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tv   Bloomberg Technology  Bloomberg  June 11, 2018 5:00pm-6:00pm EDT

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emily: this is "bloomberg technology." bit coin tumbles over the weekend after a south korean crypto exchange says it has been hacked. and can the market recover. the f.c.c. has rolled back net neutrality with the old rules expiring, but could those get
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the upper hand? we will speak to an f.c.c. commissioner. we will hear from a mayor how they are shaping up brexit. first to our top story. a crypto exchange in south korea puts fuel on the fire. here has been a $42 billion in crypto currency with it down 50%. the south korean exchange says some of its currency appears to have been stolen. the exchange did say 2/3 of the assets have been stolen or collected. this isn't the first time we have seen this attack. the japanese exchange was hit in january. when will these security risks let up? jordan covers all things cybersecurity.
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we have our bloomberg executive editor. i want to start with you, what happened in this hack as we know it? >> as far as we know, hackers compromised the web site for a small south korean crypto currency exchange called coin rail. this isn't the name ol most people's tongues. and barely ranks on the top 100, but it has ressonance and part of the reason you are seeing this big selloff in terms of billions of dollars in crypto currency stocks falling. the reason for that. once a piece of digital currency is stolen, you cannot get it back. it's not like money that can be be rurmed. but some have rurmed. i find it fascinating what
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crypto currency is, it is a number and digital file you are given and give it to an exchange and then hacked, that money is gone for good. you see people running away from the market because of that security risk. emily: look at this chart that shows the crypto currencies in the last six months, how is this due to lingering concerns in crackdowns in china and pestism from folks like yourself? >> it is a combination of a lot of different things. the simplest is the backside of the you for yeah that we saw in 2017 when people were throwing out enormous expectations where the price was going and everybody was talking about it. celebrities were talking about. and if you look from a fundamental standpoint in 2018
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and saw ongoing moves whether it's legacy financial companies expanding into the space, upstarts getting more institutionalized, people who have their finances, things look good, but it hasn't been enough to stem the tide of what is what happens if the other half of when an asset goes like this. emily: why are crypto currencies so difficult to secure? you would think they would be less vulnerable to fraud because they are trackable. >> you would. part of the problem as i said earlier, one of the difficult parts about handling virtual currencies or digital currencies, it is simply a file, a number. it is a unique number assigned to a particular individual and the value of their digital currency. if you think of all the massive
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data hacks we have seen the data flying out of companies as a result of hacks, if you inflate those data sets, whether emails or whatever, with a bitcoin that could be worth thousands of mill crops of dollars, what you get is the perfect target for the hacking attacks. and when the criminals make off with their bounty, it is a file with numbers that get tens of millions of dollars. they are hard to protect because they are small discrete piece of data because once you lose it, they are gone. emily: there are big banks experimenting with this. do you see this becoming a legitimate currency that is backed by a global financ system if some of these hiccups and issues are worked out? >> it's possible, but something that i think is really important is that the hiccups that you mention and that jordan
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described are both the vulnerability of currencies and the selling point. at is the case to use this currency? it is the implicit promise nobody can seize it from you or spend it with and nobody can tell you that you can't move it another country to circumventing capital control, these are all the things that what makes bitcoin or other currencies appealing to people. the flip side has to be measure of some irreverse built. you couldn't have a guarantee that you can do the transaction if there was a third party that said we are going to reverse that transaction or not allowed to. as long as the currency is designed for this purpose, there will never be a day where i
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don't think there is a risk of hacks that result in permanent loss of funds. emily: it's about the olympicing in general which so many people are heralding the future of, not not necess like bitcoin but blocking technology to revolutionize the rest of the net. do you think there is more optimism there outside of these specific markets? >> sure. but the underlying technology for these digital technologies has some unique and interesting properties that a lot of big bangs and other organizations are trying to tap and it has become a joke. one of the things i find amusing about these hacks, is when this money is stolen, as a result of the transparency that joe talked about, you can actually see
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where the money is. if somebody robs your bank account and holds it in front of your face, you can identify all stolen bitcoin and digital currencies, you don't know who is behind it. that is a feature of the block chain and of the technology undergirarding these digital currencies. you can revoke those coins, block them or freeze them. there is a lot more transparency in that system than the traditional banking system and that is a good thing that companies can put to use. mily: a feature or a buzz. thank you both. now to the story we are watching, amazon is trying to improve conditions in china. china labor watch released a report painting a digital picture, this coming after a
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nine-month investigation at a factory. amazon said it identified concerns and is addressing them. ming up, net neutrality is expiring. what it means to the future of the internet. heck us out on the radio and bloomberg.com. . ♪
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>> i strongly believe in the free and open internet. our rules will ensure that the free and open internet remains and americans will have access to better, faster and cheaper broadband. emily: advocates of net neutrality are pointing to the senate to block the f.c.c. from rolling back the rules but that might be a slim hope. for more on what comes next, i welcome brend and karr back to the program. you have seen the public commentary and there are a lot of people opposed to this and makes the internet less open and ss free, what stops at&t and comcast from favoring their own content. >> you're right. americans are passionate and
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there is a lot of concern about the repeal of what the rules mean. can comcast start olympicing me and start throat willing and charge me more? the answer is no. starting today by repealing this 2015 title 2 approach, comcast continues to be subject to rules that are going to stop them from engaging in that conduct. emily: talk to us about how you really expect smaller providers to compete here. i mean, the argument is they will be more competitive, more innovative, but it seems like it could have the opposite effect. >> here in disand the coast we talk about at&t and verizon and i have spent a lot of time outside disand there are mom and pop broadband providers. they don't have the regulatory lawyers that nat, verizon and
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comcast do. to work through the title 2 regime we applied for the first time was driving up their costs. we are trying to lower the regulatory costs of competing with the big providers anditle 2 was a big piece of added costs, thus making it harder for the smaller providers to compete with the comcasts of the world. emily: what happens if the courts overturn this? >> this is on appeal. and i'm pretty confident. the supreme court has looked at this, is internet regulation a title 2. and they agreed with the f.c.c., this could be classified as a title 1. that is the pagged forward in terms of the litigation. emily: nancy pelosi tweeted said she will repeal. you said the house must act to
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save these protections. congress as i mentioned is considering a measure to nullify this vote. should that pass, what should congress do? >> the vote that's currently taking place in progress that went to the senate is about restoring that 190's-era regulatory regime we talked about. that is very different than a stand-alone bill that would enshrine common rules of the road. there is not a lot of disagreement out there about what should the basic rules be, no blocking, no discrimination, no throat willing based on content and legislative paths fo would enshrine those rules into law. the bill that passed the senate is putting back that regulatory regime. i don't think that is the right approach. i'm open for regulation on the stand-alone basis. emily: with respect to nth and me warner versus the d
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where do you stand on the issue of distribution? >> this is not a transaction that came before the commission. i will await the ruling of the judge tomorrow. emily: what about this cambridge annual it ca with respect to facebook, there is some potential they violated an f.c.c. conse decree, is this something you are following? >> yes. what i think it underscores how passionately americans care about privacy. it's a good thing that today is the effective date from moving from title 2 to title 1. it gives authority back to the federal trade commission, our number one consumer premiere protection system. and your internet provider has your data, like facebook, we have the f.t.c. that can look at
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that whole operation and decide what is the best interest of consumers. under title 2, they would have divested authority for consumers with respect to their internet providers. emily: now, the chairman made you the point person on the f.c.c. 5-g wireless ie. there is a lot of concern about their authority being gutted. what are the next steps on 5g? >> we did an order that cuts 30% of the total costs called small cells. 80% of the 5g deployment. i was in boston at the u.s. conference of mayors and met with a large group of mayors and there is a lot of common ground here, too. they have important long standing role to play with respect to zoning and aprovals of these new deployments and
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finding ways. if there is outliar conduct, fees that are making it difficult to deploy particularly diverting capital from places need deployment and looking at other commonsense guardrails but the state and local officials are going to have a role to play as we look at these 5g deployments. emily: the u.s. was the first and there is a concern when it comes to china, when it comes to southorea. what are your thoughts on a network? ionwide 5g >> why does that matter? it will take $275 billion in private sector investment to get it across the u.s. the company that moves quickly, that's where the capital is going to flow so we can get the investment necessary and our consumers can benefit fst. our path forward is the same one
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incentivize and competition among companies in terms of the deployment and the provision of service. that is our game plan. and my view that's the path forward for 5g as well. emily: thank you for joining us. kitty hawk, the flying car backed by larry page has a new aircraft taking to the skies. and our conversation with london mayor, the launch of london tech week that calls london the a.i. capital of europe. ♪ urope. ♪
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>> high-speed flight in and around cities and another flying car announce its aircraft, the kitty hawk flyer founded by larry page and 10 battery-powered propelors and looks like out of "star wars." and will fly 10 feet up in the air without a pilot. >> the computer systems that any person can fly in five minutes. >> no word when it will go on sale or how much it will cost. it is working on another aircraft. dozen companies are pursuing the dream of flying personal aircraft to avoid congested highways. to put flying cars in the sky will need a new automatic air control system, years of safety tests and cultural tests with the idea that these vehicles
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could be landing right next door. emily: executive editor is here to talk with us. i'm not sure if i'm ready to ride in one of those especially at 11,000. how big is this innovation? >> it is cool. i would love to ride one and probably made advancements in about thery technology. it's a drone but only fly over water and can only go 10 feet in the air. this is a recreational vehicle. it's not monumental in the way some of these other vehicles are. emily: going short distances? >> totally. the flyer. kitty hawk is another car called the cora which is a air taxi and lots of other companies, airbus
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are working on the idea that you hover over traffic instead of sitting in it. emily: we saw a few weeks ago, is this something uber can be competitive or change the market for uber? >> it is the least impactful thing. when you look at things they can move on, uber elevates is an not building a vehicle but holding the idea. so i think it's going to be companies like kitty hawk or airbus that are actually making a difference. emily: some of the flying car people say it will be faster than self-driving cars. give us a reality check on that? >> we can look out the window here at pier 3 and saw autonomous test cars. tesla has test cars and that is level three autonomy.
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the f.a.a. has to look at some of these vehicles. so the idea of these personalized transportation vehicles flying through the air is going to take a long time. emily: talk to us about where regulation stands? >> no where. they went to uber and said we a going to come to it at safety perspective. the air traffic control system and what kind of airspace you will use that have yet to be figured out. we are at the beginning of what will be an impactful transportation revolution, but it's going to take a long time. emily: maybe someday, maybe at 1,000 feet. coming up, we prepare for i.p.o. and take a closer look. can the company keep up with global competition and expand behind china? ♪
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emily: thinks "bloomberg technology." i'm emily chang in san francisco. the anticipation is building. it lost more than a billion ollars in 2018 as the prepares to buy into its i.p.o. we have this report from hong kong. >> one of the most highly anticipated initial public offerings in years and could be 2014. ld's biggest since it is said to have won stock
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exchange approval for its expected $10 billion i.p.o. which would be the first year under new rules allowing weighted voting rights and may issue chinese deposit tower receipts and 30% could be in the mainland as the chinese government has been encouraging its large tech companies t list back at home. the evaluation have fluctuated from $30 billion to more than $100 billion in part because of mixe signals. 70% of the revenue comes from selling smart phones. they say the real goal is to be an internet services company making money off of ads. is : here to discuss this the program vice president for the mobile device chapter.
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these new numbers about the bottom line and the last of profit. howrning is that? >> when you are heading into i.p.o. and lose a billion dollars and that's a i think the bigger concern now when i look at this, i think they said 60% of the earnings is coming from hardware but trying to be more internet. the biggest challenge, if you are an investor, make that transition from hardware. not the only person out there to do this. emily: let's talk about the broader market. >> if you look at the top five, apple, samsung and others, it is number four. and they have about 8%, 8.5% of the market and they are shipping half the units in the first quarter of 2018 of apple.
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and you know how many units apple sells. they saw 26 million according to the data. that is pretty good, especially for an i.p.o. set of numbers. but the big questio is the u.s.-china trade war and what is going on there. and zte has been affected. we reported last year and they were trying to get into the u.s. this year and sounding like this, it's not going to happen. and potential investors if near-term u.s. penetration is important to them or not. we have to see how much investors care about that. emily: i have another chart which shows the breakdown of shipments in the first quarter where it comes in at number five. ryan, what are you seeing when it comes to trend? what do consumers what? how quickly are they upgrading,
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et cetera? >> the life cycles are extending. we don't see shifts. premiumbably a 60%, 70% which is apple. then it is the slow end. it hasn't shifted completely. when you look at them, they have transitioned their business model to go from china, which is a very different market where subsidies were included, high growth, which has all changed to focus on other markets where subsidies don't exist. and they have to focus on retail in-store and marketing. and they are playing to some of these markets very well in terms of brand positioning and their ecosystem. but it concerns me some of the buildup they are heading into western europe where their stores and so forth, are at a fast pace. can they stick and have tracks. emily: they are an upscaling its
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brand. can it compete? >> in china, they can compete and that's the bread and butter. and direction is offering a more premium looking device with integrated services and some of these developing markets in asian india and middle east and make a big push. apple is not playing in that space thus far successfully. but i think the next three to five years, they have a lot of ground they can get ahead. emily: one of the broader trend you see. i know you identified a few catalyst that can boost smartphones over the next couple of years? >> when you look at the vas majority of install base and users that bought a phone that is under $300, we are seeing onsumers are getting more tech
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savvy. not as often and not significant jumps. so it keeps apple and samsung outside of that picture and consumers are doing more and investing more. some of that in terms of processing. these things start to add up and collectively, people start to say, the next time i start to purchase, i will purchase better. emily: what is going to make or break? >> i think it's going to be how well they can compete against the big players in asia, apple and samsung, do they want to be a worldcom petor in terms of the services and offerings or do they want to be the alternative that comes in at several hundred dollar dollars. you can see apple is not prioritizing battery life.
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it's a life. and go fully forward tilt. emily: you have no reporting on what they have that is going to be the competition, what do you see? >> they are going to going higher and higher. new i phones. larger phones, less expensive model. and cheaper iphone 10. that will be will be in the $600 range. i don't think that's going to be a big problem. emily: do you see anything that could disrupt the hirke arcy as we know it or do you see the market share chart looking the same? >> in terms of the players at the top, i don't see short-term disruption. years,t is three to five
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they could continue to lose share. that's a trend we have seen for three years now. with regards to them successfully, if i could add my two cents, it has to go beyond hardware. they need to sell this story. whether it's with their partner devices and platforms, whater it may be. that is what is called successful. emily: will investors believe it. thank you both. microsoft xbox is looking to ramp with sony playstation and nintendo. e-3 conference. xbox has lost. and wednesday, we will be on the ground broadcasting from the e-3 onference.
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you don't want to miss it. coming up, our conversation with london mayor at the launch of london tech week and what he has to say about the new leadership at uber. and the building blocks of life, did nasa discover them on marches? -- mars ♪
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emily: big week in the city of london as tech week is under way. artificial intelligence and venture capital. we are going to london on more of what we can expect. >> 55,000 people descending on the capital to discuss the
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success of the ecosystem and i.p.o.'s but what else london is eeded to rival like par is and berlin. i talked to the mayor. >> this is europe's biggest festival and amazing, a week of events and 250,000 visitors coming from around the world and so much energy and excitement sm the great thing about london ech week, startups and those accelerating and the multinationals, interviewers, innovators, researchers, all in one place. it is a very exciting ecosystem. we can't run away from tech. why?
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it's out there and would be foolish to do so. and we are going through a fourth industrial revolution. i want us to make the most of the tech sector business. it improves our quality of life. how can tech be used for public services. how can tech be used to create jobs in the future and great tart this morning. are you worried about that? >> we are complacent but i'm not lacent. the recent report showed as far in lonn than paris and berlin.re
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we are the a.i. capital of europe. we have seen in relation to tech investments, still going up postrexit and look at apple, google, amazon, facebook continuing to invest in london. i see them more as working in collaboration. i think it's really good where if you are a smart web designer in london, you now want to have a partner in paris and berlin. even more important, cities working together and people working close together rather than national governments. so i welcome paris and berlin raising their game. >> what about the regulatory environment and welcoming companies such as uber. their license is under
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discussion. do you think that is welcoming to tech companies and how does that conversation continue? >> i want london a place to come f you are a tech startup and innovator or come with your multinational or buy it with a friend. here are the rules. the rules of the game, regulations must apply whether you are uber or a startup. really important that i support london when it comes to the regulator saying to uber, you are not playing by the rules of the game. i don't know how many lawyers you got or your lobby is, play by the rules of the game. the new global c.e.o. has heeded that message. hook at the changes they have made. they respect the rules we have. t also, in the end, it
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benefits. better service. uber and other tech companies should benefit because they are doing the responsible thing as well and more profits as well. i want tech companies coming to london. i want tech companies to help me to provide services cheaper. le as the 21st century solution. >> do you think weing companies going with the ethics you want to see in london. you are focused on diversity as well as technology. >> what is remarkable, they are positive and progressive. if you are engaged with them, they will see their competitor. and i have gidged over the last o. years with the c.e.o. they want to pay minimum wage. and when it comes to the
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pipeline, they go into deprived communities to make sure they are involved. and young people want to be effective. the reason i'm excited, they are going to help make sure that parts of our city that haven't enjoyed the fruits of growth will enjoy the fruits of growth. with the right training, mentoring and support. i want people to learn. google does great stuff. i want to see compasses that are environmentally friendly. all of my conversations in tech starters, they have the right values and love london. i was looking at research in relation to a.i. companies, the number of founders that are ethnicically diverse is remarkable. they have the values and everyone th omp s and i as the mayor can give them a helping
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hand. emily: thank you for that onversation. b.y.o.m., bring your own march mallos. he will supply the flame. hundreds of people lined up to get their hands on the $500 flame throrse that the company sold to raise $10 million in funds. the flameoff took place and showed off a falcon 9 rocket and prototype tunnel. nasa's capacity recover has made its most significant discovery on the red planet and what it means for finding life on mars. ♪
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>> chances of finding life there according to nasa, the chances just went up. i want to bring in jennifer from nasa and lead author of the study on these findings. so jennifer, is this the best evidence yet that life may have existed on mars? >> yes, i think it is. and essentially found organic matter from rocks on an old lake
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from mars. that was 3.5 billion years ago. the planet was a lot different and we have other clues that tell us there was water and energy and nutrient resources. everything that life would need to be happy was there. we just don't know if there was life. the organic materials that we found could be from life or perhaps they were possible food for life when the lake was around. either way, it bodes well for the search for life going forward. emily: is it possible that some form of life still exists there? does this give you any information about that? >> well, we're not sure if life ever existed. if life established, it was rly on in mars' history as life was established on early
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earth. the two planets were similar. and mars lost its magnetic field and the atmosphere being swept away and the radiation being swept away and earth developed a really diverse bioatmosphere and mars probably lost it. emily: they think it would have taken refuge and still may be here today but there are other scientists that feel it has been burnt out. emily: and i know this new information gives you knew details on where and how to look, but what's next, now that you know this? >> the next thing is to look for the signatures and imprints from life. you could imagine a dinosaur lifing a fossil behind.
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micro organisms can leave it behind and cell structures. those are the indicators whether or not it used to exist. and there's two missions that are in the works right now that can shed light on thfment the first one is from the european space agency and it will launch an important tech development because that means they can get away away e from the radiation and have the potential to get to organic materials. the other mission is won by masters is the mars 2020 recover and it can cash it and at some point later the planets can bring those samples back to earth. and both of those could tell us a lot more whether life existed
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on mars and the potential for life to exist there today. emily: nasa is looking for life in the solar system outside of mars. if it is somewhere else, what is most likely? >> anybody's pe december. mars subsurface to look for more recent life. on other places, two really appealing places are ocean world, we call them and a small moon that goes around saturn and they have oceans underneath an icy crust and possible those oceans have something similar what we imagine as the micro biology, hydro thermal vents in the ocean here on earth. that ocean water could have signature of life in it, modern-day cells or old material, but things that would tell us if there had been life
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there and if we could access that ocean material, we could do a pretty good search for life. if that's the case, it might be a life that evolved independent of earth, which would be pretty fascinating for i think everyone in general. emily: fascinating discovery indeed. thanks, jennifer. and that does it for this edition of "bloomberg technology." that is all for now. i'm emily chang. this is bloomberg. ♪
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>> i really believe that it makes sense for north korea to come to the table. >> we are going to make a great deal for the world, for north korea, for south korea, japan,
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for china.

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