China Consumer Prices Rise, But Deflation Pains Persist | The China Show Monday 11/10/2025

>> YOU ARE WATCHING THE CHINA SHOW.

>> WE ARE COUNTING DOWN TO THE OPEN OF MARKETS IN GREATER

CHINA.

STOCKS ACROSS THE ASIA-PACIFIC ON U.S. FUTURES RISING ON SIGNS

LAWMAKERS IN WASHINGTON ARE MOVING CLOSER TO THE END OF THE

LONGEST FEDERAL GOVERNMENT SHUTDOWN ON RECORD. YVONNE:

CHINESE CONSUMER PRICES RISE AFTER HOLIDAY SPENDING BOOST

BUT A CLOSER LOOK REVEALS DEFLATIONARY PRESSURES CAUSING

DEEPER PAIN. AVRIL:

JENSEN HUANG ASKS TSMC TO BOOST PRODUCTION MORE, CITING STRONG

DEMAND FOR AI CHIPS. THE STOCK IN FOCUS AS THE

COMPANY RELEASES THIRD QUARTER SALES LATER TODAY.

DAVID: WELCOME TO THE PROGRAM. IT IS SLIGHTLY MISLEADING WHEN

YOU LOOK AT FRIDAY'S CLOSING. A LOT HAPPENED OVER THE WEEKEND

AND EARLY MOMENTUM WE SEE AS FAR AS THE GOVERNMENT SHUTDOWN

STORY MIGHT REMOVE SOME UNCERTAINTY. YVONNE: U.S.

FUTURES PICKING UP A LITTLE IN THE MORNING SESSION AND WHEN IT

COMES DOWN TO IF IT CAN MOVE TO THE HOUSE.

THERE IS UNCERTAINTY BUT IT SEEMS AT LEAST DEMOCRATS ARE

COMING THROUGH WITH A MEASURE AND THEY WILL DO A TEST VOTE

LATER SUNDAY SO THAT IS SOMETHING TO WATCH BUT IT IS

PICKING UP THE MARKETS AND YOU ADD THAT TO THE NVIDIA RALLY

FRIDAY GIVING MORE CALMN TO THE MARKETS AND INFLATION NUMBERS

WERE NOT BAD. DAVID:

A HOLIDAY BOOST . CORE CPI COMES IN SIX STRAIGHT

MONTHS TO THE UPSIDE AND MORE ON THAT IN A MOMENT BUT AS

YVONNE WAS JUST POINTING OUT WHEN YOU LOOK AT RISK APPETITE

TODAY REALLY BOOSTED BY KOSPI, TAIWAN, TSMC, AUSSIE ON YOUR

SCREENS ALREADY INDICATIVE OF RISK APIS -- RISK APPETITE.

SK HYNIX TRADING TO THE UPSIDE. SIMS ON TO A LESSER EXTENT BUT

DECENT -- SEEMS ON TO A LESSER EXTENT BUT DECENT UPSIDE TODAY.

THAT MIGHT BODE WELL -- SAMSUNG

TO A LESSER EXTENT BY DECENT UPSIDE TODAY.

STOCKS TO WATCH GOING INTO TODAY AND 50 FUTURES COMING UP

SHORTLY ON YOUR SCREEN AND TO BE GET A REACTION TO INFLATION

NUMBERS?

FLIP THE PAGE PLEASE, THANK YOU AND SLIGHTLY MIXED ACROSS THE

CURB, UP ON THE TWO. YVONNE: CERTAINLY SOME OPTIMISM AND I

THINK RIGHT NOW WE WILL SEE BECAUSE AS WE START THE WEEK WE

HOPE MAY BE TO SEE U.S. DATA COME THROUGH IF THE

GOVERNMENT REOPENS. U.S. CPI NUMBERS HAPPENING THURSDAY

SO IF WE GET MORE CLARITY ON

DATA, THE CHALLENGE OF THE MARKET AS TO WHETHER WE WILL

SEE HIGHER JOB CUTS ON THE LIKES FALLING THROUGH INTO

OFFICIAL DATA. DAVID: CLARITY ABOUT INFLATION AND

WHAT IT MIGHT MEAN FOR DECEMBER WHICH SEEMS TO BE CLOSER TO A

DONE DEAL BUT THAT WAS A DIFFERENT STORY THE DAY BEFORE

RIGHT NOW SPEAKING TO INFLATION THAT GETS US INTO THE CHINA

STORY SUNDAY OFFICIAL INFLATION NUMBERS CAME OUT LET'S BRING IN

OUR CHINA CORRESPONDENT TO BREAK DOWN THE NUMBERS AND ARE

WE SEEING THE START I GUESS OF THE SUSTAINED RECOVERY?

>> A BIT OF A RELIEF IN OCTOBER GIVEN THE BALANCE WE SEE,

INFLATION TURNING POSITIVE AFTER TWO MONTHS OF DEFLATION

CPI 0.2% VERSUS THE PREVIOUS MONTH BUT LONGER TERM SO FAR

THIS YEAR CPI HAS HOVERED AROUND ZERO OR NEGATIVE SO THE

TREND NOT PROMISING AT THE MOMENT.

PPI COMING IN -2.1 PERCENT ALSO EASING COMPARED TO THE PREVIOUS

MONTH AND BLOOMBERG ECONOMICS BELIEVES IT'S A ONE-OFF BOUNCE

BECAUSE OF THE GOLDEN WEEK HOLIDAY ONE DAY LONGER THAN

USUAL BOOSTING TRAVEL AND SPENDING NUMBERS WE SAW BUT

STILL [INDISCERNIBLE] BELIZE DEFLATION ON THE PPI

FRONT COULD EXTEND UNTIL THE MIDDLE OF NEXT YEAR, MEANING

ANTI-INVOLUTION CAMPAIGN FROM THE CHINESE GOVERNMENT NEEDS TO

BE MORE FORCEFUL. WE HAVE NOT SEEN THAT REALLY

HELP WITH A SUSTAINABLE TREND. SO FAR THE GOVERNMENT HAS GIVEN

PRICE GUIDANCE BUT NOT BEEN FORCEFUL IN CLOSING DOWN EXCESS

CAPACITY AND THE CONCERN IS IT COULD LEAD TO DESTABILIZATION

OF THE JOB MARKET, MORE JOB LOSSES SO A LOT FOR THAT

GOVERNMENT TO BALANCE OUT. YVONNE:YVONNE:

WE CRUNCHED THE NUMBERS AND BLOOMBERG DID A GREAT PIECE

THINKING ABOUT -- TALKING ABOUT UNDER THE HOOD YOU STILL SEE

DEFLATIONARY PRESSURE. WHAT WERE SOME FINDINGS?

>> BLOOMBERG DID OUR OWN ANALYSIS OF 67 GOODS AND

SERVICES ON TRACK TO THE PRICE CHANGES IN THE PAST COUPLE

YEARS AND YOU CAN SEE DEFLATION HIT MANY DIFFERENT SECTORS.

EVERYTHING FROM RED WINE TO CARS, HOME PRICES, RENTS, AND

YOU LOOK AT SOME CATEGORIES, 51

OUT OF 67 SAW STEEPER PRICE DISCOUNTS, SO YOU FLIP THE

BOARD WHERE WE ARE SEEING THE BIGGEST PRICE DECLINES ARE SOME

OF THE GOODS YOU PROBABLY FIND IN YOUR KITCHEN.

CUCUMBERS, EGGS, EGGPLANT, PAYERS ARE DOWN 31%.

-- PEARS ARE DOWN 31% AND HOME APPLIANCES DID REALLY WELL

BECAUSE OF GOVERNMENT SUBSIDIES, STRONG RETAIL

NUMBERS AND YET WE SEE MODERATE DEFLATIONARY PRESSURE AS WELL,

MICROWAVES DOWN 8%, WASHING MACHINES, REFRIGERATORS, GAS

STOVES DOWN 4%. INFLATION IS IN THE SERVICES

SECTORS LIKE KINDERGARTENS FLIP

THE BOARD IF YOU SEE RESIDENTIAL MANAGEMENT FEES UP

AS WELL SO PRICE CHANGE IS REALLY QUITE UNEVEN ACROSS

SECTORS BUT WHAT IT MEANS IS IT CRIMPS ON CORPORATE PROFITS IF

YOU LOOK AT THE FIRST HALF OF THIS YEAR THE NUMBER OF

COMPANIES CHINESE LISTED THAT REPORTED FIRST HALF LOSSES WAS

MORE THAN 25%, THE HIGHEST AND 25 YEARS ON THE NUMBER OF

ZOMBIE FIRMS WE SEE THOSE OF THE FIRMS WHOSE PROFITS ARE

UNABLE TO COVER THEIR INTEREST PAYMENTS YOU CAN SEE IT HAS

BEEN INCREASING STEADILY IT IS UP OVER 30% BY THE END OF 2024

MEANS CAPEX SPENDING ALSO DECLINING OVER THE LAST THREE

YEARS AND WHAT THIS MEANS FOR WAGES IS THEY WILL BE MORE JOB

CUTS, OVER 40% OF COMPANIES HAD JOB CUTS ACROSS SECTORS IN 2024

AND THAT LEADS TO THE DEFLATIONARY SPIRAL WHERE

PEOPLE HOLD BACK SPENDING AND A VERY STICKY PROBLEM THE CHINESE

GOVERNMENT HAS NOW. YVONNE: HOW TO BREAK THE CYCLE AND WHY

WE SEE THIS ANTI-INVOLUTION CAMPAIGN NOW?

THANK YOU FOR BREAKING DOWN THE NUMBERS, MINMIN LOW. U.S.

ASSETS AND HOW THINGS ARE THIS MORNING, WE TALKED ABOUT S&P

FUTURES AND WE SEE A BIG -- BIT MORE MEANT SOME COMING BACK

THIS MORNING. THE U.S. SHUTDOWN MIGHT BE NEARING THE

END. A GROUP OF SENATE DEMOCRATS ARE

SET TO JUST SAID TO AGREE TO SUPPORT A DEAL TO REOPEN THE

GOVERNMENT. LET'S BRING IN OUR MANAGING

EDITOR WITH THE LATEST ON WHAT WE KNOW.

>> THIS IS STILL MAY BE A STEP IN

THE RIGHT DIRECTION BUT NOWHERE NEAR THE ACTUAL END OF THE

SHUTDOWN. SO FAR IT APPEARS THE REPUBLICANS HAVE GOTTEN OFF

MODERATE DEMOCRATS IN THE SENATE TO HOLD A PROCEDURAL

TEST VOTE TONIGHT IN WASHINGTON AND THAT COULD ULTIMATELY

ENABLE THEM TO PAVE A WAY TOWARDS PASSING SOMETHING IN

THE FULL SENATE THAT COULD LEAD TO THE END OF THE SHUTDOWN.

IT SEEMS THEY HAVE REACHED SOME KIND OF CONCESSIONS INCLUDING

APPARENTLY A PROMISE FROM REPUBLICANS THAT THERE WOULD BE

A VOTE SOMETIME IN DECEMBER ON

A BILL TO EXTEND SOME OBAMACARE PREMIUM SUBSIDIES THE DEMOCRATS

HAVE BEEN FORCEFUL ON BUT WHETHER THAT IS SOMETHING THAT

TRICKLES DOWN TO OTHER DEMOCRATS, INCLUDING THOSE IN

THE HOUSE WHERE ANY PROCEDURE WOULD ALSO HAVE TO PASS IN THE

HOUSE, IT IS -- IT REMAINS TO BE SEEN IF IT WILL BE ENOUGH.

THIS BILL IF THEY ARE ABLE TO PASS SOMETHING IT WOULD BE ABLE

TO FUND SOME AGENCIES, CONGRESS, VETERANS AFFAIRS

THROUGH THE NEXT YEAR AND THE REST OF GOVERNMENT AGENCIES

WOULD ULTIMATELY STAY FUNDED THROUGH JANUARY 30 SO A

SHORT-TERM GAP BUT WE ARE INCHING IN THE DIRECTION

TOWARDS THE END THE SHUTDOWN. DAVID: WHAT GETS US TO THE END?

>> YOU HAVE TO IMAGINE PART OF IT COMES DOWN TO PARTIES THAT

MIGHT FEEL BLAME FROM VOTERS. THE DEMOCRATS MIGHT LOOK AT THE

RECENT ELECTION WHERE THEY WON THE GUBERNATORIAL RELEASES --

RACES IN NEW JERSEY AND VIRGINIA AND THE MAYORAL NEW

YORK CITY ELECTION. ONE OF THE BIGGER ISSUES IS AIR

TRAFFIC CONTROL, FLIGHT DELAYS AND CANCELLATIONS IN THE U.S.

AND A LOT OF THAT PERTAINS TO THE END OF FEDERAL FUNDING.

A LOT OF DELAYS IN NEW YORK AND YOU HAVE A MASSIVE BLIZZARD IN

CHICAGO THAT HAS SNARLED THINGS SO YOU ARE LOOKING AT THOSE

POTENTIALLY BRINGING PRESSURE TO THE SITUATION. DAVID:

AND THANKSGIVING IS COMING. STOCKS TO WATCH GOING INTO THE

OPEN, TECH IN A BID, ALIBABA CALLED DECENTLY HIGHER TODAY

AND TAILWINDS ARE COMING THROUGH ACROSS THE REGION AND

WE HAVE OCTOBER MONTHLY SALES COMING THROUGH OUT OF TSMC

TODAY. AS WE GEAR UP, FRESH TRADING

WEEK. YVONNE: WE ARE SPEAKING WITH CITY'S

HEAD OF MARKETS TO DISCUSS MARKET STRATEGY AND WE CITY

SEES GROWTH IN THE REGION WITH PAUL SMITH NEXT AND WE ARE

COUNTING DOWN TO THE OPEN OF TRADE IN SHANGHAI, SHENZHEN AND

HONG KONG. THIS IS THE OPENING TRADE.

HAPPY MONDAY. ♪

YVONNE: HERE IS A LOOK AT THIS WEEK,

IT'S A BIG POND IN TERMS OF [CROSS TALK]

EVERYTHING FROM OCTOBER JOB NUMBERS, AND THE KEY THING TO

WATCH IS THURSDAY IF WE GET THE U.S.

OCTOBER CPI PRICES THAT COULD BE TELLING ON WHERE FED

EXPECTATIONS WILL BE AND FRIDAY WE GET THE DATA DUMP FROM CHINA

SO RETAIL SALES, INDUSTRIAL PRODUCTION, THE LIKE.

WE HAVE THE CITY CHINA CONFERENCE HAPPENING LATER THIS

WEEK AS WELL AFTER BIG TECH EARNINGS COMING THROUGH THIS

WEEK IN CHINA. DAVID: A LOT TO DISCUSS PERTAINING TO

CHINA.

CENTRAL TO OUR COVERAGE LAST WEEK WHERE EVERYONE WAS TALKING

ABOUT CHINA, THE CHANGE IN THE EXTREME PARADIGM SHIFT REALLY

THAT MARKETS HAS BEEN A RECIPIENT OF OF LATE AND THAT

IS ALL TO SAY IT HAS NOT JUST BEEN ABOUT CHINA, THIS YEAR HAS

BEEN FINED PLASTIC -- HAS BEEN FANTASTIC TO BE LONG EQUITY

MARKETS AND ON THE BENCHMARK BASIS ON YOUR SCREENS THIS IS

YEAR TO SO FAR WE HAVE GIVE OR TAKE TWO MONTHS LEFT, WE ARE UP

25% YEAR TO DATE ON PRICE ASIA-PACIFIC SO AS THINGS STAND

WE ARE SET FOR THE BEST YEAR FOR ASIAN EQUITY MARKETS GOING

BACK SINCE 2017 AND JOINING US TO TALK ABOUT THE YEAR AND WHAT

LIES AHEAD, PAUL SMITH IS THE CITY HEAD OF MARKETS FOR JAPAN,

ASIAN NORTH AND AUSTRALIA HERE TO TALK US THROUGH.

GOOD MORNING. VERY NICE TO SEE YOU.

WHAT HAS BEEN THE BIGGEST SURPRISE FOR YOU THIS YEAR

GIVEN THE REGIONAL BULL MARKET?

>> THE CONTINUOUS PERFORMANCE ACROSS ALL ASSET CLASSES.

WE HAVE SEEN Q3 RESULTS RECORD-BREAKING, BEST ON RECORD

AND THAT IS BECAUSE EQUITIES HAVE PERFORMED AND WE SEE

DOUBLE-DIGIT GROWTH IN EQUITIES ACROSS THE GLOBE, IN PARTICULAR

IN ASIA, AND ALSO RATES, FINANCING AND FX HAVE ALL GROWN

AND WE HAVE SEEN HUGE FLOWS IN ASIA, 30% IN HONG KONG, A

STANDOUT YEAR. OUR PRIME BALANCE, RECORD

FLOWS, RECORD MANDATES.

THE OVERALL OUTLOOK HAS BEEN VERY POSITIVE ACROSS ALL ASSET

CLASSES, WHICH IS UNUSUAL YVONNE:. IT'S BEEN A GREAT YEAR.

HOW WAS THE FOURTH QUARTER SHAPING UP?

YOU ARE STARTING TO SEE >> EMERGE IN THE AI TECH RALLY,

THAT UNCERTAINTY. ARE YOU WILLING TO CHASE

MOMENTUM?

>> I THINK SO. IT'S A LONGER-TERM GAME.

GOING TOWARDS THE END OF THE YEAR, THERE ARE LONGER-TERM

TRENDS HAPPENING AS WE LOOK TO 206I FEEL THE GLOBALIZATION IS

CHANGING.

CHANGING DYNAMICS OF FX CLOSED -- FX FLOWS.

FINANCING OF PRIVATE CREDIT, AI INFRASTRUCTURE PLACE TO ASIA'S

STRENGTH, DATA CENTERS COMMIT THE ECOSYSTEM OF AI AND I SEE A

HUGE TAKE IN FINANCING BUT ALSO AS CORPORATE'S START TO CHANGE

HEDGING STRATEGIES ON EFFECTS OR RATES, THE SIZE OF EMERGING

MARKET RATES HEDGING IS GROWING SO I FEEL 26 WILL BE ANOTHER

STRONG YEAR. DAVID: I WAS GOING TO ASK IF IT

CONTINUES INTO NEXT YEAR?

>> IN 25 THE FOUR THEMES WE SAW AROUND HEDGE FUNDS AND PRIVATE

EQUITY, ESPECIALLY IN ASIA, THEY ARE PAYING ATTENTION,

GROWING, AND STRUCTURAL.

THERE IS, TAKE JAPAN, THERE IS CORPORATE GOVERNANCE REFORMS

THE MEANING PRIVATE EQUITY FIRMS ARE INTERESTED.

THERE IS DYNAMIC ACTIVITY IN JAPAN.

YOU HAVE THE GROWTH ACROSS

EQUITY RATE SENT FX, AND THIS WILL CONTINUE AND SOME

STRUCTURAL SHIFTS IN ASIA, LONG-TERM SAVINGS, THE WEALTH

OF ASIA, THE CAPITAL IN ASIA IS NO LONGER DEPLOYING CAPITAL IT

IS INVESTING IN ASIA AND THAT WILL DRIVE THE GROWTH. YVONNE:

YOU MENTIONED JAPAN IS A BIG MARKET FOR YOU.

WE ARE SEEING THE EMERGENCE OF U.S. FUNDS COMING BACK TO THE

MARKET. IS THIS A SIGNIFICANT TURNING

POINT FOR JAPAN?

>> I THINK JAPAN HAS BEEN ON A PATH FOR YEARS OF UNWINDING

BLOCK TRADES AND CORPORATE REFORMS AND NOW WE ARE SEEING

THE ACTIONS AND WITH THE NEW GOVERNMENT, THE BOJ, MORE

INTERVENTION, MACRO POLICY, IT'S A SHIFT IN THE DYNAMICS.

IT'S NO LONGER THE SLEEPING GIANT, I THINK IT HAS WOKEN UP

AND ATTRACTED WORLDWIDE INTEREST IN THE SPECULATIVE

INFLOWS AND OUTFLOWS, BUT LONGER-TERM MONEY COME

INVESTMENTS FROM PRIVATE EQUITY, ALL ASPECTS OF THE

JAPAN FINANCIAL SECTOR ARE INTERESTING NEXT YEAR. DAVID:

THE EQUITY MARKET IN JAPAN HAS BEEN SOLID. FX HAS BEEN DECENT.

WHAT ABOUT THE BOND MARKETS? WHAT IS THE NUANCE?

>> A NUMBER OF THINGS.

RISING RATES MAKES JAPAN AS JGB'S INVESTMENT OF RELATIVE

VALUE VERY ATTRACTIVE TO INVESTORS.

OBVIOUSLY THERE IS THE CURRENCY ISSUE IN TERMS OF HEDGING THE

CURRENCIES AND THEN RETURNS ARE NOT THAT GREAT BUT RELATIVE TO

THE OTHER ASIA ECONOMIES YOU HAVE A DIVERGENT MICRO POLICY

NOW, RISING RATES IN JAPAN AND THIS MAKES IT MORE INTERESTING

FROM A FACTOR -- MACRO PLAY ON IN EQUITY INVESTMENT, THINK

ABOUT RETURNS AND THEN HEDGES AND IT PLAYS TO THE PLATFORM

STRENGTHS, WE HAVE BEEN IN JAPAN FOR YEARS AND HUNDRED 20

YEARS IN CHINA, HAVING OUR PLATFORM ADAPT TO OUR CLIENT

FLOWS IS KEY FOR US. YVONNE: YOU ARE HAVING A CONFERENCE IN

CHINA THIS WEEK. WHAT WILL BE THE MESSAGE?

GIVEN THERE IS RENEWED INTEREST BACK IN THE MARKET.

>> FOR CHINA IN PARTICULAR I THINK THE THEMES ARE

INTERESTING, ARE ECONOMISTS WILL GIVE THEIR VIEWS IN THE

CONFERENCE BUT I THINK THE REAL INTEREST IS THE NUMBER OF

MEETINGS WE HAVE. THOUSANDS OF MEETINGS WITH

HUNDREDS OF CLIENTS, THOUSANDS OF REGISTRATIONS.

THE INTEREST IS GENUINE I THINK FROM GLOBAL INVESTORS INTO

CHINA AND THIS IS A REAL SHIFT. I NOTICED SENTIMENT ON THE HONG

KONG LEADER SENATE -- SUMMIT LAST WEEK, LAST YEAR IT WAS ALL

ABOUT IF CHINA IS INVESTABLE AND NOW THAT DOES NOT,.

NOW IT IS HOW DO WE NAVIGATE THE CHANGE?

IT'S NOT AT THAT'S AND LIQUIDITY YET BUT IT'S ANOTHER

OPTION. DAVID: CLIENT FLOWS ARE UP 30% THIS

YEAR. MORE RECENTLY IS THERE ANY HIGHER FREQUENCY DATA TO LOOK

AT TO GET A SENSE OF WHAT THE LAST TWO MONTHS OF THE YEAR?

WILL LOOK LIKE?

>> HONG KONG EQUITY FLOWS HAVE

BEEN UP 30% ON OTHER ASSET CLASSES

, FX IS DOUBLE DIGIT GROWTH, INTEREST ON THE FX SIDE IS

MOSTLY DRIVEN FROM INSTITUTIONAL FX HEDGING AND

TYPICALLY DOES CORPORATE SO CONTINUING WITH STEADY

PRESCRIBED PROGRAMS OF HEDGING THEIR FLOWS AS THEY ADAPT THE

CHANGE IN SUPPLY CHAINS BUT INSTITUTIONAL INVESTORS ARE

INVESTING IN EQUITIES AND THEREFORE NEED TO HEDGE BACK

AND THAT HAS BEEN THE REAL SHIFT IN ASIA THIS YEAR AND

PROBABLY WILL CONTINUE INTO NEXT YEAR YVONNE:.

WHEN IT COMES TO IPO'S I THINK THE CALENDAR IS PACKED.

WHAT IS UNDER PLATFORM?

>> THEY ARE IN BANKING AND NOT MARKETS AND CLEARLY HONG KONG

IS THE LEADER AS A SINGLE MARKET.

INTEREST IN THE CHINESE STOCKS AND WHEN I GO TO CONFERENCES IN

CHINA, NOT JUST THIS BIG ONE BUT THE SMALLER ONES WITH

SMALLER COMMERCIAL CLIENTS THE ONLY TALK AT THE CONFERENCE IS

IPO, VALUATION. SOME OF THE DYNAMICS OF THOSE

COMFORT -- COMPANIES AND WHAT THEY CAN OFFER IS TRULY AMAZING

AND THAT IS WHY WE HAVE THESE

THOUSANDS OF MEETINGS WHERE GLOBAL ASSET MANAGERS WANT TO

UNDERSTAND WHAT IS HAPPENING IN CHINA SPEAKS DIRECTLY TO THE

MANAGEMENT AND I THINK THESE CONFERENCES ARE THE OPPORTUNITY

TO DO THAT. DAVID: REALLY TO PUT YOUR EAR TO THE

GROUND. AS YOU PLANNED THE BUSINESS

INTO NEXT YEAR DO YOU EXPECT THE AMOUNT OF ACTIVITY THIS

YEAR TO CONTINUE?

>> I THINK THERE IS PROBABLY THREE AREAS I WANT TO PLAN FOR

NEXT YEAR. ONE IS THE EVOLVING EFFECTS

STORY.

NO LONGER INTO SINGLE CHINA-U.S., THERE IS

CHINA-SOUTHEAST ASIA, WE VISIT TO GO TO BRAZIL AND NEW MEXICO

AND WE ARE TRYING TO GET CORPORATE'S TO BE

MULTIDIMENSIONAL. FINANCING WITH AI

INFRASTRUCTURE HAS BEEN A BIG THEME IN ASIA AND MORE MEDIUM

TERM BUT WHAT I WANT TO DO WITH OUR PLATFORM IS MAKE IT

RELEVANT TO OUR CLIENTS AND STUDYING WHAT THE CHINESE

GOVERNMENT AND HONG KONG GOVERNMENT ARE DOING AROUND

INTERNATIONALIZATION [INDISCERNIBLE]

INVESTORS -- INFRASTRUCTURE DOES NOT SOUND INTERESTING BUT

WILL BE THE FUTURE FLOWS TO CAPTURE AND THAT OUR PLATFORM

PERFORM FOR OUR CLIENTS. DAVID: PAUL, FANTASTIC.

YOU SO MUCH FOR COMING. PAUL SMITH.

YVONNE: STAY TUNED FOR GUEST LATER THIS

WEEK AS WE GO TO THE CHINA CONFERENCE FRIDAY WE WILL SPEAK

WITH JANE FRAZIER IN SHANGHAI. CATCH THE INTERVIEW WITH THE

TIMES ON YOUR SCREEN. DAVID: THE OPENING OF TRADE TO SIX

MINUTES AWAY AND FUTURES PUNCHING SLIGHTLY TO THE UPSIDE.

THIS IS THE CHINA SHOW. ♪

YVONNE: HERE IS THE AGENDA IN GREATER

CHINA TODAY. THE SHANGHAI COMPOSITE IN THE

4000 HOVERING AROUND 2025 HIGHS, STILL IN THE WINDOW FOR

CREDIT DATA COMING THROUGH AS WE COUNT DOWN TO THE DATA DUMP

LATER THIS WEEK AND WATCHING ONLINE PLATFORMS SOLAR IN TERMS

OF SECTORS TODAY, AND GET THE LATEST ON NEXT BARRY, WATCHING

X BOMB GIVEN THE VOLATILITY AND THERE IS A SOFT CARE IPO TODAY

AND WE ARE WATCHING THAT WOMEN BE FIX. DAVID:

THE APPROACH TO THE OPEN AND SPEAKING OF THE CURRENCY 71223,

THE OPEN IS NEXT. THIS IS BLOOMBERG. ♪

DAVID: GOOD MORNING. YOU ARE WATCHING THE APPEARED

TAILWINDS GOING INTO THE OPEN TODAY.

ASIA PACIFIC UP FOR 10TH OF 1% -- 4/10 OF 1%. YVONNE:

NEWS OF A POTENTIAL MAY BE LONGEST TO U.S.

GOVERNMENT SHUTDOWN ON RECORD MIGHT BE CLOSE TO AN END BUT

STILL HURDLES AHEAD AND THAT -- I THINK TECH IS CATCHING A BID,

WE TALKED ABOUT NVIDIA AND WHAT HAPPENED BRINGING UP THE RALLY

FRIDAY AND THAT IS HELPING THE OVERALL AI THEME.

[INDISCERNIBLE]

TALKING ABOUT HOW WE HAVE NOT CORRECTED ENOUGH THAT MUCH WHEN

IT COMES TO FROTHY VALUATIONS AROUND AIA AND THERE IS STILL

GOING TO BE THE NEED TO CHASE THE MOMENTUM IS THE QUESTION OF

WE JUST SPEAK WITH PAUL SMITH YOU SET FOR THE FOURTH QUARTER

THEY CONTINUE TO SEE THAT IN TERMS OF CLIENT FLOWS ON THE

LIKES OF WHAT WE SEE SO FAR IS A DECENT SORT OF START THIS

MORNING, CSI 300 UP, SHANGHAI COMPOSITE UP AT THE 4000 LEVEL

FOR THE MOMENT AND WATCHING INFLATION NUMBERS FROM THE

WEEKEND, BETTER-THAN-EXPECTED BUT UNDER THE HOOD STARTING TO

SEE BOTH DEFLATIONARY PRESSURE. LOTS OF VISUALS AND IT SEEMED

IT WAS SEASONAL WHY WE SAW THE PERK UP AND PRICES MIGHT NOT BE

SUSTAINABLE SO WE WILL SEE IF IT IMPACTS THE BOND MARKET AND

A REACTION SO FAR THE 30 YEAR AND 10 YEAR NOT DOING MUCH.

WATCHING CLOSELY THE TECH SPACE. CHIPS, NEXT.

PARENT -- NEXPERIA BREAK THROUGH , HONG KONG AND HOW

HSTECH IS DOING SO CERTAINLY STILL WATCHING HS IT IS

CATCHING A BID AND ALIBABA GAINS OF 1% OR SO, IT SHALL BE

DOING WELL, MEITUAN AND BAIDU IN THE OPPOSITE DIRECTION.

A DOLLAR STRENGTH COMING BACK OF LATE.

TALK ABOUT EU-CHINA TENSION FADING, WHEN TECH UP 3% AND

CHINA RESUMING THE CHIP EXPORT URGING EU TO MAKE PROGRESS SO

AT LEAST [INDISCERNIBLE]

AN UPGRADE FROM CCB, DOWNGRADE FROM IOWA SO MIXED VIEWS ON

THIS STOCK AFTER EARNINGS CAME

THROUGH LAST WEEKEND BUT OVERALL LITHIUM MAKERS, CITY

RECENTLY DID AN UPGRADE ON STOCKS AND YOU SEE ONE UP 8.6%.

CRITICAL MINERALS AND WHAT CHINA IS DOING, SUSPENDING

CURBS WHICH IS WHY WE MIGHT SEE TAILWINDS AND WATCHING OTHER

CRITICAL MINERALS, EXPORT CONTROLS SEEMS TO BE LIFTED FOR

NOW GIVING A LIFT TO SOME STOCKS THIS MORNING. DAVID:

A LOT OF SUPPORT ACROSS THE MARKETS TODAY.

4000 ON THE SHANGHAI COMPOSITE. HANG SENG INDEX UP AS WELL.

TO THE DOWNSIDE WE SHOW YOU BRIEFLY SHARES OF X PONG NOW

DOWN OVER 3%, EXTREMELY VOLATILE WEEK LAST WEEK AND

INTO THE CLOSE IN THE U.S. SESSION WITH MASSIVE DECLINES

SO CATCH DOWN IN THE HONG KONG MARKET.

A SIGNIFICANT RALLY ACROSS CHIP PLAYS, ALIEN PARTICULAR AND

WINDY IS HERE TO HELP US UNDERSTAND THIS.

>> A REBOUND TODAY, THE NICE MACRO TAILWIND WE ARE HAVING

POTENTIAL AND TO THE U.S. GOVERNMENT SHUTDOWN WHICH MEANS

MORE ECONOMIC DATA WE CAN BE EXPECTING, MORE CLARITY BUT

REMEMBER WHERE THIS IS COMING FROM, OFF OF VOLATILE WEEK.

LAST WEEK WE HAD THE NIKKEI KOSPI DOWN AROUND 4% AND MSCI

MORE THAN 1% SO RIGHT NOW WE SEE NIKKEI UP LIKE LESS THAN 1%

A LITTLE BIT OF A REBOUND THERE COMPARED TO A BIG SELLOFF LAST

WEEK AND ALSO KOSPI IT IS UP MOSTLY BECAUSE OF THE DIVIDEND

TAX CUT SO A BIT OF A DIFFERENT STORY THEY ARE BUT OVERALL YOU

CAN SEE HOW VOLATILE THINGS HAVE BEEN DOWN A LOT ONE DAY ON

UP AND THEN BUYING AND SELLING A LOT SO THAT IS KIND OF WHAT

WE SEE IN THE ASIA'S SESSION THESE DAYS. YVONNE:

AND WHY WE SEE SWINGS IS PROBABLY BECAUSE OF THE EXTREME

CONCENTRATION RISK.

>> WE DID THE ANALYSIS A WHILE BACK AND LOOKING AT TSMC FOR

EXAMPLE OF ACCOUNTING FOR 40% OF TAIEX AND KOSPI WITH SK

HYNIX AND SAMSUNG ABOUT 30% AND WHEN WE TALK TO ANALYSTS OR

TRADERS WE ARE SAYING NIKKEI 225 TOP FIVE COMPANIES ACCOUNT

FOR 40% SO IF WE SEE ANY BIG SWINGS IN THE TOP TECH NAMES

THE NIKKEI IS LIKELY TO PLUNGE AS WELL SO THAT CONCENTRATION

RISK IS BIGGER RIGHT NOW THAN COMPARED TO BEFORE BUT YOU ALSO

HAVE OTHER FACTORS THAT MAKE ASIA MORE VULNERABLE COMPARED

TO THE U.S. DAVID: DO WE EXPECT MORE DOWNWARD

MOVES?

>> FOR NOW THAT IS WHAT WE EXPECT.

LAST WEEK WHEN WE TALKED -- EXPECTING MORE CORRECTIONS TO

COME IN THE THING IS IF VALUATION IS THAT BIG CONCERN

WE ARE HAVING WE REALLY HAVE NOT CORRECTED THAT PART OF THE

ISSUE AS WELL AND OBVIOUSLY RECENTLY WE GOT THAT NICE

STRENGTHEN THE DOLLAR SO THAT IS ALSO WEIGHING ON RISKIER

ASSETS IN ASIA TECH, ASIA STOCKS OVERALL ARE CONSIDERED

TO BE MORE RISKY AND JUST HOW FAR THINGS HAVE RALLIED SO FAR

THIS YEAR WE ARE TALKING ABOUT MSCI ASIA POTENTIALLY

OUTPERFORMING THE S&P 500 BY THE MOST YEARLY SINCE 2009 SO

THERE IS THAT BIT OF A PROFIT TAKING THAT WE CAN STILL EXPECT

AS WE HEAD TOWARDS END OF THE YEAR. YVONNE:

WENDY HSU, THANK YOU. STICKING WITH AI NVIDIA IS

ASKING TSMC FOR MORE WAIVERS TO MEET STRONG DEMAND.

LET'S BRING IN ANNABELLE. JENSEN HUANG WAS IN TAIPEI OVER

THE WEEKEND. ANNABELLE:

ASKING FOR MORE WAIVERS, A SIMPLE REQUEST. DOES A COMPANY

EVENT AND JENSEN HUANG DOES NOT ALWAYS ATTEND BUT HE WAS IN

TAIPEI OVER THE WEEKEND AND TOOK THE TIME TO SPEAK WITH THE

CEO OF TSMC AND ASKING FOR ESSENTIALLY MORE EQUIPMENT AND

MORE SUPPLIES TO TRY TO MEET THE AI DEMAND SO ANOTHER SIGNAL

WE GET ON THE COMPANY SIDE, THESE COMPANIES ARE AT THE

FOREFRONT OF THE BUILDOUT OF THIS TECHNOLOGY SO A LEADING

INDICATOR BUT A SIGNAL THAT AI DEMAND IS INTACT.

HE IS TALKING ABOUT GENERALLY THE SCALE UP WE HAVE SEEN IN AI

MEMORY CHIP SUPPLIERS BECAUSE IT IS NOT JUST TSMC, YOU HAVE

SK HYNIX AND SAMSUNG AND HE SAYS THEY HAVE SCALED UP

TREMENDOUSLY TO SUPPORT THE COMPANY.

TSMC IN OCTOBER WHEN WE HAD THE LATEST EARNINGS SAYING CAPACITY

IS VERY TIGHT AND THAT IS WHERE THE CHALLENGE IS TO THE

COMPANY, IT'S ON THE SUPPLY SIDE, TRYING TO MEET THE DEMAND

IN THE MARKET. DAVID: WHAT IS ON DECK THIS WEEK?

ANNABELLE: IN TERMS OF THE TECH FRONT

THERE'S A HANDFUL OF NAMES THIS WEEK.

KICKING OFF FOR THE START, HON HAI WILL BE ONE TO WATCH, WE

EXPECT THE AI PART OF THE BUSINESS TO HAVE HELD UP AND

SEEN STRONG GROWTH BECAUSE THEY ARE THE AI SERVICE STORY FOR

THE COMPANY. OTHER NAMES TO TRACK, SOFTBANK

IS INTERESTING WITH THE AI THEME BECAUSE THE VISION FUND,

PORTFOLIO INVESTMENT OPENAI IS A KEY ONE AND REUTERS SAYING

THEY ARE LOOKING AT AN IPO IN 2026 AND GET THE FILING NEXT

YEAR, SONY IS ANOTHER WANT TO TRACK AND TENCENT IN CHINA

NAMES, A GOOD ONE FOR THE CONSUMER AI SIDE, DOING WELL

AND JD AS WELL. FOOD PRICE WARS AND JD HAS BEEN

A LITTLE BEHIND, ALIBABA, MEITUAN BECAUSE OF THE LATE

ENTRANCE IN THE SPACE BUT YOU COULD SEE MORE GROWTH IN THAT

BUSINESS. DAVID: ANNABELLE THANK YOU FOR THE

PREVIEW OF THE WEEK AHEAD.

WE ARE AT THE AI SUMMIT IN SEOUL EXPO IN SOUTH KOREA WITH

SHERY AHN STANDING BY WITH WHAT IS COMING UP.

SHERY: YOU CAN HEAR THINGS RAMPING UP

BEHIND ME. THIS IS A TWO DAY EVENT WE ARE

BUSINESS LEADERS AND EXPERTS IN THE AI SECTOR COME TOGETHER TO

DISCUSS THE CONVERGENCE OF AI AND INDUSTRY.

COMING UP, LGA I RESEARCH AND -- BEING SHORTLISTED BY THE

GOVERNMENT TO BUILD UP A PURPORTED -- PROPRIETARY

FOUNDATION, TRIPLED AI INVESTMENTS TO $7 BILLION NEXT

YEAR. THAT IS COMING UP. THIS IS BLOOMBERG.

♪

YVONNE: THE AI SUMMIT SEOUL EXPO BEGINS

BRINGING TOGETHER ACADEMICS AND INSTITUTIONS TO EXPLORE THE

LATEST TRENDS IN AI AND INDUSTRIAL INNOVATION.

SHERY AHN IS THERE WITH THE NEXT GUEST. SHERY:

LET'S BRING IN THE SENIOR RESEARCH FELLOW AND HEAD OF

SUPER INTELLIGENCE LABS, GREAT TO HAVE YOU WITH US.

CONGRATULATIONS ON BEING SHORTLISTED BY THE GOVERNMENT,

BUILDING OUT THE PREPARATORY AI FOUNDATION MODELS.

-- PROPRIETARY AI FOUNDATION MODELS.

>> EVERY YEAR WE WILL BE EVALUATED SO IT'S KIND OF A

TOURNAMENT THAT SURVIVAL GAME. SHERY:

DON'T WE LOVE THOSE GAMES? WHAT IS YOUR COMPETITIVE EDGE?

>> WE HAVE BUILT THIS FOR ALMOST FOUR YEARS STARTING FROM

SCRATCH AND HAVE A LOT OF EXPLORATION EXPERIENCE AND

TECHNOLOGICAL ADVANCE SO THE GOAL IS TO ACHIEVE THE FIRST

PLACE. DAVID: WHAT THE GOVERNMENT AND LG --

SHERY: WHAT THE GOVERNMENT AND LG IS

TRYING TO DO WAS AN OPEN SOURCE MODEL?

>> BUILD AN OPEN SOURCE MODEL TO FACILITATE ALL OTHER

INDUSTRY.

ON TOP OF THAT ALSO A DOMAIN SPECIFIC MODEL FOR THE COMPANY

SO IT IS A TWO WAY. SHERY: WHY DOES THE SOUTH KOREAN

GOVERNMENT THINK IT IS IMPORTANT AND WHY DOES LG WORK?

>> THE SOUTH KOREAN NEW GOVERNMENT WILL THINK THE AI

TRANSFORMATION IS THE KEY FOR

THE NEXT STEP OF ALL INDUSTRY AND THEY TRIED TO INVEST FIVE

MAJOR INDUSTRY TO COMPETE EACH OTHER AND BUILD SOME COMMERCIAL

USABLE TO PROVIDE TO ALL INDUSTRY AND DOING THAT WE CAN

GET A LOT OF EXPERIENCE AND EVENTUALLY FACILITATE THE

ENTIRE INDUSTRY. SHERY: IT'S INTERESTING TO SEE SOUTH

KOREA ACCELERATE THIS SECTOR AS A NEW GROWTH ENGINE.

IS THERE A CONCERN THIS COULD BE A BUBBLE, EVENTUALLY YOU

WOULD NOT NEED TO BUILD UP SO MUCH INFRASTRUCTURE AND SO MUCH

INVESTMENT INTO THE SECTOR?

>> WE HAVE TALKED ABOUT WHERE THE CONCERN [INAUDIBLE]

TECHNOLOGICAL ADVANCEMENT FOR THE AI HAS BEEN THERE MORE THAN

30 YEARS, THE NEW PARADIGM OF THE LEARNING FROM THE DATA OR

DAVE AND DRIVEN MODEL HAS BEEN THERE TWO DECADES.

GENAI IS JUST A RESULT OF THAT PROGRESS, NOT JUST SOME

DISRUPTION TO THE SCENE WHICH HAS NEVER BEEN THERE SO IT IS A

VERY UNLIKELY IS A BUBBLE, IT CONSTANTLY GROW AND TRY TO

TRANSFORM A LOT OF INDUSTRY [INAUDIBLE] SHERY:

LG THE CONGLOMERATE HAS SO MANY DIFFERENT SECTORS OF BUSINESS.

HOW IS THE COMPANY GOING TO ENHANCE ITS OWN BUSINESS AND?

PRODUCTS THROUGH ARTIFICIAL INTELLIGENCE?

>> AS EVERYBODY KNOWS LG HAS DIFFERENT AFFILIATES INCLUDING

ELECTRONICS AND [INAUDIBLE]

OR EVEN CHEMISTRY SO THE WAY WE SAW THE EVOLUTION OF THE MODEL,

IT FIRST TOUCHES DAILY CONVERSATION LIKE CHANGING OR

SUBSTITUTING THE SEARCH ENGINE, MOSTLY JUST FOR Q&A.

LATER WE SAW THAT THERE IS A TREMENDOUS CAPABILITY HIDDEN TO

TOUCH THE DOMAIN SPECIFIED STUFF BY INTRODUCING AI

WORKFLOW THAT MATCHES INDUSTRY WORKFLOW, WE FINALLY GET A LOT

OF TRANSFORMATIONAL POWER AND WE ARE IN THAT STAGE 2025 TO

2026 FINALLY JUST BEYOND WE WILL SEE THE AI NODULE ACTUALLY

EMBEDDED INTO THE INDUSTRY, TO LEAD TO A LOT OF JOBS. SHERY:

IS THE TRANSFORMATIONAL POTENTIAL WHEN IT COMES TO

VERTICAL AI AND INTEGRATION INTO THE BUSINESS?

>> YES. SHERY: WHEN YOU TALK ABOUT VERY SOON

AND HOW IT WILL INTEGRATE INTO DAILY LIVES, WHAT IS THE

TIMELINE?

>> IT IS THE TIMELINE WILL BE DEPENDING ON THE INDUSTRY

SPECIFIC DATA, HOW MUCH DATA IS READY AND HOW MUCH THE

EXPERIENCE AND USERS ARE READY TO DO.

CURRENTLY IN 2025 THE AI WORKFLOW STARTED FROM JUST THE

USER AND DAILY THEME LIKE OUTLOOK EMAIL, CHAT, HOW TO DO

THE GOOGLE SPREADSHEET AND THINGS LIKE THAT BUT EVENTUALLY

WE ARE GOING TO REACH INDUSTRY-SPECIFIC WORKFLOW.

IN SOME SENSE THE WORKFLOW MAY BE EVEN MORE SIMPLE WITH

INDUSTRY BECAUSE IT HAS TO FOLLOW CERTAIN PROTOCOL,

WHEREAS THE DATA AND GETTING THOSE DATA AND INDUSTRY IS

DIFFICULT.

THE POWER TO THE LG REALLY THE COLLABORATE BETWEEN

SUBSIDIARIES AND DIFFERENT AFFILIATES, WE ARE ABLE TO GET

THE DATA AND ABLE TO TUNE THE MODEL REALLY SPECIFIC TO THAT.

SHERY: YOU ARE ALSO COLLABORATING WITH

OTHER COMPANIES.

I UNDERSTAND YOU HAVE A PARTNERSHIP WITH A RENEGADE

CHIP. WHAT IS DIFFERENT ABOUT THAT

AND HOW DOES IT APPLY TO YOUR OWN PROJECTS?

>> TO TRAIN THE MODEL, TO USE THE MODEL, WE NEED A LOT OF GPU

RESOURCES AND THE OTHER NAME OF THE GPU IS AI CHIP BECAUSE IT

IS PHYSICALLY THE BRAIN FOR THE AI.

DEPENDING ON THE EXTERNAL AI CHIPS DEVELOPED OUTSIDE OF THE

COUNTRY, OVER TIME THIS COLLABORATION, WE SEE THERE IS

A LOT OF POTENTIAL AND EVEN MORE BENEFIT OF USING OUR

DOMESTIC TRIPS SO WE ARE TESTING A LOT AND OVER TIME WE

ARE GOING TO EMPLOY MORE OF THE DOMESTIC CHIPS THERE ARE

COLLABORATIONS. SHERY: IS CIRCULAR DEALS ON FINANCING

SOMETHING YOU THINK ABOUT? WHEN WE TALK ABOUT A POTENTIAL

AI BUBBLE AND ALL THIS MONEY GOING BETWEEN COMPANIES BACK

AND FORTH, THERE IS A CONCERN THAT THIS IS HOW THE BUBBLE

POPS.

BEING IN THE FIELD AND AS A RESEARCHER, IS THAT SOMETHING

YOU THINK ABOUT WHEN YOU NEED RESEARCH FUNDING TO BACK YOUR

PROJECTS?

>> YEAH. THERE ARE TWO DIFFERENT ASPECTS

ABOUT THAT. JUST IN TERMS OF THE MONEY

FLOW, THERE HAS BEEN A REPORT FROM M.I.T.

THAT A LOT OF MONEY HAS BEEN INVESTED TO THE MAJOR COMPANIES

BUT ONLY 5% OF THAT ACTUALLY DEPLOY THAT SO THERE IS NO

PROFIT AND LOSS EXPRESSIONS, EVEN THOUGH THERE IS A LOT OF

INVESTMENT.

I GUESS IF THERE IS NO PROFIT AND LOSS YET, AT LEAST IN THE

RESEARCH INDUSTRY AND MODEL PERFORMANCE, WE SAW THAT

DRASTIC PERFORMANCE BOOST SO THAT EVERYBODY CAN USE AI

QUICKLY, EASY FASHION, SO IF NOTHING HAS BEEN OUTPUTTED,

PROBABLY I HAVE A BIG CONCERN TO SEE ALMOST DAILY PICK

OUTFITS FROM THE INDUSTRY SO I DO NOT THINK THAT IS SIMPLY A

BUBBLE. AND THEN YEAH.

SHERY: A PRODUCTIVITY BOOST AND EFFICIENCY BOOST ON THE OTHER

SIDE OF THE COIN IS ALSO AN ISSUE WENT THINKING ABOUT JOBS

-- WHEN THINKING ABOUT JOBS AND HOW IT COULD CAUSE MORE LAYOFFS

INSTEAD OF JUST ENHANCING LIVES. HOW DO YOU ASSESS THAT?

>> I RECALL WHEN I USED TO BE A UNIVERSITY STUDENT THERE HAS

BEEN TRANSITION TO DIGITAL AND

I SAW A LOT OF FILM PRINTING, FILM DEVELOPMENT, THEY CLOSED.

EVENTUALLY IN 25 YEARS I SAW WAY MORE ORDER OF MAGNITUDE

JOBS CREATED BASED ON THAT DEPLOYMENT.

I THOUGHT SIMILAR STUFF WOULD COME IF WE PREPARE EVERYTHING

READY IN THE RIGHT FASHION CONSIDERING ALSO RISKS. SHERY:

I REMEMBER DEVELOPING THE FILMS AND THERE ARE STILL SOME OF

THOSE SHOPS. GREAT TO HAVE YOU WITH US HERE

FROM LG AI RESEARCH. BACK TO YOU.

YOU REMEMBER DEVELOPING THOSE FILMS AND HAVING THOSE ANALOG

CAMERAS, DON'T YOU? DAVID: KNOW, WE DON'T. IT IS ONLY YOU.

YVONNE: WHAT ARE YOU TALKING ABOUT.

DAVID: ZERO RECOLLECTION. SHERY: THROWING ME UNDER THE BUST.

YVONNE: I JUST POST ON TIKTOK NOW.

[LAUGHTER] THAT'S ALL I DO. DAVID:

WE LOVE YOU, SHERY AHN. MORE ON THE GROUND SPEAKING

WITH MORE INDUSTRY PLAYERS AT THE AI SUMMIT.

LATER, WE DISCUSSED AI STRATEGY, CATCH THAT INTERVIEW

ON THE TIMES ON YOUR SCREENS. PLENTY MORE AHEAD.

THIS IS THE CHINA SHOW. ♪

YVONNE: YOU ARE LOOKING AT PICTURES OUT

OF CAPITOL HILL AS OFFICIAL START TO TALLY UP THE COUNT IN

TERMS OF THE TEST VOTE THAT IS SUPPOSED TO HAPPEN IN D.C..

IF IT SUCCEEDS THE SENATE WILL NEED CONSENT OF ALL MEMBERS TO

END THE U.S. GOVERNMENT SHUT DOWN QUICKLY.

ANY ONE SENATOR COULD FORCE DAYS OF DELAYS AND VOTES.

THE HOUSE WE NEED TO PASS THE BILL FOR THE GOVERNMENT TO

REOPEN. WE HEARD FROM SPEAKER MIKE

JOHNSON. HE WILL GIVE LAWMAKERS TWO DAYS

NOTICE TO VOTE. DAVID:

SO EVEN IF IT GOES THROUGH, THE COUNTING, HEAD OF THE TEST VOTE

THEY ARE STILL TALLYING WITH THE TEST VOTE COULD LOOK LIKE

AND THEN IT MIGHT GO IN SOME WAYS TO EXPLAIN THE REVERSAL IN

THE DOLLAR STRENGTH, THE STARTING POINT THIS MORNING WAS

HIGHER IN U.S. ABSCESS BECAUSE OF THE --

ASSETS BECAUSE OF THE ENCOURAGING NEWS BUT I GUESS

MARKETS ARE TRYING TO FIGURE OUT THE NEXT STEPS FORWARD.

WE WILL KEEP YOU UP TO DATE.

STAFFERS AND INVESTORS ARE SETTING THIS ONE OUT AS WE WAIT

FOR MORE INFORMATION. IN THE MEANTIME LET'S LOOK AT

BIG MOVERS ON OPPOSITE SIDES OF EXPUNG

, HANG SENG INDEX MOST STOCKS

ARE UP, VOLUME ON THE LIGHTER SIDE, AND CHANGES OUT OF DIE

WHILE, WHILE HONG AND CCB INTERNATIONAL.

HSBC DROPPING, INITIATING [INAUDIBLE]

PLENTY MORE AHEAD IN THE NEXT HOUR OF THE CHINA SHOW.

WE WILL GET INTO ALL THINGS FX AND RATES.

♪

ANNABELLE: WELCOME BACK TO "DAYBREAK: ASIA

0 -- YVONNE:WELCOME BACK "THE CHINA SHOW."

AS WE OPEN UP A NEW TRADING WEEK, WE ARE UP 0.4%.

THIS IS COMING OUT A TIME OF A LITTLE PULLBACK WHEN IT COMES

TO THE AI TRADE AND PEOPLE QUESTIONING THESE LOFTY

VALUATIONS. TODAY, IT SEEMS LIKE INVESTORS

ARE WILLING TO CHASE THAT MOMENTUM. DAVID:

WE NEEDED TO REVIEW THE HEADLINE AS WE WERE THINKING

ABOUT JAPAN AND KOREA. SUCH IS THE NATURE OF MARKETS.

IT CAN GO UP OR DOWN. A PUBLIC SERVICE REMINDER FOR

THOSE IN HONG KONG. TYPHOON SIGNAL 1 WILL BE ISSUED

JUST AFTER 12:00 TODAY ON THE BACK OF THIS SUPER TYPHOON THAT

I BELIEVE IS WEST OF THE PHILIPPINES AFTER LASHING THE

COUNTRY OVERNIGHT. THE NEXT STOP LOOKS TO BE

TAIWAN.

WE WILL BE HEARING THAT PREEMPTIVE SIGNAL ABOUT TWO

HOURS FROM NOW. THAT TAKES US TO THE THE STORY

PETERING OUT QUICKLY. WE WILL SEE IT DEPENDING ON

WHAT IT LOOKS LIKE. AS THE GAP HIGHER ON U.S.

ASSETS THIS MORNING. U.S. FUTURES, A TWO DAY LOW.

THE DOLLAR IS COMING OFF VERY QUICKLY, QUICKER THAN THE

EQUITY COMPLEX IS CONCERNED. WE HAVE SINCE GIVEN BACK MOST

OF THE EARLY GAINS SINCE MONDAY. A LOT OF THAT HAS TO DO WITH

THIS FIX COMING THROUGH ON THE PBOC.

DOLLAR-CHINA COMING UP ON YOUR SCREENS.

BACK TO LEVELS AROUND THIS TIME ON FRIDAY.

ALL EYES ARE ON DO YOU SEE AND WHAT IS HAPPENING THERE.

-- ALL EYES ARE ON D.C. AND WHAT IS HAPPENING THERE.

YVONNE: A SO-CALLED TEST VOTE ON TESTING MEASURES TO END THE

GOVERNMENT SHUTDOWN. LET'S BRING IN OUR MANAGING

EDITOR.

THIS IS SOMETHING THAT DOESN'T INCLUDE THE EXTENSION OF THE

AFFORDABLE CARE ACT TAX CREDITS, SO HOW ARE DEMOCRATS

DEALING WITH THIS?

>> IT IS IMPORTANT TO REMEMBER THIS IS A PROCEDURAL TEST VOTE

IN THE SENATE. IT DOES SEEM LIKE THEY HAVE

SUPPORT OF ENOUGH OF THESE MODERATE DEMOCRATS TO A FLOOR

VOTE. IF ANY SENATOR DISAGREES FOR

ANY REASON, EVEN IF IT IS PROCEDURAL, THAT COULD TIE

THINGS UP. THAT IS TO SAY NOTHING OF THE

SUPPORT THIS WOULD ULTIMATELY NEED IN THE HOUSE.

STILL A LOT OF ONGOING DISCUSSIONS.

BUT IT APPEARS THAT WHAT THE DEMOCRATS HAVE GOTTEN FROM

REPUBLICANS IS SOME KIND OF AGREEMENT THAT THEY WOULD HOLD

A VOTE FOR A BILL IN DECEMBER TO THEN EXTEND THOSE OBAMACARE

PREMIUMS. THOSE TAX CREDITS BEING SOMETHING AT THE HEART OF

ALL THIS YEAR. IF THIS ULTIMATELY DOES PASS,

WHAT IT WOULD DO IS FUND FOR THE NEXT YEAR SOME AGENCIES

INCLUDING THE DEPARTMENT OF AGRICULTURE, CONGRESS, THE

DEPARTMENT OF VETERANS AFFAIRS, OTHER GOVERNMENT AGENCIES ONLY

FUNDED THROUGH JANUARY 30. MORE OF THAT SHORT-TERM FUNDING

SOLUTION HERE. BUT AGAIN, THIS PROCEDURAL TEST

VOTE WOULD NEED TO REACH THE FULL SENATE AND THEN AGAIN

ULTIMATELY STILL LOOKING FOR HOUSE SUPPORT.

MAYBE WE ARE SEEING AN END TO THE SHUT DOWN BUT NOTHING THAT

IS 100% GUARANTEED AT THIS POINT. DAVID:

THERE WAS A VERY IMPORTANT DATA POINT ON THURSDAY, WHICH IS

THAT U.S. INFLATION IS COMING THROUGH.

CAN WE ASSUME THAT IS COMING OUT?

IS THERE ENOUGH RUNWAY FOR US TO SEE THAT COMING OUT? JILL:

I THINK THAT IS WHAT WE ARE WAITING TO SEE WITH HOW QUICKLY

THIS ALL RESOLVES.

IT SEEMS MEMBERS OF CONGRESS HAVE BEEN TOLD TO STAY IN D.C.,

WAIT FOR A VOTE. I THINK AT THIS POINT, IT

DEPENDS ON HOW QUICKLY THEY CAN ACTUALLY BRING AN END TO THE

SHUTDOWN, AND THEN HOW LONG IT TAKES TO GET THESE PIECES IN

PLACE WITH ACTUALLY BRINGING PEOPLE FROM GOVERNMENT BACK

INTO OFFICE. STILL KIND OF UP IN THE AIR IN

TERMS OF WHEN THIS ALL ENDS, BUT IT REALLY DOES DEPEND ON

WHETHER OR NOT THEY CAN GET THESE WORDS OVER THE LINE AND

BRING AN END TO WHAT HAS BEEN THE LONGEST SHUTDOWN. DAVID:

IT HAS BEEN. RANDY KRASNER WAS HERE.

HE SAID THE FED IS NOW DECIDING BASED ON FIVE AND NOT SO MUCH

DATA -- BASED ON VIBE AND NOT SO MUCH ON DATA.

JILL DISIS, OUR MANAGING EDITOR GETTING US STARTED.

JOINING US ON SET, THE HEAD OF EMERGING MARKETS FIXED INCOME

AND EM CORPORATE'S AT EMP PARIBAS -- BNP PARIBAS.

WHERE YOU POSITIONED AROUND THE LACK OF DATA?

IT SEEMS LIKE THE MARKET IS CONVINCED EASING MORE THAN

OTHERWISE BUT HOW DO WE POSITION AROUND THE LACK OF

INFORMATION RIGHT NOW?

>> I THINK IT IS VERY IMPORTANT TO SEE HOW PROLONGED THE

SHUTDOWN REALLY IS BECAUSE THE SHUTDOWN IS SOMETHING WE HAVE

SEEN BEFORE WHICH MARKETS HAVE BEEN ABLE TO DIGEST AND NOT

NAVIGATE. THE MORE PROLONGED IT IS, THE

MORE IT WILL AFFECT MARKET SENTIMENT.

IT IS BECOMING MORE AND MORE IMPORTANT FOR US TO GAUGE HOW

THE FED WILL CONTINUE TAKING THEIR DECISIONS.

ARE THEY GOING TO PERHAPS CUT REGARDLESS OF THE DATA, WHETHER

IT IS THERE OR EVEN WHEN IT DOES START TO COME FORTH.

THAT IS BECOMING MORE AND MORE OF A FOCUS FOR US.

THE BIGGER QUESTION IS, DO THEY CONTINUE TO CUT REGARDLESS OF

WHAT THE DATA IS AND WHETHER THAT BECOMES AVAILABLE SOONER

OR LATER? YVONNE: A LOT OF THE EM ECONOMIES HAVE

STARTED TO CUT BEFORE THE FED HAS. DO YOU SEE THIS DECOUPLING

CONTINUING? ALAA: YES, I THINK WE HAVE ALREADY

SEEN THAT TO A GREAT EXTENT ALREADY OVER THE LAST YEAR, 18

MONTHS, WHERE WE HAVE SEEN EM ECONOMIES REALLY EXECUTE ON

THEIR OWN EASING CYCLES BASED ON THEIR OWN DATA AND METRICS

THAT THEY ARE TARGETING TO MEET. WE EXPECT THIS TO CONTINUE TO

BE THE CASE. EM ECONOMIES CONTINUE TO BE

STRONG IN TERMS OF FUNDAMENTALS. VERY CREDIBLE IN TERMS OF THEIR

POLICY MAKING, AND WE EXPECT THAT EASING TO CONTINUE TO BE

MORE OR LESS INDEPENDENT OF WHAT IS HAPPENING WITH THE U.S.

POLICY MAKERS AND THE DECISIONS FROM.

THE FED THE LAST TIME WE SPOKE WAS IF YOU WANT TO GO IN THE

MARKET DAVID: DURATION. WHERE ARE YOU GUYS?

ALAA: WE ARE BALANCED IN TERMS OF

DURATION. WHAT I WOULD SAY IS WE ARE

BECOMING MORE AND MORE SELECTIVE, AND WE EXPECT THAT

SELECTIVITY IS GOING TO BE KEY IN TERMS OF PORTFOLIO

PERFORMANCE MOVING FORWARD, WHETHER YOU ARE LOOKING AT THE

HARD CURRENCY PARTS OF THE EM UNIVERSE OR THE CURRENCY PARTS

OF THE UNIVERSE. THERE ARE CERTAIN CURVES WHERE

WE FIND THE RISK-REWARD IS ATTRACTIVE ON THE LONGER END

AND OTHERS WHERE WE WOULD NOT GO ON THE LONGER END AND VERY

MUCH STAY ON THE FRONT. BUT THE ULTRA LONG IS ONE THAT

WE ARE LESS POSITIONED GIVEN THE SHAPE OF THE CURVE AND THE

OUTLOOK.

AND HOW WE WOULD PREFER TO SEE HOW WE DEVELOP IN TERMS OF THE

FED DECISIONS AND THE DATA BEFORE WE HAVE A HIGHER

CONVICTION ON THE ULTRA LONG AND. -- END. YVONNE:

WHAT IS YOUR VIEW OF THE DOLLAR? IT SEEMS WE HAVE SEEN IT COME

BACK A LITTLE BIT AFTER MONTHS OF PEOPLE TALKING ABOUT DE-

DOLLARIZATION. ALAA: THIS WAS THE THEME.

THE FIRST HALF OF THIS YEAR, WE SAW WEAKNESS IN THE DOLLAR.

BUT THIS IS COMING AFTER DECADES OF VERY STRONG DOLLAR

STRENGTH. DO WE SEE FURTHER WEAKENING

FROM HERE? WE EXPECT THE DOLLAR TO REMAIN

RANGE BOUND FROM HERE, UNLESS WE SEE THE DOLLAR MARKETS BEING

TESTED MOVING FORWARD. GIVEN THE ENVIRONMENT WE ARE

IN, U.S. MARKETS ARE STRUCTURALLY VERY

STRONG. WE EXPECT IT TO CONTINUE TO BE

SO. WHETHER WE ARE LOOKING AT INNOVATION OR THE DEEPNESS OF

THE MARKET, THE DOLLAR CONTINUES TO BE THE RESERVE

CURRENCY. A LOT OF CURRENCIES ARE PEGGED

TO THE DOLLAR. SO, WE DO EXPECT IT TO BE RANGE

BOUND FROM HERE, NOT THE SAME MAGNITUDE OF WEAKNESS WE HAVE

SEEN IN THE FIRST HALF OF THIS YEAR, UNLESS WE HAVE SEEN

SIGNIFICANT CHANGE IN MARKET CONDITIONS.

THIS IS A VERY SUPPORTIVE ENVIRONMENT FOR EM ECONOMIES

AND EM MARKETS TO CONTINUE TO PERFORM LIKE WE HAVE THIS YEAR.

DAVID: WHAT ABOUT EM LOCAL CURRENCY

BONDS AND THE OPPORTUNITIES THEY ARE GOING INTO NEXT YEAR.

WHAT ARE THE OPPORTUNITIES YOU THINK WE SHOULD BE LOOKING AT?

ALAA: OUR CONVICTION VERY MUCH IS IN

EM LOCAL CURRENCY UNIVERSE, AND WITHIN THAT WE HAVE A HIGHER

CONVICTION IN LOCAL RATES. EM LOCAL RATES VERSUS EMFX.

IF I WERE TO DESCRIBE THAT, I WOULD SAY WE ARE STRUCTURALLY

HIGHER CONVICTION ON EM LOCAL RATES, WHERE WE ARE MORE

TACTICAL ON EMFX, GIVEN THE GOOD FUNDAMENTALS WE HAVE SEEN

AND EM ECONOMIES AND THE EASING CYCLE WE EXPECT ACROSS THESE

ECONOMIES. WE ARE STRUCTURALLY HIGHER

CONVICTION ON EM LOCAL RATES. YVONNE: I WAS GOING TO ASK WHAT

HAPPENED LAST WEEK WITH CHINA RETURNING TO DOLLAR BOND MARKET.

IT WAS LIKE THE SHEER AMOUNT OF DEMAND MEANT IT WAS PRICED

ALONG THE SAME LINES AND LEVELS AS TREASURIES.

WHAT DO YOU MAKE OF THIS SORT OF RETURN AND IS IT SUSTAINABLE?

ALAA: IS IT A VOTE OF CONFIDENCE, I

WOULD SAY. FOR AN ISSUER IN THE BOND

MARKET TO RECEIVE SUCH DEMAND AND ISSUE AT VERY FAVORABLE

LEVELS IS VERY MUCH A VOTE OF CONFIDENCE IN TERMS OF THE

CREDIBILITY OF THE ISSUER. SO, THAT IS HOW I WOULD

DESCRIBE IT. AND IT HAS PERFORMED QUITE WELL.

DAVID: THAT TAKES US INTO THE BROADER

QUESTION AROUND SUPPLY IN THE ASIA-PACIFIC, WHICH I GUESS TO

A LARGE EXTENT HAS REALLY KEPT SPREADS VERY TIGHT.

DO YOU THINK THE STRUCTURAL TIGHTNESS IN SUPPLY REMAINS THE

CASE GOING FORWARD? ALAA: YES, AND IT IS NOT JUST ASIA.

IT IS ACROSS ALL EMERGING MARKETS.

THAT IS HOW WE HAVE SEEN THE TREND. AND IT IS NOT JUST IN THE

SOVEREIGN SPACE BUT ALSO IN THE CORPORATE SPACE.

SO, WE HAVE SEEN VERY STRONG TECHNICALS PLAY OUT IN THE BACK

OF THE LACK OF ISSUANCES. BUT THAT IS ON THE BACK OF

THESE ISSUERS DEVELOPING THEIR LOCAL MARKETS, HAVING ACCESS TO

DIVERSIFIED FUNDING CHANNELS, WHICH IS REALLY A STRONG STORY

FOR THEIR OWN FUNDAMENTALS AND THEIR ABILITY TO FINANCE

THEMSELVES. ON THE BACK OF THAT, THEY

DIDN'T REALLY HAVE TO TAP THE CAPITAL MARKETS, AND THAT

RESULTED IN THE POSITIVE TECHNICALS THAT WE HAVE SEEN

ACROSS EMERGING MARKETS. YVONNE: A BIG THING WE HAVE SEEN IN

CREDIT MARKETS IS THIS WHOLE AI BOOM, THESE BIG TECH FIRMS NEED

TRILLIONS OF DOLLARS TO FUND WHAT THEY ARE DOING NOW.

HOW MUCH ACTIVITY ARE YOU SEEING ON THE EM SIDE OF THINGS

WHEN IT COMES TO AI NOW? ALAA: IN THE FIXED INCOME SPACE,

THERE ISN'T TOO MUCH OF THAT.

THERE IS VERY LITTLE OF BOND ISSUANCES IN THAT SPECIFIC

SECTOR. BUT WHATEVER IS BEING ISSUED

OUT OF THE SECTOR IS VERY STRONG. THERE ARE VERY STRONG

INVESTMENT GRADE ISSUANCES AND FAVORABLE RATES ON THAT END.

BUT I WOULD SAY THE CATHOLICS SPEND IS ONE THAT IS NECESSARY

-- THE CAPEX SPEND IS ONE THAT IS NECESSARY, AND WE WILL

CONTINUE TO SEE THIS PART OF THE MARKET REALLY DEVELOPING

MOVING FORWARD. DAVID: THE BIGGEST DRIVER IN

PERFORMANCE NEXT YEAR, WHAT IS IT GOING TO BE? ALAA:

THE SINGLE LARGEST MACRO THEME IS VERY MUCH THE FED, GLOBAL

RATES, AND WHAT WE SEE THERE. IT WILL BE THE FOCUS,

ESPECIALLY THROUGH THE FIRST HALF OF THE YEAR, AND I WOULD

SAY THAT IS GOING TO BE THE FIRST DRIVER AND PERHAPS THE

SINGLE LARGEST RISK FACTOR FOR SINGLE INCOME MARKETS.

IF THE DOLLAR REMAINS RANGE BOUND AS WE EXPECT, THAT IS A

SUPPORTIVE ENVIRONMENT. BUT IF WE SEE A PIVOT FROM

HERE, THAT COULD POTENTIALLY AFFECTS PERFORMANCES INTO NEXT

YEAR. DAVID: DO YOU THINK WE WILL SEE THE

END OF THE EASING CYCLE AT SOME POINT NEXT YEAR? ALAA:

I THINK IT IS GOING TO BE MEASURED.

I WOULDN'T EXPECT IT TO END IN THE FIRST HALF OR ANYTHING TO

BE FRONTLOADED. THEY HAVE SHOWN THEY ARE VERY

MUCH MEASURED IN THIS APPROACH. THAT IS WHAT WE SAW THIS YEAR.

AND WE EXPECT THAT TO CONTINUE TO BE THE CASE.

WHEN WE SPEAK TO POLICYMAKERS, THAT IS THE MESSAGE WE RECEIVED.

YVONNE: ALAA BUSHEHRI, THANK YOU.

WE GOT PLENTY MORE AHEAD. THIS IS BLOOMBERG. ♪

DAVID: WELCOME BACK. YOU ARE WATCHING "THE CHINA

SHOW ." I REMEMBER, OF COURSE.

IT IS A QUIET NEWSDAY SO WE HAVE TO DO A MENTAL EXERCISE TO

KEEP OURSELVES SLIGHTLY AWAKE. CONSUMER PRICES CAME OUT

SHOWING A POSITIVE NUMBER IN HOLIDAY BOOSTING.

TRAVEL, FOOD, TRANSPORT DEMAND. FOR A BREAKDOWN OF WHAT WE SAW

SO FOR, THE HEADLINE NUMBERS AND SOME OF THE DATA BENEATH

THE HOOD, OUR CHINA CORRESPONDENT MINMIN LOW IS

HERE WITH A BREAKDOWN OF THE NUMBERS AND WHAT WE ARE SEEING.

ARE WE SEEING THE START OF A SUSTAINABLE BALANCE IN

INFLATION? MINMIN: THERE IS SOME EXPECTATION THAT

CHINA IS TURNING THE CORNER, BUT THERE ARE MANY ECONOMISTS

SAYING THIS COULD BE A ONE-OFF BOUNCE BECAUSE OF THE GOLDEN

WEEK HOLIDAY AND THE TRAVEL SPENDING WE GOT.

CPI TURNING POSITIVE AFTER TWO MONTHS OF DEFLATION.

0.2% IS THE PRINT IN OCTOBER COMPARED TO THE FALL OF 0.6%.

PPI ALSO EASING, DOWN 2.1% VERSUS 2.3 THE PREVIOUS MONTH.

THE POSITIVE SIGN IS THAT CORE CPI, 1.2%, THE SIX CONSECUTIVE

MONTH. THIS IS WHERE WE STRIP AWAY THE

VOLATILE FOOD AND ENERGY PRICES. SO, IF YOU PULL OUT

LONGER-TERM, PPI HAS BEEN DECLINING FOR TWO YEARS AND 10

MONTHS. CPI THIS YEAR HOVERING AT

SUBZERO LEVELS. SOME ECONOMIES ARE SAYING IT

WILL NOT TURN THE CORNER BEFORE THE END OF THIS YEAR AND

POSSIBLY PPI COULD REMAIN NEGATIVE UNTIL THE MIDDLE OF

NEXT YEAR. IT ALSO MEANS THE ANTIEVOLUTION

CAMPAIGNS STILL HAVE A LONG WAY TO GO AND MAYBE THE CHINESE

GOVERNMENT WILL NEED TO BE MUCH MORE FORCEFUL IN THE WAY THEY

ENFORCE THESE COMPETITION ROLES. YVONNE: THERE ARE STILL A LOT OF

INFLATIONARY PRESSURES IN THIS ECONOMY. MINMIN:

THIS IS A VERY INTERESTING FINDING BECAUSE IT GIVES YOU A

MORE GRANULAR PICTURE OF WHAT INFLATION LOOKS LIKE IN CHINA.

BLOOMBERG TRACKS 67 CATEGORIES OF GOODS AND SERVICES.

YOU CAN SEE ACROSS MANY OF THESE SECTORS, WHETHER IT IS

HOME PRICES, HOME APPLIANCES, WE ARE SEEING DOUBLE DIGIT

DECLINES ACROSS MOST OF THEM, AND IF YOU FOOT THE BOARD,

WHERE WE ARE SEEING THE BIGGEST DECLINES ARE IN SOME OF THE

VERY ORDINARY ITEMS YOU MIGHT HAVE IN YOUR HOMES.

THINGS LIKE EXIT AND CUCUMBERS, EGGPLANT DOWN 14%.

AND EVEN HOME APPLIANCES. IF YOU FLIP THE BOARD, WE ARE

STILL SEEING MODERATE DECLINES DESPITE THIS BEING ONE OF THE

OUTSTANDING SECTORS IN CHINA BECAUSE OF THOSE GOVERNMENT

SUBSIDIES. YET WE ARE STILL SEEING AN 8%

DECLINE IN MICROWAVES, 4% DECLINE IN WASHING MACHINE AND

FRIDGES. THERE ARE SOME AREAS WHERE WE

ARE SEEING INFLATION AND THAT IS MOSTLY IN THE SERVICES

CATEGORY, SO THINGS LIKE KINDERGARTEN FEES, ATTRACTION

TICKETS OF 0.5%, THE PRICE CHANGE PRETTY UNEVENLY SPREAD

ACROSS THE BOARD, BUT CLEARLY A BIG IMPACT ON CORPORATE PROFITS

BECAUSE THE FIRST HALF OF THIS YEAR YOU SAW THE CHINESE LISTS

OF FIRMS THAT REPORTED LOSSES. 25% IS THE HIGHEST WE'VE SEEN

IN THE COURSE OF A QUARTER OF A CENTRALLY. YVONNE:

MINMIN LOW BREAKING DOWN HOW ENTRENCHED SOME OF THESE

DEFLATIONARY PRESSURES ARE. THAT CERTAINLY IS THE TAKE FROM

BLOOMBERG ECONOMICS ON THE BACK OF THESE INFLATION NUMBERS WE

GOT OVER THE WEEKEND. BASICALLY SAYING INFLATIONARY

PRESSURES HAVE REMAINED ENTRENCHED SINCE THE RISE IN

CONSUMER PRICES REFLECT A HOLIDAY BOOST THAT WILL FADE.

YOU'RE SAYING WHEN IT COMES ANTIEVOLUTION, STILL A LOT OF

UNFINISHED BUSINESS.

>> I THINK A BETTER GAUGE OF THE ANTI-EVOLUTION POLICY IS

THE IT IS WHAT IS TO COME. IF YOU LOOK AT THE MEASURE,

THIS MONTH, OCTOBER JOBS WAS DIFFERENT FROM THE PREVIOUS TWO

MONTHS. THAT COULD BE A SIGNAL THAT THE

ANTIEVOLUTION, THE PROGRESS IS SLOWING DOWN, OR BECAUSE OF A

BOOST IN THE PREVIOUS TWO MONTHS.

THERE CAN BE DIFFERENT REASONS. BUT IN ANY CASE, IT SHOWED THAT

FOR THE PPI TO GET BACK TO INFLATION, THERE IS STILL A LOT

OF WORK FOR THE GOVERNMENT TO FINISH THE EVOLUTION PROBLEMS.

DAVID: I WANT TO ASK ABOUT CORE CPI

BUT I AM THINKING ABOUT PPI. WHEN DO YOU EXPECT PPI TO TURN

POSITIVE NEXT YEAR? ERIC: I THINK BASED ON THE CURRENT

TRAJECTORY, PROBABLY MIDDLE NEXT YEAR. DAVID:

IS THAT MATH SIMPLY? ERIC: YEAH, IT IS BASED ON CURRENT

MOMENTUM. SO IT IS MORE LIKELY THE MIDDLE

OF NEXT YEAR. DAVID: CORE CPI UP SIX MONTHS.

MARCH WAS THE 1.2%. WHAT IS YOUR INTERPRETATION OF

THAT. ERIC:

I THINK IT IS DIFFICULT TO INTERPRET BECAUSE THERE IS SOME

HOLIDAY BOOST. THERE'S HIGH FREQUENTLY THAT HIGH-FREQUENCY

DATA. PROBABLY THEY ARE OVERWEIGHT

THE FIRST WEEK OF THE HOLIDAY, BUT WE DON'T KNOW YET.

I THINK IT IS TOO EARLY TO SAY IT IS A TURNING POINT ON CPI

BECAUSE ONCE THE HOLIDAY DEMAND FADES, WE MIGHT SEE SOME

FLOWING AGAIN ON THE CPI CHART. DAVID:

DO YOU THINK WE WILL GET THAT SEASONAL ABERRATION ONCE WE SEE

THE NUMBERS SET TO COME OUT LATER THIS WEEK? ERIC:

OUR EXPECTATION IS OCTOBER WE ARE NOT GOING TO SHOW ANY SIGNS

OF IMPROVEMENT.

MOSTLY, IT IS SLOWING DOWN AND LIKELY IN THE FIRST CORNER

BECAUSE THEY'RE QUITE COMFORTABLE ON THE GROWTH RIGHT

NOW AND ARE NOT READY FOR MORE POLICY SUPPORT SO FOR.

YVONNE: I THINK YOU HAVE A CALL. [LAUGHTER]

BLOOMBERG ECONOMICS ERIC ZHU. PLENTY MORE AHEAD. DAVID:

THEY ARE CALLING. [LAUGHTER] ♪

YVONNE: TRACKING THE WORLD NEWS THIS

MORNING. PRESIDENT TRUMP'S ECONOMIC

ADVISOR SAYS THE GOVERNMENT SHUTDOWN WILL LIKELY HAVE A

SIGNIFICANT IMPACT ON GROWTH. THE NATIONAL ECONOMIC COUNCIL

DIRECTOR KEVIN HASSETT TOLD CBS THAT A PROLONGED SHUTDOWN COULD

CAUSE FOURTH-QUARTER GDP TO TURN NEGATIVE, SETTING

DISRUPTIONS IN AIR TRAVEL.

>> THANKSGIVING TIME IS ONE OF THE HARDEST TIMES IN THE AIR

FOR THE ECONOMY. BLACK FRIDAY AND ALL THAT STUFF.

IF PEOPLE ARE TRAVELING AT THAT MOMENT, WE COULD BE LOOKING AT

A NEGATIVE QUARTER FOR THE FOURTH QUARTER.

YVONNE: TREASURY SECRETARY SCOTT BESSENT SAYS THE SUGGESTION OF

A TARIFF DIVIDEND COULD COME VIA THE TAX CUTS IN HIS

SIGNATURE ECONOMIC POLICY BILL. BESSENT MADE THE STATEMENT ON

ABC NEWS WHEN ASKED ABOUT TRUMPS SOCIAL MEDIA POST WHERE

THE PRESIDENT SAID EACH AMERICAN WOULD RECEIVE A

DIVIDEND OF AT LEAST $2000 FROM IMPORT DUTIES.

>> THE $2000 DIVIDEND COULD COME IN LOTS OF FORMS AND LOTS

OF WAYS, GEORGE.

IT COULD BE JUST THE TAX DECREASES THAT WE ARE SEEING ON

THE PRESIDENT'S AGENDA, NO TAX ON TIPS, NO TAX ON OVERTIME, NO

TAX ON SOCIAL SECURITY, THE DEDUCTIBILITY OF AUTO LOANS,

THOSE ARE SUBSTANTIAL DEDUCTIONS THAT ARE BEING

FINANCED AND THE TAX BILL. YVONNE:

THE U.S. SUPREME COURT HAS TEMPORARILY

ALLOWED THE TRUMP ADMINISTRATION TO WITHHOLD $4

MILLION IN FOOD AID THAT A LOWER COURT JUDGE ORDERED

DISTRIBUTED TO 42 MILLION PEOPLE.

JUSTICE KENTUCKY BROWN JACKSON ISSUED THE ADMISSION OF STATE

TO GIVE AN APPEALS COURT MORE TIME TO WEIGH THE GOVERNMENT'S

REQUEST FOR A LONGER HALT. THE ADMINISTRATION SAYS IT CAN

ONLY PROVIDE PARTIAL FUNDING AS CRITICS WARN MILLIONS COULD GO

HUNGRY.

CHINA AND THE EU ARE JOINING

BRAZIL AND NEW COALITIONS TO LOWER CARBON EMISSIONS.

THEY SEEK TO ALIGN STANDARDS AND PROMOTE DECARBONIZATION.

RESULTS IS INTEGRATING MARKETS COULD BE ONE OF THE MOST

IMPORTANT LEGACIES OF COP 30 AS IT WOULD FACILITATE TRADE AND

ULTIMATELY HELP CURB EMISSIONS. DAVID:

WE ARE LOOKING AT MOVERS ACROSS THE REGION.

WE ARE STARTING THINGS OFF DOWN SOUTH AND WE WILL MAKE OUR WAY

UP NORTH INTO THE MAP ACROSS ASIA PACIFIC.

WE ARE STARTING THINGS OFF IN OZ AND NEW ZEALAND.

I THINK THESE ARE THE OZ SHARES, UP TWO PERCENT.

THERE IS AN AGREEMENT'S INFANT MILK FORMULA BOOSTING.

WE ARE UP TO $11 AS FAR AS THAT IS CONCERNED.

SOMEWHAT LOOSELY BABY RELATED THEME GOING THROUGH TODAY AND

WE WILL TALK WITH THIS IPO IN HONG KONG, WHICH IS THE BOOK

END OF THE BABY RELATED STUFF.

ANZ WITH EARNINGS. THEY WERE TALKING ABOUT THE

NEED FOR MORE ACTION TO TURN THE BANK AROUND.

I BELIEVE THIS SHOULD BE HIS FIRST FULL SET OF FINANCIALS.

I COULD BE MISTAKEN. BUT IT DOES INDICATE MORE NEEDS

TO BE DONE AND MORE LIKELY WILL BE COMING THROUGH FROM HIM AND

HIS TEAM. VERY QUICKLY, UP TO INDONESIA

WHERE YOU HAVE DISCUSSIONS AROUND INVOLVEMENT IN THE PLANS

BETWEEN THE TWO BIG TECH PLAYS. WE ARE UP 7%.

SELF-CARE IS THE DIAPER MAKER IN HONG KONG THAT DEBUTED

TODAY, AND A VERY GOOD ONE AT THAT. ♪

YVONNE: 11:29 A.M. IN TOKYO. JAPANESE MARKETS HITTING THE

LUNCH BREAK. WE ARE SEEING A PRETTY GOOD

MONDAY MORNING THERE. A WRAP UP OF 2%.

WE TALK ABOUT THE CHIPMAKERS, SOME BIG OUTSIZED GAINS OF

THESE JAPANESE NAMES THIS MORNING.

THAT AI TRADE IS COMING BACK IN TOKYO TODAY.

DOLLAR-YEN, SOME WEAKNESS. JGB YIELDS UP ONE BASIS POINT

THIS MORNING. DAVID: A LOOK AT SOME OF THE MOVERS.

OLYMPUS IS ONE OF THE BIG ONES TO THE UPSIDE.

WE ARE STILL UP ABOUT 10%. WE WERE UP AS MUCH AS 15 AT ONE

POINT THIS MORNING IN THE FIRST FEW MINUTES.

RESTRUCTURING, SOME JOB CUTS. SHARES OF THE MOST AT ABOUT SIX

OR SEVEN YEARS. MARKETS REACTING TODAY.

WE ARE LOOKING AT HONDA AND NEC COMING UP ON YOUR SCREEN.

ALREADY DOWN ABOUT FIVE. NEC UP ABOUT 2.7%.

CITI GRAZING AND EC TO PRICE TARGETS, WHICH IS RIGHT ABOUT

WHERE WE ARE ALREADY, HENCE MAY BE THE NEUTRAL STAT COMING OUT

OF THE BACKEND. THE STORY ACROSS MARKETS IN

ASIA, PRICE SLIGHTLY HIGHER ON VOLUME. MOST SECTORS ARE HIGHER.

NINE OUT OF THE 11 WERE LED BY TECH. BEHIND THAT IS ENERGY TO A

LESSER EXTENT.

THEN YOU ARE GETTING SOME OFF NUMBERS AS FAR AS HEALTH CARE

IS CONCERNED. S&P FUTURES, NOW THAT SHOULD BE

SESSION HIGHS. 600 TO EIGHT HUNDRED.

MAYBE ON THE BACK OF PROGRESS WE ARE SEEING TOWARDS THE END

OF THE U.S. SHUT DOWN. OF COURSE, IT WILL TAKE

SIGNIFICANT STEPS FROM WHERE WE ARE CURRENTLY TWO MAY BE

ACTUALLY SEEING AND INFLATION

PRINT COME OUT ON THURSDAY. FROM MARKETS, LET'S TURN OUR

ATTENTION TO THE WEATHER. SOUTHEAST ASIA, THE

PHILIPPINES, SUPER TYPHOON FUNG-WONG HASN'T SLAMMED INTO

THE PHILIPPINES. --HAS SLAMMED INTO THE

PHILIPPINES. GOVERNMENT WORK HAS BEEN

SUSPENDED AND CLASSES THROUGH TO TOMORROW.

MARKETS ARE STILL TRADING TODAY. LET'S BRING IN OUR GUEST FOR

MORE ON THIS.

BEFORE WE TALK ABOUT WHAT THE TYPHOON WAS LIKE, I CAN SEE YOU

ARE AT THE BUREAU RIGHT NOW. HOW IS IT GETTING TO WORK TODAY?

GIVE US A SENSE OF WHAT THE IS LIKE THIS MORNING.

>> YES, STORMY MORNING FROM THE CAPITAL MANILA.

REALLY UNPREDICTABLE WEATHER, SO HARD TO GET TO THE OFFICE.

MUCH OF THE BUREAU IS WORKING FROM HOME SAFELY.

BUT THANKFULLY, NOT MUCH FLOODS HERE IN THE CAPITOL.

I THINK THE OFFICIALS HAVE PREPARED FOR THIS SECOND STRONG

FIGHT TUNE -- TYPHOON IN A WEEKS TIME HERE IN THE

PHILIPPINES. YVONNE:

VERY DRAMATIC PICTURES WE ARE SEEING. WE TALK ABOUT THE GROWTH

OUTLOOK AND THE IMPACT THESE TYPHOONS ARE HAVING.

THIS IS THE SECOND DEADLY TYPHOON THAT THE COUNTRY HAS

SEEN IN THE PAST WEEK. HOW HAS IT IMPACTED THE

PHILIPPINE SO FAR?

>> SO FAR, REPORTS HAVE BEEN COMING IN FROM OUR LOCAL

DISASTER AGENCIES THAT THERE HAVE BEEN IN ACCESSIBLE ROADS,

LANDSLIDES, FLOODS, FLASH FLOODS IN SOME AREAS.

FORTUNATELY -- UNFORTUNATELY,

IT HAS LED TO THE DROWNING OF THREE PEOPLE.

IN TERMS OF THE ECONOMY, THE ECONOMY COULD BE AFFECTED WITH

THIS SET OF TYPHOONS AND OFFICE CANCELLATIONS HERE IN THE

PHILIPPINES. DAVID: WHAT IS NEXT AS FAR AS THE

STORM IS CONCERNED? GIVE US A SENSE OF THE

PROJECTED PATH. WHAT ARE WE WATCHING FOR NEXT?

>> DEFINITELY. AFTER HITTING LAND LAST NIGHT

IN THE MAIN ISLAND, IT HAS CONTINUED TO TRAVERSE GOING

WEST , AND NOW IT IS FORECAST TO GO TOWARDS TAIWAN LATER THIS

WEEK. IT WILL HAVE LESSER STRENGTH AS

IT GOES THROUGH THE LAND HERE IN THE PHILIPPINES, BUT IT

COULD PICK UP STRENGTH, AND IT IS HEADED FOR TAIWAN.

THEY WILL WANT TO BE PREPARING FOR THIS ONE. YVONNE:

JEROME, THANK YOU. OUR REPORTER JOINING US FROM

MANILA. SOME OTHER CORPORATE NEWS,

NVIDIA'S CEO SAYS THEY HAVE ASKED TMC FOR MORE CHIPS

APPLIES TO KEEP UP WITH BOOMING AI DEMAND.

SPEAKING AT AN EVENT IN TAIWAN, HE SAYS NVIDIA'S MEMORY CHIP

SUPPLIERS HAVE SCALED UP TO SUPPORT THE COMPANY.

THE CEO CONFIRMS THE REQUEST, SAYING THE CHIPMAKER EXPECTS

RECORD SALES EVERY YEAR. PFIZER HAS AGREED TO MIY

METSERA -- BUY METSERA. THEY RAISED THEIR OFFER,

MATCHING NOVO'S REVISED BID. BUT THEY CITED A CALL FROM THE

FCC ABOUT PROPOSED RISKS OVER THE STRUCTURE.

PFIZER HAD ALREADY SECURED FTC CLEARANCE FOR ITS BID. DAVID:

LET'S CHECK IN ON SHARES. WE ARE OF EVERY SO SLIGHTLY.

THIS IS THE IPO, THE BIG ONE IN MANILA LATE LAST WEEK, INTO THE

FRESH SESSION TODAY. IN TERMS OF THE COMPANY'S

PLANS, IT IS BACKED BY PROCEEDS FROM THE NATION'S

SECOND-LARGEST IPO OFFERING IN HISTORY.

THAT IS WHAT THEY PLAN TO DO WITH THE MONEY.

THE FRIDAY DEBUT WAS SEEN AS A KEY TEST FOR INVESTOR APPETITE

IN THE PHILIPPINE MARKET, WHICH IS UNDERWHELMED AND

UNDERPERFORMED COMPARED TO MOST PEERS. WE SPOKE WITH THE CEO AND

PRESIDENT IN THE LAST TWO HOURS OR SO ABOUT THEIR PLANS POST

IPO. HAVE A LOOK.

>> ASIDE FROM COMPLYING WITH OUR FRANCHISE REQUIREMENT, THE

LISTING OF MANILA HAS RECEIVED VERY STRONG INTEREST, BOTH

DOMESTICALLY AND INTERNATIONALLY.

ON THE INTERNATIONAL FRONT, WE HAVE GOTTEN INVESTMENTS FROM

ADB AND IFC.

ASIDE FROM VERY INTERESTING SUSTAINABILITY LENDERS LIKE RIB

ECHO. THIS HAS GENERATED VERY ROBUST

DEMAND IN OUR IPO, SUCH THAT DAY ONE WE HAD TO TAKE THE

DOWNSIZED OPTION OF OUR OFFERING.

>> IT DID NOT TRANSLATE INTO A ROBUST DEBUT.

WHAT ARE YOUR THOUGHTS ON THAT?

>> I THINK WE WERE AFFECTED

ALSO BY THE ASIAN ENVIRONMENT. BUT WE ARE LOOKING FORWARD TO A

BETTER PERFORMANCE BECAUSE AS WE HAVE SEEN TODAY, ASIAN

MARKETS ARE UP AGAIN. SO, WE HOPE TO WRITE WITH THAT.

DOES THE IPO COVER ALL YOUR FUNDING NEEDS OR ARE YOU

LOOKING TO RAISE MORE?

>> THE RECEIPTS FROM OUR IPO WILL FUND PARTIALLY OUR 100 63

BILLION COMMITMENT TO OUR REGULATORS FOR THIS CURRENT

RATE.

THESE FUNDS WILL GO TO THE FIVE PILLARS OF OUR CAPEX, MAINLY

WATER SOURCE, REVENUE, WASTEWATER COVERAGE, INCREASING

CAPABILITIES, CUSTOMER ENGAGEMENT, AI, AND ALSO OUR

FOR A WAY INTO AUTOMATION. THE SHOWER FOR RAY INTO

AUTOMATION.

>> THERE HAVE BEEN POLITICAL RISKS THAT LED TO THE

RENEGOTIATION WITH -- OF YOUR CONTRACT WITH THE GOVERNMENT.

HOW ARE YOU ASSESSING SOME OF THESE RISKS AS HEADWIND FOR THE

COMPANY GOING FORWARD?

>> I PERSONALLY FEEL BETTER. OUR CONCESSION AGREEMENT WAS

REVISED AND RENEGOTIATED, SOLVING THE CONTENTIOUS

REVISIONS IN OUR CONTRACT. BUT IN EXCHANGE, WE WERE ABLE

TO GET A 12% RETURN ON OUR OPENING POSITION.

BUT THE OTHER THING THAT GIVES ME CONFIDENCE IS ASIDE FROM THE

CONCESSION AGREEMENT, WE HAVE A FRANCHISE TOGETHER THAT HAS

BEEN EXTENDED TO 24/7. THEREFORE, A MORE STABLE

FRAMEWORK THAT WE ARE OPERATING. DAVID:

THAT WAS THE PRESIDENT AND CEO OF MAYNILA.

HE SPOKE WITH AVRIL. IS SILICON VALLEY EMBRACING

OPEN SOURCE AI APPROACHES? WE WILL DIG INTO THE SHIFTS IN

THE AI INDUSTRY AND WHAT THAT MEANS FOR WHERE INVESTMENT

STRATEGY IS MOVING FORWARD WITH BLOOMBERG OPINION.

THAT IS COMING NEXT. THIS IS BLOOMBERG.

♪

YVONNE: CHECKING SOME OF THE AUTOMAKERS

IN THE REGION, PARTICULARLY IN JAPAN. HONDA IS DOWN 4%.

THEY DID TALK ABOUT THIS SHORTAGE THAT WEIGHED ON THEIR

RESULTS. THAT IS CERTAINLY A REASON TO

LOOK INTO IT. BUT THERE IS SOME NEWS.

CHINA SUNDAY CONFIRMED THEY ARE TAKING STEPS TO EXEMPT THESE

COMPLIANT EXPORTS OF CHIPS INTENDED FOR CIVILIAN USE.

THAT IS WHILE URGING THE EU TO RESOLVE A CLASH THAT THREATENS

TO DISRUPT GLOBAL AUTO PRODUCTION.

LET'S GET TO OUR LONG. TELL US HOW WE GOT TO THIS

PLACE. ALAN:

THE STORY GOES WAY BACK BUT THERE IS THIS STORY ABOUT A

DISPUTE WITH THIS---BASED COMPANY.

IT IS OWNED BY A CHINESE COMPANY.

BUT EARLIER THIS YEAR, THEY STOPPED SUPPLYING THESE CHIPS

THAT ARE CRUCIAL FOR CAR MAKING AS PART OF A BROADER TRADE

DISPUTE WITH THE EU. BUT NOW, THEY HELD TALKS AND

CHINA OVER THE WEEKEND SAID THEY ARE GOING TO RESUME THE

EXPORTS OF THOSE CHIPS TO THIS--BASED COMPANY, IF THEY

ARE ELIGIBLE FOR CIVILIAN USE. I GUESS THESE ARE POSITIVE

STEPS BECAUSE WE KNOW CARMAKERS INCLUDING VOLKSWAGEN AND HONDA

HAVE BEEN AFFECTED BY THESE SUPPLY SHORTAGES OF CHIPS.

DAVID: WHEN CAN WE EXPECT THE RESUMPTION OF ACTUAL EXPORTS?

ALAN: SOME EXAMPLE TO DRAW ON IS HOW

CHINA HAD BEEN RESUMING THE EXPORTS OF RARE EARTH MATERIALS.

WE HAVE SEEN THAT AFTER THEY STRUCK A TRADE DEAL WITH THE

U.S., THE MATERIALS RESUMED THEIR FLOW ACROSS THE BORDER

VERY RAPIDLY. BUT THERE IS NO PRECISE

TIMELINE. BUT CHINA'S SIGNAL IS POSITIVE.

YVONNE: WHAT DOES IT TELL US ABOUT HOW

U.S. AND CHINA RELATIONS ARE GOING?

IN SOME WAYS, YOU ARE SEEING COMPANIES THAT ARE NON-CHINA,

NON-US, THAT ARE GETTING ENTHRALLED IN THIS, RIGHT?

WHAT IS THE MESSAGE WE CAN TAKE FROM THIS CASE? ALAN:

THOSE COMPANIES, THEY ARE NOT NECESSARILY PRO ONE GOVERNMENT

OR THE OTHER. BUT THEY HAVE TO LOOK AT THEIR

ENTIRE SUPPLY CHAIN TO SEE WHAT RESOURCES ARE BEING DOMINATED

BY ANYONE COUNTRY AND THEIR GOVERNMENT.

AND THEY HAVE TO MANAGE THEIR SUPPLY CHAINS MORE CAREFULLY.

IN THE CASE OF RARE EARTHS, I THINK MORE COMPANIES ARE

THINKING ABOUT DIVERSIFYING THEIR SUPPLY BECAUSE THEY LEARN

FROM THE TRADE WAR THAT CHINA COULD WEAPONIZE IT FOR

GEOPOLITICAL GOALS THE RARE EARTHS, THE CURVE LAX.

WE ARE SEEING THE RESUMPTION OF THE FLOWS OF THESE MATERIALS.

BUT IF THE TENSIONS ESCALATED AGAIN IN THE FUTURE, WHAT ARE

THOSE COMPANIES GOING TO DO? THAT IS ONE QUESTION THEY HAVE

BEEN ASKING THEMSELVES ABOUT.

DAVID: HONDA IS CERTAINLY THE STAND

OUT -- THE STATE OUT TO THE DOWNSIDE.

THE COMPANY SEEMS TO BE THE WORST AFFECTED AMONG THE

JAPANESE AUTOMAKERS. ALLEN WAN, OR BLOOMBERG CHINA

ECONOMY AND GOVERNMENT EDITOR. LET'S STAY SLIGHTLY ON THEME

AND BROADEN THE VIEW. A FANTASTIC CALL TODAY ON

BLOOMBERG OPINION. THE THESIS HERE, AND SHE WILL

BE COMING OUT SHORTLY TO EXPOUND ON THIS, THIS LOW COST,

OPEN SOURCE BOTTLE WE ARE SEEING ON THE CHINESE SIDE OF

THINGS IS ATTRACTING NOT JUST CHINESE USUALLY YOU -- CHINESE

USERS. GLOBAL USERS ARE STARTING TO

HEAD INTO THIS DIRECTION, ESPECIALLY WHEN YOU LOOK AT

SILICON VALLEY.

YOU HAVE AIRBNB ACTUALLY USING CHINESE AI TOOLS.

CATHERINE, THANK YOU FOR THIS. WHAT IS THE THESIS?

EXPLAIN THAT FIRST, AND WE CAN TALK MORE ABOUT THIS. CATHERINE:

SURE. WE HAVE ALL SEEN THIS DEBATE

ROILING FOR MONTHS THAT CHINESE LOW-COST AND OPEN SOURCE AI

MODELS WILL ATTRACT MORE GLOBAL USERS AWAY FROM U.S. OFFERINGS.

BUT I HAVE NOTICED A SUBTLE SHIFT TAKE ROOT RECENTLY, WHICH

IS MORE SILICON VALLEY COMPANIES ARE ACTUALLY BUILDING

ON TOP OF THESE CHINESE AI MODELS.

FOR EXAMPLE, THE VENTURE

CAPITALISTS SAID IN HIS PODCAST THE VIRAL AI MODEL FROM

BEIJING-BASED MOONSHOT AI. AS YOU MENTION, THE AIRBNB CEO

SAYS HE HAS BEEN RUNNING A LOT ON ALIBABA'S QN MODELS.

THERE WERE A FEW STARTUPS WHICH BOTH SEEMED TO HAVE BUILT

PRODUCTS BASED ON SHIITE -- CHINESE AI MODELS, AT LEAST

ACCORDING TO INTERNET SLEW THING.

THIS SHIFT IS HAPPENING OPENLY AND A LITTLE BIT MORE QUIETLY.

BUT I THINK IT IS INTERESTING TO KEEP TRACK OF BECAUSE I

THINK IF WASHINGTON IS SERIOUS ABOUT WINNING THE AI RACE, THAN

IT NEEDS TO START QUESTIONING MY SO IS ALREADY SWITCHING

SIDES. YVONNE: YOU MENTIONED THE SHIFT IS

QUIET. I DON'T THINK A LOT OF PEOPLE

KNOW ABOUT THIS. WHAT DO YOU THINK IS THE APPEAL

OF THESE AI MODELS IN SILICON VALLEY? CATHERINE:

THE THEME SEEMS TO BE THAT THEY ARE VERY GOOD AND ALSO VERY

CHEAP. ALSO, YOU MENTIONED THE OPEN-SOURCE ELEMENT OF ALL OF

THIS, WHICH MEANS THAT DEVELOPERS CAN DOWNLOAD THESE

MODELS AND BUILT PRODUCTS ON TOP OF THEM.

I THINK GEOPOLITICAL CONCERNS ASIDE, WHEN YOU ARE RACING TO

BUILD AND SHIP PRODUCTS, PERFORMANCE AND COST MATTERS

QUITE A LOT. I THINK THAT HAS BECOME THE BIG

APPEAL AND DROP OF THESE CHINESE AI MODELS.

DAVID: ONE OF THE NARRATIVES THAT HAS

EMERGED IS THAT WHILE INNOVATION, AND OBVIOUSLY THE

PRODUCT NEEDS TO BE GOOD, YOU DON'T REALLY HAVE TO BE AT THE

VERY FRONT OF THIS TO WIN BUSINESS.

I THINK WHAT WE ARE SEEING FROM THE CHINESE SIDE UNDERSCORES

THIS. TO YOUR POINT, IF CHINESE AI IS

WINNING ON COST, CAN AMERICA STILL WIN ON INNOVATION?

IT IS INNOVATION THE NUMBER ONE THING WE SHOULD BE FOCUSED ON?

CATHERINE: RIGHT. I THINK AMERICA STILL HAS VERY

CLEAR ADVANTAGES WHEN IT COMES TO ACCESS TO CUTTING-EDGE CHIPS

AND ACCESS TO COMPUTE. I THINK IT IS WAY TOO PREMATURE

TO DECLARE THIS AI RACE HAS A WINNER, DESPITE VARIOUS

SPECULATION FROM TECH EXECUTIVES OVER THE PAST WEEK.

BUT I THINK ONE THING THAT HAS BECOME CLEAR IS THESE LOW CORE

-- LOW COSTS OPEN SOURCE AI MODELS HAVE WON OVER DEVELOPERS.

DEVELOPERS ON THE BACKBONE OF AI INNOVATION.

THE MORE THIS SHIFT TAKES HOLD, THE HARDER IT WILL BE FOR THE

U.S. AND SILICON VALLEY TO SLOW DOWN

THE MOMENTUM OF CHENEY AI TOOLS. -- OF CHINESE AI TOOLS.

YVONNE: BE SURE TO CHECK OUT HER COLUMN

HERE THIS MORNING.

SILICON VALLEY IS BUILDING ON CHANEY'S -- ON CHINESE AI.

WE WILL HAVE MORE WITH FIGMA. THIS IS BLOOMBERG. ♪

YVONNE: LOOKING AT LIVE PICTURES OUT OF

CAPITOL HILL AS OFFICIALS THERE GETTING LATE INTO THE NIGHT,

TALLYING UP THE COUNT ON THAT PROCEDURAL TEST VOTE THAT IS

SUPPOSED TO BE HAPPENING. IT LOOKS LIKE THEY ARE GOING

INTO THE LONG HOURS OF THE NIGHT.

BUT CERTAINLY, AS WE SAW, THESE MODERN DEMOCRATS HAVE REACHED

SOME SORT OF FUNDING DEAL. THAT IS SOMETHING THE SENATE IS

DEALING WITH, BUT FOR HOUSE DEMOCRATS, I THINK THERE'S BEEN

REPORTS THAT THEY ARE IN SOME WAYS FUSSED ABOUT THE FACT

THESE EXTENSIONS OF OBAMACARE SUBSIDIES WERE.NOT INCLUDED .

WHERE DOES IT LEAD WHEN IT COMES TO THE HOUSE?

>> THERE ARE STILL A LOT OF HURDLES. DAVID:

THEY WILL NEED TO DO THE TALLY, THEN THE TEST ABOUT, THEN IT

GOES TO THE SENATE, THEN TO THE HOUSE.

BUT THE EXTENSION OF SOME OF THE SUBSIDIES ON OBAMACARE FOR

ABOUT A YEAR, SO IT SEEMS TO BE THE STICKING POINT.

IT DOES SEEM THAT DEMOCRATS ARE FAIRLY OPEN.

ANYBODY COULD MAKE THIS DEAL BASED ON WHAT WE ARE DOING.

WE ARE GETTING LATE INTO THE NIGHT AND THE HOPE IS THE

MARKET WILL MAKE THIS SIMPLE. THERE IS A CPI REPORT DUE OUT

THURSDAY. I THINK THE QUESTION IS THERE.

WILL THE GOVERNMENT REOPEN IN TIME FOR THAT REPORT TO

ACTUALLY COME OUT? SO WE GET FINALLY SOME

INFLATION NUMBERS TO PARSE. YVONNE:

DO THEY RELEASE THIS ONE FIRST BEFORE ALL THE OTHER ONES WE

MISSED? I DON'T KNOW. WHAT WILL THE FLOW OF DATA LOOK

LIKE? THAT WILL BE INTERESTING. THOSE THAT WATCH SAY IT WILL

TAKE SOME TIME BEFORE THE DATA COMES OUT, EVEN AFTER THE

GOVERNMENT REOPENS. DAVID: LIKE MOST GOOD THINGS. YVONNE:

YOU HAVE TO GET PEOPLE BACK TO WORK FIRST. THAT IS ONE STEP WE

ARE LOOKING AT. THERE STILL SEVERAL STEPS

BEFORE WE GET THERE, BUT CERTAINLY THAT IS THE FOCUS FOR

MARKETS. WE HAVE SEEN U.S. FUTURES PERK UP THIS MORNING.

IT IS LEADING TO THIS REGAINING OF ANIMAL SPIRITS AGAIN, THAT

THIS IS ONE FACTOR AND THEN YOU HAVE THE WHOLE NVIDIA STORY.

WE HEARD FROM TSMC AND THE LIKE AS WELL.

THAT RE-INVIGORATES THE TRADE TODAY. DAVID:

WE TALKED ABOUT AI, THE MACRO PICTURE SEEMS TO BE DECENTLY OK

WITH A STRONGER U.S. SESSION. SEPARATELY, YOU ARE GETTING

SOME UNEXPECTED PILLARS OF SUPPORT ON THE BENCHMARK.

WE TALKED ABOUT THIS LAST WEEK. THERE WAS A STRONG SHOWING ON

THIS DIVIDEND TAX STORY OUT OF KOREA THAT IS CONTINUING TO

SHOW ITSELF TODAY IN THE FORM OF FINANCIALS AND THIS RALLY WE

ARE SEEING AND SOUTH KOREA. NUMBER TWO IS TRAVEL STOCKS IN

CHINA. WE ARE LOOKING AT THIS UPSIDE

SURPRISE WE GOT IN MANY OF THE COMPONENTS.

HOLIDAY RELATED BOUNCE ON THE CPI PRINT ON THE WEEKEND.

AS YOU CAN SEE, THE MARKETS ARE TAKING THIS AND WE WILL SEE HOW

LONG IT LASTS. PRICING POWER DOWNSTREAM.

THE AIRLINES FOR EXAMPLE ARE SEEING DECENT UPSIDE.

POP MART UP ABOUT 7%. WE ARE STILL TRYING TO FIGURE

OUT WHY ON PRICE THIS IS THE BIGGEST AND MONTH SO FAR.

THERE'S NOT A LOT OF FUNDAMENTAL NEWS OUT THERE.

IT COULD BE THE BUYING ON DIPS FOLLOWING A FAIRLY VOLATILE

WEEK. CHIPS ARE A BIG ONE. WE ALLUDED TO THIS ONE.

THE TOP FOUR MOVERS ON THE BENCHMARK WITHIN THE I.T.

INDEX ARE THESE NAMES, WHETHER THAT IS IN GENIC, WHICH IS

TRADED IN MAINLAND CHINA, UNIT SHIP TRADED IN TAIWAN, AND THE

TOKYO LUNCH BREAK UP BY FIVE .7%.

OR YOUR HOUSEHOLD NAMES -- OR YOUR HOUSEHOLD NAMES.

THEY ARE DOING VERY WELL WITH THE EXCEPTION OF MS CI. YVONNE:

IT IS A BIG WEEK FOR EARNINGS BEFORE WE GET TO DATA.

THERE IS DATA ON FRIDAY FROM CHINA BUT BEFORE THAT WE WILL

GET THE LIKES OF TENCENT, SOFTBANK, HAN HIGH.

THEY WILL BE TALK ABOUT THAT STRONGER AI DEMAND LIFTING

EARNINGS, ESPECIALLY FOR TENCENT.

JD.COM WE ARE FOCUSING ON AS WELL.

OBVIOUSLY, THE WHOLE PRICE WARS WE ARE SEEING IN THE FOOD

DELIVERY SPACE WITH MEITUAN AND ALIBABA.

ARE THERE ANY SIGNS OF RIVALRY EASING? DAVID:

GUIDANCE FOR COMPANIES WILL BE IMPORTANT.

ON THAT NOTE, THAT IS IT FOR US. WE WILL SEE YOU TOMORROW.

INSIGHT WITH HASLINDA AMIN IS NEXT. ♪