the markets, asia slumping, and you can't blame it on fed chair jerome powell for failing to push back on certain yields, treasuries were filled up overnight, yields touching 1.55%, the asia-pacific index down by about 1%, the csi and focus, flat right now, but it was down 10% from its february 10 flows. enhancing index, it was down -- and the hang seng index, it was down 20%. rish? rishaad: yep, let's look at what's going on in bangkok.
are they following the regional trend? not really. currently, there is a lot of pressure on authorities to put an end to tourist quarantines in thailand, largely because we've got vaccine rollout is taking place. the prime minister ordered officials to look into certificates for national travelers after signaling it is open to scrapping the quarantine. the nifty on the contract is down. the sensex managed to break a three day winning streak. this could be adding to some of those losses. we've got news on the csi. haslinda: that's right, reversing its earlier loss of as much as 2%, so quite a turnaround. we'll continue to monitor. the national people's congress underway, outlining the government's work.
also, china's plan. let's get to tom mackenzie in beijing. the key takeaway, really, is that growth target. it didn't give one last year. it did this time around. tom: absolutely right. that was the standout surprise from this work report. we got the five-year plan, as well. but it was the gdp target set this year. many said they weren't going to set a target for growth because of the global economy that remains very uncertain. but they have set it at about 6%. as you say, they didn't set one last year. in terms of the five-year plan, no numerical gdp target embedded in the plan. as many of your guests have been suggesting, it underscores that a focus is on quality growth going forward. many would say it's going to be relatively easy to beat that
target this year, the range between 7-8% in terms of the consensus forecasts for growth for this year, but it is above 6%. the deficit target is slightly lower than last year, not a big surprise, 3.6% last year, 3.2% the target this year. in terms of monetary and fiscal policy, the wording was unchanged. we know they are increasingly concerned about risks and leverage, but they want to ensure they are not pulling back too quickly because the economy, or the recovering, is something -- although recovering, is shaky. you've got the importance of technology driving growth going forward, trade as well, saying they want to reach out to japan and south korea and build out trade ties. those are some of the key takeaways. rishaad: tom, as you mentioned, technology was a key focus. they said they are going to be
concentrating on key technologies, the king about new innovations, looking at 2035 to get this done. there was this emphasis of increasing spending on research and development. tom: yes, so they want to ramp up r&d spending by about 7% a year between now and 2025. making a point of saying really issuing a rally called to innovators, tech entrepreneurs, and businesses to drive innovation, saying innovation will be absolutely key to the modernization of china's economy. also, lines coming out saying they're going to hope to make huge, significant breakthroughs in terms of the technology space by 2025. there's going to be an emphasis on semiconductors. we know they been trying to ween
themselves off the reliance of the u.s. they are hoping to ramp up the output, or connectivity around 5g. they want about 56% penetration by 2025. they're also looking at the ai space and operating systems, as well. there's also this push against the drive that hit the likes of alibaba, and again, they stress that we're going to continue to push in terms of antimonopoly's and breakups and continue to target the financial technology sector, as well. rishaad: tom mackenzie for us in beijing. let's get to the hong kong angle and look at what was said and what was referred to with stephen engle. how did premier li's speech deal with hong kong? it was mainly about how we elect the people who represent the people here, or do they? stephen: yeah, the handwriting
is more than just on the wall. it is in a new draft resolution that will be debated and pushed through the national people's congress over this next week and a half or so, and then taken up, very likely, by the standing committee of the national people's congress. the same process we saw a year ago in the delayed national people's congress, when we had the national security law debated, the draft approved, and propagated by the standing committee. so, this is an enhancement on that, where authorities in beijing want to bring more civility to the electoral process. we know they last year, the legislative council elections were delayed by a year under the guise of safety under the pandemic and the coronavirus outbreak. but many pro-democracy activists are saying that was done because beijing was concerned that there could be a repeat of the previous year's district elections, where candidates
overwhelmingly won and beijing was perhaps a bit too concerned that these non-patriots, as they put them, those who are not loyal to the communist party and the motherland, would have to much sway in the election in legislative council elections, as well as the body to select the chief executive. this new draft resolution looks as though they're going to change the laws and the rules and the requirements to be an elected official in hong kong, as well as the composition of the 1200 member body that fixed the chief executive. haslinda: it is a -- fair to say it is a balancing act when it comes to hong kong. as much as you want to clamp down on hong kong, it needs hong kong right now despite the fact the focus is moving to what the greater area is doing, as well. stephen: yeah, in the comments,
he reinforced that hong kong and macau, those integrated areas of the program or delta and the greater bay, as they like to call it, will be part of the development plan in the next five-year plan. but again, getting stability here is probably paramount. and he did say we could implement one country, two systems in hong kong. we can ensure the limitations of the national security law, as well. we can suppress foreign forces in hong kong affairs, and that's the root of this next step from the legislature in china, to change things and change the basic law. the standing committee of the npc, the only body that can legally change the many constitution here, and that would be required if you are going to have those electoral changes. he also says they will improve hong kong mechanisms for enforcing the basic law. now, even more strident was a
commentary from the news agency last night, basically saying, for years, anti-china forces seeking to disrupt hong kong have been colluding with external focus -- forces. effective measures must be taken to "knock them out once and for all." and many in the pro-democracy camp, 47 of them are now potentially up for trial under national security law charges in the biggest suite under the national security -- sweep under the national security law. this does not bode well for any form of democracy in hong kong, as laid out in the basic law, which stipulates the old to maim of hong kong politics and the election of the legislative council and chief executive is for a democratic process. looks as though china is taking steps to make sure that loyalists and patriots will be choosing lawmakers, or will be the lawmakers, and most importantly for the chief
executor. haslinda: chief north asia correspondent stephen engle. now, let's get the first word news for you. fed chair jerome powell says he would be concerned by disorderly markets, but stop short of concrete action to rein in rising long-term interest rates. he told the wall street journal webinar there's a lot left to do before the economy heals, signaling no policy tightening is on the horizon. treasuries extended losses and inflation expectations reached new highs as powell spoke. >> i would be concerned by disorderly conditions in markets or persistent tightening that threatens the achievement of our goals. i would be concerned if those things were to happen. haslinda: it up contender, a south korean president urged the u.s. to give seoul a bigger role in pushing kim jong-un to give up his nuclear weapons.
he's emerged in opinion polls as a leading candidate to represent moon's block in the elections next year. >> we don't have the luxury to procrastinate. the biden administration needs to set this as a prioritized agenda item and needs to acknowledge the importance of south korea's stance. south korea has two types of roles. one is a mediator. and one is a directly involved party. haslinda: opec and its allies have shocked the market by keeping oil output unchanged, setting prices to two-year highs. the alliance agreed to hold production steady in april. and saudi arabia says it's in no hurry to bring back supply. the saudis dismissing concerns about overheating markets and rising inflation. >> i don't care about prices. i care about discipline.
i care about bringing inventories to -- once these curves -- once the levels are in control of 2015, 2019, that is comforting. haslinda: and that was the first word news. rish? rishaad: right, close look at the tensions between china and india is both sides look engaged in their position. we're going to get some analysis from a major general in the indian army later. first, getting market insight on the policies with cicc. he's one of the top china strategists, awarded four of the past six years. this is bloomberg. ♪ so you're a small business, or a big one. you were thriving, but then... oh. ah.
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rishaad: quite a remarkable markets story today. we're seeing in pc taking place in beijing. we had a serious negativity, csi down around 2%. we're virtually positive around all the benchmarks in china. looking at some of the sectors, quickly looking at what's driving the asset three, consumer staples actually down, up nearly 1% now. the tech index, one of the major contributors to the fallback we were witnessing, positive. quite something. let's get analysis to the npc itself and how it does in fact -- affect investments. let's bring in lang. thank you for joining us. how did you move the dial as an investor? >> i think the message from the
government report is quite rare important -- quite important, and i'm quite impressed by some of the points. first of all, you can see the growth target for 2021, which is actually a record low. but by this growth, you can see china wants to seek not just level growth, but more importantly, -- growth. and secondly, i think if you look at the message, they're trying to emphasize the innovation. innovation for china is very important at this stage. and thirdly, i think the message from this report, you can see that they tried to boost domestic demand, especially consumption. i think that's quite important for the five-year plan period.
and then lastly, i think is something also quite important, is the green development. china has promised to -- i mean, to reached so-called carbon neutrality by 26 80 -- 2050, and it will take more measures to prepare for such a target. so, all of these messages have medium-term and long-term implications for investors. i think over the next few months, even the next few years, people will try to reach these messages for investments in china. rishaad: just hold that thought. we've got a bit of breaking news. the bank of japan governor, we've been talking about yields
as you've been talking about yields control, as they been judicially following. you think it's unnecessary, doesn't think it's unnecessary to expand long-term yields. he's been talking about more stimulus and vaccine hopes, really something which has been behind the yields going up. we've heard them talking for quite a while, saying the global consensus is against ending the stimulus to early and he doesn't see the u.s. economy overheating either. let's get back to hang seng. what i wanted to get a sense of here was, did you find anything new, something appear new that you haven't flagged up before this meeting? >> there are several points, actually. as i mentioned earlier, i think the growth target is actually lower than my expectation. and if you look at the research, we forecast 80-8% gdp growth for
china while the growth is like 6%. i think this is a bit lower than what we expect. i think it's understandable because the overall target for china is not only the level growth, but also the -- growth. secondly, if you look at the policy, given the growth is robust, under normal policy support we've seen last year, you can see in some reports that one of the message is that they gradually faced the support. for example, if you look at the percent of gdp, the target is only 3.2%. i think is a significantly lower than what we see last year, which is something like 6.3% --
3.6%. so, essentially, in the short-term, i think china, they want to phase out this addition of policy support. i think another point that quite impressed me is the emphasis on structural interviews, especially like the tech, technology, improvement, and also they are focused on environmental protection, and also the input for innovation and allocation, and research and development. these are indicators. i think they show what the government cares about is not just the level growth, but also the quality of growth. we are looking for a more balanced approach, more sustainable growth, and high-quality growth. haslinda: so, having said that,
how do you position yourself to perhaps optimize the gains from the chinese market in the next five years? >> i think that's a very good question, especially even china is going to release the full contents of this plan. in five years, i think china will transition the economy from a more investment growth to a more consumption based model. so, i think this consumption, and the surveys, and the ones from manufacturers, we're continuing to present very good long-term secular growth opportunities for the investors in china, and also investors from the globe. haslinda: we seen a selloff in
stocks deemed frothy. do you expect that to persist? >> yes, they may persist for a while. actually, as a strategist, i have to remind investors from early february, this year, that the market volatility may increase because you can see there are several factors. number one, the market board announced, since march 23 last year, and it has a very long and very big bullish round. i mean, and secondly, you can see the valuation -- if you look at the index, before this correction, it has already reached the level close to what we have seen in mid-2016 -- mid-2015. and certainly, i think china's
recovery has reached a level we have seen before the pandemic. and that means the recovered to quite a degree. and on the margin, you can see china's gradually tightened the policies. so, given all this conditions, performance has been so good and growth may continue to improve. and also, the policy are changing on the margin. so, i think it's natural to predict the market. and over the past few weeks, if you look -- yeah? rishaad: we've got to get to break, but thank you so much for joining us.
haslinda: welcome back, and taking a look at markets. china facing losses, rish. rishaad: totally. we've got them raising other losses and going back in the red to recover. but then it's gone down again. that's what we have at the moment as we head towards the lunch break. looking at companies like these, which are really responsible for the come back taking place, here bigo. -- here we go.
>> we are tracking the global covid-19 vaccination efforts using bloomberg data to measure week on week progress on the greatest medical challenge of our time. let's have a look at how we look . we had seen a jump in the numbers of countries, 13 countries. this week measures last friday. we are looking at 11 new country starting vaccination programs. the number of stotts has risen
54 million. decent progress there. week on week, let's have a look individually at which countries are leading this race. relatively smaller population countries are the top of the list. israel had been holding the top spot for several reits -- weeks. maldives. globally, we are looking at a rate of 6.6 million doses per day. at that rate, it will take us about 4.5 years to cover 75% of global population with a two dose vaccine. currently, we are at 2.4%, up from just under 2% this time last year. -- last week.
clients track the biggest vaccination campaigns in history on our terminal on bloomberg.com . right here, same time next week. ♪ haslinda: federal reserve chairman jay powell is acknowledging that he is watching volatile bond moves while stopping short of signaling the need to take action to stop them. kathleen hays is here with more. what were his key points? kathleen: the overall take away is that jay powell is going to be patient, stick to its goals to get this economy fully recovered. that takes precedence over appeasing the concerns of bond market investors that something has to be done to prevent them from selling more bonds and causing yields to rise too much, too fast. he did say, the run-up in bond
yields has been notable. its disorderly conditions that would concern him. >> i would be concerned by disorderly conditions in markets or persistent tightening in conditions that threatens achievement of our goals. i would be concerned if those were third -- those things were to happen. >> he isn't. he doesn't see things being that way yet. financial conditions are still accommodative. stocks have not fallen apart. there's lots of liquidity out there still. he is watching to see if this changes. he has ticket -- he is sticking to the fed mantra. we are a long way from our goals. it will take some time for a full economic recovery which would show us that we have a need for rate hikes. far from it. not ready to do anything to change that.
you have to see inflation at 2% and above and staying there. you have to see full employment, tell million people still unemployed in the u.s.. we are not there yet. it's interesting that it is investors who talked up, surely jay powell has to talk about an operation twist, long-term bonds. taking a step to do real yield curve control. jay powell didn't do that. it's clear that he didn't do that because the fed is far from being there. market conditions are not disorderly. yields are rising but in a growing economy, an economy that will pull out of the pandemic and get to very solid growth in the second half, that's what the fed is communicating to us right now. if there are any terrible moves, something might change. certainly not yet. rishaad: kathleen hairs -- hayes there.
let's have a look at the first word news now. the japanese government recommending extending the virus state of emergency by two weeks. the restrictions are expected by sunday. japan looks to host the olympics in about four months. under the emergency, bars and restaurants close at 8:00 in tokyo and 3:00 -- three adjacent cities. australia is considered a nonverbal country. the european commission did not object to the decision. europe allows curbs and experts of coronavirus vaccines when drugmakers fail to make delivery targets within the block. united states is blacklisting myanmar anthonys and exposing new export controls in response to the military coup. the blacklist applies to their ministry of defense, a group the
agency says his response will for the coup. the united nations saying that secured a forces killed 38 protesters on wednesday. the u.s. and u.k. considering measures against russia over the use of chemical weapons. the two countries are weighing options ranging from sanctions against oligarch to the extreme step of targeting the nations sovereign debt. the bind administration announced it sanctions against russia on tuesday for the poisoning and jailing of an opposition leader. that is your first word news. haslinda: in the markets, asia still in losses. a session -- off of session lows. the issue is surging bond yields, sending ripples across markets. the index down by 8/10 of 1%. it has seen two drawdowns of 5% this year.
s&p is currently down about 0.3%. we have some stuff we are watching. hong kong banks among them. boc hong kong cited better economic outlook in the possibility of rate hikes. we are keeping an eye on the -- there you have it. faang stocks in hong kong. boc down by 9/10 of 1%. let's take a look at where commodities are right now. and focus is oil as we had closer to 65 bucks per barrel. jp morgan coming out to say that brent is forecast to rise by 2-3 dollars per barrel on that opec decision. rishaad: absolutely. that's all down to that opec was meeting.
the cartel surprising traders by agreeing to oil output unchanged for now. our guest joins us from singapore. i suppose the surprise was that there was no surprise. was that the key takeaway? >> i think that decision was deftly a surprise. if you look at the price action, it was really quite impressive. brent futures stirred. oil prices are extending games -- gains in asian trading. a selloff right now across risk assets. oil traders -- in the run-up to the meeting, many investors were expecting the opec-plus to return some barrels to the market.
producers would be keen to pump more to take advantage of the price gains this year. the market could be able to absorb extra barrels. expectations for again ranged from 500,000 barrels a day to as much as 1.5 million barrels per day. they gave a surprise to the market by deciding to keep output level steady in april. it's part of the agreement. russia and kazakhstan were granted exceptions. what's more important is that saudi arabia went further, saying that the one marion -- million barrel per day cut introduced in february was now open-ended. haslinda: we've seen the likes of j.p. morgan raising their target for oil. what's the outlook for oil prices from here? >> it's pretty bullish. the outlook for oil prices has
actually been enhanced significantly after the decision. whether to increase output or not, the thursday meeting was the biggest question in the market. that was the biggest factor to determine the direction of the market going forward. now that the message is clear that the group will continue to rein in supply to support this price recovery momentum, oil will likely cruise higher until they meet again on april 1 for their output policy from a. if you look at brent time spread , they crept back up after slipping in the run-up to the meeting. indicating that further tightening is in the level oil market. given this recovery in demand and a drawdown in inventories, which were built during the height of the pandemic last year, there's even the risk of supply undershooting if we see a faster than expected recovery in demand later on.
rishaad: since the 1962 war between india and china, the nations lacked demarcated border in the himalayas. the area has been witnessing frequent clashes. after the deadliest fighting in decades, india and china are setting up demilitarized areas. it's understood that soldiers from both sides will no longer patrol on nine kilometers stretch on the north bank. haslinda: let's get insights from an indian army veteran who served close to 40 years in the military. it's now an independent defense outlet and consultant. good to have you with us. what is your reading of the latest developments? jagatbir: good morning everybody. this initiative, the disengage and is a right -- a step in the
right direction. we have various boundaries or borders existing between countries. the other international boundary is very clearly designed. most people are not aware of this. you have a ground position line where the two armies are having a standoff. you have a line of control which is between india and pakistan. and then you have the line of actual control which is the area which has been deferred as defending the undefined, which has not clearly been delineated or demarcated. this is the major issue that you have between both the countries. both countries have their perceptions of where this line lies. based on that, there are some areas which are mutually agreed
disputed areas. some patrols move into each other's areas. we did witness very difficult areas in june this year when the clash took place. if you recall, two years ago in 2017, a similar incident happened. there have been such incidents between india and china which happened in 1986 and 1967. both countries need to resolve this issue on priority. haslinda: is there a sense of which side started this disengagement? there's a perception that india has a bigger price to pay. jagatbir: a lot of people are saying that india has paid a bigger price as far as targeting
goes. people say that we had taken over an area and we have vacated that. that is on the south. in the bargain, the chinese have disengaged. the area of contention was the area of the north over there. both sides have agreed not to patrol the area in between these points. a lot of people say that you had a bargaining chip with the occupation. do you use that for bargaining only for southbank of the occupation? that gives you that for south and north. or do you want to expand further to include the areas which are the other flashpoints?
should it all have been cut together or should you have done it in phases like it is being done now? the major issue is that both sides must reach out to resolve tensions. one disengagement and disk escalation. you have chosen to do it in stages. it's a very welcome step. there is trust between the two forces. that is what is important at this stage. rishaad: keep your answers brief. i want to get your take care on how far this goes towards bridging this trust deficit between beijing and delhi. jagatbir: it is the first step to bridging the trust. the next step will be the disengagement and de-escalation that is carried out in the other identified areas that i brought out earlier.
after, the bigger trust deficit will be once you sit down and decide to exchange, demarcate the border, carry out limitations. once that is done, right now we have an unguarded order between two asian giants. rishaad: there's another player in all of this, pakistan. it has agreed a cease-fire now with india on the line of control here. how far will that hold? ultimately, how far are china and pakistan working in tandem against india? jagatbir: that's an interesting question. india has talked about a two front war. we are seeing a two front de-escalation. both sides are disengaging simultaneously. your move down in the latter.
as far as pakistan is concerned, this took place on the night of the 25th when the cease-fire started. it's a step in the right direction. you need stabilization in southeast asia. there are factors which led to this step by pakistan. one is the economic situation. there's the pandemic. there is support from the oic. they are having problems. it has not happened without chinese knowledge about this, chinese support. whether china has pushed them to do this, this is a good thing. 2021, july 2021 is the 100 years of the populist party. do they want a volatile border? do they want peace and security?
it's a very important message that a lot of people are not getting. haslinda: india is the largest democracy in the world. it has been quiet when it comes to its response to myanmar. why do you think that is so? is it concerned about china's influence? jagatbir: i think that's the reason. india always supported democratic values. india has stood for democracy and secularism. at the same time, it supports anything which is happening in our country. yes, we are not people who will just, we are not imposing restrictions at the moment. i don't think that has happened. we are carrying on people to people ties with myanmar. the army has been in control earlier also. india is following caution. india has its own relations with its neighbor. it is not influenced overly by
♪ rishaad: your back with bloomberg markets. the top contender in south korea talking to joe biden. in an interview, the democratic party later discussed ways to address south korea's income inequality. >> [speaking foreign language] >> on top of the already existing welfare policies, we have to support low income classes. we conducted four rounds of emergency relief programs and that alleviated a lot of the income drop from lower income classes. this shows how that kind of whelp policy is necessary in the future as well. >> you just talked about your
cash handout scheme. will there be more cash handouts this year? >> [speaking foreign language] >> as long as there are difficulties that people are facing, i have no change in stance. fiscal policy should play a role in providing support. giving the support that is different in size to the difficulties that one went through is not fair. >> what exactly is your profit-sharing scheme? do you think this will follow income in south korea? >> [speaking foreign language] >> it's not a mandatory scheme. it's about giving incentives for corporate's to take response abilities to tackle social problems. i'm not arguing for unequal distribution of wealth. unequal distribution is needed for sustainable growth. >> are you going to run for the presidency? >> [speaking foreign language] >> i will not avoid response ability. there would be an appropriate time for an official announcement. >> how do you plan to facilitate
the denuclearization of north korea? >> [speaking foreign language] >> we don't have the luxury to procrastinate. the bind administration needs to set this as a prioritized agenda item needs to a knowledge the importance of south korea's stance. south korea has two types of roles. mediator and directly involved party. the trump ministration has explicitly separated the roles of washington and soul. the u.s. led the denuclearization process. south korea is leading the peninsula peace process. it would be more efficient to not distinguish those roles. >> do you have any message to president biden? >> i hope they refers to the clinton administration on how to approach the north korean problem. obama's administration was due to this situation in the peninsula with no inter-korean talks. that policy gave north korea the
time in condition to strengthen its nuclear arsenal. i would like to ask biden to prioritize the north korean do nuclear station issue and acknowledge a wider role for south korea to play in that matter. haslinda: that was the leader of south korea's ruling democratic party speaking exclusively to bloomberg. let's do a quick check of the latest business flash headlines. china's top technology maker is ramping up its push into investment banking. it has made its name advising and investing in startups. the bashan group is seeking top positions -- alongside wall street banks. it is working on 13 ipo deals globally and once -- globally. baidu has secured approval for a second listing in hong kong. it could launch its share sale as soon as next week. bloomberg reported the offering could raise as much is $5 billion. the nasdaq listed search engine will join a wave of chinese
forms -- firms flocking to the city. rishaad: let's get to markets. we had to the hang seng lunch break. the chinese market having a massive turnaround day. some manage to end up negative again after deltas of 2.5%. we are looking at currencies, the aussie dollar against the yen. we've got gold futures they're also showing big lines. hang seng why -- way off of the lows of today. h-shares contributing. it's really down to what has been happening in the technology side of things which has hit what's happening with regard to tech. there we go. these are the tech stocks being recovered.
♪ rishaad: it is noon here in beijing when the annual meeting of china's legislature is underway. this is bloomberg markets asia. i'm tom mackenzie. david: here we start. this is the most important economic meeting out of beijing. a conservative growth target for the coming year above 6%. the premier tells the national
people's congress that many economic risks and challenges remain. tom: the mpc also sounds a warning. promising to suppress foreign interference in hong kong. and remain highly vigilant against taiwanese independence. david: all this as asian equities selling off treasuries as we speak. jay powell refrain from pushing back against a recent surge in bond yields. tom: brent crude surging past $67 as opec-plus confounds expectations by deciding not to open the taps. david: all of that today for investors to digest. juliette saly joins us from singapore to give us a market update. where are we?
? juliette : chinese markets coming off of their earlier losses. csi 300 down 2%. there was more support coming through. you will see some state based support on a day like this. it also seemed like investors were a little disappointed by the growth target and the fact that the mpc basically seems to be saying, watch out, hold off on hope on stimulus for the moment. you are seeing strength in tech players. look at the china xp it rise by as much as 1.6% after we saw tech stocks hit particularly hard. hong kong and h shares down modestly. more broadly, yields rising and what that means for overall investor sentiment. you have another day of selling which is showing more prediction in these markets and a time where we have been seeing oscillation between positive and negative territory since february 23.
today, a second session of losses. japan being sold off. that state of emergency will be extended. a rise in oil helping some of the energy producers which we are watching more in australia's 10-year note. we continue to see the backup coming through in these bond markets. tom: juliette saly out of singapore. china with a conservative economic growth target of 6% for the year. that was one of the key surprises from the report. many economists over the last few days and weeks have projected that they were going to drop the growth target for the year. they did drop it in the five-year plan. there's an emphasis on quality growth. the deficit target was reduced as well. 3.6% last year. it has been reduced to 3.2%. there is no monetary policy side of things as well. david: absently.
policy will remain prudent when you look at the currency. remaining stable. not that there's any surprise. what's interesting is in terms of money supply, that's going to be roughly online. we now have a 6% growth target at least. that's also what you should expect in terms of money supply growth, in line with nominal gdp growth. tom: yeah. we also had business flags leading up to the first day of the national people's congress. the additional actions that beijing is likely to take vis-a-vis hong kong. they will now look at his draft proposal to trained up the election law in hong kong. very likely restrict further access in terms of the democrats and opposition lawmakers in that city. also, they will continue to suppress foreign forces that
china says are interfering in hong kong's affairs. a line on taiwan, saying that they want to see a peaceful reunification with taiwan, the self-governing island. of course, they will continue to keep an eye on what they say are independent forces in the island. david: yeah. no numerical target for the next five years. have a look at some of the key points. there's a lot that had to do with clean energy use, also increasing their investment in advanced technology, advanced chips, ai operating systems, and digital currency. in terms of reform, we heard from the peer he mayor earlier. have a listen. >> all developing goals and tasks for the year were accomplished. a major catalyst has been made
in china's reform, opening up, and socialist modernizations. david: let's get analysis now with our next guest who specializes in chinese financial markets, michael pettis. a senior fellow at the hela center. great to get your insights. what is your take on the decision to set a target of above percent but drop any numerical targets in the five-year plan? what does it tell us about the quality growth that officials are trying to pursue? michael: i think that's the key point. last year, most expected growth was negative. at the time, i argued it was likely to be between 2-3%. mostly because quality growth is contracted. they are using what they don't want to use, a residual to
achieve whatever the gdp growth target is that they think is politically important. this year, while most analysts were talking about 10% growth since december, i said no. they are going to partially reverse some of the damage that occurred last year. they would probably settle for 6-7% gdp growth this year. i think that's a much better number than 8%. if they had gone for 8%, that would have been a terrible signal. 6% is manageable this year with high quality growth. anything else requires a significant increase in nonproductive investment and the debt. tom: what you .2 is that quality approach to make up that growth. part of that has been a focus on the lawmakers and officials here, driving consumption as part of this policy. where are we in the recovery of
consumption here in china? michael: well, over the longer-term, we have not advanced at all. in the short-term, partial recovery of the increase in the household savings rate that occurred last year. when you can't spend money, you are forced to save more. some of that will come back in the form of higher consumption. basically, the model hasn't been fixed. we are stuck with low consumption until we manage a significant redistribution of income. david: ok. michael takes us into the debt issue. analysts making dead an issue in china has been there as long as the economy started to open up. it has never really resulted in the market. is that something we should still worry about, looking at
the next 10 years? michael: i'm sorry. i'm getting you very badly. if i can understand your question, the longer-term growth really depends on a number of things. it's part of the dual circulation model. they've argued that they want domestic demand to drive growth which is really consumption. in order for consumption to drive growth, as is well understood, you have to allow household income to grow much more quickly the gdp. by definition, if household income grows more quickly, the government share in the business share must grow much more slowly. i would argue that this is really a very important political transition which they have been talking about for more than 10 years but have been
unable to do. david: is that something that actually falls within the control of the government? that takes you into things like tax policy, social security networks. what does the government needs to do in -- as far as those things are concerned to follow that objective you laid out for us? michael: well, just to give you an idea of the arithmetic of the transition, household consumption in china is maybe 35 to 40% of gdp. the rest of the world, it is above 60%. we are talking about a 20 percentage point difference. imagine that household income in china is roughly half of total gdp. the other half being business and government. it is on parity roughly. if you want household
consumption to rise by 20 percentage points, you need the household share of gdp to rise by at least that much. so the government and business share declines by at least that much. that means you have to shift from a country in which households are roughly on parity with government and business to a country in which households have roughly two or three times the share that governments and businesses do. it's not easy to say. the arithmetic is simple. i argue that the politics is very difficult and requires significant transformational political institutions, which they are still struggling with. tom: arguably, one lever that would help those households expand their wealth would be opening up the capital markets. we know that that has been a focus, a gradual push we have seen over the years. is there one thing that you are
looking out for that they may enact, one policy chains to spur a further, more rapid opening of the capital markets year. michael: well i think they are opening it up about as fast as they can with so much foreign money coming into china. it is still quite small. we are not a major risk now. if this continues further for a year or two, we will see a much bigger foreign presence within the domestic capital markets which beijing is trying to match by encouraging capital outflows. since november, a whole series of measures aimed at encouraging capital outflows. that creates a very different type of risk because the money that comes in is not indexed to the money to leave. already, we've been seeing, particularly with the speech earlier this week, that beijing
is starting to worry a great deal about the financial stability consequences of a significant opening of the capital markets. as i said, i don't think that will be a problem this year. beginning next year or thereafter, we have to start watching very carefully the composition of inflows and outflows. david: thank you so much for your time. we are looking forward to speaking with you again. let's get you caught up now on your first word news. the senate has voted to take up the $1.9 trillion pandemic relief bill backed by president biden. a debate over the plan should end this week. lockdowns began about a year ago. , harris kept her first tiebreak vote. all 50 senate republicans
rejected the bill. a big oil story today. opec has shocked the market by keeping oil unchanged, sending prices near two-year highs. the alliance agreed during a virtual meeting to hold production study in april in saudi arabia says it is in no hurry to bring back supply. the saudi's dismissing concerns about overheating markets and rising inflation. >> i don't care about prices. i care about discipline. i care about bringing inventories. once this occurs, once the inventory is within the 2015, that is comforting. david: the united states is blacklisting for more myanmar entergy -- entities in response to the escalating violence against peaceful protesters. the e-commerce department black
mark -- blacklisted two groups that the agency says are responsible for the coup. the u.n. says security forces killed 38 protesters on wednesday. those were your first word headlines. tom: still ahead, oil jumps after an output surprise. next, energies also on the agenda. china's national people's congress in beijing. target set for nonfossil fuel use among others that were announced. we take a look at that and the impact of jerome powell's comments on bond yields. this is bloomberg. ♪ when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included.
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our assessment of national unemployment. we want to see inflation at 2%. these are highly desirable outcomes that would represent an economy that is very far along the road to recovery. as it relates to the bond market, we want to see disorderly conditions -- orderly conditions in markets. we don't want to see a persistent tightening and broader financial conditions. we are likely to see inflation move up during the course of the year. businesses will be potentially hit by a lot of demand as the economy recovers which is a good thing. you could see prices moving up. we are inclined to see those as transient. as far as the rate lift off of guidance, it is very specific. as i said, it will take some time to get there. tom: some highlights from jay powell's wall street journal webinar. david: yeah.
let's get more context on what's happening with these markets, prompted by the lack of action in one aspect from jay powell when it comes to rising yields. let's bring in -- garfield, let me get started with this. we woke up in worse shape. largely risk off as europe starts to wake up. what is the team talking about? does it seem like things will be in the green in a couple of hours? garfield: that might be a little bit challenging. if you look across, there's a lot of red in a lot of places. however, asia is now somewhat calm her than the way the u.s. finished overnight and certainly the way asia opened this morning.
a big boost has come recently when the boj governor came out and made clear that he's not interested in widening the yields target band. that was the first pushing back we've had in a while from a major central banker against yields. that helps that he is specifically talking about changing yields. most of the central bank governors out there have been focusing on the short end yields which is where their policies are targeted and effectively saying, we find long and yields back up. kuroda stepping in has been a big help. also, some of the nuance of the messages that we are talking about the economy, the u.s. economy and the global economy, getting back to growth. a healthy economy should have yields that are actually considerably above 1.5%.
tom: let's switch focus to chinese equities. losses at the start of trade, still in the red before the lunch break. it looks like we will get another week of chinese equities firmly in the red. what is driving this risk off momentum? garfield: again, china is something of a corley. it is further along the economic recovery. it has been running a tighter policy than the rest of the world for quite some time. i think that has been she did home this week with comments about asset concerns and china is more vulnerable than some of the rest of the world to concerns about global timing. it is a tightening bend. it's likely to keep that. on the other hand, there is an air of capitulation that perhaps
the selling might slow down now. we are heading for the first three week drop in the csi 300 since february of last year. that raises the potential that we might get a base forming here, especially with the mpc, looking to the 100 year anniversary of the communist party in july. it's unlikely they would really want the optics of a foggy start market is that approaches. tom: no sign of the national team running to the rescue. it may still happen. garfield reynolds with the latest on the market action. you can follow more on this story in the day's trading on our market live blog. that's on the bloomberg at mliv . a market rundown and one click and commentary and analysis from bloomberg's expert editors. you can find out what suspecting -- what is affecting your investment right now. when ahead. this is bloomberg.
♪ tom: welcome back. you are watching bloomberg markets: asia. i'm tom mackenzie beijing. david: i'm david on glass in hong kong. tom: let's bring you a quick check of the latest business flash headlines. kathy woods exchange traded fund has arranged all of its gains for the year after closing more than 5% lower in new york. the ark innovation etf has fallen 24% since hitting an all-time high in february, putting it in the red for 20 to anyone. over the past year, the fund is still among the best performing u.s. equity etf's. bloomberg names at the best stock pickup in 2020. boeing is set to be seeking a new for billion-dollar revolving credit facility from a group of
lenders led by citibank. they have leaned heavily on banks for financing over the past year amid the global slowdown in travel, the grounding of the 737 max, and now flaws in the 787 dreamliner. sources say the playmaker has the option to increase the size of the two-year facility for $6 million. suez is an advanced talks with australian businesses to clean away waste in a deal that could value the french firms aussie waste treatment assets at 2.4 billion u.s. dollars. the proceeds would help them as they seek to fend off a hostile takeover by their rifle. a deal is uncertain. broadcom shares fell in after-hours trade as the company's main chip division reported revenue that just missed estimates. wall street's iphone field expectations. they expect $6.5 billion in
revenue for the current quarter which largely was in line with estimates. the ceo says revenue gains are to persist throughout 2021. china's top technology dealmaking is wrapping up its push into investment banking. they have made their name investing in startups. the group is seeking top positions in block listings alongside wall street banks, starting working on 13 ipo deals globally and wants to expand its team of about 30 bankers. david: oil is a big story today. there's the opec-plus story and the planned hike that we did not get. that dovetails into the higher inflation story that markets are pricing in. a height that we might not see. that's coming together across listings.
david: welcome back. it's friday and you are watching bloomberg markets asia. tom: juliette saly joins us now with a market update. what are we seeing? juliette: hong kong and china markets in negative territory. volatility that we've been seeing in these markets. you would've expected that the npc would prefer more of a stable market going through into the congress today.
instead, wild gyrations coming through. the csi 300 has been retreating from these near 13 your highs. have a look at my chart. you can see this volatility that we've been watching in a number of these markets. we've been talking about the csi 300 falling more than 10% from its february 10 height. the msci china 10 day with volatility, climbing to its highest since august. it could get to levels that we last saw in march as well. more broadly, weakness coming through in asian equity markets on the back of the rising yields. we heard from jay powell overnight, the msci asia-pacific is in the red for a second session today. the nikkei down by 4/10 of 1% as we see the state of emergency looking like it will extend around the tokyo area. weakness coming through in the kospi by about 4/10 of 1%. the asx 200 being hit.
shop rises and energy prices. david: you mentioned rising yields. part of the story is inflation expectations. the story of oil prices moving up as well. it seems that analysts are trying to catch up with this move and oil. what we know now? juliette: the opec-plus decision catching a lot by surprise. there has been a scramble in forecast to the upside when you look at the dream mark forecast for brent. ubs coming through in the last hour or so. they are listing their second half. 75 dollars per hour. we've send goldman increase their targets by about five dollars a barrel. ap morgan raising there's by two or three dollars. it is a story about inflation, vaccines being rolled out, and what opec-plus did overnight.
david: we will get on that story right now. it's a big story. let's get more on that oil story . saudi arabia shocking oil markets. we woke up to the story this morning. oil prices on the way up. a decision to keep supply and check. we heard from the saudi energy minister dismissing concerns about overheating markets and also rising inflation. have a look. >> i don't care about prices. i care about discipline. i care about bringing inventories. once this occurs, once the inventory levels are within the controls of the 2015, 2019, that is comforting. david: let's get you caught up on this opec story more. our energy reporter joining us through this. it was a surprise. what about it was particularly
coming out of the blue here? >> opec-plus meeting, everyone was understanding that opec was already cutting a lot of output and prices had risen. they were bound to put some back of that 7 million barrels a day. putting some of that back in the market but they didn't. that was a big surprise. there was next picked tatian that they would return 1.5 million barrels but they didn't. saudi said that they will continue their limit -- unilateral one barrels -- one million barrels per day cut in april. the rest of the alliance will continue as well. the only increase will be marshall prediction -- production out of russia. overall, this is standing strong. it shows a big shift for opec-plus. saudi arabia is not that worried about u.s. drillers. when the prices got too high, they were worried about shale drillers coming out and boosting
supply to the market. now saudi arabia isn't too worried about that risk. tom: not the first surprise from the saudi's. what is the next move from opec? >> look after april. they have another meeting coming up. it will be, how much of that production will they be putting back into the market? looking at this meeting alone, this could be a very gradual retreat. they could take their time returning these barrels into the market. what you will see then is the continuation of these bullish prices. you have all of these banks increasing their outlooks now for oil. you will see $70 brent soon. we have analysts calling $100 for brent by the end of next year. tom:reaking down that surprise
move by opec-plus and looking forward to the actions they may take going forward. a line crossing the terminal now. un update from mpc officials. the chief executive of hong kong is here. hong kong will amend its election legislation after china passes new rules. we know officials have announced that this proposal is now in front of the delegates at the mpc here today to change election laws around the election of the chief executive. we get more on that later in the show. that line just crossing now. david: ensuring patriots in hong kong. measures must be taken to block what it phrased as -- let's get your first word news now. we have jay powell saying that he would be concerned by disorderly markets but stopped
short of concrete action to rein in rising long-term interest rates. he told wall street journal that there's a lot left to do before the economy heals, signaling that no policy tightening is on the horizon. treasuries extended their losses. inflation expectations reaching new session highs. have a look. >> i would be concerned by disorderly conditions in markets or a persistent tightening and financial conditions that threatens the achievements of our goals. i would be concerned if those things were to happen. david: central bank boj governor says that it is neither appropriate or necessary to widen the movement range around the bank of japan's yields target. parliament shoots down any speculation that an appetite range was in the pipeline during this review of the banks policy framework this month. kuroda says he wants to keep the whole yield curve as low as the economy recovers from the pandemic.
the u.s. and u.k. are considering more measures against russia over the alleged use of chemical weapons. according to our sources, the countries are weighing options ranging from sanctions against oligarchs two steps of targeting the nation sovereign debt. the white house announced its first sanctions against russia on tuesday for the poisoning and jailing of an opposition leader. over in europe, italy has blocked a shipment of astrazeneca's coronavirus vaccine to austria. it blames scarcity in europe and says australia is considered a non-vulnerable country. the european kitchen did not object. in january, europe introduced legislation allowing curbs on these exports of coronavirus vaccines if drugmakers failed to meet delivery targets within the block. those were your first word headlines. tom: coming up, beijing's latest
we are looking at southeast asia right now. indonesia in particular. thank indonesia. in terms of where you are on the currency, the central bank continues to look at any further movement beyond what they might be comfortable with. they are ready to intervene and they are intervening in the fx bought and domestic markets. there we go. dollar indonesia at 14,300. speaking of interventions, tom: yeah. intervention of a different kind. china saying that there's foreign interference in hong kong. that's why they want to change election laws. the chief executive. they want to curb the ability for pro-democracy activist to win representation. it's the latest move to will -- eliminate dissent in the city. let's bring in our chief north asia correspondent stephen engle
who has been on the story for us. give us the latest into what we are hearing from mpc officials in carrie lam. stephen: yeah. i have been covering hong kong for a long time, even before the handover in 1997. i have seen tremendous change. this could be the biggest legislative change that's in the cards for hong kong that i've witnessed. that's needing to change the law here and the constitution to change how the chief executive and legislative council members will be chosen. essentially, the message we are getting from the national people's congress is that xi jinping and the government wants to read the hong kong government, the legislative council of anti-china forces.
the local ponds of the anti-china forces from abroad. we are just getting those lines that you mentioned a few minutes ago. even carrie lam here saying hong kong will amend its election legislation after china passes this new regulation. the draft regulations have been passed around. the mpc delegates in beijing will debate over the next week and a half or so. likely approved. some people say the rubberstamp legislative body will likely approve it as they did last may with the national security office or get it was then passed on to the national people's congress standing committee for the ultimate decision. they did pass that law. hong kong has been under the national security law including now, many local lawmakers are former lawmakers of the pro-democracy camp are now facing possible trials.
definitely facing charges under the national security office are you the vice chair of the national people's congress, this is significant, he is saying that this new regulation will empower the chief executive committee here in hong kong, the members to dip -- to participate in the nomination of all eligible candidates and elect a relatively large share of the members. you guys know, current makeup right now is half the legislative council in hong kong open for direct elections. those elections have been delayed by the chief executive here on the grounds of the pandemic. many in the pro-democracy camp say it was because beijing wanted to change the electoral laws and that's what they are about to do. david: what does this mean for them, the pro-democracy camp, the opposition?
it seems their room to maneuver within the redlines is getting smaller and smaller. stephen: the remaining 15 pro-democracy candidates in the legislative council at the end of last year resigned after four of their colleagues were disqualified because beijing came down with the mandate saying you have to pledge down -- allegiance to the communist party into china in order to serve. the pro-democracy camp all resigned. there are no pro-democracy opposition lawmakers in the current legislative council. what does that mean for opposition as we say in hong kong? it's not going to look like the previous in a rations -- iterations. perhaps the opposition is now the up-and-coming party which is still pro-business, pro-establishment, probation.
david: let's have a look at south korea. a top contender to succeed the south korean president urging u.s. president joe biden to give a bigger role in pushing north korea to give up its nuclear weapons. wide-ranging exclusive interview, democratic party leaders also discussed ways to address south korea's income inequality. have a look. >> on top of the already existing welfare policies, we have to support low income classes. we conducted four rounds of emergency relief programs and that alleviated a lot of the income drop for lower income classes. i think this shows how that kind of welfare policy is necessary in the future as well. >> you talked about your cash handout scheme. will there be more cash handouts this year? >> as long as there are
difficulties that the people are facing, i have no change in stance and thinking that fiscal policy should play a role in providing support. giving support in size -- that is different in size is not fair. >> what is your profit scared -- sharing scheme? will this solve the inequality problems in south korea? >> i would like to stress that it's not a mandatory scheme. it's about giving incentives to corporate to take responsibility to tackle social problems. i'm not arguing for an equal distributional wealth. redistribution is needed for sustainable growth. >> are you going to run for the presidency? >> i will not avoid responsibly. there will be an appropriate time for an official announcement. >> how do you plan to facilitate the denuclearization of north korea? >> we don't have the luxury to
procrastinate. the bind administration needs to set this as a prioritized agenda item. and needs to a knowledge the importance of south korea's stance. south korea has two types of roles. one as a mediator and one is a an involved party. the trump administration has exquisite we separated the roles of washington and stole and aware where the u.s. led the do nuclear station progress while south korea is leaving the positional peace process. wouldn't it be more effective to not distinguish on those roles? >> do you have any message to president biden? >> i hope the bind administration refers to the clinton administration on how to approach the north korean problem. it may have been due to the situation in the korean peninsula with no inter-korean talks. that policy basically gave north korea the time and condition to strengthen its nuclear arsenal. i would like to ask him to prioritize the north korean denuclearization issue and acknowledge a wider role for
♪ david: you're watching bloomberg markets asia. tom: back to one of our top stories. jerome powell sounded a gentle word of caution to the bond market. he's watching the jump in long-term interest rates. he stopped well short of trying to rein them in. we spoke to scott minerd who said that the fed has a dial-in -- dilemma and will drag its feet when it comes to monetary policy. >> the fed is finding itself in a bit of a dilemma here. that is that they need the markets to remain relatively stable and favorable to achieve
the long-term employment goal. at the same time, we are starting to see inflationary pressures which i believe, and the chair says himself, should prove to be transient. market participants are putting the fed to the test. saying, ok, given this spike in inflation, if it's not transient then you are going to have to ask -- act sooner. that's the real tension. the other question is, what are you going to do it -- if it continues? they want answers to these questions. >> you felt like you got all the answers you needed. when you did this big analysis on where inflation is going, transient means there is near-term concern. right? how are you positioning your portfolio? what are you buying right now to prepare for that volatility? >> one of the best trades we had
on over the last couple of years was curve steepening trades. we expected the spread between 10-year gilts into your yields to increase and that happened. that has given us good insulation on the backup. we are slowly taking that off. reducing our exposure to that trade. slowly extending the duration of our portfolios because we willie -- even if 10-year note's get to 2%, which seems to be the new norm already -- number, it's not going to be sustainable. history shows that these sort of spikes up and yelled that occur after the end of recessions typically are reversed because inflationary expectations get ahead of what the real inflation experience is. >> inflation expectations leading into the nasdaq.
where do you see the market ending the year, at what level? it is my favorite question for you. >> [laughter] i think we will end the year lower than we are today. possibly less than 1% on the 10-year note. it all depends on what finally breaks in the market. if the market continues to press on the fed and to try to find out what their reaction function looks like with the increase in long-term rates, we are obviously seeing the impact that's happening -- having on stocks, especially tech stocks. eventually, something will have to give here. i think that will be the moment of truth. it will either force people to rebalance their portfolios in a flight to safety or the federal reserve will step in and do
something. one of the best options they have is to do another round of operations west. tom: that was guggenheim's stock minor. a quick check of the latest business flash headlines. by do has secured approval for a second listing in hong kong it could l'anse -- launch as soon as next week. bloomberg reported that the new offering could raise as much as $3.5 billion. nasdaq listed search engine will join a wave of chinese firms flocking to the city with about $17 billion raised by secondary offerings in hong kong last year. china's top technology dealmaker is ramping up its push into investment banking. china resin sounds has made its name advising and investing in startups. the beijing-based group is seeking top positions in blockbuster listings alongside wall street banks.
currently working on 13 ipo deals globally and wants to expand its team of about 30 bankers. david: here we go. we are on the lunch break in china, coming out of that in four minutes from now. the shape of markets, not fully unbridled optimism but better than six hours ago. it's a most like a handover. wake up and you don't know what's happening. give it a few hours, and there will be more clarity. have a look at where we are right now. a lot of these measures here were a lot more out of the money earlier on. let's see what happens when the session gets underway. tom: plenty more ahead. investors continue to unpick what's coming out of the national people's congress and the implications. we continue to focus on that story.