Asian Chipmakers Fall on Breakthrough by China's CXMT

Author: Bloomberg Television · Watch on YouTube

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Original language: English

Original video: Asian Chipmakers Fall on Breakthrough by China’s CXMT · Channel: Bloomberg Television · 1:33:51 · Watch on YouTube

Topics: AI infrastructure and hardware, Markets and economy

Summary

Bloomberg Television’s “The China Show” covers a sharp selloff in Asian equities, led by Korean chipmakers, amid concerns about AI spending and competition from China’s CXMT. The program examines CXMT’s reported advances in memory-chip architecture, Tencent’s planned $5 billion bond sale to finance AI expansion, and investor doubts about whether AI investment will generate adequate returns. From the New Economy Forum in New Delhi, reporters discuss India’s growth ambitions, currency and market pressures, protests, and the infrastructure needed to support AI. Interviews from the IMF and World Bank meetings consider global growth, inflation, energy-price shocks, and escalating Middle East tensions.

Key points

South Korean equities plunged, with the KOSPI falling around 6–7% during the program, as semiconductor shares came under pressure.
Market concerns included AI companies’ high capital spending, the cost of financing, and the prospect of stronger competition from Chinese chipmakers.
CXMT reported progress in a new chip architecture that increases memory efficiency; the report said the product could enter mass production by 2028.
Tencent was reported to be raising $5 billion through dollar and offshore yuan bonds, with proceeds primarily intended to acquire chips and support its AI buildout.
A Bank of Singapore strategist said investors are focused on whether AI investment will deliver returns, while favoring defensive companies and selective exposure to AI-related sectors.
The IMF raised its global growth forecast for this year to 3.1% and projected 3.4% growth next year, while warning that resilience faces energy and interest-rate headwinds.
India’s New Economy Forum took place amid currency and market pressures, domestic protests, and the government’s long-term ambition to develop manufacturing and technology.
Forum discussions highlighted India’s potential role in AI infrastructure and semiconductor supply chains, alongside challenges including reliable power, jobs, and geopolitical uncertainty.
Egypt’s foreign minister expressed solidarity with Saudi Arabia, called for regional de-escalation and diplomatic solutions, and discussed the economic effects of disruptions affecting the Suez Canal.

Chapters

Start	Chapter	Summary
00:02	Asian markets sell off as AI concerns mount	The hosts introduce the Asian market decline, concerns about AI spending and CXMT, and the day’s coverage from India and the IMF meetings.
07:13	Security and political tensions in New Delhi	Yvonne Man describes security preparations for the New Economy Forum amid protests and tensions over electoral roll revisions.
12:11	New Economy Forum opens as markets weaken	Reporters discuss the forum’s theme, Modi’s expected appearance, and State Street’s views on AI, equities, and interest rates.
20:26	Market opening and Tencent’s AI financing	The program tracks losses across Asian markets and introduces Tencent’s planned bond fundraising for its AI ambitions.
27:38	Tencent bonds, DeepSeek, and CXMT	Bloomberg’s Minmin Low outlines Tencent’s financing plans, DeepSeek’s fundraising and robotics investment, and CXMT’s reported chip advance.
32:34	Chinese automakers’ European expansion	The show examines proposed European restrictions and BYD’s plans to expand local manufacturing, research, and hiring.
37:03	Global growth and energy-price risks	BNP Paribas economist Isabelle Mateos y Lago discusses economic resilience, energy shocks, higher rates, and AI-driven investment.
43:54	India’s ambitions amid near-term pressures	The hosts weigh India’s long-term growth prospects against currency defense, inflation, market weakness, and political protests.
47:46	IMF outlook and global resilience	Avril Hong reports the IMF’s revised growth projections and its view that AI investment supports growth even as risks remain.
50:57	India’s economic and geopolitical challenges	Shery Ahn discusses India’s growth, weather and inflation risks, strained trade relations, and its ties with China and the United States.
57:31	Chip-stock weakness and China equity strategy	A markets reporter and a Bank of Singapore strategist discuss regional selling, portfolio positioning, AI returns, and Chinese equities.
1:08:30	Luxury, autos, and continued market declines	The program notes pressure on luxury and auto stocks before reviewing further declines across Asian markets.
1:11:30	India’s AI infrastructure opportunity	Reporters discuss India’s investment prospects, potential semiconductor supply-chain development, power needs, and domestic employment concerns.
1:23:02	Egypt on regional tensions and the Suez Canal	Egypt’s foreign minister discusses support for Saudi Arabia, regional de-escalation, security cooperation, and disruptions affecting the Suez Canal.
1:32:07	Wrap-up: IMF outlook and India forum	The hosts recap the IMF outlook and market losses before returning to India’s economic ambitions and the forum’s upcoming address.

Quotes

One of the things market participants will be parsing is companies starting to benefit from the AI they have been deploying. — 15:38

We actually think rates are going to remain about where they are for a while. — 18:48

There is still a lot of need for AI spending. — 27:05

The only way out is through political and diplomatic solutions. — 1:27:02

Concepts and entities

CXMT, Tencent, State Street Investment Management, International Monetary Fund, New Economy Forum, BYD, Narendra Modi, Isabelle Mateos y Lago, Suez Canal

Full transcript (original language)

00:02 YVONNE: 9:00 A.M. IN HONG KONG, 6:30 A.M. RIGHT HERE IN NEW DELHI WE ARE COMING TO YOU LIVE FROM THE INDIA CAPITAL WHERE POLICYMAKERS, ASSET MANAGERS, AND CORPORATE EXECUTIVES ARE GATHERING FOR THE BLOOMBERG NEW ECONOMY FORUM. INDIAN PRIME MINISTER NARENDRA MODI IS SET TO SPEAK HERE IN A FEW HOURS. YOU ARE WATCHING “THE CHINA SHOW .” DAVID: I AM HERE IN HONG KONG. WE ARE COMING ONTO THE OPEN OF THE MARKETS ACROSS GREATER CHINA. LET’S GET THE TOP STORIES TODAY. KOREAN CHIPMAKERS LEAVING.

00:34 A MASSIVE DROP ACROSS ASIAN EQUITY MARKETS. CONCERNS ABOUT AI SPENDING AND COMPETITION FROM CHINA CXMT. ALSO ON THE PROGRAM, SOURCES TELL US TENCENT WEDNESDAY WAS $5 BILLION IT IS RAISING FROM BOND SALES TO BANKROLL ITS AI BUILDOUT. AND AT THE IMF AND WORLD BANK MEETINGS, EGYPT’S FOREIGN MINISTER JOINING US TO DISCUSS THE MIDDLE EAST CONFLICT AND ANY POTENTIAL RESPONSE COMING FROM CAIRO. [MUSIC]

01:17 DAVID: A GOOD MORNING TO ALL OF YOU. WE ARE LOOKING AT IF YOU ARE LONG IN THESE MARKETS – I GUESS LOOK AWAY. IF YOU HAVE THE STOMACH FOR IT, HERE IS WHAT IS HAPPENING. MASSIVE PLUNGE IN KOREA ABOUT ONE HOUR INTO THAT SESSION. SESSION LOWS, 5.5%. LET’S CALL IT THAT. WE ARE NOW BELOW THE 200 AND MOVING AVERAGE. WE CLOSED BELOW THIS LEVEL ONCE OR TWICE DURING THE JULY SELLOFF BUT QUICKLY RECOVERED THAT. A MASSIVE GAP LOWER. COMING ONLINE TODAY AFTER THE

01:49 LONG WEEKEND. 1.7. ALL THINGS TOGETHER, LOOKING AT A LOT OF SELLING PRESSURE ACROSS ASIAN EQUITY MARKETS. U.S. FUTURES AS YOU CAN SEE ALSO CONTINUING THE WEAKNESS FROM OVERNIGHT, ALTHOUGH IT IS WORTH POINTING OUT OF COURSE VOLUMES IN THE U.S. WERE VERY LIGHT IF THAT IS ANY SORT OF SILVER SOLACE THERE. THE DOLLAR HAS SEEN SOME TRADING SIDEWAYS, SLIGHTLY LOWER. WE ARE LOOKING AT OBVIOUSLY SOME STRENGTH COMING THROUGH AN

02:20 UPTREND MOMENTUM HAS BEEN ON THE UPSIDE AS FAR AS THE U.S. DOLLAR IS CONCERNED. BRENT CRUDE PULLING BACK A LITTLE BIT TO 05 IS THE KEY POINT. GOLD IS CONTINUING TO SEE SOME WEAKNESS GIVEN INFLATIONARY CONCERNS IN REAL YIELDS MOVING TO THE UPSIDE. SPEAKING OF YIELDS, THE OPPOSITE WAS TRUE. YEAR-TO-DATE LOOK AT CHINESE 10 YEAR YIELD, ONE TO WATCH IN THE SESSION TODAY. WE ARE TESTING YEAR-TO-DATE LOWS ON THE 10 YEAR YIELD. WATCH THIS VERY CLOSELY.

02:52 THE SET UP AS WE GO INTO THE OPEN TODAY, FUTURES COMING UP ON YOUR SCREEN. DOLLAR CHINA AT THE LOWEST LEVEL SINCE 2022. WE WILL SEE HOW THINGS HOLD UP IN THE FX MARKETS, BUT ALL THINGS EQUAL, WE ARE LIKELY GOING TO SEE AN ALREADY – AND ALREADY SO IN THE FUTURES MARKET A DEEPENING SELLOFF IS LIKELY WHAT WE WILL SEE WHEN MARKETS, CASH MARKETS OPEN IN JUST 27 MINUTES FROM NOW. OK, WE WILL SET MARKETS ASIDE. I PROMISE YOU, WE WILL BE DIPPING IN AND OUT OF THESE MARKETS THROUGHOUT THE COURSE

03:25 OF TODAY’S COVERAGE. IN THE MEANTIME, LARGE REPORTS AT THE NEW ECONOMY FORUM TAKING PLACE IN NEW DELHI. YVONNE MAN IS THERE ON THE GROUND FOR US TO TAKE US THROUGH WHAT IS GOING ON. QUITE A TIME TO BE TALKING ABOUT THIS, TO BE TALKING ABOUT INDIA. LAY THE GROUNDWORK FOR US. YVONNE: YEAH. AT A TIME WHEN MARKETS ARE REALLY SELLING OFF ON THESE AI FEARS, THE BROADCOM CEO SAID INVESTORS ARE LIKE GAMBLERS RIGHT NOW. THAT SET SOME SHIVERS ACROSS THE MARKETS, THIS IS COMING AGAINST THE BACKDROP OF ALL OF

03:58 THESE BIG THEMES HAPPENING HERE AT THE NEW ECONOMY FORUM IN INDIA. SEEMS LIKE THEY ARE ALL CONVERGING AT THE SAME TIME. WHEN WE TALK ABOUT THIS EQUITY MARKET THAT HAS STRUGGLED, THE HISTORIC DEFENSE OF THE RUPEE THE IBI HAS DONE TO PUT A FLOOR ON THE CURRENCY, CONTRAST THAT TO THE GROWTH AMBITIONS INDIA IS PURSUING, AND THAT IS THE MESSAGE I THINK THAT NARENDRA MODI, THE PRIME MINISTER, WILL BE PLAYING OUT IN A FEW HOURS NOT FAR AWAY FROM WHERE WE ARE FROM THE PALACE HERE. BUT IT WILL BE INTERESTING. THE CONTRAST WE HAVE SEEN, JUST

04:32 ABOUT 10 KILOMETERS FROM WHERE WE ARE RIGHT NOW. THERE ARE STUDENT PROTESTS UNDERWAY AND WHAT HAS BEEN A VERY DRAMATIC COUPLE OF DAYS OF THE WEEKEND WHEN PROTESTERS WERE DETAINED, OPPOSITION LEADERS WERE ALSO DETAINED AS THEY WERE TAKING OVER THE STREETS THERE IN PROTEST OF THESE ALLEGED VOTER REGISTRATION AND THIS VOTER ROLLOFF – THE REVISIONS OF THE VOTER ROLLS. THERE IS A TWO-MINUTE ON THE GROUND BUT A HUGE STORY WHEN IT

05:04 COMES TO INDIA, RIGHT? MODI AND HIS ADMIN’S MISSION BEEN PUSHING FOR INDIA TO BECOME THE DEVELOPED MARKET BY 24/7. CENTRAL TO THAT THEME IS REALLY GOING TO BE PUSHING MANUFACTURING, INVESTMENT AS WELL AS TECHNOLOGY, WHICH WILL BE A KEY FOCUS OF THIS CONFERENCE FOR THE LAST THREE DAYS OR SO. SO HOW IS HE GOING TO RELAY THAT MESSAGE? MAYBE ADDRESSING SOME OF THE DOMESTIC ISSUES ON THE GROUND.

05:35 BUT THIS IS COMING AT A TIME WHEN YOU ARE TALKING ABOUT WALL STREET REALLY LOOKING AT INDIA WITH A VERY CLOSE LENS NOW WHERE THE LIKES OF BLACKSTONE, WHO HAS BEEN INVESTING IN INDIA, SAYING WE ARE AT THE TIPPING POINT OF CAPITAL BEING DEPLOYED IN THIS MARKET. DAVID: YEAH. I THINK THE QUESTION RIGHT NOW IS I THINK THERE IS NO BETTER PLACE THAT REPRESENTS THE INTERSECTION OF MANY OF THE

06:06 THINGS WE DISCUSSED QUITE LITERALLY RECENTLY AND QUITE LITERALLY WHERE YOU ARE. SO THE AI STORY AND THE DISPLACEMENT WE ARE SEEING IN THE EQUITY MARKET. WE WERE SPEAKING YESTERDAY WITH FRANKLIN TEMPLETON. NUMBER ONE, THEY THOUGHT SOMETHING DIFFERENT AT THE START OF THE YEAR AND THE POINT YOU MADE ON THE DEFENSE OF THE CURRENCY IS POINT NUMBER ONE. POINT NUMBER TWO, THE EQUITY MARKET. ALL THE SOCIAL UNREST YOU JUST OUTLINED. I THINK IT WILL BE INTERESTING

06:41 HOW WE ARE ABLE TO DISTILL IN THE CONVERSATIONS WE ARE HAVING THE NEAR TERM PAIN AND DISLOCATIONS WE ARE SEEING RIGHT NOW FROM THE STRUCTURAL TAILWINDS WE ARE SEEING IN THAT ECONOMY AND HOW WE THREAT THAT NEEDLE BETWEEN THE CURRENT CHALLENGES AND THE LONGER-TERM OPPORTUNITIES. I AM CURIOUS, WHAT IS SECURITY LIKE AROUND WHERE YOU ARE RIGHT NOW? WHAT SORT OF CONVERSATIONS ARE YOU HAVING TODAY ON THE GROUND THERE? YVONNE: AS YOU KNOW, THIS IS THE FIRST TIME THAT BLOOMBERG HAS BROUGHT

07:13 THE NEW ECONOMY FORUM TO INDIA. RIGHT? IN TERMS OF THE LOGISTICS AN EVENT OF THIS SCALE TO AN ENTIRELY NEW COUNTRY IS ONE THING WE HAVE BEEN TRYING TO DEAL WITH THE LAST COUPLE WEEKS OR MONTHS OR SO. BUT NOW THAT IT IS COMING TO PLAY NOW, YOU ARE FEELING THAT BUZZ. YOU ARE FEELING THAT A LOT IS ABOUT TO HAPPEN BECAUSE THIS IS PROBABLY THE CALM BEFORE THE LOGISTICAL STORE. THERE IS A HEAVY SECURITY PRESENCE IN AND AROUND THE

07:49 PALACE WHERE WE ARE AND THE TAJ PALLET – PALACE WHERE NARENDRA MODI WILL SPEAK. IT WILL BE QUITE INTERESTING. WE TALKED ABOUT THE PROTESTS ON THE GROUND. THERE HAS BEEN SOME PART OF THE CAPITAL THAT HAVE BEEN IN SOME WAYS SHUT DOWN. THERE IS ALSO OF COURSE WHEN IT COMES TO THE SECURITY PRESENCE NOT JUST AT THIS EVENT BUT IN AND AROUND THE CAPITAL AS WELL AFTER THIS VERY UNFOLDING OF DRAMATIC EVENTS OVER THE WEEKEND WHEN IT COMES TO THE STUDENT PROTESTS. OBVIOUSLY, WHAT WE HEARD

08:21 YESTERDAY OF SOME OF THESE GROUPS THAT ARE STORMING AND DEMANDING FOR THE ELECTION COMMISSIONER TO RESIGN AFTER THE ALLEGED VOTER – THE REVISION OF THE VOTER ROLLS. THERE WILL BE A LOT AT STAKE HERE POLITICALLY AND AT A TIME WHEN THERE ARE SOME KEY ELECTIONS COMING UP FOR INDIA. SO THE PRESSURES, EXTERNAL PRESSURES ARE ALSO MOUNTING HERE FOR THE MODI GOVERNMENT AS ALL OF THESE THINGS ARE REALLY

08:53 DEVELOPING IN FRONT OF OUR EYES RIGHT NOW. CERTAINLY, YES, IT WILL BE 500 PEOPLE. AFTER MODI SPEAKS, THEY WILL ALL COME HERE, WHICH IS ABOUT A 10 MINUTE DRIVE FROM HERE. HOW WE WILL MOVE EVERYONE HERE WILL BE INTERESTING TO SEE. IT WILL GET BUSY AND THEN WE WILL KICK OFF NEXT THREE DAYS OF DISCUSSIONS RIGHT HERE, BUT YES YOU DEFINITELY FEEL THAT BUZZ GOING ON. DAVID: JUST PAST 6:30 IN THE MORNING WHERE YVONNE IS. WE ARE ABLE TO TAKE A STEP BACK AND DISSECT THIS OBJECTIVE,

09:25 CHALLENGES RIGHT NOW. THERE IS NO BETTER OPPORTUNITY TO TALK ABOUT THESE CHALLENGES FRONT AND CENTER. ANY GIVEN SUNDAY, THE SIX INCHES IN FRONT OF YOUR FACE, ALL OF THESE FRONT AND CENTER AS WE BEGIN THESE CONVERSATIONS AROUND INDIA, WHETHER THAT IS WHAT IS HAPPENING ON THE GROUND COME ACROSS THESE MARKETS WITH INDIA FRONT AND CENTER OF THE SOFTWARE DISPLACEMENT ISSUE AS IT PERTAINS TO THE AI STORY. AND THE MACRO HEADWINDS COMING THROUGH, HIGHER YIELDS, HIGHER

09:57 OIL PRICES, INFLATION PROBLEMS. IN CASE YOU ARE JUST JOINING US RIGHT NOW, UNDERSTANDING WHERE INDIA IS ON THE CURRENCY ANGLE AS WELL. REMEMBER THE TEMPER TANTRUM? 13 YEARS AGO, 2013. YVONNE: YEAH. DAVID: THE MAGNITUDE OF DEFENSE MECHANISMS THE RPI PUT IN PLACE– RBI PUT IN PLACE, YOU HAVE TO GO BACK 13 YEARS TO SEE THE AMOUNT OF DEFENSE, THE BARRIERS OFFICIALS HAVE PUT IN PLACE TO UNDERSCORE THE DEFENSE OF A CURRENCY, BY THE WAY, AND

10:27 THIS HAS BEEN A MOVING TARGET OVER THE COURSE OF MANY YEARS. 80, 85, 90, 95, AND NOW WE ARE LOOKING AT TRIPLE DIGITS. WE SAW THE STRENGTH YESTERDAY ON THE BACK OF THOSE BIG ANNOUNCEMENTS ON THE WEEKEND TO STABILIZE THE CURRENCY MARKETS. TAKE A STEP BACK. HERE WE ARE. TRIPLE DIGITS ON THE EXCHANGE RATE. GOING INTO THE SESSION TODAY. PUT EVERYTHING TOGETHER FOR YOU. THE INTERSECTION OF MANY OF THESE ISSUES WE TALKED ABOUT, PERFECT PLACE TO HAVE YVONNE

11:00 AND THE TEAM THERE IN INDIA FOR US IN DELHI FOR THE NEW ECONOMY FORUM. IT IS THE FIRST WE ARE HOLDING IT ON THE GROUND, AS WE OUTLINED FOR YOU. LOGISTICAL CHALLENGES, BUT HERE WE ARE IN A SHOW. LET’S GO ON. WE WILL TAKE YOU BACK TO YVONNE LATER ON ONCE WE HAVE MORE INFORMATION AND DEVELOPMENT. IT IS VERY EARLY IN INDIA. WE ARE LIVE WITH A TEAM IN BANGKOK FOR THE IMF MEETINGS. 15 MINUTES FROM NOW, I WILL BE GETTING AN UPDATE ON THEIR NEW

11:32 THINKING ABOUT GROWTH, INFLATION, AND ALL OF THOSE SEPARATE CONVERSATIONS COMING THROUGH OVER THE COURSE OF THE NEXT TWO DAYS OUT OF THE IMF AND WORLD BANK MEETINGS IN BANGKOK. BACK TO HONG KONG WHERE I AM, 19 MINUTES AWAY FROM THE OPENING BELL. FUTURES ARE LOOKING LIKE THIS. BRACE YOURSELVES. THIS IS “THE CHINA SHOW.” ♪

12:11 YVONNE: WE ARE LIVE BACK HERE AT THE NEW ECONOMY FORUM IN NEW DELHI, COMING DOWN TO THE PRIME MINISTER NARENDRA MODI’S SPEECH THAT WILL KICKOFF THIS CONFERENCE IN A FEW HOURS. LET’S BRING IN SHERY AHN AT THE VENUE IN NEW DELHI WHERE THE PRIME MINISTER IS SET TO SPEAK. HOW ARE THINGS LOOKING RIGHT NOW? WHAT ARE YOU EXPECTING TODAY? SHERY: I GOT TO SAY IT IS REALLY HOT AND STICKY HERE AT THE HOTEL IN CENTRAL DELHI. IT HAS BEEN RAINING. WE ARE OUTSIDE.

12:43 BUT THIS HAS NOT REALLY DAMPENED THE MOOD AS WE AWAIT PRIME MINISTER MODI TO MAKE HIS APPEARANCE FOR HIS SPEECH. WE HAVE ALREADY SEEN DISCIPLINES, HUNDREDS OF THEM IN THE BUSINESS, CORPORATE WORLD, IN THE GOVERNMENT POLICY WORLD AS WELL, THAT WILL BE ATTENDING THIS SESSION. THIS IS THE EIGHTH EDITION. THE THEME FOR THIS YEAR IS DEFINING THE NEW LEVERS OF POWER. THAT IS SURPRISING BECAUSE WE TALKED ABOUT GEOPOLITICS, THE ECONOMIC CHAOS AROUND THE WORLD, AND THIS BACKDROP OF

13:16 COMING HERE AND SECURITY IS ALREADY PRETTY HIGH. IT MUST BE THE SAME FOR YOU, BUT HERE WE ARE ASKED TO MOVE FROM THE FRONT SIDE OF THE HOTEL TO THE BACK BECAUSE SECURITY WAS RAMPING UP WITH THE APPEARANCE OF NARENDRA MODI, WHO ALREADY WELCOME TO THE NEW ECONOMY FORUM , SAYING INDIA IS NOT JUST AN INVESTMENT DESTINATION ANYMORE, IT IS A RELIABLE PARTNER IN SHAPING THE GLOBAL FUTURE. NOW, SECURITY HAS BEEN TYPED AND RAMPED UP IN THE LAST FEW DAYS. WE HAVE SEEN IN WEEKS THAT PROTESTERS HAVE BEEN OUT AND

13:51 ABOUT SEEKING ELECTION REFORMS. WE ARE ON HIGH ALERT, ESPECIALLY AROUND CENTRAL DELHI, AROUND A VERY BUSY ENTERTAINMENT DISTRICT IN ORDER TO SEE WHERE THESE POLITICAL DEMONSTRATIONS GO FROM HERE. DAVID: FANTASTIC, SHERY. WE HAVE OUR TEAM ON THE GROUND COVERING ALL OF THESE THINGS. SHERY AND YVONNE THERE. WE ARE JUMPING ACROSS THE REGION, BACK HERE IN HONG KONG WITH ME AS WE GO INTO THE OPEN TODAY. WE ARE UNDER 14 MINUTES AWAY.

14:28 MEANTIME, LET US TAKE YOU TO AVRIL WHO IS OUT OF CHINA, WHERE THE IMF AND WORLD BANK MEETINGS ARE TAKING PLACE. AVRIL IS THERE WITH HER NEXT GUEST. AVRIL: ABSOLUTELY. I HAVE WITH ME NOW THE GLOBAL CIO AT STATE STREET INVESTMENT MANAGEMENT. GREAT TO HAVE YOU IN BANGKOK FOR THE IMF WORLD BANK MEETINGS. WHAT CONVERSATIONS HAVE YOU BEEN HAVING SO FAR? I KNOW IT IS ONLY DAY TWO, BUT THINGS ARE WRAPPING UP. . >> THEY ARE,. THE FIRST AND FOREMOST – THEY ARE.

15:03 THE FIRST AND FOREMOST IS HIGHER INFLATION AS WELL AS MONETARY INFLATION TIGHTENING AS WELL AS THE AI TAILWINDS AND WHAT THAT MEANS FOR THE ECONOMIES GLOBALLY. AVRIL: WHEN IT COMES TO THE AI TAILWINDS, WHAT ARE YOU SEEING IN TERMS OF THE POTENTIAL FOR RISK THOUGH? BECAUSE WE ARE HEARING SOME OF THESE BIG TECH COMPANIES WERE MADE ABOUT CAPITAL OR THE AI FUNDING. THAT MIGHT ACTUALLY RESTRAIN THEIR CAPEX PLANS. LORI: THERE – AS WE GO INTO Q3 EARNINGS,

15:38 ONE OF THE THINGS MARKET PARTICIPANTS WILL BE PARSING IS COMPANIES STARTING TO BENEFIT FROM THE AI THEY HAVE BEEN DEPLOYING. WE HAVE SEEN A RATCHETING UP OF EARNINGS EXPECTATIONS. CERTAINLY THAT IS CENTERED IN AI AND TECHNOLOGY, BUT IT IS BROADER THAN THAT IN PLACES LIKE HEALTH CARE AND FINANCIALS. IT IS BOTH THE AI TRADE AT ITS CORE BUT ALSO HOW THAT BROADENS OUT TO THE GLOBAL ECONOMY. AVRIL: HOW ARE YOU THEN ALLOCATING? HOW IS IT LOOKING LIKE ASIA VERSUS THE U.S.? LORI:

16:09 WE REMAIN OVERWEIGHT TO THE U.S., PARTICULARLY IN LARGE-CAP EQUITIES BECAUSE THERE IS RESILIENCY THERE. WE THINK THAT IS THE EPICENTER OF A LOT OF THE AI INNOVATION. WE ARE NOT PARTICULARLY WORRIED ABOUT CAPITAL RAISING BECAUSE AS WE SEE SO FAR, EVEN ON A COST OF CAPITAL IN THE SINGLE DIGITS, WHEN YOU ARE PRINTING 25% TO 30% EQUITY GROWTH, THAT DOES NOT DAMPENED DOWN THE DEMAND, BUT WE LIKE AND MORE BROADLY. WE THINK THERE ARE OPPORTUNITIES IN ASIA, PARTICULARLY IN SOME DEVELOPING ECONOMIES, AND WE ARE QUITE

16:40 CONSTRUCTIVE ON JAPAN. AVRIL: ARE THERE ANY SPECIFIC SECTORS THAT YOU ARE SEEING THAT BROADENING OUT PARTICULARLY FOR ASIA? HOW SELECTIVE DO YOU HAVE TO BE IN THIS PART OF THE WORLD? LORI: CERTAINLY, YOU CANNOT AFFORD TO IGNORE THE BIG NAMES, THE BIG THREE IF YOU WILL, BUT WE THINK BEYOND THAT THERE IS A GROWING GROWTH OPPORTUNITY IN THE REGION. SO FINANCIAL SERVICES IS SOMETHING WE LIKE. WE ALSO THINK THERE ARE A NUMBER OF CONSUMER SECTORS THAT SHOULD BENEFIT FROM THAT SO LONG AS WE DO NOT SEE ANY DESTABILIZATION FROM RATE HIKING. AVRIL:

17:13 I WAS GOING TO ASK, WHEN IT COMES TO FINANCIAL SERVICES OR FINANCIAL RELATED STOCKS, WHAT IS THE ERA OF HIGHER YIELDS GOING TO MEAN FOR THEM EVENTUALLY? DO YOU SEE A TURNING POINT MATERIALIZING? LORI: THERE ARE A COUPLE OF DIFFERENT VECTORS THERE. ON THE ONE HAND, IT IS GOOD TO HAVE A POSITIVE YIELD CURVE BECAUSE YOU CAN BORROW CHEAP IF YOU ARE A FINANCIAL COMPANY AND CAN LEND MUCH MORE HIGH SO YOU CAN MAKE A SPREAD. AS YOU NOTE, IF YOU START TO SEE RATES TOO HIGH, THAT POTENTIALLY DAMPENS DEMAND FOR CREDIT SO THERE IS THAT SWEET

17:45 SPOT. WE ARE THINK RIGHT NOW RATES ARE HIGH ENOUGH BECAUSE THE RETURN ON THE EQUITY IS QUITE COMPELLING, BUT THERE WILL BECOME A POINT WHERE THAT IS A PROBLEM. IT IS NOT TODAY. AVRIL: FOR TREASURIES IN PARTICULAR, WE CAME INTO THIS YEAR THINKING WE COULD SEE LOWER 10 YEAR YIELDS. LORI: YEAH. AVRIL: WHAT WAS STATE STREET’S ASSESSMENT BACK THEN AND HOW HAVE THINGS CHANGED AND WHAT ARE YOU SEEING POTENTIALLY IN THE HIGHER END USE? LORI: COMING INTO 2026, WITHOUT THE

18:16 ECONOMIC RECOVERY WOULD CONTINUE BUT THAT IT WOULD SLOW, SO WE WERE ACTUALLY FORECASTING 10 YEAR YIELDS TO DROP THROUGHOUT THE COURSE OF 2026 AND ACTUALLY TO SEE SOME RATE CUTS. CERTAINLY WHEN THE WAR ERUPTED IN FEBRUARY, WE ACTUALLY DOUBLED DOWN ON THAT IDEA BECAUSE WE SAT HIGHER OIL PRICES AND OTHER INFLATIONARY IMPULSES WOULD REALLY TALK OF SOME OF THE CONSUMER SENTIMENT AND POTENTIALLY LEAD TO A SLOWDOWN. BUT AS WE WENT THROUGH THE YEAR, WHAT WE MISSED CERTAINLY

18:48 WAS THIS AI TRADE HAS WAY MORE DETAIL TO BIT AND A LOT MORE LEGS IN TERMS OF CAPEX, IN TERMS OF HOW THAT HAS TRANSFORMED BUSINESSES, AND ULTIMATELY WE ACTUALLY THINK RATES ARE GOING TO REMAIN ABOUT WHERE THEY ARE FOR A WHILE. AVRIL: THERE HAS BEEN SO MUCH UNCERTAINTY ON THE RATE TRAJECTORY. TO YOUR POINT, IT SHIFTED FROM WHERE WE THOUGHT IT WOULD BE START OF THE YEAR TO WHERE WE ARE NOW, SO WHAT ARE THE RISKS TO THAT VIEW, AND WHAT ARE THE ECONOMIES THAT PERHAPS MARKETS ARE POTENTIALLY MISPRICING THE RATES TRAJECTORY? LORI: ONE OF THE GOOD THING IS YOU

19:20 CAN ACTUALLY GET YIELD ON RISK-FREE INVESTMENTS. IT WAS A LONG PERIOD OF TIME WHEN YOU WERE GETTING ESSENTIALLY ZERO IN TERMS OF INTEREST RATES FROM USB ASSETS. 5.25%, COASTER 6% ON A 30 YEAR TREASURY, SUDDENLY THAT IS A PRETTY COMPELLING STORY. PLACES WE ARE CONCERNED ABOUT ARE THE CREDIT SECTORS WHERE THE SPREAD IS JUST NOT COMPENSATING YOU FOR THE INCREMENTAL RISK, SO WE HAVE BEEN LIGHTENING UP ON HIGH YIELD FOR EXAMPLE, AND WE STILL

19:51 THINK U.S. WHICH MARKETS ARE A BIT MORE INSULATED THAN SOVEREIGN BONDS OUTSIDE THE U.S. AVRIL: WE HAVE TO LEAVE IT THERE FOR TODAY BUT NICE TO CHAT WITH YOU. FINK YOU FOR YOUR TIME. BACK TO YOU GUYS. DAVID: THE GLOBAL CIO OF STATE STREET INVESTMENT MANAGEMENT WITH AVRIL FOR US ON THE GROUND. ON THAT LAST POINT THEY JUST MADE, HERE IS A BIG NUMBER FOR YOU. 8 TRILLION U.S. DOLLARS IS THE AMOUNT OF MONEY SITTING IN MONEY MARKET FUNDS. JUST UNDER THAT AMOUNT. NOT A BAD WAY TO DO NOTHING.

20:26 HANG SENG INDEX DOWN IN THE PREMARKET. THE PAIN POINT IS COMING TODAY THROUGH KOREA, DOWN 6% AS YOU CAN SEE ON YOUR SCREEN. COMING BACK ONLINE TODAY. 2.5. ASIA-PACIFIC BENCHMARK DOWN MORE THAN 1.5 POINTS. THIS IS “THE CHINA SHOW.” ♪

20:56 DAVID: WELCOME BACK. I WAS MEANT TO BE TALKING ABOUT THE HONG KONG MARKETS, WHICH I WILL, BUT JUST MENTIONED, STAY TUNED FOREVER UPDATE ON KOREA BECAUSE THIS MARKET CANNOT FIND A FLOOR. KOSPI NOW BELOW 6000, DOWN OVER 6% AS I SPEAK. WE ARE SET TO OPEN NUMBER ACROSS THE HONG KONG MARKETS. DOWN 1%, COMPARATIVELY NOT AS BAD RELATIVELY SPEAKING. THE BROADER EU CONVERSATIONS HERE. RELIGIOUS SPENDING

21:29 REGISTRATIONS FOR ONE OF ITS MODELS. WE’LL TALK ABOUT THAT IN A MOMENT. DOWN NOT A LOT. THAT IS A GOOD WAY TO JUXTAPOSE THE DECLINES WE ARE SEEING IN CHINESE MARKETS AGAINST TOSSING OUT THE WINDOW IN SOME CASES ACROSS THE REGION HERE. TENCENT ON YOUR SCREENS. THIS IS THE EQUITY MARKET BUT OF COURSE THE COMPANY HAS BEEN FUNDRAISING. I THINK IT IS A FURTHER $5 BILLION IN TERMS OF BONDS. IT IS THE SAME STORY. ANOTHER BIG TECH COMPANY HITTING THESE MARKETS.

22:05 TO FUND ITS AI AMBITIONS. WE ARE DOWN 1.1%. CALL AT FIVE DOLLARS ON SHARES OF TENCENT. COMING UP ON YOUR SCREEN AS WELL, WE ARE LOOKING AT THE LAUNCH INTRODUCING THE AI MODEL, FOR WORKFLOWS IN THAT SPECIFIC SECTOR. WE ARE DOWN 3%. ABOUT TO TAKE OUT $600 HERE. AS PROMISED, KOREA, THIS ONE IS

22:36 NOW AT 5994, 6.1%. LOTS MORE AHEAD INCLUDING THE OPENING BELL AND MAINLAND CHINA. THIS IS “THE CHINA SHOW.” ♪ YVONNE: WELCOME BACK. YOU’RE WATCHING “THE CHINA

23:07 SHOW.” WE ARE ABOUT TO GO LIVE TO NEW DELHI. BUT RIGHT NOW, WE ARE FOCUSING ON THE OPENING OF MARKETS HERE IN GREATER CHINA. CERTAINLY GOING TO BE ONE THING TO FOCUS ON GIVEN THE AI NERVES SEEM TO BE COMING TO FRAY. THE KOSPI SEEING 5% OR 6% LOSSES HERE. REALLY LEAD BY THE CHIPMAKERS. YOU HAVE THE CXMT NEWS THAT SEEMED TO BE THREATENING THAT PART OF THE TRADE YESTERDAY. IT SEEMS LIKE THAT IS CONTINUING ON HERE TODAY. THEN OF COURSE THE COMMENTS

23:44 FROM BROADCOM SAYING INVESTORS ARE SENDING MORE SHOCK WAVES THROUGH THE MARKETS THIS MORNING. DAVID: ANY ALLUSION TO THE LACK OF AGENCY WE HAVE OVER THE FUTURE SENDS MORE THAN SHIVERS WHEN WE LOOK AT THESE MARKETS, PARTICULARLY WHEN – THE REASON I ALLUDE TO IT THAT WAY, HOW CLOSELY CORRELATED PARTS OF THE ONSHORE MARKET IN CHINA ARE TO THE BROADER SELLOFF IN THE STOCKS INDEX. CASE IN POINT, THE CHINEXT INDEX IS NOW AS CLOSELY

24:17 CORRELATED TO THE PHILLY SEMICONDUCTOR INDEX AS IT HAS BEEN IN YEARS. 2.5%. SHANGHAI HAS NOW TAKEN OUT THE 4000 LEVEL QUITE MEANINGFULLY TO THE DOWNSIDE. THE SELLOFF IS CONTINUING, ONE .4%. THE BANK OF SINGAPORE JOINS US AND ABOUT 45 MINUTES TO GIVE US THEIR SENSE OF WHAT DO YOU DO? THAT IS A KEY QUESTION. 1.7% TO THE DOWNSIDE. CXMT ON THE BACK OF WHAT YVONNE WAS ALLUDING TO, COMING UP ON YOUR SCREENS. REPORTING SOME PROGRESS.

24:56 MARKETS NOT LISTENING, DOWN ABOUT 5%. I THINK IT IS THE FIRST TIME IN MANY WEEKS WE ARE TRADING WITH A FOREIGN HANDLE. THIS IS AFTER THE MASSIVE DEBUT AND IPO. WE HAVE BEEN HOVERING ABOVE THE 50 HANDLE BEFORE THIS. PERHAPS MORE IMMUNE, LESS RELATED TO WHAT IS GOING ON IS HONG KONG. WE WILL LIKELY SEE THE CLIENTS. THERE WE GO WITH BENCHMARKS. SLIGHTLY NEGATIVE ON THE HANG SENG TECH INDEX. TENCENT COMING UP. WE TALKED ABOUT THE LATEST FUNDING ROUND COMING OUT.

25:31 ZHIPU, MINIMAX, ALIBABA THE BIG ONES COMING UP. HERE IS THE THING, RATES ARE HIGHER, YIELDS ARE HIGHER. IT IS HAVING AN IMPACT. THE ECONOMIC IMPACT PLAYING ON MARKETS ALREADY. IT IS NOT PLAYING AS FAR AS YOU’RE GETTING PRODUCTIVITY IN TERMS OF BEING RESTRICTED IN THE ECONOMIC SPACE. BUT I THINK TO THE POINT ON THIS ONE, DESPITE HIGHER RATES,

26:02 CAMPEN – COMPANIES CANNOT STOP RAISING MONEY IN THE DEBT AND OIL MARKETS. CHINA IS NOT A STRANGER TO THE DAILY TREND. YVONNE: YOU SEE THE PLAYERS DURING THIS. THE TENCENT ONE IS CERTAINLY FRONT AND CENTER. WE ARE TALKING ABOUT CLOSE TO $5 BILLION WHEN IT COMES TO DOLLAR AND OFFSHORE YUAN DENOMINATED BONDS. THIS IS JUST THE LATEST IN

26:32 TERMS OF THAT GLOBAL WAVE OF FUNDRAISING WE HAVE SEEN AMONG SOME OF THESE ASIA PLAYERS. WE HAD THE 12 BILLION DOLLARS IN PRIVATE FUNDING FROM DEEPSEEK NOT LONG AGO. LAST MONTH IT WAS THE 1.1 BILLION JUNK BOND FROM SOFTBANK, THE LARGEST WE HAVE SEEN. THEN THERE’S THE LIKES OF THE PEER PLAYERS LIKE Z.AI. WE ARE STILL TALKING ABOUT THE IPO ON THAT ONE.

27:05 THERE IS STILL A LOT OF NEED FOR AI SPENDING. FOR HOW INVESTORS INTERPRET THAT NOW WILL BE UP IN THE AIR, WHETHER WE STILL NEED THIS MUCH AI SPENDING. WHAT THIS MEANS FOR THE WHOLE BUILD OUT HERE AT A TIME WHEN PEOPLE ARE QUESTIONING THE COMPETITION AND HOW IS THIS ALL GOING TO PLAY OUT, THIS WHOLE AI RACE? DAVID: ALSO, WHO NEEDS AN IPO WHEN YOU CAN RAISE MONEY IN MANY OF THE HEIRS OF THIS MARKET, NOT INCLUDING OF COURSE EQUITY MARKETS.

27:38 JUST SOME OF THE CONVERSATIONS YVONNE WILL BE HAVING IN PRIVATE MARKETS LATER ON. LET’S GET BACK TO ONE OF OUR STORIES TODAY ON TENCENT. YOU PROBABLY SAW THAT, 1.7 THE LATEST BOND OFFERING. MINMIN LOW HAS THE DETAILS OF THIS LATEST FUNDING ROUND IN THE DEBT MARKET. MINMIN: TWO YVONNE’S POINT ABOUT WHETHER INVESTORS ARE CONVINCED, YOU LOOK AT TENCENT STOCK YEAR TO DATE. IT IS DOWN CLOSE TO 30% ALREADY. IT IS INTERESTING, WE HEARD FROM INTEL TALKING ABOUT HOW HIGH BORROWING COSTS IS GOING

28:09 TO BE. ONE OF THE BIGGEST CONSTRAINTS FOR AI FUNDRAISING, BUT PERHAPS NOT THE CASE IN CHINA WHEN YOU HAVE THE 10 YEAR YIELD CLOSE TO RECORD LOWS. THIS IS THE SECOND ROUND OF BOND ISSUANCE FROM TENCENT THIS YEAR, FOLLOWING FROM THE JUNE ASSURANCE THAT WAS CLOSE TO 4.7 BILLION DOLLARS. THIS TIME THEY ARE ISSUING $5 BILLION, OF WHICH UP TO $2 BILLION COULD BE DOLLAR NOTES AND THE REST WOULD BE OFFSHORE YUAN NOTES. WE DID SEE THE JUNE QUARTER, WENT UP BY 176 PERCENT AS THEY

28:44 TRY TO CATCH UP WITH THEIR RIVALS LIKE ALIBABA AND BYTEDANCE. THESE COMPANIES’ SPENDING FAR OUTPACES TENCENT’S SPENDING. THERE’S ALSO THIS DEAL WITH ORACLE, RENTING THESE OVERSEAS DATA CENTERS IN SOUTHEAST ASIA. SOURCES SAY THE LATEST RUN OF FINANCING WILL BE PRIMARILY USED TO ACQUIRE CHIPS.

29:19 YVONNE: SORRY ABOUT THAT. WE ARE GOING THROUGH SOME TECHNICAL ISSUES. LET’S TALK ABOUT DEEPSEEK. HOW MUCH IS IT INVESTING AND WHERE ARE THE FUNDS COMING FROM? MINMIN: DEEPSEEK HAS BEEN GOING IT’S ON ROUNDS OF FUNDRAISING. IT WAS TARGETING 30 BILLION YUAN TO FUND DATA CENTER BUILDOUT. THE EXCESS CASH IT SEEMS THEY ARE TRYING TO INVEST IN NEW

29:53 STARTUPS. THIS ONE IS A START UP THAT IS CREATING THE BRAINS FOR ROBOTS. THEY ARE SAID TO BE INVESTING TENS OF MILLIONS OF SEED FUNDING. THIS WOULD EXPAND DEEPSEEK’S FOOTPRINT INTO THE HUMANOID ROBOTICS SPACE AFTER THEY ACQUIRE THE 2% STAKE AS WELL, POTENTIALLY LEADING TO PARTNERSHIPS THAT BUILD ON DEEPSEEK’S MODEL. DAVID: TELL US ABOUT CXMT. MINMIN: THIS IS THE NEWS THAT CAME OUT

30:24 OVER THE WEEKEND AT AN INDUSTRY EVENT IN SHANGHAI. CXMT SAID TO BE UNVEILING THIS KEY PROGRESS IN THEIR CHIP ARCHITECTURE. IT IS A LITTLE BIT TECHNICAL, BUT WHAT YOU NEED TO KNOW IS THEY HAVE INCREASED THE MEMORY, WHICH MAKES THE CHIP MORE EFFICIENT. THIS IS A TECHNOLOGY KNOWN AS THE FOUR F SQUARED CHIP ARCHITECTURE. IT IS SAID TO BE HITTING MASS PRODUCTION FOR THE NEW PRODUCT BY 2028, WHILE CXMT SAID TO BE

30:55 UNVEILING THIS NEW PRODUCT BY THE END OF THIS YEAR. IT IS GIVING THE OTHER RIVALS A RUN FOR ITS MONEY. THE KEY LEADING TECHNOLOGY IS INSTEAD OF SQUEEZING MORE SALES HORIZONTALLY, THEY HAVE SHIFTED FUNDAMENTALLY FROM HORIZONTAL TO VERTICAL CHANNELS. THAT HAS ALLOWED THEM TO ADJUST THEIR KEY PROCESSES BECAUSE TRADITIONAL MANUFACTURING FLOWS DOES NOT ADAPT TO THIS NEW STRUCTURE. IT IS A KEY LEAP IN THE TECHNOLOGY. THAT IS SOMETHING HIGHLY ANTICIPATED.

31:27 THE STOCK DOES NOT SEEM TO BE PERFORMING THAT WELL EVEN ON THE BACK OF THIS NEWS. DAVID: YOU AN ACCURATE NUMBER FOR HOW THE STOCK IS DOING. MINMIN LOW, OUR CHINA CORRESPONDENT. WE ARE DOWN THREE POINT 5% ON CXMT. THAT IS HELPING THE BEARS WHEN IT COMES TO THE BENCHMARKS. 3.4% TO THE DOWNSIDE. LET’S HAVE A LOOK AT THAT AND WHERE WE ARE. SPECIFICALLY, IF YOU HAD TO PICK A BENCHMARK, MOSTLY RELATED TO WHAT IS GOING ON

31:58 OUTSIDE. WE TALKED ABOUT THE KOSPI AND STOCKS INDEX. LET ME HAVE A LOOK AT WHERE WE ARE. WE ARE DOWN ABOUT 2%. LET’S SHIFT FOCUS. I’M HAVING TROUBLE GETTING MY WORDS OUT. THAT’S A BAD OMEN BECAUSE IT’S ONLY TUESDAY. BLOOMBERG INTELLIGENCE SAYS THE EU’S PLANNED CAP ON CHINA BUILT HYBRID IMPORTS STARTING AT

32:34 150,000 IS LIKELY TO BE MORE RESTRICTIVE FOR CHINESE TARIFF MAKERS – CHINESE AUTOMAKERS THEN TARIFFS THEMSELVES. IT WOULD NOT STOP MARKET SHARE GAINS. WE HAVE HEARD FROM CARMAKERS OUT OF THE PARIS AUTO SHOW. A COUPLE THINGS TO TALK ABOUT. MASSIVE HIRING SPREES. WHAT THEY ARE PLANNING TO BOOST CAPACITY. IN EUROPE 500,000 IN ANNUAL SALES IN UNITS BY 2030.

33:10 CHERY EXPANDING PRODUCTION. AND LI AUTO ENTERING NORWAY AND THE NETHERLANDS. YVONNE: THAT IS A BIG ONE. THE EB GIANT SAYS IT IS DOUBLING DOWN ON ITS COMMITMENT TO EUROPE DESPITE A NEW AGREEMENT AIMED AT CURBING IMPORTS. THE VICE PRESIDENT SPOKE TO US AT THE PARIS MOTOR SHOW. >> WE NEED TO UNDERSTAND WHAT THIS MEANS. WE DON’T HAVE THE DETAILS YET. BUT I WANT TO ASSURE BYD

33:43 COMMITMENT IN EUROPE IS VERY DEEP, IT IS LONG-TERM. AFTER CHALLENGES RAMP UP, BY Q4, WE WILL START MASS PRODUCTION. AND WE WILL CONTINUE TO INVEST MORE IN EUROPE. IN THE PAST TWO YEARS, WE QUALIFIED VENDORS TO BECOME BYD GLOBAL VENDORS. NOW WE ARE BUILDING R&D IN EUROPE. STEP-BY-STEP, BYD WILL TAKE

34:14 VAST MOVES NOT ONLY FOR MANUFACTURING, BUT TO INVEST MORE FOR R&D AND BUILDING THE ECOSYSTEM IN EUROPE. >> BYD HAS AN INCREASING MARKET SHARE IN EUROPE. THE LATEST NUMBERS FOR CHINESE CARS, INCLUDING BYD IN AUGUST, WHERE 12% OF THE NEW CARS REGISTERED AREN’T EUROPE. WHERE DO YOU SEE BYD GOING IN EUROPE?

34:47 >> I THINK BYD IS FAST GROWING HERE. BECAUSE A LOT OF CONSUMERS VERY MUCH APPRECIATE BYD IS NOT JUST A CAR, IT IS A TECHNOLOGY COMPANY. SAVING THE MONEY, ESPECIALLY WITH THE OIL PRICE INCREASING, NOW MORE PEOPLE REALLY SERIOUSLY CONSIDER BYD ELECTRIC CARS. ALSO, ON THE BACK OF THE SPACE, WE INTRODUCED THE FIRST BYD

35:21 MODEL TO CARRY THE FLASH CHARGING TECHNOLOGY. >> YOUR PRICE COMPETITIVENESS IS ONE OF YOUR COMPETITIVE ADVANTAGES. WITH THESE NEW RESTRICTIONS, THESE NEW TARIFFS ON EV’S, RESTRICTIONS ON HYBRIDS, YOUR PRICE IS GOING TO GO UP IN EUROPE. >> BUT YOU SEE WHAT WE ARE DOING NOW IN THE PAST SEVERAL YEARS, WE ARE TURNING BYD INTO AN INTERNATIONAL COMPANY TO BE A MORE LOCAL COMPANY. SO WE ARE BUILDING A HUGE TEAM HERE IN FRANCE, IN GERMANY, ALSO IN ITALY, SPAIN, ALL THE COUNTRIES. WE ARE ALSO BUILDING UP OUR

35:53 MANUFACTURING HERE. SO OUR MANUFACTURING LOCALLY, HIRE THE LOCAL JOBS, COEXIST WITH LEGACY BRANDS IN EUROPE. I DON’T SEE ANY CHALLENGE BECAUSE BYD IN THE MARKET IS BEING RECOGNIZED AS A VALUE BRAND. IT IS NOT A PRIEST CHALLENGER, IT IS A VALUE CHALLENGER – A PRICE CHALLENGER, A VALUE CHALLENGER. YVONNE: THAT WAS STELLA LI SPEAKING WITH CAROLINE QANON.

36:32 YOU CAN FIND LIVESTREAMING NEWS, TV SHOWS, DOCUMENTARIES, ANALYSIS, AND MORE. THE NEW ECONOMY FORUM AS WELL. BLOOMBERG.COM/VIDEOS. ♪ DAVID: WELCOME BACK. JUST A TIME CHECK.

37:03 9:44 IN THE MORNING. THE IMF WILL BE RELEASING ITS LATEST ECONOMIC OUTLOOK HERE. LET’S TAKE YOU STRAIGHT BACK TO THE ANNUAL MEETINGS TAKING PLACE IN BANGKOK. AVRIL IS STANDING BY WITH OUR NEXT GUEST. AVRIL: WE ARE STANDING BY WITH GROUP CHIEF ECONOMIST AT BNP PARIBAS. IT IS GOOD TO HAVE YOU WITH US. >> GOOD MORNING. THANKS FOR HAVING ME. AVRIL:

37:35 WHAT IS YOUR ASSESSMENT OF THE STATE OF THE GLOBAL ECONOMY? WE ARE SEEING IT GO INTO MULTIPLE STOCKS BUT GROWTH DOES SEEM TO BE GOING UP. >> ABSOLUTELY. THERE IS A PICTURE OF RESILIENCE, AND THAT IS TRUE ACROSS THE WORLD, REALLY. ADVANCED ECONOMIES, EMERGING MARKETS, MANUFACTURING SERVICES, EVEN THE CONSUMER THAT YOU THINK COULD BE SUFFERING FROM INFLATION STOCK IS DOING FINE. THE QUESTION I HAVE IN MY MIND AND THAT I WILL TRY TO ANSWER

38:07 THIS WEEK IS HOW LONG CAN THIS RESILIENCE LAST IN THE FACE OF STRONGISH HEADWINDS OF THE ENERGY SHOCK AND OF THE VERY STRONG RISE IN INTEREST RATES, WHICH AGAIN WE ARE SEEING ACROSS THE WORLD. THESE ARE STRONG TAILWINDS. I THINK THIS WILL TEST THE RESILIENCE WE HAVE SEEN SO FAR. AND WE ARE GOING TO SEE HOW MUCH PEOPLE ARE WORRIED ABOUT THE BALANCE OF THESE TWO FORCES DURING THE WEEK. AVRIL: IN TERMS OF ENERGY SHOCKS, WHAT DO YOU THINK ARE THE SECOND

38:39 ORDER EFFECTS THAT ARE PARTICULARLY WORRYING, AND WHICH REGIONS ARE MOST VULNERABLE? ISABELLE: INTERESTINGLY, AT THE START OF THIS ENERGY SHOCK, AT THE START OF THE WAR IN THE GULF, PEOPLE THOUGHT THE U.S. WOULD BE OK BECAUSE IT IS A NET ENERGY EXPORTER, BUT IT WILL BE TOUGH FOR EUROPE AND ASIA. ACTUALLY, WHEN YOU LOOK AT THE GROWTH NUMBERS, EVERYBODY SEEMS TO BE GROWING ABOVE TREND, INCLUDING EUROPE. BUT THE REALITY IS, THIS ENERGY

39:10 SHOCK IS HURTING EVERYBODY. EVEN IN THE U.S., WE ARE SEEING, STEPPING ASIDE FROM PAPER OR WTI AND BRENT FUTURES, BUT YOU LOOK AT THE PRICE OF DIESEL WHICH IS SUCH A CRITICAL INPUT INTO SO MANY PARTS OF THE ECONOMY, THE U.S. IS SUFFERING FROM RECORD HIGH PRICES JUST LIKE THE REST OF THE WORLD. AND SO, I WOULD SAY EVERYBODY IS IMPACTED BY THIS GLOBAL

39:41 SUPPLY SHOCK, EVEN THOUGH THE PRICE OF BRENT AND WTI HAS NOT GONE TO $ 150 OR $200 PER BARREL THAT EVERYONE WAS WORRIED ABOUT AT THE START OF THE WAR. AVRIL: YOU GET THE SENSE ALSO THAT MAYBE PEOPLE ARE UNDERESTIMATING THE RISK PERHAPS BECAUSE OF THE BANK DROP LAST YEAR WHERE WE CAME TO THE TARIFF SHOCK, THAT WAS QUITE OK, BUT THE PICTURE THIS YEAR IS A BIT DIFFERENT IN TERMS OF WHAT CENTRAL BANKS ARE DOING. THEN YOU ALSO HAVE THE BACKDROP OF HIGHER YIELDS. HOW DO THOSE CONFLUENCE OF FACTORS ACTUALLY AFFECT YOUR

40:12 OUTLOOK? ISABELLE: THAT IS EXACTLY RIGHT, AND IN FACT, THE TWO ARE RELATED. YOU HAD THIS TARIFF SHOCK WHICH ENDED UP BEING MUCH SMALLER THAN MANY HAD FEARED, PARTLY BECAUSE THE UF TECH – THE U.S. TARIFF SHOCK WAS MUCH LOWER THAN ANNOUNCED ON THE BRIDGE AND, PARTLY BECAUSE THERE WAS HARDLY ANY RETALIATION. SO, THERE WAS NO GLOBAL TRADE WAR. IN FACT, GLOBAL TRADE CONTINUED TO BOOM AS IF THERE HAD BEEN NO TARIFF ACTION.

40:44 BUT THROUGHOUT MUCH OF LAST YEAR, THANKS FOR DELIVERING RATE CUT AFTER RATE CUT. THIS YEAR, WE HAVE A CLEAR INFLATIONARY SHOCK. BECAUSE IT IS THE SECOND IN A ROW, CENTRAL BANKS HAVE DECIDED WE CAN’T LOOK FOR IT AND INSTEAD THEY HAVE STARTED RAISING INTEREST RATES. SO, THAT IS A BIG FACTOR OF SUPPORT THAT WAS THERE LAST YEAR THAT ISN’T IN HERE THIS YEAR. THIS HAWKISH TALK FROM CENTRAL BANKS HAS CONTRIBUTED I THINK VERY SIGNIFICANTLY TO THE RISE IN BOND YIELDS THROUGHOUT THE

41:18 CURVE, WHICH IS PROVING TO BE MUCH MORE OF A HEADWIND THAN PEOPLE HAD ANTICIPATED EARLIER IN THE YEAR. AVRIL: THEN YOU HAVE THE AI BOOM ALSO TO ACCOUNT FOR. DO YOU HAVE A SENSE OF WHAT THIS IS DOING TO DRIVE THE ECONOMY BOTH FOR INFLATION WOES OR THE GROWTH FUND? ISABELLE: YOU HAVE BASICALLY.A GLOBAL BOOM A LOT OF THAT IS AI. BUT IT IS NOT JUST AI. YOU HAVE ALSO IN EUROPE, DEFENSE INVESTMENT PLAYING A BIG PART.

41:50 THROUGH DIFFERENT PARTS OF THE WORLD, INFRASTRUCTURE. THESE ARE THE THREE PILLARS. AI IS THE BIGGEST. IT HAS BEEN PLAYING A VERY SIGNIFICANT ROLE IN SUSTAINING THE MANUFACTURING SECTOR. PEOPLE TEND TO THINK IT IS MOSTLY A U.S. AND ASIA STORY, AND IT IS A BIG STORY THERE IN THE U.S. THAT ACCOUNTS FOR MAYBE HALF OF GROWTH, IF YOU TAKE INTO ACCOUNT THE WEALTH EFFECT THAT CONSUMERS ARE BENEFITING FROM, AT LEAST IN STOCKS. IF YOU LOOK AT INDUSTRIAL PRODUCTION, YOU ARE SEEING

42:21 GROWTH AT DOUBLE DIGITS OVER THE LAST YEAR OR SO IN SECTORS RELATED TO AI LIKE ELECTRONICS, OPTICS, ETC., AS WELL AS DEFENSE. AND YOU HAVE OTHER SECTORS THAT ARE EXPOSED TO THE ENERGY SHOCK, LIKE THE CHEMICAL INDUSTRY THAT IS DOING VERY POORLY, OR THE AUTOMOTIVE SECTOR STILL DOING RELATIVELY POORLY. BUT YOU SEE THE BENEFITS OF THIS AI BOOM IN GLOBAL TRADE AND GLOBAL MANUFACTURING. AVRIL: TO SOME EXTENT, THAT COULD BE

42:53 HELPING TO OFFSET THE SHOCK FROM THE ENERGY CONCERNS. WE HAVE TO LEAVE IT THERE FOR TODAY. THANK YOU SO MUCH FOR YOUR TIME. GREAT TO CHAT. ISABELLE MATEOS Y LAGO. BACK TO YOU GUYS. YVONNE: GREAT CONVERSATION. THANK YOU, OF COURSE. WE WILL BE LIVE WHERE AVRIL IS IN BANGKOK FOR THE IMF MEETINGS WITH EGYPT’S FOREIGN MINISTER JOINING US IN THE NEXT HOUR TO DISCUSS THE WIDENING MIDDLE EAST CONFLICT. LATER THIS WEEK, WE WILL SPEAK WITH CENTRAL BANK GOVERNORS

43:24 FROM THAILAND, LEBANON, MALAYSIA, AND FINLAND. ♪ YVONNE: WELCOME BACK. WE ARE COUNTING DOWN IN NEW

43:54 DELHI, JUST MOMENTS AWAY FROM THE ADDRESS SET TO BE IN A FEW HOURS. CERTAINLY WANT TO TALK ABOUT HERE ON THE BACKDROP OF WHAT WE HAVE BEEN SEEING ON THE GROUND WITH OPPOSITION PARTIES AND WE HAVE SEEN PROTESTS ON THE GROUND IN THE CAPITAL, AT A TIME WHEN THE WEATHER HASN’T BEEN COOPERATING AS WELL. BUT CERTAINLY GOING TO BE A REALLY INTERESTING DEBATE AND CONVERSATION AROUND THE INDIA GROWTH STORY HERE AND AMBITIONS OF INDIA TAKING CENTER STAGE HERE AT THE BLOOMBERG NEW ECONOMY FORUM, THE FIRST TIME

44:25 WE ARE HAVING THIS NEW ECONOMY FORUM IN INDIA AS WELL. IT WON’T JUST BE MODI, IT WILL BE A WHOLE LIST OF GUESTS THAT WE WILL BE TALKING TO AS WELL, WHETHER IT IS WALL STREET BANKS, COMPANIES, AND WHAT THEY WILL SEE IS A LONGER-TERM ECONOMIC PROSPECTS AND BUSINESS PROSPECTS IN THIS MARKET, DAVE. DAVID: I THINK FOR THE VERY FIRST TIME IN A LONG TIME, AND THIS IS TO BE CLEAR NOT NEGATIVES, THE STRUCTURAL GROWTH STORY THAT INDIA AND THE TAILWINDS YOU

44:57 HAVE HAD AROUND THE MARKET AND ALSO THE ECONOMY HAVE BEEN TRUMPETING FOR YEARS ARE NOW A THREAT. I THINK WHEN YOU LOOK AT INFLATION, THE DEFENSE OF THE CURRENCY IS ONE THING. YOU HAVE THIS NEW TECHNOLOGY IN AI AND SOFTWARE AND ONE HAS TO SIMPLY LOOK AT HOW THE EQUITY MARKET HAS DONE THIS YEAR. IT UNDERSCORES THOSE CHALLENGES BEING FRONT AND CENTER, NOT SOMETHING WE ARE JUST COUGHING UP. HOW WE THREAD THE NEEDLE BETWEEN THE CURRENT CHALLENGES NO LONGER TERM OPPORTUNITIES IS KEY. LOTS OF GOOD CONVERSATIONS COMING UP HERE.

45:33 VERY QUICKLY TO THE HERE AND NOW, IF YOU ARE LONG ON THESE MARKETS, I SUGGEST YOU CLOSE YOUR EYES RIGHT NOW, ESPECIALLY IF YOU ARE LONG THE KOSPI INDEX. ON YOUR SCREENS. LOTS MORE AHEAD, INCLUDING A LOOK UNDER THE HOOD. THIS IS “THE CHINA SHOW.” ♪

46:07 SHUT YVONNE: WE ARE TAKING THE CHINA SHOW ON THE ROAD TODAY, PRIME MINISTER NARENDRA MODI IS SET TO DELIVER AN ADDRESS TO KICK OUT THE EVENT FOR THE NEXT THREE DAYS. IT COMES AT A TIME WHEN WE’RE SEEING THE RISK OFF MOVES ACROSS THESE MARKETS, THE SHIPPERS WE SEE ACROSS THE ALT-RIGHT WILL BE FRONT AND CENTER AT THIS CONFERENCE AS WE DEBATE ABOUT WHERE INDIA PLAYS IN THE WHOLE EQUITY STORY,

46:39 AFTER WE TALKED ABOUT WAS HAPPENING ON THE GROUND HERE, NOT JUST WHEN IT COMES TO THESE PROTESTS LED BY THESE OPPOSITION PARTIES AND THE DRAMATIC EVENTS THAT HAVE UNFOLDED OVER THE LAST FEW DAYS. ALSO WE TALK ABOUT THESE DORIC DEFENSE OF THE CURRENCY WE SAW YESTERDAY. THERE WILL BE A LOT OF THINGS RIGHT AND CENTER AS WE COUNT DOWN TO THE PRIME MINISTER STEPPING ON STAGE HERE IN NEW DELHI. DAVID:

47:11 YOU HAD TO GO BACK TO 2013 WHEN WE HAD THE MAGNITUDE OF DEFENSE THAT’S BEEN ESTABLISHED AND DEPLOYED FROM THE ARE BEYOND THE WE CAN. MARKETS TANTRUMING, I JUST INVENTED THE VERB. WE ARE ALSO GETTING SOME BREAKING LINES COMING THROUGH OUT OF THE IMF THAT WE WILL GET TO AND A COUPLE OF MOMENTS BUT WE ARE NOW LOOKING AT THE IMF, THESE REVISED PROJECTIONS ON GLOBAL GROWTH FOR NEXT YEAR,

47:46 2027, WORLD GDP 3.4% WARNING OF RESILIENCE IS COMING UNDER STRAIN. AVRIL HONG IS WITH US AT THAT BRIEFING AND HAS MORE DETAILS. AVRIL: BASED ON THIS IMF OUTLOOK YOU’RE SEEING THE SINCE OF GLOBAL RESILIENCE, THIS IS AN ECONOMY THAT HAS WEATHERED MULTIPLE HIKES, AND FOR THIS YEAR THE IMF IS RAISING IT SLIGHTLY TO

48:20 3.1% AND EXPECTS IT TO PICK UP FURTHER TO 3.4% NEXT YEAR. MUCH OF THIS IS THANKS TO THE MOVES ARE SEEING FROM AI INVESTMENTS BUT YOU ALSO HAVE TO THINK ABOUT THE AI BOOM, BASED ON THIS IMF DATA, TWO THIRDS OF THE TRADING HARDWARE IS COMING FROM TAIWAN, COMING FROM SOUTH KOREA. THE WORLD IS ALSO RUNNING HAMNET THAT – THAT IS ANOTHER

48:51 RISK TO THINK ABOUT WHEN IT COMES TO FINANCIAL AND THE BROADER VIEW WHEN IT COMES GLOBAL YIELDS, GIVEN HOW IT IS MAKING IT MORE DIFFICULT FOR GOVERNMENTS TO TRIM PUBLIC THAT. SO THERE IS RESILIENCE IN THE GLOBAL ECONOMY. WE WILL WATCH CONTINUOUSLY FOR THE BREAKDOWN COMING OUT OF THIS BRIEFING AND SPEAK TO THE IMF CHIEF ECONOMIST AS WELL. RESILIENCE, BOTH WHAT IS THE RISK? DAVID: I’M SALUTED.

49:22 AND FOR BLOOMBERG CLIENTS, YOU CAN CATCH THIS BRIEFING THAT’S ONGOING AS WE SPEAK. WE ARE LIVE FOR MULTIPLE LOCATIONS, I’M IN HONG KONG, AND YVONNE IS IN DELHI FOR US FOR THE NEW ECONOMY FOR THEM. WHAT ELSE DO YOU HAVE IN STORE FOR YOU TODAY? AVRIL: 3:00 P.M. LOCAL TIME I WILL BE MODERATING A PANEL WHICH WILL BE TALKING ABOUT THAILAND THROUGH THE

49:54 DECADES WHICH IS THE HOST NATION TODAY. THIS IS COMING AT A TIME WHERE, YOU THINK WAS IN THE 1980’S, WE SAW GROWTH THAT DOUBLE DIGITS AT SOME POINT BUT NOW IT IS LAGGING ITS REGIONAL. HIS. I WILL HAVE ON MY PANEL THE BANK OF THAILAND GOVERNOR AND THE COUNTRY’S FINANCE MINISTER AND MAYBE THERE COULD BE SOME LESSONS IN THERE AS WELL FOR EMERGING MARKETS IN TERMS OF HOW TO AVOID STAGNATION, GIVEN THE BACKDROP WE ARE SEEING IT WITH THE ESCALATION IN THE

50:26 MIDDLE EAST WITH THE STRIKES IN SAUDI ARABIA, WE WILL GET THAT INTERVIEW AS WELL COMING UP TOWARD THE END OF THIS HOUR WITH THE EGYPTIAN FOREIGN MINISTER AND THE RISK OF THE BROADENING CONFLICT IN THE MIDDLE EAST. YVONNE: YOU ARE STILL QUITE BUSY THERE IN BANGKOK. OUR VERY OWN AVRIL HONG JOINING US AT THOSE IMF MEETINGS IN THAILAND. THAILAND AND INDIA IS WHERE WE ARE TAKING THE CHINA SHOW THIS MORNING. THE NEW ECONOMY FORM IS GETTING

50:57 UNDERWAY HERE IN NEW DELHI. THE COUNTRY IS HOSTING EVENT FOR THE FIRST TIME AND PRIME MINISTER NARENDRA MODI IS SAID TO SPEAK A LITTLE LATER. HOW ARE THINGS LOOKING NOW? >> THINGS ARE RAMPING UP HERE AWAITING PRIME MINISTER MODI’S ARRIVAL. HE WILL GIVE HIS SPEECH, HE HAS ALREADY WELCOMED THE NEW ECONOMY FORUM SAYING INDIA IS NOT JUST AN INVESTMENT NATION ANYMORE IT IS A RELIABLE

51:29 PARTNER WHEN IT COMES TO SHAPING THE GLOBAL FUTURE. YOU CAN SEE EVERYONE GATHERING AROUND ME, THE PLENARY SESSION STARTS IN ABOUT AN HOUR AND WE ARE EXPRESSED – EXPECTING THE PRIME MINISTER, TALK ABOUT INVESTMENTS AND THE ECONOMY. OTHER PROFILE LEADERS AS WELL FROM THE GLOBAL CORPORATE WORLD AND THE GOVERNMENT SIDE OF THINGS AS WELL. HUNDREDS OF THEM ATTENDING AND SECURITIES PRETTY TIGHT. WE’VE SEEN THEM AT THE FRONT OF THIS HOTEL AND WE’VE SEE THEM

52:04 ACROSS DELHI. WE SEEN THESE PROTESTS ALREADY ACROSS INDIA, SEEKING ELECTORAL REFORMS. THEY WANT THE MINISTER TO RESIGN OVER WHEN INFLATION. PROTESTERS HAVE BEEN GATHERING IN A VERY BUSY ENTERTAINMENT AREA. YVONNE: WE’VE BEEN TALKING ABOUT SOME OF THE DOMESTIC CHALLENGES,

52:36 THERE IS EXTERNAL CHALLENGES IN INDIA AS WELL, WITH WHAT WERE SEEING WITH THE RUPEE AND HIGHER OIL PRICES RAISING THE IMPORT BILL FOR INDIA. WHAT SORT OF MESSAGE DO YOU THINK THE PRIME MINISTER WILL LAY OUT IN TERMS OF THE ECONOMY AND HOW FINANCIAL MARKETS ARE PERFORMING? SHERY: YOU SAID IT, OIL IS SUCH AN IMPORTANT PART OF INDIA’S STORY. BETWEEN INFLATION CONCERNS AND

53:07 ASK – INFLATION ACCELERATING, SO FAR GROWTH HAS BEEN RESILIENT , GROWING 7.8% IN THE SECOND QUARTER, BUT FOR HOW LONG? TODAY’S A PRETTY WET DAY, IT RAINED THIS MORNING, BUT THE MONSOON SEASON THE ISSUE HAS DELIVERED 13% LESS RAIN THAN NORMAL. REMEMBER WE HAVE EL NIÑO, ONE OF THE STRONGEST WEATHER PATTERNS AND ABOUT SEVEN DECADES OR SO. SO THAT’S REALLY AFFECTING

53:37 WHAT’S HAPPENING HERE IN INDIA, THE CENTRAL BANK HAD TO HIKE RATES AND START THE RATE HIKING CYCLE JUST LAST WEEK AND WE ARE TALKING ABOUT RATE HIKES OF 2020 THREE FINANCIAL MARKETS BECAUSE OF THE EXPECTATIONS OF HIGHER INFLATION, BORROWING COSTS HAVE BEEN HIT. WHEN IT COMES TO INDIAN STOCKS, WE RECENTLY SAW THE LONGEST LOSING WEEKLY STREAK IN 25 YEARS. BOND YIELDS AT THE HIGHEST LEVEL SINCE 2024 AND LET’S NOT EVEN TALK ABOUT THE REPEAT WHICH IS STILL LINGERING AROUND RECORD LOWS. YVONNE:

54:15 WILL BE INTERESTING HOW THE PRIME MINISTER WEAVES THE STORY OF WHAT IS HAPPENING DOMESTICALLY, AND REALLY THE LONGER-TERM AMBITIONS THAT INDIA IS TRYING TO LAYOUT HERE, AND THIS WHOLE VISION TO BE AN EMERGING MARKET TO A DEVELOPED ONE BY 2047. BUT IT’S COMING OUT A AND THERE’S A LOT OF UNCERTAINTY IN TERMS OF GEOPOLITICS, HOW DOES INDIA FIT INTO SOME OF THESE GEOPOLITICAL CHALLENGES RIGHT NOW? SHERY:

54:46 THE ECONOMY HAS NOT BEEN HELD BY THE FACT THAT WE DO HAVE THESE GEOPOLITICAL CHALLENGES AND TRADE CHALLENGES US WELL. THE U.S. IS INDIA’S TOP TRADING PARTNER AND WE’VE SEEN THOSE TRADING GOALS STALL. IT’S NOT JUST ABOUT TRADE, INDIA HAS HAD A RANGE OF ISSUES IF UNITED STATES, WHETHER IT’S TARIFFS, IMMIGRATION, OR THE ADMINISTRATION DONALD TRUMP BEING CLOSER WITH PAKISTAN THESE DAYS AS WELL.

55:17 IT’S ALSO ABOUT RUSSIAN ENERGY INPUTS – IMPORTS THAT WE’VE SEEN PUSHBACK AGAINST WITH U.S. LEDGE OF – LEGISLATION THAT MIGHT GIVE THE PRESIDENT MORE POWER TO APPLY TARIFFS TO COUNTRIES THAT IMPORT. WE’VE SEEN WARM RELATIONS WITH CHINA, WE HAVE SEEN THE RELATIONSHIP OF INDIA AND CHINA BOTTOM JUST A FEW YEARS BACK IN 2020 AFTER THAT FATAL BORDER

55:51 CLASH, WE ACTUALLY SAW THEM HERE IN NEW DELHI WE HAD THE BRICS SUMMIT BETWEEN PRIME MINISTER MODI AND PRESIDENT XI JINPING WANTING A CLOSER PARTNERSHIP, IN THE FUTURE, LEARN TO COOPERATE IN DEALING WITH A VERY UNCERTAIN UNITED STATES, BUT AT THE SAME TIME TRADE ISSUES BETWEEN THESE TWO COUNTRIES ALSO LINGER. YVONNE: SHERY AHN JOINING US FROM THE PALACE WHERE THE PRIME MINISTER SAID TO SPEAK IN JUST A FEW

56:25 HOURS, KICKING OFF WITH HIS INAUGURAL ADDRESS OF THE BLOOMBERG NEW ECONOMY FORUM. WE WILL BE HERE THE NEXT THREE DAYS. STAY TUNED FOR OUR SPECIAL COVERAGE RIGHT HERE IN NEW DELHI. WE WILL HEAR FROM BUSINESS LEADERS INCLUDING EXECUTIVES FROM NEXT ON AND OTHERS. DAVID: LET’S LOOK AT THE KOSPI INDEX, PERFECT SEGUE INTO MARKET THAT’S GETTING OUT THE WINDOW, NEAR SESSION LOWS WITH THE KOSPI INDEX, VOLUMES ARE ABOUT

56:58 35% HEAVIER THAN WHAT WE ARE – WHAT IS TYPICAL FOR THIS TYPE OF SESSION. THIS ONE IS TAKEN IT STRAIGHT ON THE CHIN. QUICKLY TO PERHAPS, THIS COULD ALSO LIMIT LOSSES ACROSS RISK ASSETS, WE ARE SEEING A RALLY ACROSS THE TEN-YEAR TREASURIES, DOWN ABOUT FIVE BASIS POINTS, THERE IS SOME ABERRATION HERE IN TERMS OF AFFECTING THE PRICING.

57:31 NONETHELESS WE ARE DOWN FIVE BASIS POINTS FOR THE U.S.. TAKE A LOOK. ♪ YVONNE: WE ARE CHECKING MARKETS HERE THIS MORNING. ASIAN MARKETS FEELING THE PRESSURE FROM THE SHARP ROTATION AWAY FROM SOME OF CHIP NAMES, LET’S BRING IN AN UPDATE WITH OUR MARKETS REPORTER

58:02 ANTHONY STEPHENS WHO IS HERE TO DISCUSS THE BIG TEN MOVES TODAY. >> IT’S AN INTERESTING FOLLOW ON ON THE RECENT U.S. CHIP MARKET SELLING INTO ASIA, TAIWAN FINALLY CRACKING UNDER THE PRESSURE IN THE DOLLAR HAS BEEN VERY RESILIENT. LOCALS FIND THEMSELVES OVERLEVERAGED AND NOW THEY’RE GETTING A VERY SHARP DRAWDOWN. IT REALLY REFLECTS THE KOREAN

58:36 MARKET AS WELL, KOREANS ARE LEFT HOLDING THE BAG A LITTLE BIT HERE, SELLING ALMOST 38 BILLION IN THE LAST FEW MONTHS. THE FACT THAT THE MARKET CAN HOLD THIS LEVEL MEANS LOCALS ARE RUNNING OUT OF OUR POWER AND WE ARE SEEING THAT ON THE CHINESE MARKET WHICH HAS BEEN RESILIENT BECAUSE IT’S A COMPLETELY DIFFERENT POSITION. NOW WE ARE SEEING VALUATIONS COME ACROSS THE SUPPLY CHAIN, SO IT SEEMS CHINA’S TECHNOLOGY IS LIKING THE U.S. AND NATURALLY THEY WILL SUFFER,

59:08 DAMAGE ACROSS THE BOARD. SO WHAT IS RALLYING? FINANCIALS, CONSUMER, TO A LIMITED EXTENT SOME OF THE CHINESE INTERNET SPACE. WE SAW CYCLICALS OUTPERFORM AND HYPER-SCALERS TAKEN THE LEAD. NOW THE BIGGEST RISK FOR MARKETS IS HYPERSCALER PRODUCT STARTING TO OVERTAKE OPENAI AND ANTHROPIC. DAVID:

59:38 THAT’S GOING TO BE AN ISSUE. THANK YOU SO MUCH, ANTHONY STEPHENS, OUR MARKETS REPORTER LAYING OUT THE POSSIBILITIES. WERE GETTING THIS DOWNDRAFT ACROSS CHINESE CHECK, WE ARE RELITIGATING WHAT IT MEANS, SPECIFICALLY CHINESE HARDWARE AND THE CHINA, INC. INDEX GIVEN THE DROP OVERNIGHT ON THE STOCKS INDEX AND THE KOSPI AND HOW CLOSELY CORRELATED RIGHT NOW THE CHINA

1:00:14 SITUATION IS, THE HIGHEST CORRELATION IN YEARS AS YOU CAN SEE ON THIS CHART, WHAT DO WE DO WITH THIS INFORMATION GIVEN THAT WEAKNESS WE ARE SEEING IN THE ASIAN MARKET? LET’S BRING IN THE CHINA ASIA STRATEGIST AT BANK OF SINGAPORE. GOOD MORNING. >> I THINK WE EXPECT VOLATILITY TO BE HERE, MACRO BACKDROP, WE HAVE ELEVATED BOND YIELDS AND HIGH ENERGY PRICES. LOOKING AHEAD WHAT WE DO EXPECT IS COMING OUT FROM Q3 RESULTS,

1:00:50 WHETHER WE WILL SEE THE FIRST POSITIVE SURPRISE COMING OUT FROM SOME OF THE INNOVATIVE SECTORS WE SAW IN THE SECOND QUARTER. SOME OF THE HYPERSCALER NAMES LIKE WE’VE AND ALSO HEALTH CARE, WHICH WE’VE BEEN SEEING ONGOING COME INTO THE UPSIDE, DEFENSIVE NAME LIKE YOU JUST MENTIONED, THE CHINESE BANKS. WE LOOK AT FROM A TOTAL RETURN PERSPECTIVE, IT ACTUALLY UP,

1:01:23 IT’S JUST A RELATIVELY LOW LONG CORRELATION GIVEN WHAT THE GOVERNMENT HAS JUST DONE, WE SEE THAT AS A FAVORABLE BACKDROP, BEING DEFENSIVE AND A DIVERSIFIER. DAVID: IN TERMS OF BEING AT THE INTERSECTION, WAITING FOR SECTOR OVERWEIGHT, DO WE HAVE TO LEAN MORE OVERWRITE FINANCIALS FOR EXAMPLE BEFORE WE GET CLARITY ON THE EARNINGS? >> ON THE DEFENSIVE SIDE, BANKS WILL BE A SECTOR WE TALK ABOUT.

1:01:57 ON THE OTHER HAND, COMPANIES WITH STRONG VISIBLE CASH FLOW, STRONG SHAREHOLDERS RETURN THAT WILL BE SELECTIVE NAMES ACROSS VARIOUS SECTORS. THAT WILL BE PREFERRED. ON THE UPSIDE OPTIONALITY, WE STILL LIKE AI, WE STILL THINK IT WILL BE A MULTIYEAR STRUCTURAL SCENE. HOWEVER WE DO SEE THAT ROLLING OUT, NOT JUST FOCUSING ON THE REFERENCE TO SEMICONDUCTORS AND HARDWARE, BUT BROAD ENOUGH TO

1:02:30 UPSTREAM POWER EQUIPMENT, FOR EXAMPLE COPPER IS A SUBSECTOR OF THE INDUSTRY THAT WOULD LIKE BECAUSE AFTER FAVORABLE SUPPLY DEMAND DYNAMICS, OVERSEEING SUPPLY DISRUPTION AT A RECENT LOW AN ONGOING DEMAND FOR INSTANCE FROM THE AI D.C., THAT’S GOING TO SUPPORT THE OUTLOOK FOR THAT. ON THE OTHER HAND, SOME OTHER SECTORS, FOR INSTANCE HYPER-SCALERS, WHICH IS ALSO A

1:03:02 SUBSEGMENT THAT WE FOCUS ON. YVONNE: ARE YOU SEEING THAT CLEAR PATH TO MONETIZATION FOR SOME OF THESE AI HYPER-SCALERS IN CHINA? WHAT SECTORS DO YOU THINK COULD STILL HAVE A MORE CLEAR PATH OF VISIBILITY ON THAT? >> I THINK WHAT THE MARKET IS FOCUSING ON IS NOT JUST MONETIZATION WHICH IS PART OF THE EQUATION, BUT MORE

1:03:33 PARTICULARLY RETURN ON INVESTOR CAPITAL, ESPECIALLY WHEN KEY PLAYERS ARE COMING OUT AND REVISING THE CAPEX IN RAISING FUNDS BY SOME OF THE LEADING NAMES. SO I THINK THIS IS WHAT THE MARKET IS FOCUSING ON, THE RETURN OF THE CAPITAL THAT IS BEING DEPLOYED. YVONNE: WHAT ARE CLIENT CONVERSATIONS LIKE RIGHT NOW, GIVEN THE TIME WHEN THE NORTH ASIAN MARKETS ARE SELLING OFF, THERE’S A QUESTION ABOUT AI SPENDING. IT IS A MORE INTEREST AND WHAT

1:04:03 DO YOU THINK SENTIMENT IS RIGHT NOW WHEN IT COMES TO CHINESE EQUITY MARKETS? >> CHINESE EQUITIES MARKET LIKE JUST MENTIONED, THERE WILL BE YOUR TURN MICRO VOLATILITIES. WE DO SEE THAT GOING INTO THE REST OF THIS YEAR, INVESTMENT ACTIVITIES WILL PICK UP, WHEREAS CONSUMPTION REMAINS RELATIVELY LACKLUSTER. FOR INSTANCE WHAT THE GOVERNMENT DID, SORTED EASING BEFORE THE NATIONAL HOLIDAY AND ALSO AFTER THE GOLDEN WEEK WITH THE DEPLOYMENT OF THE 500 BILLION RMB LOCAL BOND QUARTER.

1:04:38 THAT’S GOING TO DO SOME LIFTING IN TERMS OF DRIVING INVESTMENT ACTIVITIES TO PICK UP. HAVING SAID THAT, CONSUMPTION PARTICULARLY WASN’T AUTOS. WE CONTINUE TO SEE HEADWINDS. DAVID: ON AUTOS AND MAYBE BATTERIES, RELATED SECTORS. THERE CERTAINLY LOOKS TO BE VALUE THERE. WHAT WOULD BE THE CATALYST FOR YOU TO BE ADVISING TO TAKE ADVANTAGE OF, OR IS THERE ENOUGH VALUE GOING FORWARD?

1:05:10 >> I WILL STILL BE A BIT CAUTIOUS ON AUTOS BECAUSE OF TWO RECENT HEADWINDS LIKE THE QUOTA CAP IS ONE AND ALSO THE EXPORT REBATE JUST GOT ANNOUNCED THAT WILL BE FURTHER REVISED DOWN. THE MARKET IS TRYING TO GAUGE WHAT IS THE EARNINGS IMPACT GOING INTO NEXT YEAR. WE BELIEVE THIS COULD BE ANYWHERE IN THE RANGE OF HIGH SINGLE DIGIT TO PROBABLY TEENS LEVEL. SO THE MARKET PROBABLY STILL NEEDS TIME TO DIGEST THIS PIECE OF NEWS. GOING TO THE ENERGY STORAGE

1:05:44 BATTERIES, MANY OF THE BIG EMPLOYERS, SIDE FROM ENERGY VEHICLE BATTERIES, THERE ALSO HAD ANOTHER MAJOR GROWTH DRIVER WHICH IS ENERGY STORAGE AND WE DO BELIEVE THAT THIS IS PROBABLY WITHIN BUT WE JUST DISCUSSED ABOUT THE WHOLE AI SUPPLY CHAIN GOING UPSTREAM TO THE ENERGY SUPPLY SEGMENT WHICH WE ARE STILL SEEING POSITIVE. DAVID: MACRO SEEMS TO BE OVERTAKING THE PART OF THAT DYNAMIC IN

1:06:16 HONG KONG, AND I WANT TO GET YOUR THOUGHTS ON THIS, ALL THIS FUNDRAISING, THERE ARE SO MANY IPOS, SO MANY LISTINGS THAT SEEM TO BE CARVING OUT SPACE FOR SO MANY INVESTORS. ARE THERE TOO MANY IPOS? LET ME REPHRASE THAT. IS THE AMOUNT OF IPOS TAKING THE SHINE AWAY FROM THE EQUITY MARKET? >> I DO NOT THINK SO. WHAT THE MARKET IS CONCERNED ABOUT ARE TWO THINGS. FIRST OF ALL IS WHETHER THE CAPEX OR INVESTMENT WILL DELIVER RETURNS.

1:06:51 ONE OF THE LEADING HYPER-SCALERS , WE RECENTLY SEEN THE EARNINGS GET REVISED DOWN ON THE BACK OF CAPEX BUT EARNINGS COME AT THE SECOND STAGE. THE SECOND ISSUE WAS WE HAVE A VERY ROBUST CAPITAL MARKET THIS YEAR, THAT USUALLY ALSO COMES WITH A SIX-MONTH TYPICAL LOCKOUT. WE ARE PROBABLY STILL IN THE MIDDLE OF THAT GIVEN THE ROBUST MARKET IN THE FIRST Q, IF YOU DO THE MATH, WE ARE STILL IN THIS WAY.

1:07:24 SO THAT COULD BE STILL MORE SUPPLY INTO THE MARKET. THE MARKET IS STILL PROBABLY WELCOME, ESPECIALLY IN HONG KONG WHERE THE COMPOSITION OF TECH HARDWARE IS STILL RELATIVELY SMALL FROM AN INDUSTRY PERSPECTIVE, IF YOU COMPARE ACROSS ASIA OR EVEN WITHIN THE ASIAN MARKET. DAVID: ONE SIMPLY HAS TO LOOK AT DIVERGENCE IN MARKETS TO

1:07:55 UNDERSCORE YOUR POINT THERE. THANK YOU SO MUCH, CHINA EQUITY STRATEGIST AT BANK OF SINGAPORE. AS WE WERE TALKING THERE, LOOKING AT DECLINES GLOSSIES EQUITY MARKETS. MORE AHEAD “THE CHINA SHOW.” ♪

1:08:30 YVONNE: HAIDOA DOWN AFTER A LONG TO THE CHAIRMAN FOR PERSONAL FINANCIAL ARRANGEMENTS. CITI WITH A PRICE TARGET SAYING THE MOVE MAY REVIVE SOME INVESTOR WORRIES OVER THE CONTROLLING SHAREHOLDERS NEED ALSO CHECKING THE LUXURY SECTOR, SOME OF THE STARTS OF ROLLING HERE TODAY ON THE BACK OF WHAT WE HEARD, LOUIS VUITTON

1:09:02 CAME OUT WITH SOME INTERESTING NUMBERS WHEN IT CAME TO THE SLUMP IN CHINA IN SALES. SOME WERE FOCUSING ON THE LIKES OF PRADA, SAMSONITE AND OTHERS FALLING THIS MORNING. AUTO STOCKS ALSO IN FOCUS AFTER WHAT WE HEARD FROM THE E.U. WHEN IT COMES TO HYBRID VEHICLES, SO HAVE BEEN TALKING MORE ABOUT THE EXPORT RATE CUT, MOST IF NOT ALL EVA MAKERS DOWN THIS MORNING. THIS IS BLOOMBERG. ♪

1:09:47 DAVID: WELCOME BACK. WE’RE JUST GOING INTO THE JAPANESE LUNCH BREAK, COMING OFF THE MARKET REOPENING TODAY, PLAYING SOME AMOUNT OF CATCH PERIODS SPORTS DAY WAS A HOLIDAY ON MONDAY. WE’RE LOOKING AT DECLINES IS TO BET ACROSS THE BOARD WE KNOW THAT ANYTHING AI RELATED TO TECH, GROWTH, MOMENTUM AND SOME OF THE RELATED SECTORS

1:10:21 OVERLAPPING THEMES AND NAMES AROUND THE KEY FACTORS. ASIA-PACIFIC DOWN ABOUT 2%, A LOT OF THAT’S JAPAN, PART OF IT IS TAIWAN AND A LOT OF IT IS WHAT IS HAPPENING OVER IN KOREA. STILL DOWN ABOUT 6% ON THAT MARKET, 6.5% ON THE KOSPI INDEX. THE HANG SENG IN THE LAST FEW MINUTES HAS PICKED UP MOMENTUM TO THE DOWNSIDE RIGHT NOW, LOSSES HAVE NOW TOP 1% AND

1:11:00 THAT’S WHERE WE ARE ON THE CSI 300 AND TAIWAN ALSO BEING A BIT UNDER THE GUN TODAY. ALL THIS AGAINST THE BACKDROP OF IMPORTANT CONVERSATIONS AROUND THE RESILIENCE OF THESE ECONOMIES. AND THE RESILIENCE OF LABOR MARKETS AND SUPPLY CHAINS AMIDST THE AI BOOM HAPPENING AND THE CAPEX SPENDING AT VERY HIGH LEVELS RIGHT NOW IN TERMS OF INTEREST RATES. WE NEED TO RETHINK THOSE RETURNS ON THOSE INVESTMENTS GIVEN A LOT OF THESE COMPANIES

1:11:30 ARE A MIX OF PUBLIC AND PRIVATE AT MUCH HIGHER RATES IN JUST 12 MONTHS AGO. AND ALONG THOSE LINES WE HAVE A FANTASTIC TEAM COVERING THE STORIES FOR US, SPECIFICALLY AT THE NEW ECONOMY FORUM. OUR TEAM IS THERE ON THE GROUND FOR US, YVONNE AND SHERY. PRIME MINISTER MODI IS SET TO SPEAK ON THE GROUNDSHERY IS AT THE VENUE WHERE THE PRIME

1:12:04 MINISTER IS SCHEDULED TO BRIEF EVERYBODY. WHAT ARE WE EXPECTING? SHERY: HE’S EXPECTED TO ARRIVE ANYTIME NOW, SECURITY IS PRETTY HIGH HERE AT THE HOTEL IN CENTRAL DELHI. PARTICIPANTS ARE ALL GATHERED, YOU CAN SEE THINGS ARE RAMPING UP. HE IS ALREADY WELCOME THE NEW ECONOMY FORUM SAYING INDIA IS NOT JUST AN INVESTMENT DESTINATION ANYMORE BUT CAN BE A TRUSTED PARTNER IN THE PATH FOR THE FUTURE GLOBAL GROWTH IN THE ECONOMY.

1:12:36 OF COURSE THINGS HAVE NOT BEEN SO EASY DOMESTICALLY FOR PRIME MINISTER MODI. I MENTION SECURITY HERE AT THE HOTEL, THERE’S BEEN SECURITY POLICE AND PARAMILITARY FORCES ACROSS DELHI FOR WEEKS. OVER THE WEEKEND WE SAW SOME PROTESTERS DETAINED AND THEN LATER RELEASED. NOW THE COCKROACH GEN Z LED MOVEMENT IS SAYING PROTESTERS WILL BE OUT AND ABOUT, IN ORDER TO DEMAND THE RESIGNATION OF THE TOP ELECTION OFFICIAL. THEY ARE SEEKING ELECTORAL

1:13:08 REFORMS AND THEY ALLEGE MANIPULATION OF VOTERS LISTS. SO THE PROTESTS HAVE BEEN GOING ON ABOUT 20 MINUTES BY CAR FROM HERE. THERE’S PLENTY ON THE AGENDA HERE AT THE NEW ECONOMY FORUM WHEN IT COMES TO INDIA AND THE GLOBAL ECONOMY. TALKING ABOUT A RESILIENT ECONOMY, SEVEN .8% GROWTH IN THE SECOND QUARTER BUT AT THE SAME TIME THREATS TO THE INDIAN I.T. SERVICES INDUSTRY OR $350 BILLION. WERE TALKING ABOUT THE FINANCIAL MARKETS REALLY SINKING IN THE LAST FEW WEEKS.

1:13:42 THE NIFTY 50 FOR EXAMPLE HAS SEEN THE LONGEST WEEKLY LOSING STREAK AND 25 YEARS. YVONNE: IT’S INTERESTING YOU TALK TO WALL STREET BANKS, INVESTORS LOOK AT INDIA NOW, IT’S THE DOMESTIC ISSUES ON THE GROUND THAT NEAR-TERM COULD BE A CHALLENGE FOR THE MODI GOVERNMENT WITH THEY ARE MAKING BIG BETS INTO INDIA HERE FOR THE LONGER TERM. JONATHAN GRAY FROM BLACKSTONE

1:14:13 HAS BEEN INVESTING IN INDIA FOR THE LAST TWO DECADES AND HE SAYS IN TERMS OF LIQUIDITY, THIS IS A MARKET THAT HAS ONE OF THE BIGGEST IPO MARKETS IN THE WORLD. YOU TALK ABOUT GEO PLATFORMS, THEY ARE TALKING ABOUT A VALUATION OF MORE THAN 00 BILLION. JONATHAN GRAY SAYS THIS IS A VERY EASY MARKET WHERE I CAN IPO OR COMPANIES CAN IPO THIS YEAR. SO HE SEES THAT AS FOREIGN CAPITAL AT THIS TIPPING POINT OF REALLY COMING INTO THIS MARKET IN A REALLY BIG WAY. THEIR AUM COULD DOUBLE TO 100

1:14:50 BILLION OVER THE NEXT COMING YEARS. THE BIG THINGS LIKE INFRASTRUCTURE, LOGISTICS, REAL ESTATE, THESE ARE SOME OF THE TRADITIONAL PILLARS THEY INVEST INTO. THEY ARE NOT PIVOTING TO OVERALL AI INFRASTRUCTURE AS WELL AS DATA CENTERS AND THE LIKE. IT WILL BE A GREAT CONVERSATION WITH THE LIKES OF JONATHAN GRAY AN INTERESTING, WHO YOU WILL BE TALKING TO THE NEXT THREE DAYS AS WELL. WALK US THROUGH SOME OF THE PREVIEWS OF WHAT CONVERSATIONS YOU WILL HAVE ON STAGE.

1:15:25 SHERY: IT’S INTERESTING YOU MENTIONED BLACKSTONE AND JOHN GRAY. ANALYST IN TOKYO I BEEN HEARING ABOUT THE POTENTIAL OF INDIA, TALKING ABOUT JOINT VENTURES HERE IN INDIA. SO THE FINANCIAL MARKETS HAVE BEEN A BIG OPPORTUNITY FOR GLOBAL EVENTS. BUT YOU SAID IT, THERE IS SO MUCH OPPORTUNITY, ABOUT 65% OF THE INDIAN POPULATION IS UNDER THE AGE OF 35. THEY CAN ADOPT AI VERY FAST. I MENTION THE THREAT TO THE I.T.

1:15:59 SERVICES INDUSTRY BUT THAT CUTS BOTH WAYS. PRIME MINISTER MODI HAS PLEDGE BILLIONS OF DOLLARS IN ORDER TO BUILD A SEMICONDUCTOR HUB AND A SUPPLY CHAIN HERE IN INDIA. WHAT WE HAVE BEEN SEEING IS FROM THE LIKES OF HITACHI ENERGY, FOR EXAMPLE. I WILL SPEAK TO THEIR CEO IN THE NEXT FEW DAYS. HE SEES OPPORTUNITIES IN THIS COUNTRY FOR POWER DEMAND. HOW ARE YOU GOING TO POWER THE ENERGY DEMAND PROBABLY STATA CENTER CENTER BEING BUILT HERE IN THIS COUNTRY? OF COURSE WE HAVE THE

1:16:33 OPPORTUNITIES THAT EVEN THE LIKES OF INDIAN COMPANIES THAT SEE THE THREAT FROM ARTIFICIAL INTELLIGENCE, LOOKING TO ORCHESTRATE THIS CHANGE BECAUSE THEY THINK AI SOLUTIONS WILL BE SO COMPLEX THEY CAN ACTUALLY HELP ENTERPRISES ADOPT ARTIFICIAL INTELLIGENCE. DAVID: THE POWER QUESTION, I THINK YOU HIT THE NAIL ON THE HEAD, IN THIS DAY AND AGE, ONE HAS TO WONDER WHAT THE INDUSTRIAL POLICIES OF INDIA, BECAUSE THIS IS A TECHNOLOGY WE ARE DEALING

1:17:05 WITH THAT DEMANDS VAST AMOUNTS OF POWER. WHEN YOU GET AN OIL SUPPLY LIKE WITH HAD THESE YEAR, SUDDENLY YOU HAD THE MACRO FLIPPING ON ITS HEAD AND IT DOESN’T SEEM TO BE AN EQUATION THAT WILL HOLD UP IN A FUTURE WHERE POWER NEEDS TO BE CONSISTENT AND DEPENDABLE. JUST TO BACKTRACK IF YOU COULD, WHAT WOULD THEN BE THE MAJOR GEOPOLITICAL ALLIANCES AND CHALLENGE THAT INDIA NEEDS TO SUBMIT RIGHT NOW TO BE ABLE TO CONVINCE INVESTORS THAT THERE

1:17:38 IS SOMETHING CONSISTENT THERE THAT WE CAN’T SEE THROUGH THE CURRENT CHALLENGES. SHERY: YOU SAID IT, GIVEN THE GEOPOLITICAL THAT DROP WE ARE SEEING MORE AND MORE COUNTRIES WANTING THEIR OWN ARTIFICIAL INTELLIGENCE CAPABILITIES AND THEIR OWN WAY TO POWER THIS AI BOOM, SOVEREIGN AI IS A KEY TOPIC. YOU MENTIONED THE ENERGY SIDE OF THINGS AND THAT IS A BIG QUESTION. I DO ACTUALLY HAVE A PANEL COMING UP THIS AFTERNOON ON BUILDING THE PHYSICAL

1:18:09 INFRASTRUCTURE AND THE POWER. WE TALK ABOUT ALL THIS COMPETITION, WHEN IT COMES TO FRONTIER MODELS, DIFFERENT PARTS OF THE AI CAPITAL STORY. CAN PHYSICAL INFRASTRUCTURE ACTUALLY KEEP UP? WE ARE NOT ONLY TALKING ABOUT DATA CENTERS, GPU’S, THESE ACCELERATORS, BUT ENERGY. YOU HAVE TO DELIVER ENERGY. IS IT FIBEROPTICS, WIRELESS NETWORKS, IS EVERYTHING THAT

1:18:42 GOES AROUND ARTIFICIAL INTELLIGENCE, AND THAT’S IS WHERE SOME OF THAT OPPORTUNITY COULD BE FOR INDIA AS THE PREMONITION WANTS TO INVEST BILLIONS OF DOLLARS IN A SUPPLY CHAIN THAT COULD MAKE THAT POSSIBLE. WE HAVE HEARD IN JAPAN FUJIFILM IS VERY INTERESTED ON DOING MORE BUSINESS AROUND THE SEMICONDUCTOR OPPORTUNITY HERE IN INDIA. HITACHI ENERGY, TOKYO ELECTRON HAS ALREADY BEEN TRAINING SOME

1:19:13 ENGINEERS HERE IN INDIA IN ORDER TO BE ABLE TO MAINTAIN OR REDUCE CAPACITY IN THE FUTURE SOME OF THOSE SEMICONDUCTOR EQUIPMENT. SOME GEOPOLITICS, THE UNCERTAINTY OF THE TRADE ENVIRONMENT, THE GEOPOLITICAL ENVIRONMENT, COSTS GOING UP, FREIGHT, SHIPPING AND OIL COSTS ALL LEADING TO A SENSE THAT MORE AND MORE COUNTRIES WANT A DOMESTIC SUPPLY CHAIN, WANT MORE SECURITY, CYBERSECURITY. THEY WANT MORE SECURE

1:19:44 INFRASTRUCTURE THAT THEY THEMSELVES CAN OWN. YVONNE: ON THAT NOTE, WHEN IT COMES TO AI, WHAT WERE SEEN ACROSS GLOBAL ECONOMIES, INDIA IS ASKING THAT QUESTION AS WELL. JUST BECAUSE OF WHAT WE BEEN SEEN ON THE GROUND, THESE USE LEAD PROTESTS THAT WE’VE SEEN OVER THE SUMMER, WHICH DID ULTIMATELY LEAD TO THE EDUCATION MINISTER TO STEP DOWN WHEN HE CAME TO THIS EXAM LATE – LEAK. IT SHOWS A GROWING ANXIETY ON

1:20:17 THE GROUND, PEOPLE COMING OUT OF COLLEGE AND LOOKING FOR THOSE JOBS, AS INDIA HAS THOSE JOBS IN AN EVER-CHANGING WORLD AND AI GIVEN IT’S A VERY YOUNG WORKFORCE OF 1.5 BILLION PEOPLE BUT ALSO A RISING MIDDLE CLASS. THOSE ARE CERTAINLY VERY INTERESTING QUESTIONS AS WELL. THE LATEST PROTESTS WE’VE SEEN IS IN SOME WAYS PART OF THAT COCKROACH PARTY OF YOUNG PROTESTERS OUT THERE AS WELL THAT ARE PROTESTING WHEN IT

1:20:48 COMES TO THE REVISION OF THESE VOTER ROLLS US WELL. YOU ARE SEEING THAT DOMESTIC SOCIAL UNREST UNFOLD A FEW BLOCKS AWAY FROM WHERE WE ARE AS WELL. IT WILL BE INTERESTING IF HE WILL ADDRESS IT IN THE SPEECH LATER ON TODAY BUT CERTAINLY THERE IS STILL MUCH TO TALK ABOUT HERE IN INDIA. WE WILL BE ON THE GROUND FOR THE NEXT FEW DAYS AS WE COUNT DOWN TO THAT SPEECH FROM THE PRIME MINISTER.

1:21:23 WE WILL BRING THAT SPEECH LIVE AS SOON AS WE SEE IT HERE IN NEW DELHI. COMING UP, SOME HIGH-PROFILE SPEAKERS AS WELL, NOT JUST WHEN IT COMES TO THE PRIME MINISTER BUT THE FORM WHICH BEGINS IN NEW DELHI TODAY. YOU HAVE THE LIKES OF THE FINANCE MINISTER INDIA, AND THE FORMER U.S. CONGRESS – COMMERCE SECRETARY. YOU ARE STILL WATCHING THIS BRUTAL BLOODBATH WE ARE SEEING IN KOREA RIGHT NOW. DAVID: SPEAKING OF HOSTILE

1:21:57 ENVIRONMENT, THAT WE GO. 7% ON THE KOSPI, RIGHT ON CUE AS YOU TOSSED TO ME, JUST CROSSING THE THRESHOLD ON THE KOSPI RIGHT NOW. IT’S NOT PRETTY, LOOKING AT LEVERAGE UTS IN HONG KONG. WE WILL BE UNPACKING THE STORY FOR YOU EVEN FURTHER. KOREA IS DOING THE DANCE AGAIN, IT’S A SINGLE DAY MOVE, IF HISTORY IS ANY INDICATION.

1:22:30 WE DID BREAK BELOW THE 200 DAY MOVING AVERAGE LOWER AT THE OPEN. WE WILL SPEAK WITH EGYPTIAN FOREIGN MINISTER TO DISCUSS IF THERE’S AN OPPORTUNITY FOR EGYPT TO PLAY A ROLE THERE TO STABILIZE THINGS. THAT’S COMING UP NEXT. THIS IS “THE CHINA SHOW.” ♪

1:23:02 DAVID: BRENT PRICE IS CURRENTLY TRADING AT 105, GIVEN THE TURMOIL WE ARE SEEING ACROSS ENERGY MARKETS AND THE EVENTS OF LATE. BLOOMBERG ECONOMICS ACTUALLY SAYS BRENT COULD HIT 20 A BARREL IF THE CONFLICT WIDENS WE ON WHERE THE CURRENT SETTINGS ARE. THAT’S HEAD BACK TO THE IMF MEETINGS IN BANGKOK WHERE

1:23:35 AVERILL IS STANDING BY WITH YOUR NEXT GUEST. AVRIL: THAT’S RIGHT, JOINING ME NOW IS THE EGYPTIAN FOREIGN MINISTER. GREAT TO HAVE YOU, THANKS FOR TAKING THE TIME, ESPECIALLY AT A TIME LIKE THIS, WE ARE SEEING DEADLY ATTACKS OF THE WEEKEND IN SAUDI ARABIA. WHAT SORT OF RESISTANCE AND SUPPORT EGYPT HAS BEEN OFFERING TO THE KINGDOM AT THIS STAGE. >> OF COURSE.

1:24:09 OR FOR SOLIDARITY TO ASSIST THE COUNTRY OF THE KINGDOM OF SAUDI ARABIA. THEIR NATIONAL SECURITY IS PART OF OUR NATIONAL SECURITY, SO WITHOUT ANY RESERVATION WE ARE FINDING ALL SORTS OF SUPPORT AS WELL AS SOLIDARITY WITH THE PEOPLE IN THE GOVERNMENT OF THE KINGDOM OF SAUDI ARABIA.

1:24:40 WHENEVER ASKED BY THE SAUDI’S – AVRIL: WHAT HAVE THEY BEEN ASKING FOR? >> THIS IS UP TO THEM, BUT I CAN TELL YOU VERY CLEARLY THAT ANY KIND OF SUPPORT FROM EGYPT, OUR RESPONSE WILL BE POSITIVE. AVRIL: THIS IT MEAN EGYPT IS OPEN TO DIRECT TALKS IN YEMEN? >> WE WOULD PROVIDE A DIFFERENT KIND OF SOLIDARITY AND SUPPORT

1:25:20 INTO SAUDI ARABIA. IT’S FULLY CONDEMNED BY EGYPT AND – AVRIL: WHERE DO YOU HEARING FROM THE SAUDI’S IN TERMS OF THE LEVEL OF SUPPORT THEY ARE EXPECTING FROM WESTERN ALLIES INCLUDING THE U.S.? >> I CANNOT SPEAK ON THEIR BEHALF, BUT LET ME RESTATE OUR CLEAR POSITION THAT WE CANNOT ACCEPT UNDER ANY JUSTIFICATION

1:25:54 OR ANY CIRCUMSTANCES THOSE ATTACKS ON CIVILIAN TARGETS IN SAUDI ARABIA FOR ANY KIND OF VIOLATION OF THE SAUDI SOVEREIGNTY AND INTEGRITY. WE STAND FOR ME BESIDE SAUDI ARABIA BECAUSE WE CANNOT ACCEPT AGGRESSIONS OR ATTACKS ON THE SOIL OR THE SOIL OF ANY OTHER COUNTRY. AVRIL: IN YOUR MIND WHAT WOULD IT TAKE

1:26:28 TO MOUNT A CREDIBLE THREAT AGAINST THEM? >> AGAIN, WE ARE PUSHING FOR STOPPING THOSE ATTACKS AND AGGRESSIONS AND WE HAVE TO WORK FOR DE-ESCALATION WITH THE WHOLE REGION BECAUSE IT’S A MILITANT SITUATION WE HAVE ALSO THE FRONT WITH IRAN WHICH IS ALSO VERY TENSE AND WE HAVE OTHER CRISES IN THE REGION INCLUDING IN SUDAN AND LIBYA.

1:27:02 BESIDES HIM AND WE ALSO HAVE LEBANON AND SYRIA. AND DON’T FORGET THE CONFLICT IN THE REGION, IT’S A COMPLICATED SITUATION AND OUR MAIN TARGET IS FOR DE-ESCALATION AND TO EASE THE TENSION BECAUSE I CAN ASSURE YOU THAT THE ONLY WAY OUT IS THROUGH POLITICAL AND

1:27:34 DIPLOMATIC SOLUTIONS. AVRIL: GIVEN THE GRAVITY OF THE SITUATION, WHAT IS THE LATEST ON EGYPT’S STANCE OF PERHAPS JOINING THE DEFENSE PACT, SOMETHING PAKISTAN AS WELL AS TURKEY HAVE ALREADY SIGNED UP? >> WE HAVE A GROUP YOU’RE GOING TO MEET SOON, WHICH INCLUDES DIFFERENT COUNTRIES IN ADDITION TO EGYPT. THIS IS THE PLATFORM FOR DISCUSSIONS, FOR TALKING ABOUT THE FUTURE OF THE SECURITY REGIME IN THE MIDDLE EAST AND

1:28:11 WHAT IS OUR COMMON PERSPECTIVE ABOUT THE SECURITY ARCHITECTURE IN THE REGION. THIS IS UNDER DISCUSSION AND AS I MENTIONED BEFORE, THIS AGREEMENT IS UNDER CONSIDERATION, SERIOUS CONSIDERATIONS ON THE EGYPTIAN SIDE, AND AS I MENTIONED, WE HAVE A STRONG BILATERAL COOPERATION AND POLITICAL, MILITARY, ECONOMIC, COMMERCIAL WITH THESE COUNTRIES, WITH SAUDI ARABIA, PAKISTAN AND

1:28:48 TURKEY AND WE HAVE A COLLECTIVE PLATFORM, AND THAT’S WHY , IN A STATEMENT ISSUED JUST TWO DAYS AGO ON THE EVENTS OF THE ATTACKS AND AGGRESSIONS OF THE SAUDI’S. AVRIL: SO THERE’S A POSSIBILITY THAT THERE MIGHT BE MORE DISCUSSIONS. TALK TO US AS WELL ABOUT WHAT YOU FORESEE IN TERMS OF THE IMPACT TO TRAFFIC THROUGH THE SUEZ CANAL GIVEN THE ESCALATION ON THE RED SEA AND OTHER CHOKEPOINTS.

1:29:23 >> WE HAVE AN EFFECTIVE IMPACT TO THE DISRUPTION, WHETHER ON THE STREET OF KOSOVO OR THE RED SEA, AND OF COURSE TRYING TO MAKE A NEGATIVE IMPACT ON THE SUEZ CANAL. BEFORE THE TOTAL LOSS OF THE SUEZ CANAL

1:29:54 , $20 BILLION IS NET LOSS OF THE INCREASE OF THE SUEZ CANAL. ALSO THERE IS NEGATIVE IMPACT ON THE SURGE OF ENERGY PRICES, FOOD PRICES AND BECAUSE IMPACT OF COURSE IN ENERGY SECURITY AS WELL AS FOOD SECURITY. THE CURRENT FISCAL YEAR, THE CURRENT BUDGET, WAS BASED ON

1:30:28 THE ASSUMPTION THAT THE PRICE PER BARREL OF OIL WILL BE AROUND $65. NOW IT IS RECEIVING 1.5. AVRIL: HOW PREPARED IS EGYPT FOR THAT SCENARIO? >> EXTERNAL SHOCKS COMING FROM THE GOVERNMENT AND THEN THE EUCLIDEAN CRISIS, ESPECIALLY

1:31:03 THAT WE ARE NUMBER ONE WITH, AND THE ISRAELI OCCUPATION OF GAZA AFTER THE SEVENTH OF OCTOBER 2023 EVENTS. AND FINALLY NOW THE ESCALATION IN THE GULF AREA BETWEEN IRAN. THE GYPSY AND ECONOMY PROVED THEIR RESILIENCE AND MANAGED TO ABSORB ALL THOSE EXTERNAL SHOCKS , AND WE ARE GROWING FOR THE FIRST SEMESTER OF THIS

1:31:36 FISCAL YEAR BY 5.3%, WHICH IS GOOD. THE INFLATION RATE HAS BEEN DECREASED FROM 35% TO AROUND 14 PERCENT NOW. SO THE ECONOMY IS MOVING AHEAD AND READY TO ABSORB THOSE SHOCKS AND RESILIENCE BECAUSE OF HIS FOUNDATION AND DIVERSITY. AVRIL: IT’S GREAT TO HAVE THIS CONVERSATION WITH YOU.

1:32:07 THANK YOU FOR TAKING THE TIME, ESPECIALLY AT A TIME LIKE THIS. DAVID: FANTASTIC, AVRIL HONG FOR US THERE. A GEOPOLITICALLY RELEVANT QUESTION RIGHT NOW OF COURSE. FOR OUR BLOOMBERG SUBSCRIBERS, YOU CAN TURN TO YOUR TERMINAL AND GET SOMETHING LIKE THIS ON MY LEFT ON YOUR SCREEN. BASICALLY THE KEY TAKEAWAYS AND

1:32:39 WHAT’S GOING ON, RESILIENT, NOW AT RISK, BUT THEY HAVE KEPT THE FORECAST AT 3.4 GOING INTO 2027. THEY HAVE RAISED THE GROWTH ASPECT THIS YEAR BUT WE ARE ABOUT TO WRAP UP 2026. IT’S NOT PRETTY BUT WE ARE COMING OFF LOWS, BELIEVE IT OR NOT, THE KOSPI INDEX DOWN 6.9, WAS DOWN AS MUCH A 7.3% AT ONE POINT. THAT’S A STORY FOR MARKETS NOW. LET’S TAKE A BACK TO WHERE YVONNE IS, THE OTHER BIG STORY WE ARE TRACKING TODAY. YVONNE:

1:33:20 IT’S INTERESTING IN THOSE COMMENTS, ALMOST LIKE A CASINO, AND WHAT HE SAYS IS THE COST OF CAPITAL AS THE BIGGEST CONSTRAINT IN THE WHOLE BUILD OUT OF AI RIGHT NOW. SO A KEY QUESTION AS WE CONTINUED THE COUNTDOWN TO WHAT’S HAPPENING HERE AT THE NEW ECONOMY FORM AND PRIME MINISTER NARENDRA MODI IS SET TO KICK OFF THE CONFERENCE IN HIS INAUGURAL SPEECH IN JUST A FEW HOURS. TALKING ABOUT I JUST AI BUT THE GROWTH PROVISIONS INDIA IS

1:33:51 PUSHING FOR WHEN IT COMES TO MANUFACTURING, INVESTMENT, TECHNOLOGY AND REALLY AT A TIME WHEN DOMESTIC ISSUES ARE COMING TO THE FRAY. WE CAN TALK ABOUT THE OPPOSITION IN THESE PROTESTS THAT ARE STILL HAPPENING ON THE STREETS AND THE DEFENSE OF THE CURRENCY AS WELL. THAT’S IT FOR US HERE ON THE CHINA SHOW. INSIGHT WITH HASLINDA AMIN IS COMING UP NEXT. ♪