TLDR;
This episode of "The China Show" on Bloomberg Television discusses the progress of trade negotiations between the U.S. and China, focusing on key points such as Chinese purchases of U.S. soybeans, critical minerals, and fentanyl. It also covers other significant events, including President Trump's deals with ASEAN partners, South Korea's investment talks with the U.S., and economic indicators from China and the Philippines. The show features interviews with experts and live updates on market reactions and diplomatic activities.
- U.S. and China making progress on trade deal, aiming for finalization at APEC summit.
- South Korea and U.S. discuss investment plans, facing sticking points.
- China's industrial profits show strong growth, boosting market sentiment.
Bloomberg: The China Show opens [0:00]
The show starts with an introduction to the new studio in Hong Kong and highlights the progress in U.S.-China trade negotiations. The potential trade deal includes Chinese purchases of U.S. soybeans and critical minerals. South Korea's president notes that talks with the U.S. on a $350 billion investment plan are facing major obstacles. President Trump is in Kuala Lumpur for the ASEAN summit, where he announced several deals with regional partners.
What to watch in Greater China today [1:42]
The hosts discuss the new studio setup and the significance of the week's macro events. Markets are reacting positively to news from Malaysia regarding soybeans, fentanyl, and export curbs. Trump is heading to Tokyo, and the markets are at record highs. The hosts review key market indicators, including the Aussie, Yen, Nikkei, and commodities like oil and copper.
US, China tee up sweeping trade deal [4:25]
The show discusses the progress in trade negotiations between the U.S. and China, noting that negotiators have come to terms on several contentious points. This sets the stage for a final agreement when Presidents Trump and Xi meet. President Trump emphasizes the negotiating leverage gained from the threat of tariffs.
BNP Paribas' Jason Lui on market outlook [10:41]
Jason Lui from BNP Paribas discusses the market reaction to U.S.-China relations, particularly in the technology sector. Despite volatility, Asian markets have remained relatively stable. He highlights the importance of asset reallocation in the onshore market and the potential for policy clarity to encourage household investment in equities. The conversation touches on the Fourth Plenum, which reaffirmed growth targets and a commitment to high-tech innovation. Lui suggests focusing on software applications within the tech sector due to more attractive valuations.
Alert: Chinese FM Wang Yi speaks at Lanting Forum [16:44]
The show provides a brief update on Chinese Foreign Minister Wang Yi's speech at the Lanting Forum, focusing on diplomacy and global governance. This occurs as preparations are underway for the meeting between President Trump and Xi Jinping at the APEC summit in South Korea.
Breaking: PBOC sets yuan fix at strongest since Oct. 2024 [17:25]
The People's Bank of China (PBOC) sets the yuan fix at its strongest level since October of the previous year. This move is seen as a potential olive branch as the U.S. and China prepare for further trade negotiations. The strong fix may indicate China's intention to maintain a stable currency leading up to the finalization of a trade deal.
Lee: US-Korea trade talks stuck on key points [18:12]
South Korea's president states that talks with the U.S. regarding a $350 billion investment pledge are stalled on major details. Negotiations cover both security and economic issues, with trade discussions having reached a preliminary agreement but still requiring detailed hashing out. The president emphasizes the need for a mutually beneficial outcome that supports U.S. manufacturing while considering Korea's unique circumstances. He also addresses concerns about potential disadvantages for Korean companies and the importance of maintaining a balanced relationship with both the U.S. and China.
Breaking: China industrial profits up most in two years [26:58]
Breaking news reveals that China's industrial profits have increased by 22% year-on-year in September, marking the fastest growth in two years. This positive economic indicator may be partly due to a low base effect.
CSIS's Scott Kennedy on US-China trade talks [28:40]
Scott Kennedy from CSIS discusses the U.S.-China trade talks, suggesting that a deal is likely but that details are still unclear. He notes that the Chinese have been quiet about their commitments, and the U.S. may be overstating the deal's depth. Kennedy points out that key issues like the scope of export control delays and specific purchase amounts of soybeans remain uncertain. He also highlights that fundamental disagreements about economic fairness and security are not being addressed. Kennedy suggests that the U.S. might delay its 50% rule on subsidiaries in exchange for China delaying its rare earths export control regime. Taiwan is unlikely to be part of the agreement.
Philippine central bank's Benjamin Diokno on monetary policy outlook [36:33]
Benjamin Diokno, a monetary board member at the Philippine Central Bank, discusses the Philippine economy, noting that it may slow down due to trade uncertainties and reconstruction controversies. He anticipates a transition period in 2026 but expects recovery by 2027-2028 if the government addresses budget and implementation issues. Diokno supports a December rate cut and emphasizes that the central bank is data-dependent, focusing on growth, employment, and inflation. He believes the Philippines is less affected by trade impacts compared to other Asian economies and is comfortable with the country's international reserves.
Alert: President Trump set to leave Malaysia for Japan [45:21]
President Trump is set to depart from Malaysia to Tokyo following successful talks. Markets interpret this as a significant de-escalation in U.S.-China trade relations. In Tokyo, Trump will meet with the new Japanese Prime Minister, Sonia Takeuchi, to strengthen the Japan-U.S. alliance.
US, China tee up sweeping trade deal [50:36]
The show revisits the U.S.-China trade deal framework, highlighting that top trade negotiators have come to terms on contentious points. The agreement awaits final confirmation from President Trump and Xi Jinping. The discussion covers soybeans, shipping levies, and fentanyl, but questions remain about export curbs, particularly on rare earths and technology.
US-China trade progress eases haven demand [53:09]
The market reaction to the U.S.-China trade progress is analyzed, with bulls dominating the trading landscape. The positive sentiment is attributed to the surprise from the Chinese side, indicating their commitment to the agreement. This development is expected to push major trade problems into the future, allowing investors to focus on earnings and fundamental issues. The PBOC's strong yuan fix is seen as a supportive gesture, reinforcing China's commitment to closer ties with the U.S.
Asia Group's Daniel Kritenbrink on US-China trade deal outlook [58:18]
Daniel Kritenbrink from the Asia Group discusses the U.S.-China trade deal outlook, viewing the talks between Secretary Bessant and Vice Premier Li Fung as very positive. He anticipates a constructive meeting between Presidents Trump and Xi, potentially leading to relative stability in the U.S.-China relationship for the next six months to two years. Kritenbrink notes that both sides seem focused on stability, with the U.S. seeking resumed purchases of agricultural products and assurances on rare earths, while China desires tariff relief and a freeze on U.S. tech controls. He also highlights the importance of addressing the fentanyl problem and measures on shipping.
Qatar Airways Cargo's Mark Drusch on business outlook [1:10:05]
Mark Drusch, chief cargo officer at Qatar Airways Cargo, discusses the impact of U.S.-China trade tensions on cargo volumes. He notes that while Chinese exports have increased, their destinations have shifted. Capacity has been redirected from trans-Pacific routes to Europe, with growth in traffic from China to the GCC and Africa. Drusch emphasizes the resilience of global trade and the strength of major economies. He also highlights Qatar Airways' agility in responding to changing trade flows and its focus on high-tech and aerospace industries.
South Korea's Lee prepares to meet President Trump [1:20:09]
South Korea's president discusses ongoing negotiations with the U.S. regarding a $350 billion investment pledge, noting that talks are stuck on major details. He emphasizes the importance of a rational outcome that benefits both countries and addresses the visa issue for Korean workers in the U.S. The president also highlights Korea's position between the U.S. and China, stressing the need to maintain a strong alliance with the U.S. while managing relations with China. He expresses concern over Chinese sanctions on Korean subsidiaries in the U.S. and the potential for a real estate crisis in Korea.
President Trump heads to Japan after Malaysia [1:28:32]
President Trump is en route to Japan after trade deal framework was ironed out at K.L. The Chinese premier is starting the ASEAN Plus three summit. The next stop, of course, is Japan, where President Trump is currently en route to the country after leaving Malaysia.