about china. not that we ever had china but. >> chiang kai shek lost china. that is it. he lost china. >> mccarthy and his followers blame certain people. for having lost china. >> absolutely. the blame game will begin. eisenhower had to save marshall. marshall is tainted by his mission over there to try to build a united china. we wanted a united china in 1945. remember what was supposed to happen in japan was it was supposed to be moved back 1000 years and be an agricultural society and china was going to be the new japan and offset stalin in russia. and asia. you have to have, not a sick china but a china that was getting well. marshall goes over and tries and it falls apart and mao's demands could not be met by chiang kai shek. he did military things on the ground operationally and strategically from 1946 to 1949 that were just stupid. that is the easiest way to say it. they did not make military sense. they lost. chiang kai shek lost china. >> didn't the split personality of this front start

of china, xijinping. in october this year at the conference, he will almost definitely be chosen for another five years. at the very top, we are seeing a message out to the most influential and prominent economic leaders that they need to be risk averse and reminded of who is in charge overall. will this put an end to the chinese companies and theirforeign buying an end to the chinese companies and their foreign buying spree, an end to the chinese companies and theirforeign buying spree, paying eye—wateringly high prices for foreign assets? the tide has turned already. for instance, delian, controlled by the richest man in china, he owns legendary pictures in the us along with an attempt to get dick clark productions, which did not happen in the end. the tide is turning. much of that is trying to stem the capital outflows and it is about the pressure on the currency, the rnb, as well. and there is money flooding out to hong kong. we are seeing the tide turning. we are not seeing the tide turning. we are

at least i know china tried. sounded like he was giving up on china, has he? >> i don't think the president is giving up in any sense. we will continue to work with china and anyone else. the president is firmly committed we will cut the money off to north korea until they behave properly. >> -- south korean today -- >> different topics, one, how much do you feel china can move the needle on north korea? two, in terms of tax reform, you say you've got 100 folks over there roughly in the treasury department dealing with that issue. are there any contingency plans in place in case health care doesn't get done? and thirdly, janet yellen, how much is the administration seriously considering her to -- >> that's an awful lot of questions. let me work backwards. again, no decisions have been made in regards to the fed chair. gary cohn and i will at some point make recommendations to the president, but no decisions have been made on that. in regards to tax reform, i think as you've heard gary and i say we are very committed to get tax reform done this year. it is one

china is communist. what does china want to get out of this? the prime minister speaks there every year. it is the only event that takes place outside of the meeting in january in that takes place outside of the meeting injanuary in switzerland. it is really intended to highlight chinese businesses. now, we can name a few chinese businesses, but it would have been a struggle a few yea rs would have been a struggle a few years ago. so, the goal is to highlight their tech companies and show that china is innovative. it can grow, because it is now home to hundreds of big tech companies. it reassures a lot of people that with the focus on technology and innovation, that china will continue to expand in a stable way, even if growth slows down to six and a half ‘x: growth slows down to six and a half %or growth slows down to six and a half % or more. we also heard china say again that they are not going to have a hard landing. we will have to see whether businesses really address what is on the mind of the l

and china cooperating against the soviets. how will the china understand is countries? i create a generally positive image. i wouldn't say that it is constantly a positive image. there were places where the chinese did appeal to africa -- -- you see this in china's diplomacy today as well. in the last decade, they ruined it as they became more zealously nationalistic. in asia, there is a better understanding of cambodia or vietnam. some of the conversations with african revolutionaries are actually white funny. that the chinese didn't know who these guys were and what they were asking for. times, you are revolutionary and they bring them to china. sometimes they would say yes, we support this. they realized this is how you get chinese aid. that also goes to a point that i was making about the u.s. exaggerating chinese influence. not always understanding that just because somebody went to china or received a from china it meant they were absolutely committed to spreading this throughout the third world. thank you very much, those were good questions. thehis has to do wit

was china. there's a reason for this. we can understand why we feel this potential about china bus all of the economists echo this point of view. everyone who reads the newspaper you see china, the second largest economy, coma, now we have been told it's the first largest economy. anyone who is reading vanity fair in december 2015, january 2016, an article by renowned economist called the chinese century where he said china has surpassed the united states as the world's largest economy. how could we not feel existential inks? how can you feel that the best days of america are behind us and try to make ourselves great again. china is the background to this desire. where do we get this? where does joseph say china is the number one economy, well, it's based on numbers and this is why it's difficult to get this across sound bites and bumper stickers but it's important. economies are sized and compared today using gross domestic product and gdp was developed during the time of fdr. this was a metric

of china. where you land on these assumptions determines how you come out on loc issues. up at the lifted front of this conversation or otherwise they will float behind. we have two different perspectives. i was reading graham's comment describing china's unstoppable and and a and, to my left, described chinese economy has the world's largest pyramid scheme. in other words, the chinese economy won't be very important to the world in a short amount of time. is, iser question china's rise good for the united states and for the world? some believe it is the nine, the effects will not the much different. they will want what we want, or we will want what they want. there is a different school i ascribe to that would suggest not the china's rise is a bad thing but there are elements that pose quite severe challenges to the vital interest of the united states and where you come down on that or the nature of the character of chinese rise is fundamental. it is worth bringing those out in the discussion.

how are you looking at china? i saw the breakdown. 13% is china. 23% of revenue is asia. how do you see that growing? >> growing more than double digits. so, more than 10% growth in this first quarter. as i most likely look at this very moment, also, above 10%. so, china is offering a great opportunity for our company to grow. i mean, sustainable materials, health food ingredients, addressing climate change, bringing new innovation. it's all desired in china and we can bring those things to the market here and grow. urbanization is helping us. the more people are going to eat healthy, go to the store, buy their food, buy a car with our materials and buy our mysterious. we love this country. >> coming up on "best of bloomberg markets: middle east," qatarng offer from airways. it wants to buy a chunk of american allies. will it be a flight of fancy? more on that next. this is bloomberg. ♪ >> welcome back to "with all due respect"." qatar airways is suggesting it might by 10% of america was rebuffed by the company with doug parker calling a puzzling at best and concerning

in china. our words count and our actions should be successful. china will stand by its responsibilities on climate change, and china does not stand alone. our scientists in this area are in connection with the world and follow the climate protection development very closely. ira: there really was a very memorable speech by president trump. for those of you are not familiar with his worldview, you were exposed to his america first rhetoric. that is something that concerns many people here in germany and around the world that were very excited about the paris accord, which now is perhaps in grave danger because of the united states' position. >> premier li heading to brussels for the china-e.u. summit. back,t to take a look less than year ago, when then-president barack obama made the historic announcement about the u.s. joining the paris climate agreement. this also happened in the rose garden in 2016. president obama: today is a historic day in the fight for protecting our planet for future ge

president xi marking the 20th anniversary of hong kong's handover to china. not a market — there it is! the south china morning post reports that during his visit, president xi praised officials for effectively curbing independence advocacy. he talked about how they handled political issues there. the new york times has this story too. it's a feature looking at how two decades ago a modern and prosperous hong kong was a model of what china might one day become. it says that hope is now fading. the caliphate has fallen: that's the headline from the independent looking at the battle in mosul against the so—called islamic state. the us—led coalition says a victory there is now imminent. mumbai's business standard looks at the introduction of a goods and services tax in india. it reports that finance minister arunjaitley has met a handful of top business bosses, urging them against increasing prices. in the guardian, the brexodus of banks. ireland's capital, dublin, claims more than a dozen london—based banks plan to move part of their operations there be

excuse me, for china. i do not choose to send them to aad to south korea to protect the south korean people from an imaginary problem. this is a real problem. and the problem is not south korea, putting it in a fully defensive system for the defense of their own people. the problem is north korea, and if we want to stop bringing more military capability into the northwest pacific, we have to address the problem that is a threat to japan, to south korea, and all the other nations. so we have many areas we can work with korea, but at the same time -- excuse me, with china. at the same time, north korea is a problem that has to be addressed, and we can do so. we believe that right now, china is working this issue, but i hope that addresses each of the four questions. >> thank you very much. i will take a quick round. please keep your questions crisp. from india. >> secretary, i am from india. we have been hearing not just this session, but we talk about rules-based laws being followed. but i do not think chin

control of the south china sea is a fundamental part of china policy. freedom of navigation efforts notwithstanding, how far is the u.s. willing to go to prevent militarization? thank you. >> in regards to the president's view of north korea, i believe he represents the american people's view of north korea right now. we see a young man go over there healthy and with a minor act of mischief come home dead, basically, die shortly, immediately after he gets here. there's no way that we can look at a situation like this with any kind of understanding. this goes beyond any kind of understanding of law and order, of humanity, of responsibility towards any human being. so, what you're seeing, i think, is the american people's frustration with the regime that provokes and provokes and provokes and basically plays outside the rules, plays fast and loose with the truth and that sort of thing. as far as china's role, the point of having the dialogue today, china's end state on the korean peninsula in terms of nuclear weapons is the same as ours and we continue to

the trademarks were approved in china. it just highlights this tremendous number of conflicts moreterest that trump has generally, but specifically them as it involves china and chinese companies and chinese state-owned companies were banks,i should -- or should say, news that trump's organization had a lot of debt with chinese banks. we mention the trademarks. trump himself has products or his company has products that are mostly produced in china. between china,s of different chinese companies, and even if their private companies, there --hey can be influenced by the government, as we can see in this case. so i think there is a lot of leverage they can use on the trumps or even curry favor through this sort of act. it could be an indirect signal that, look, we're protecting our interest, ivanka trump and the trump family, in china, and it can be an unspoken favor. so i think there is a tremendous number of conflict of interest involved here. amy: you say this is highly unusual. amnesty has joined in the call for these me

rising china. where you land on these assumptions, in many ways determines where you will come out in policy issues, which i think are very important. otherwise, they will lurk behind. the first is the inevitability of china's rise. i was reading graham's op-ed about china's unstoppable rise. anne described china's economy as the world largest year amid scheme,-- pyramid that it will not be important to the world economy in a short amount of time. the trajectory is fundamental. other question is is china's rise good for you the united states and the world? some believe the effects will not be much different. or they will want what they want but it will not affect us all that much. there is a different school that would suggest not that china's rise is a bad thing but there are elements other question is t challenges to the vital interest of the united states. where you come down on that question, the nature and character of china's rise is fundamental. it's worth bringing those out in the discussio

they are the source of china's chaos. and not only in tiananmen, not only in 1989, but in the last 60 some years. but does not a pattern of events that we've seen, for example, in the middle east since 2011 support their case, their case being that in the end you need a strong, central government that is capable of imposing its will on the country, to deliver security? because when you lose that, you can point to egypt, you can point to syria, or to yemen, or a host of other arab countries after the popular uprisings, when you lose that, you introduce chaos, and then ethnic tensions, and then internal violence on a scale that in china could only be imagined. yet 750 years ago, you decide to adopt democracy. i am quite sure that in the early days of the beginning era of democracy, it was quite chaotic in this country, too. and then you manage to prevail. democracy prevailed here in the last 750 years. give them time. they need time, they need support. and then they need patting on the shoulders, say "you're doing good. you

shin first, then all of china. it is not all of sudden all of china. rishaad: they look at things in very long time horizons. what next? how do they evolve and become more involved with the global economy? saw msci inclusion. that is one way, the other is the sdr basket. since they enter that basket, the yuan is further away from being internationalized. >> that's true. problem, as it was for the united states 35 years ago, was to create a bond market that can support demographics of an aging society , and for that you need transparency. you cannot have a bond market without transparent deals, whether cross-border m&a or local m&a, you have to be transparent an to have a vibrant bond market. i think they are strongly committed to making that work. rishaad: maybe they follow argentina with a 100 year bond. that will be a decision made by the next pboc governor. >> right. rishaad: a tough act to follow some of this guy. >> he did a great job. what can anybody complain about? the central bank governor with a difficult task, and he has really managed well.

-china relations. i'm evan osnos from the new yorker and the brookings institution or i'm thrilled to be joined by three of my favorite scholar practitioners and they'll introduce them in a second buffer zone what you commended them for agreeing to wait into one of the most complex and pressing questions, foreign-policy questions before us, and that of course is a question of whether beijing and washington can avert the pressure towards confrontation, the pressure of history, the patterns of history that drive a ruling power and a rising power into confrontation. and then even the harder question which will also do with, and that is what do we do about it? a couple of housekeeping notes at the very beginning. please completely turn off your electronic devices are don't just put it on vibrate because that can interfere with the sound system. and if you have a reason to use your phone, you are welcome outside the repair our meeting today is on the record. we will talk for about 30 minutes appear and then

the tactic has been to lean on china, pressure china, ask china to put serious pressure on pyongyang. donald trump is indicating that he's losing a little bit of patience with that approach, prompting the question, what then follows? do we then revert to the old policy of sanctions, in the hope that kimjong—un changes his mind, or do we revert to a completely new policy, basically, of an attack on north korea? and, briefly, steve, what about bilateral trade? donald trump is not a big supporter of the current free—trade agreement. he's indicated that he doesn't want it to go ahead. there is a big trade deficit with the us. i mean, south korea sells much more stuff to the us than the other way around. president moon is indicating they may have a look at what restrictive practices there may be, but many people in korea will say, well, people purchase korean cars because they are good. scientists have released the findings of a major new study into the effects of pesticides on bees. the investigation focused on the impact of chemicals used all around the world, and found they were har

they are concerned about the rise of china, increasingly strong and more assertive china, particularly from india's perspective, the way that plays into pakistan where china looked at pakistan. that making a more assertive pakistan which is a core issue for mr. modi. betty: we know a big issue has been the u.s. trade deficit with china, but when you look at the i want our viewers to look at bloomberg, the trade deficit with india has been on a steady climb higher for the last 20 years. it may not be as large as the the with china, but how is sentiment? richard: i would see it as half full rather than half empty. 38 -- if you look at the last three years, they have been steady around $38 billion with the latest data for 2016. you can put that in context for your viewers. with china it is about $300 billion, so it is 10 times smaller. there is further angering around that germany and mexico are twice as big. i don't think this will be a key area for trump to focus on compared to yawning trade deficits with china. from thet the comments trade department, goods and services arresting to 16

let's talk about china. manufacturing sector expected to more evidence of a slow down and overall growth into the second half. let's get the latest from our china correspondent, tom mackenzie from beijing. what are the forecast? the survey is for 51 for the month of june for manufacturing pmi, down slightly from the 51.2 we saw in may. we have a mixed early indications leading up to this number. we have had the satellite surveys for june that contracted, came in below 50, lowest level since august of 2016. we have the trade partner pmi, looking at the eurozone, japan, and the u.s. that also came in lower. on the flip side, you have seen sales managers, their optimism , their most optimistic since may of 2015. a positive for china's manufacturing sector. we are getting the nonmanufacturing pmi number. the may number came up above 54.5, verys, comfortably in expansionary territory. it is driven by the construction component. betty: how does this play into china's broader economic story? if the numbers came out

china invested four times as much in the eu last year as european companies did in china. meanwhile, eu investment in china fell for the second consecutive year — to 7.7 billion euros. chinese and eu leaders are hoping to agree a joint statement on the paris climate agreement, saying it is "an imperative more important than ever". that of course is widely seen as a rebuff to the us, as president trump looks set to announce the us will withdraw from the deal. with me is dr linda yueh, fellow in economics at oxford university. ben was running through some of the issues there, if they are looking to doa issues there, if they are looking to do a deal, do you think there is enough that unites them, enough common ground to override the point of division? in terms of climate change it would be easy for them to come to an agreement because they arejust affirming come to an agreement because they are just affirming what they have signed up to, the paris climate change are called, so i think anything that president trump looks like he is pulling away from, for them it is an easy e

the money we made in china needed to be reinvested in china. now there is more liberalization products out of china. quick, unitedy states and trump rejectionism? -- protectionism? >> we are still growing fast in the united states, as well. it is so great market. the fact that the united states independent -- energy , it should not be attractive at all, but the spending is there. inhope that the u.s. will the end remain committed to address climate change. stephen: thank you. we will see you next year at the annual meeting of the new champions in china. back to you. shery: thank you so much. get the headlines. >> president trump says the supreme court's partial revival is a clearel ban victory for national security. justices unanimously said lower courts have gone too far by blocking the 90 day ban. people from six mainly muslim countries will now be part and must the can show a genuine relationship with a person or entity in the u.s.. the court will consider in october whether the executive order is constitutional. president trump has warned t

chairman wang shi quits china vanke. motor vehicle sales and australia surged to a high in may, defined worries about weak consumer spending at a time of record low wage growth and record high household debt. sales rose for a third straight month and top 100,000. suv's and commercial vehicles were strong. luxury sales growth was at a five year low. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: now, curious as it sounds, bad debt is rapidly becoming the latest hot commodity in china, prices surging 30% this year, but there may be a limited supply of nonperforming loans to go around. ? what is going on here exactly hot investment for domestic and foreign investors right now. chinese banks still have a big number of nonperforming loans on their balance sheet that they are eager to offload. 1.6 trillion yuan of loans, a 12 year high. rishaad: we can bring up this chart showing that, #313. of 61% from two years earlier. have of global inve

the one thing i know for sure about china is that we'll never know china. it's too big, too old, too diverse, too deep. there's simply not enough time. that's, for me, the joy of china -- facing a learning curve that impossibly steep. the certain knowledge that even if i dedicated my life to learning about china, i'd die mostly ignorant. that's exciting. it's too much. and it's changing so fast. china has a population of around 1.3 billion people. and the number of them who are joining an explosive middle-class, demanding their share of all that good stuff -- infrastructure, the clothes, the cars, the gas to fuel them -- it's, well -- it's the engine that might well drive the whole world. >> zhou: you like chinese food? >> anthony: very much. yes. >> zhou: okay. what do you want? >> anthony: please, uh, order. of course. yes, some good -- some dumplings. [ zhou speaking mandarin ] >> anthony: professor zhou lin is an economist and the current dean of the college of economics and management at shanghai jiao tong university. like so many people you meet here,

invented bymething china. chinese scientists are moving forward, based on international results in this regard. however, we realize that since consensus, as a large developing country, we should bear our due responsibility. >> lee held a news conference with angela merkel in berlin on thursday, ahead of a two-day summit in brussels at which china and the european union commit to free trade in a sweeping rejection of president protectionist policies. the e.u. and china have prepared obtainedraft statement by bloomberg that says clean energy will become a main pillar bilateral relationship, including in their economic relations. the two sides also recognized importance of developing global free trade and investment. that's a direct quote. the discord with president trump at the group of seven leaders italy last week prompted merkel to suggest the unreliablecome an partner. she subsequently held meetings as well asra modi the chinese premier. at the brussels meeting, the countries will work on a stalled investmen

think china's debt, the size and pace, increased significantly in the past decade. 2007, china's overall debt to ,dp ratio was only 100 or 2% about average for emerging market economies. now it is as high as 260% and is still rising. that the deaths are domestic. most of the debt is domestic. secondly, the debt seems to be financed from a high savings rate in china. that is true, but the thing is china's savings rate cannot be so i forever. there is a very unique reason behind china's high savings rate , that is relating to the one china policy -- one child policy. when the one child policy was implemented, the ratio of chinese family sees shrank, driving up the savings rate, but going forward, those families will have a lot of people retiring, and when that comes, you have a surge in china's elderly dependency ratio, which will inevitably drive down the savings rate, so the challenge for china is 5-10 years from now, we will see a much higher debt level, but much lower savings rate, so the disadvantage in china will increase and the advantage will decrease. we need toe the time think ab

china relationship. it is relatively well managed, and that could change in the event there was an unexpected turn and taiwanese politics. i don't think we are at a point where this is a defining issue in the u.s. china relationship. graham: in the book i have a chapter about taiwan being a viable country. i think the things about taiwan that washington doesn't like, china will fight over taiwan independence. i think that is a fact. the u.s. has its -- accepted that fact and they're not likely to fight over taiwan's independence. >> charles, right here in the front. >> thank you. i'm part of the u.s. china working group and capital counsel of asian research. i agreed as will play out in an economic sphere and as i watch the f and ed, i won't comment on what trump is doing with the new negotiation strategy. it seems they are more process oriented as time went on. it became more and more and tolt to have results get chinese to commit. given that a lot of this is going to play out in the institutional arena

china is talking of retreat. i think beijing isn't entirely happy about this because it gives china an opportunity to create its own form of globalisation. —— entirely unhappy. is there a brand of globalisation we now need to look towards and understand as the pre—eminent force of the 21st century? i feel this is pre—eminent force of the 21st century? i feelthis is a pre—eminent force of the 21st century? i feel this is a long historical sweep. i have a sense of shifting towards what was described asa shifting towards what was described as a post columbus world to a pre— columbus world. christopher columbus? yes, it is you wondered which columbus! we have lived all oui’ which columbus! we have lived all our lives with a sense that it is europe, the us, basically the west which governs the world. in one sense you could link that all back to columbus and the shift in power to columbus and the shift in power to western europe. the seeds of european empire? absolutely. that in a sense reaches its climax

this is a bit of a gift to china to take leadership for this , cedingnegotiations ground to china and the european union to take action on this, so that part is much more significant come about how that will play out, we will have to see a the course of the next couple weeks and months. i guess the symbolism of creating that power vacuum, if you will, and so many ways is the latest, but in terms of the impact on the energy industry, i want to throw out this pie chart. of new asia in terms solar investment by region taking the lion's share, 60% of that. do you expect this shifting of the focus of where we are expected to see further efforts on green energy and green economy, is that going to change the picture when it comes to the industry? >> so the answer is no we don't believe that the u.s. decision on the paris climate accord will have any sort of long-term impact on clean energy investment. clean energy investment is increasing and has been driven by underlying trends out of international agreements. outside of the sentiment, we don't think there will be any impact on this. it mig

-china relations. he will examine a key 50 years in the relationship of the two countries, in this case from 1900 and 1950 that really set the stage for a lot of what was to come, including south korea, the korean war and the vietnam war. it's a period he's looking at the started with american involvement in conjunction with the boxer rebellion of 1900. this of course was before xi jinping was even a twinkle in donald trump's eye, or maybe it's vice versa, i'm not sure. as i said before, the event continues. i think our favorite and most successful programming partnership with the command and general staff college, they are specialists. i am sure many of you have been to their presentations before. they do not fail. they are engaging, they are enlightening, and th are entertaining. they are terrific to have here. i think this is geoff's first time here. he is long overdue. he's taught there since 1991. he is a retired u.s. army special forces officer. he was a lieutenant colonel. he was trained by the

i saw american year, german beer, no china beer. so i typed china. i said, what if we can put china information on the internet, let people know about china. that was the idea. i came back to china and said i want to resign from my school. charlie: you were a teacher. jack: i was teaching in university for six years. i said, i want to do it. i invited 24 friends to my apartment. after two hours of explaining what i am going to do on the internet, 23 of them say forget it. [laughter] jack: they said, this will never work because there's no such thing as the internet. you know nothing about computers, why would you want to do this? only one people, he said jack, if you want to try this, just try it. if there's something wrong, come back. after a whole night thinking, i said, i still want to do it. because most of the people they have a fantasy ideas in the evening, but when they wake up in the morning, i go back to the same job. we have to do something different. from there, i borrowed from my relatives and friends. i called myself like a blind man rid

you one finalsk analysis on china. i know you are bullish on china. we have had people who have said the day of reckoning is coming for china. reading thell be unwelcome rewards of all their fixed asset investments. what do you say to that? >> i clearly don't agree with that. that is the u.s. bear camp. i think we have had a substantial validation from the switch of old china economy to the new china economy. that. at drivers of the transition from an export economy to consumer-led economy and servicesbase through has been validated through the numbers, and i think we move a lot higher based on the world starting to grasp this is what is driving the pace of growth in china at this point. >> msci inclusion, will that happen? >> selectively, but not across the board. >> we have to leave it there. this is bloomberg. ♪ these days families want to be connected 24/7. that's why at comcast, we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment

ramp up china suv output. we have seen the likes of honda and kia against backlash when it comes to chinese consumers. take a look at crowne resorts in sydney on the radar. cba strategist chris walters sees less the vip plays from china. although the casino player still has high rollers. while they are still flush with cash, puts it in a very comfortable position. we did see crown shares snap a five-day drop on tuesday. this after reports its staff in shanghai have been charged in that region. that is a brief look at what we are watching when trading gets underway in australia, japan, and korea, just moments from now. this is bloomberg. ♪ >> asia-pacific stocks set to rise as optimism sees back into the market. soft inflation. speculation surrounds china's , theaggressive dealmaker chairman can no longer perform his duties. germany opening the eu door if the eu changes its mind on brexit. the second hour of daybreak asia. it is just after 8:00 a.m.. on firmere markets footing with the tech shares rebounding

china. honeywell says it is the place to be. we have got the world covered here on daybreak asia. we will go to san francisco shortly for the latest on changes in uber's leadership. on thewe have our eye middle east with the crisis in vauxhall, later in the program. this is daybreak asia, coming to you from -- 7:00e: it is just after a.m. in hong kong. i am yvonne man. we escaped the typhoon in hong kong. a whirlwind of a storm. the selloff going global. it is hard to tell if this is a pause or meaningful rotation out of some of these growth stocks. betty: it seems to make perfect sense, right? yvonne, these big tech shares are the ones that have led the rally, so you can see at some point, investors would say "let us take some profit on these gains." the question is, what is the timing? what gives here? that is what investors are tied to parse through in the next few hours. -heavy: some of the tech investors. that looks set to continue. let us look at how the state of play is into new zeala

trish: china increasing its presence in the south china sea. satellite imagery shows china moving equipment to hanan island. the images show four planes. our next guest says china will continue to test washington with provocative actions until there is significant pushback. joining me right now. forbes contributor, gordon chang. it sounds like we are starting to hear a different tone and different policy towards china. you saw donald trump tweet saying china can't deal with north korea on its own. this is in response to otto warmbier's death. what do we need to do to get tough on china and north korea. >> the only thing we need to do is enforce u.s. law. chinese bangs have been using the u.s. financial system to launder money for the north koreans. we are were fine is european banks for busting iran sanctions. and here you have china designing a money laundering scheme for pyongyang and there is no penalty. if we were to say because you are laundering this money you can no longer use your dollar accounts in new york. trish: otto warmbier, his d

doubling our way to our total number in china by 2020 based on 2015 number, so we are and limiting china expansion strategy right now. rishaad: what about ease of business? how is that currently? on,or the business we focus investment banking, which we were the first full-fledged foreign securities firm in china about 11 years ago, so we are doing well, especially with msci inclusion. leading international broker to bring foreign capital to china, and now we see other china intoing inclusion and for the high net investor overseas and serve the leading institutions and high net worth individual onshore, which is expanding. by expanding onshore client days , onshore client acquisition, we are able to serve our international and domestic clients and a cross-border scenario, bringing the best expertise to the the international investor and bringing the chinese investor abroad. we are enjoying some of those sweet and nietzsche spots. -- niche spots. anticipate when you will be allowed to hold a majority stake? >> as you know, all things in china take time. we are exploring these opportunities

excuse me, for china. them to choose to send south korea to protect the south korean people from an imaginary problem. this is a real problem. and the problem is not south it in a fully defensive system for the defense of their own people. the problem is north korea, and it we want to stop bringing more into thecapability northwest pacific, we have to address the problem that is a threat to japan, to south korea, and all the other nations, so we have many areas we can work with korea, but at the same time -- excuse me, with china. at the same time, north korea is a problem that has to be addressed, and we can do so. we believe that by now, china is working this issue, but i hope that addresses each of the four questions. >> thank you very much. i will take a quick round. please keep your questions crisp. from india. secretary, i am from india. we have been hearing not just but we talk about rules-based laws being followed. will pullhink china back his militarization -- back its militarization. are we going

maybe you are exaggerating repression in china. in china today, you see protest movements. if you read the internet, people have the space to criticise local officials. xi jinping and his senior colleagues have responded to the frustration with corruption in china by launching a massive anticorruption drive with officials being brought down because the public is demanding a cleaner government. something is happening in china. something is always happening in that massive country. when the western world thinks of the term corruption, the idea comes your mind as you have corruption in your democracies. that is bribery, that is money exchanging with the government. it is like nothing compared with the corruption happening in china. xi jinping has the least interest in getting rid of systemic corruption. the government is corruption. china before reform, there was a so—called socialist country. they looted the former republic of china. the got all of the capitalist property in the government. when they introduced at the time reform and then privatised it, who was benefited? t

/china relationship in other areas like the south china sea, like joint trade between the world's largest economies, that's another outstanding question that really has broad implications. >> matt, trade between north korea and china, is it still up since the trump administration took over? >> reporter: in fact, it's risen. in the first quarter of 2016 compared to 2017, total trade volume with north korea rose nearly 40%. yes, while china is doing things like banning coal imports from north korea, it is still trading with the north koreans in a major way, and it is absolutely providing an economic lifeline to the kim jong-un regime. >> all right. good stuff. matt rivers live in shanghai, thanks. >> it's questionable whether or not china's going to use the economic influence to make headway. >> it does not appear so. >> not at this time. >>> the u.s. is denying claims by isis that american forces destroyed a mosque of critical significance to the islamic state. we are live in the mideast with why this matters next. it's our little differences, that can make a world of difference. expedia,

i think, regime, so it's notjust us and china. ithink, too, with president trump in one of his tweets calling out china as having not been able to succeed with north korea wasn't very helpful, because china is very worried about having a refugee crisis on its burdens, —— its borders if it were to pull out all its support. we know 80 or 90% of the fuel that goes to north korea goads from china. can the chinese truly engage with the north koreans? because we haven't seen much change from the stance north korea shows the world, so is diplomacy even possible with that country? well, you don't want to give up on diplomacy, because the alternative is much worse here, and, with china, too, they have the most influence in north korea, but also regionally we have a newly elected president in south korea talking about all options on the table. but he also has said that he sees a possibility for north and south korea to come together during the winter olympics and to possibly use some event news there to really bring north korea more int

., and 53% in china. the authorities have been working diligently to unlock some of the administrative blocks come and we are making a lot of progress recently. in may, they have issued three accelerating the regulatory pathway for innovative products. >> are you looking for more deals? >> we certainly do, but we would like to find deals that fit our portfolio. >> thank you very much. deal, $820ut that million to buy dendreon from valeant. rishaad: thanks very much indeed for that. tom mackenzie there. looking at beijing as we look at what is going on with 20 years after that handover. what is the future for business in the city? we will be asking that next. this is bloomberg. ♪ rishaad: we are back. one company at the heart of hong , china light and power providing electricity since 1901. the vice chairman joins us now to have a look back at the hand over 20 years ago and ask where the city is heading. that is the first question. >> i think hong kong will continue to be an attractive place to do busine

having a local partner in china would allow tesla to access china where luxury cars are all the rage. emily: how big a market to we think china could be for tesla? dana: we are already seeing signs sales of the model x are doing well. we came out with a model with a filter for climate control. china is the leader on climate change especially when it comes to auto. emily: there are two upcoming spacex launches. what can you tell us about those? dana: the next is a communications satellite scheduled for friday from cape canaveral in florida. on saturday they are going to iridiumatellites for from brandenburg air force base. is the significance of these launches given the challenges spacex has had? back fromex has come the mishap of september and they are launching rockets on a more regular basis. their goal is that -- is to launch 20-24 rockets this year and that would be a pretty incredible launch cadence. emily: talk to us about what we are expecting. dana: launches can shift a lot because of last-minute technical issues or the weather and permission from the air force. if they launch

what about china? david: one is interesting speeches, and has led to was malcolmking about it, turnbull saying we can no longer rely on the great powers. he's talking about american engagement. he says smaller countries need to band together, and that is what we saw happen. trilateral controls ,eginning in the sulu sea bordered by the philippines and malaysia and indonesia. these countries are extremely worried that these unregulated seas will be used as a conduit for terrorists getting into places like the southern philippines. patrol going to try a later this month. said heapore minister was happy to include many countries, but china was left off the list. he was very noncommittal. if chinarn is that gets involved in the patrols, it will try to legitimize its own territorial claims, as we have seen the china navy do around the atolls in the south china sea. it uses its navy and coast guard as a way of asserting its civilian rights and therefore it's sovereign rights over areas of disputed territory.

both parties are concerned about the rise of china come increasingly strong, more assertive china, and particularly from india's perspective the way that plays in the pakistan. >> i want to show you something interesting. we are talking about avoiding any anti-chinese alliance. this is the trade relationship with india and its top trading countries. number 1, 72 $.3 billion in 2016. the united states at $66.5 count on themey as their top trading partner, but mr. modi speaking about donald trump said india's growth presents a win-win partnership with united states moving ahead. we have already been seeing some kind of warmth, something we have not seen with donald trump and other world leaders, china, australia, middle eastern it has beennd it via twitter between both leaders are donald trump and mr. modi growth have huge followers on social media. take a look at what mr. trump has been saying in advance of mr. modi coming. he is saying, looking forward to welcoming india's prime minister modi, important issues to discuss with a true friend. it is important to note this will be the firs

is asking from china. you saw that tweet from the president saying thanks but they are going to wait on their options. then you have jim mattis, rex tillerson at this meeting speaking for china's help in reining in north korea. who is the prevailing voice? >> the best reaction is one chinese expert, quoted as saying we don't assume that president's tweets speak for the administration, which is indicative of the confusion over what signal to take. at this point, i think we do have to assume that that tweet has something real behind it and that we are moving what president trump is signaling, that we are moving into a new phase in terms of how his administration approaches north korea and there are no longer going to use this strategy of hoping beijing is going to solve the problem for them. yvonne: that's right. at what point does the usa, we are going to go at this ourselves? the death of otto warmbier has sparked outrage in d.c. is that going to be the catalyst for the u.s. to act on pyongyang alone? >> t