tv Whatd You Miss Bloomberg November 12, 2021 4:30pm-5:01pm EST
today, we will get a status check on where these countries stand when it comes to trade and how investors should view the relationship. taylor, we start with what we know so far about this meeting on monday. taylor: it was interesting. we had cop26 and a representative said they were trying to get china involved. they were showing up in other areas. getting this is a big deal. they will speak on monday, easing the tensions between these effective rivals. tech restrictions, taiwan, you name it. we are not noticing any specific outcomes, but there is an agenda of things to come. we will await any news on monday. let's do more about this in these upcoming talks between biden and president xi.
how big of a deal is this and any specifics? >> given president biden said from the start the focus of his administration when it comes to foreign policy is going to be beijing, china, that makes this virtual summit a big deal, even if it is being downplayed by the biden administration. as you mentioned, it will be virtual. monday in the u.s., tuesday morning in beijing. what we heard from washington officials and beijing officials is these are two heads of two powerful and influential nations who want to keep the lines of communication open and want to make sure the company vision between these two nations does not become conflict. both sides have acknowledged that tensions between the two countries. they rose during the trump administration and continued with the biden administration.
they had that acrimonious meeting in alaska between diplomats from both countries, so the idea is trying to ease those tensions and get the relationship between the two nations where there is open communication and they can talk through things and maybe make progress on trade, where they are in that two-year trade agreement that began under the trump administration, and china is behind on delivering. that could be a potential topic of conversation, as well as both economies in general. sonalia: is there any surprise about this happening now? there was a lot of talk about this being virtual. >> part of that is because president xi jinping has not left china in almost two years, and part of that has been because of covid-19 restrictions. that is part of the reason this format is virtual. there are a couple of points of tension that have been relieved
, the ceo being held in canada, that was resolved in september, releasing a pressure point. it was mentioned the u.s. and china did agree on climate, methane emissions and omissions and general, so you do see a little bit of easing of the tensions between the u.s. and china. you still see other tensions in places like taiwan, so a complex relationship. romaine: complex to say the please. the tension still stand. some would say the relationship today is worse than the trump administration. the new trade representative, how involved has she been with her chinese counterpart? >> she has had a number of meetings with her counterpart. she told reporters she thinks
this meeting between joe biden and xi jinping would be good for trade. she acknowledges that there are tensions between the two countries she wants to bring down. there is discussion about the trade deal and china's ability to uphold its end of the bargain purchasing u.s. products. you made a great point about continuing the trump administration policies. in washington, there is a since the u.s. needs to be aggressive with china and beijing. this is absolutely bipartisan. lawmakers on both sides of the aisle, candidates from both parties feel like the u.s. needs to take a tough stance on china now, and that is consistent regardless of party. romaine: that is a great part. one of the few areas of bipartisanship. we will continue the conversation now with a senior fellow at the peterson institute international economics and
professor of economics at syracuse university. mary, i want to start off with something emily pointed out, the idea xi jinping has not left china for a couple of years now, and obviously some of that is due to the pandemic from a but there is a broader issue about how inward looking he has been over the last few years. if that complicates whatever discussions will be had on monday, will that? >> on think it remains how much a complicates it. he certainly has in some sense been insulated. this insulation is getting more problematic, as communication lines between the u.s. and china get more difficult to open up. all levels of government, civil society, these types of communications have diminished
over the last four years in the it is hard to know how much the rest of the world is viewing china, and that could complicate the relationship with joe biden. the chinese retaliation against australia was australia called for an independent review of the origin of covid-19, and china reacted with trade barriers that most people view as highly unfair. i think they have had some miscues, some missteps, and part of that is due to their isolation. sonalia: the town has been tense the last several months. what tone do we expect for these two leaders to take on monday, constructive, do you expect tensions to rise? >> we hope the tensions don't
continue to rise. they are high enough already. there are many issues in which china and the u.s. need to cooperate, but have different views about. we believe there are deals to be struck. it is the end of the year in the end of the phase one agreement, and china has commitments, which remains the law of the land and we expect china to fulfill those agreements. that needs to be discussed and there needs to be a resolution. we saw at the big meeting on climate, cop26, there was a communiqué issued by the u.s. and china. it did not break new ground, except perhaps on china's
commitment to reducing methane emissions, but a lot of people, easier knowing they could come together for a joint communiqué. taylor: in the past, we looked at it as u.s. versus china, and this represents a shift of u.s. and its allies pressuring china to play fair, to play by the fare rules. is that going to work better where you need the west pressuring china because the u.s. can't do it on its own? >> that is something we will see in the framework from the biden administration in which national security, a framework for asia that will work closely with allies, but again, there have been warnings from president xi
about the rest of the world circling the wagons against china, and the extent to which the u.s. can cores its allies on a key issue to keep china out of the technology supply chain is certainly somewhat weak. other countries don't see china the same way completely, even though they oppose what they see as chinese bullying, strong-arming, unfair trade, but they have a lot of business to do a china. romaine: absolutely. we have seen the comments from boris johnson out of the u.k. come to your point. i want to get to the military issues and the idea this could be may be what tips the relationship to a different level in a bad way, particularly with the way xi has been policing the south china sea, to the point it is overlapping with geopolitical tensions of the u.s., australia, and even
europe. >> both sides really do realize what is at stake. that continuing to saber rattle is not good. we are seeing heightened communication between the two militaries, and the meeting next monday, the virtual meeting between president biden and president xi jinping is another good sign. neither side thinks that a hot war is anything other than a catastrophe. again, this week, we had the biden administration reaffirming the idea we want to compete china. we are not in conflict with china. the main tensions have to do with whether there is a level playing field, is china playing fair in terms of trade, in terms of our investment in china
, in terms of setting technology standards for emerging technologies? so in all those areas, we want china to play by the rules and be part of setting the rules. this dialogue is a good sign. it is what we need to keep this as competition, as opposed to conflict. romaine: we appreciate your insights. mary lovely. i'm going to get some insight into the geopolitical issues and continue this conversation with the perspective of that an investor. is china and investable country? you're talking about a country moving towards communism and less towards, i don't know, capitalism? what was the economy before? that is the big question. sonali: and you have a leader who will not be there for much longer. romaine: we will get the perspective of jimmy chang.
40 years. it gives and the mandate to potentially rule for life, as the summit wrapped up. what is interesting is it was only a four-day meeting but it was historical. some of these big historical leaders have used this to dominate the political party until they died. let's talk with jimmy chang, the chief investment officer for rockefeller global family office. how are you thinking about the way you can invest in china? is it still investable given the changes we have seen as of late? >> good afternoon. more people are questioning whether china is investable. if you're looking at the
long-term private equity investment, there are a lot of risks. you can't trust the policy. you don't know what the government will do or whether the policies will be business friendly. they would do what will be right for the communist party of china, not investors can so you have to be really careful. when we look at public equities in the sentiment is bearish, there may be a tradable rally. you can trade, but for long-term investment, you have to give it a lot of thought to make sure you have the proper connection, and even that is the difficult. just imagine if someone said you could coinvest with? h jack ma, you would jump at it, but it could change abruptly. taylor: you are talking about
public versus private. the number one story is about tiger global in the way it facts more than a dozen private companies in china. is it really the big companies, where you see the biggest crackdowns? or is there more opportunity amongst smaller ones? i wonder with the capital markets being choppy or that the exit opportunities might limit investors from the final return. >> the challenge with private equity investing is you have an investment where you are locked in, so do you put more into it or take the risk that your investment dies off. that is a challenge for people already in. if you have not made that investment and there's an opportunity to go into an investment in china, do you want to make that that? i would give it very careful thought. romaine: a lot of people are
focusing on the geopolitical risks of investing in china. i wonder if there is economic risks as well. a lot of the reasons they chase after china is the phenomenal growth in the promised on the road of a rising middle class and rising generation of folks with newfound wealth. is that economic narrative still intact? >> it is changing rapidly. there are three main pillars of growth in china. one is exports. that is doing well now thanks to our stimulus checks. we are buying stuff way above trend. it is building their export business. that has given them the opportunity to tackle some internal structure issues with property markets. the second driver is infrastructure spending in china which includes property, roads, bridges, and airports. property is a huge bubble,
because governments use land sales to raise revenue from so everyone wants to keep on raising prices, but the price to income ratio is so out of touch with reality, 30 or 40 times here, that is a clear bubble, so prison xi jinping thinks he needs to tackle this issue and is starting to do that, leading to these default issues in china. the third driver is consumption. that is why they are curtailing private tutoring, with the hope of more discretionary spending, but as the property market slows down, how would that help consumer spending? so the question is where will they find another major growth driver going forward? i am not so optimistic, so i'm looking at china as coming down to a normal 2% to 3% real gdp growth range without these leverage-driven growth. taylor: we got some interesting
comments from jeffrey gundlach. big picture, he tweeted, why do economists referred to china as an emerging market country? if china is still emerging from of the u.s. dollar status as a global reserve currency is doomed. do you agree? >> i agree. the chinese middle class is 300 million people to 400 million people from a so why are we calling it an emerging market? china is assisting through the belt and road initiative. other countries, southeast asia, central asia, africa, and even south america, so i don't think it qualifies as a conditional emerging-market. taylor: we appreciate you spending your afternoon with us. jimmy chang, chief investment
romaine: wrapping up the show, we are looking ahead to that meeting between xi jinping and joe biden, meeting for the first time since joe biden is taken over as president of the u.s. how do you reset this relationship, if at all, especially when you have this plan to solidify xi jinping's power? meanwhile, joe biden has a big midterm election. taylor: when you think about the
approach, the u.s. and china growing at alone versus the u.s. and getting allies to put pressure on china to play fair, that is the different approach we expect more of. sonali: this has been a tense relationship, but we will see. we have many questions we may not get answers to, including the future of taiwan, more on climate change. romaine: you want to know what will happen with the tariff and trade relationship, supply chain issues. some of that is an outgrowth of the tariffs put in place in the disruptions before covid, then covid exacerbated it. there has been a push by manufacturers saying make it easier. they did that with steel and aluminum. taylor: we have to get jimmy chang back on. he had a lot of comments about supply chain issues, tariffs, and how that feeds into inflation. romaine: you have to look at the