US-China Trade Deal Await Trump, Xi Approval | The China Show 10/27/2025

We've created a framework for the two leaders to discuss. On Thursday in Korea. Treasury Secretary Scott Benson, there, speaking as U.S. and Chinese negotiators tee up a trade deal to be finalized by Presidents Trump and Xi Jinping later on this week. You're watching the China Show. I'm Yvonne Man with David in Glass. A very good morning to all of you.

We are kicking off a big week in our brand new studios here in Hong Kong. We're counting down to the open of trade: Hong Kong, Shanghai, and Shenzhen. Let's get to your top stories today.

It's risk on across these markets as investors cheer progress toward a wide-ranging trade deal between the U.S. and China. At the heart of that agreement are Chinese purchases of U.S. soybeans and the flow of critical minerals, though those details are to be finalized in Thursday's expected meetings between President Trump and Xi.

Meanwhile, South Korea's president tells us that talks with the US on a $350 billion investment plan remain stuck on all major details. "You wouldn't be eager to go do. I wish I did. See the U.S. will, of course, try to maximize its interests, but it must not be to the extent that causes catastrophic consequences for South Korea."

And I'm April Hong in Kuala Lumpur for the ASEAN summit, where President Trump announced a flurry of other deals with partners in the region. We'll have the details coming right up.

All right. Same show, new set. Though, Dave, come on. We're very excited about it to really salute the long-awaited sort of revamp of our Hong Kong studios here. If we could just do a bombshell of just how big it is and a big sort of labor of love when it comes to our New York team. They flew in the last couple of days to really get this going. And yes, we've thrown away the podium. So back to a nice, beautiful desk and, of course, plenty more to cover here this week. It is a big, big week when it comes to macro risk and events. It's almost like we did it on purpose. We did, actually. So what happened was on Friday, it was the old said breaking news, and then we rushed everyone. And that's, of course, an exaggeration. We can't wait to tell you all the stories from our brand new set here, some of the stories you want to hear, some of the stories you don't want to hear. But that is, of course, what we do here. We're looking at these markets and certainly just perfect timing to be able to leverage off what we have right now to tell the world the story right now, a big, big week ahead of the up, as we say.

Right. Looks like those two days in Kuala Lumpur were quite fruitful for the U.S. and China. There seems to be some consensus when it comes to likes of soybeans, fentanyl, export curbs. I think that's one thing. We still got to see what really happened there. But certainly markets are really liking what we've heard from Malaysia here. Of course, as Trump heads to Tokyo soon. Yep, in a couple of hours. We'll get to that in a moment. As Yvonne is pointing out, what a deal to be wrong these markets right now. In fact. I'll be back in a moment there with Iran. Let me just step aside and have a look at these markets right now. And of course, our first opportunity to show off our new set. And you know what? What we've done is we've taken markets and we've taken them at a record high. So that's that's our starting point today. Asia Pacific benchmark coming up on your screens. Dollar. And we're looking at the Aussie and the yen, a gauge of risk appetite right now. As you can see, it's risk on across these markets. Dollars on offer. Bond futures are on the way down. A closer look at equity markets: Nikkei, Cosby. Nikkei is at 50,000. Taiwan is coming online. The US futures bottom of the screens. It's green across your screens right now. No better way to look at risk appetite right now away from equity markets. It's really in commodities, right? Sea of a massive pop as far as oil goes. Copper should be opening up as things stand. And there was actually a chance when you look at so that the copper contracts traded in the US that we could actually see and we are very close to a record high, very close to record high in LME copper right now. This divergence between Bitcoin and gold, something to watch, of course, very closely within the equity complex. We already seeing that in fact play out the approach to the open today. So we had a challenging week for the most part of last week. Good end to the week. It looks like we are set for a rally here today. 50 Futures. I call it about 9% to the upside. Of course, as we talked about, oil is also catching a decent bid today on the back of all the news, encouraging news. Let's see how things might out, of course, out of the weekend, out of the Asian meetings, if it is a perfect sort of setup, as you say, for markets that I think people are really looking at now, APEC as possibly the the final signature really from President Trump and Xi on this trade deal that seems to be really ironed out over the weekend here. And as we talk about these top trade negotiators from both sides, they say that they have come to terms on a range of contentious points. Now, it does set the table for when the two leaders meet to finalize that deal at the meeting this week. Take a listen to President Trump: "gave me a great deal of negotiating leverage with the threat of the 100% tariffs on November 1st. And I believe we've reached a very substantial framework that will avoid that and allow us to discuss many other things with the Chinese."

All right. Let's bring in our reporters along joined side of call today. And of course, Midwin Lo here on set with us here in Hong Kong. Let me start with you. That's really where all the news was in the weekend going into this morning and hence why we're looking at risk assets rallying quite hard and we'll see how long it's last. Get us up to speed. What was what was agreed on. What do we know?

Well, there was really a flurry of activity over the week. I mean, coming into this weekend, there was still that overhang about the Trump-Xi meeting, right? Will be a one-day meet in South Korea. And then a number of sticking points given how they ratcheted up the pressure. We saw how earlier in the month Besson called the top Chinese trade negotiator on one of their mutual guns unhinged. So there was a lot at stake coming into this weekend. And then there were this flurry of like optimistic activity coming out of Malaysia, two days of trade talks between the top U.S. and Chinese trade negotiators on the U.S. side, led by Scott Morrison, Treasury secretary. And on the Chinese side, you saw the vice premier and these talks that took place in Medica 118, which, by the way, second tallest building in the world. The idea behind that is to really tee things up so that their bosses on Thursday, when they meet in South Korea and seal the deal, finalize a sort of trade agreement. So some of the key sticking points that have been cleared out of the way, there's been optimism about some resolution on fentanyl. Importantly, we're also hearing about increases of soybean purchases. And, of course, when it comes to us, optimism that there will be a delay in the restrictions coming from the Chinese side.

Yeah, that certainly seems to be why we're seeing most of the relief across these markets. I think just given that was what led to the recent flare-up. But tell us what basic readouts that we're getting from state media and how they're covering what happened in K.L. What's the message that China is sending so far?

Yeah, it's definitely a very positive tone for China. I mean, you just look at the visuals out of the Malaysia talks. You saw Harley Van coming out, a big smile on his face. He walked past reporters. He didn't talk to them, but looking very upbeat. And also the same photo with a big smile pasted on on that official readout on Xinhua news as well. And the Chinese side is saying they reached consensus on a number of issues beyond what Errol mentioned, the soybeans and fentanyl. There was also a shipping levies that was agreed upon. And you read between the lines when it comes to fentanyl. They said that they agreed on something there. It could mean potentially either a reduction or removal of that 20% fentanyl-related tariffs. And the tone, again, very positive. If you look at some of the editorials on Global Times, for example, quoted something from presidency himself saying that both US and China are capable of helping each other succeed and prospering together and that achievements are hard won. These turbulent are not something they want to see again.

Yeah, you know, markets are trying to figure out what and of the multiple angles to trade on today. Before I just get to you, I just want to also mention that Taiwan is coming on line, as we mentioned at the top of the show, 8 minutes into the session, there were already up 2%. Marco Rubio also commenting that the US will not change its Taiwan policy in exchange for a China trade deal. Speaking of April, what other deals were announced out of ASEAN?

Yeah, I mean, Trump really got busy while he was here on Sunday. He mused, by the way, for Japan in the next hour, as we understand it, and this flurry of activity in terms of not just trade deals or trade frameworks included for the likes of Thailand, Cambodia, Vietnam, Malaysia as well. And what stands out from that is not just the deal making that activity that is going on, but also how this is really part of the drive for the U.S. to secure this supply chain when it comes to critical minerals, because we did hear about some of these engagements with the Malaysians, for example. They have been looking to move up the value chain when it comes to critical minerals. But what do they need? They need investments to do that. So there have been positive developments in that regard. But when it comes to some of these deals, it's really about the devil being in the details as well, because, of course, there are a couple of other sticking points. For example, for Malaysia, this deal, it needs to commit to that purchase of 50 billion of U.S. goods for the Cambodians, even though they're sharing all these exemptions for some of their goods, they're still hopeful of holding out that garments will be exempt from tariffs. And this, don't forget, is accounting for about 60% of Cambodia's exports. So there are a number of details that still need to be filled in at the moment, David.

Tim. Fantastic. Thank you so much. Everlong there in Malaysia for us and minamino here on set as we approach the open 20 minutes. And we were looking at futures pointing to some decent upside right now 8/10 of 1% on a50 futures, some strength coming through and the Chinese currency markets are initially loving this, dare I say. Jason lui is here with us on sets head of equity and derivative strategy at BNP paribas. This is the market reaction makes sense to you at this point?

Yeah, absolutely. I think if you look at the price action over the past few weeks, certainly in the Hong Kong market, we've been going through a roller coaster ride in terms of the US-China relations, and especially when you look at the technology side of things like we've seen Hang Seng Tech did incredibly well in September and it's given back almost half the gains for about a week and a half. And we're starting to see a little bit of that recovery towards the end of last week. And so hopefully today we've a little bit more definitive, positive news That will be good. But what's more interesting to us is on the Asian market that on a point to point basis for the entire month of October, despite all the volatility between us and China, when it comes to geopolitics, the market's actually flat to small up. I think that's something we briefly discussed last time when we talk about this kind of so-called global market in Asia.

Yeah, you mentioned the silver market. What do you think is essential to providing that stability in that Asian market now? And what part of the market is?

Sure. I think when we talk about global is mostly focusing on the onshore market. And the key here is about asset reallocation. I think it's been well understood in the market that the onshore risk-free rate will remain quite low for some time. And so there is this desire that the onshore household needs to move the money into something that's a little bit higher yielding. And so in order to encourage that process, the policy makers hoping to create this equity asset class that is something stable enough where the household can put money in in the medium to long run. We have seen some of that happening, being on the ETF, buying by the national team. But more importantly, we want to see some of that happening from a policy clarity standpoint. And so the fourth plan last week actually provided some interesting kind of guidelines in terms of what to expect in the next 3 to 5 years.

What does it tell us about that from the fourth Plenum? What was the takeaway for you there?

Sure. I think for us two to perhaps something worth noting, point number one, even though it's not a usual topic for a fourth plenum, the government did acknowledge or commit to fulfill the four year target for growth. And I think that is a positive surprise because previously the market were more thinking about what is it going to be in the five year plan rather than anything immediate. So with that statement included, we are off the view that there could be some easing between now and the end, likely in the form of ten basis point in the risk-free rate. The other one that is interesting for us is this recommitment to high tech innovation, and that has been a major theme for both the Hong Kong market and the onshore market. So I think having the medium term to long term visibility should continue to allow the investor to feel a bit more positive about the market.

If it's about tech innovation, a lot of these homegrown giants or, you know, the ones that they've trying to at least nurture and build, I mean, they're trading at very elevated levels here right now. I think we talked about some of the ship names as well. Can we still stay on those kind of group of stocks or where do you tilt to now?

I think when we talk about the tech investment thesis, we have to divide into the hardware and the software part of things. I think on the hardware part, you're right, when we look at a lot of the leaders in the China onshore market, they're trading 40 or 50 times or even higher p e But that's also a reflection that the starting point for China's hardware side is quite low. And so investors are hoping that in three years time they can at least close the gap with some of the global peers. But when we look at the software Saudi application site, this is where we think could be more opportunity, at least in the near term, which is the Hang Seng technology index, where the index itself is trading roughly 20 times forward P for the next 12 months, actually below its historical average since the inception back in the 2020s. So I think that is a interesting entry point when it comes to the valuation discount versus his own history and also versus some of the more, I guess, expensive peers both in China and outside of China.

Since you mentioned Hang Seng Tech, he alluded to this earlier on. There was a wobble last week and momentum slash growth. There's an overlap between the two. Do you think that's back? What what do you think happened last week?

So if we probably took a step back maybe last two weeks because when we noticed that you had that peak to trough retracement of quite a meaningful amount, I think a couple of things happened. Number one, there were a lot of gains that was concentrated around September, especially when it comes to Hang Seng technology index. Number two, we actually saw a rotation from these kind of high growth sensitive stocks to value stocks. Yeah. If you look at the month of October, the high dividend stocks in Hong Kong actually done very well. We have a basket of high dividend stocks that actually posted a 6% return month to date, whereas the broader HCI market is actually down about 2%. So you have this kind of rotation from growth to value or to dividend yield, which we thought would happen in December. But now it seems to be a little bit earlier. But now with this positive news for Alpha over the weekend, then it is possible that part of that money will rotate back. But. On an international level. We also seen something quite interesting. So when we look at the ETF listed in the US, despite the drawdown, we actually see money info into the China ETF.

So the Okay, let's get to work. That's right. Are you is there any suggest I think to suggest that this column is going to last? I mean, what are you looking for in particular, maybe at a peak on this whole grand bargain that seems to be ironed out to really kind of add more conviction for you? What specifically are you looking for in this trade deal?

I think the expectation of this particular meeting has evolved quite a lot over the past few weeks because let's see if we we run the clock about three weeks ago. We're just happy that President Trump and President Xi are finally meeting in person. And then in between, we have both sides kind of increasing pressure in terms of this kind of trade negotiation. So I think part of that's been kind of eased up over the weekend. But I think for the market to get more comfortable, we hopefully want to see a little bit more concrete. You may recall that us and China have done multiple rounds of trade talks and the market has not actually seen the actual agreement. We've seen statement from both sides, but we actually haven't seen the actual agreement. So if President Trump and President Xi can deliver an actual statement on the terms that are being agreed upon, I think that will provide more comfort to the market.

Okay, Jason, we're going to leave it there. But thank you so much for bringing in our new studio. Thanks for having me. Head of equity and digital strategy at BNP Paribas. Here we bring you some live pictures that we're seeing when it comes to the foreign minister of China, Wang Yi. He is speaking at the Lanting forum on when it comes to diplomacy, global governance. We'll bring you some updates here on what he has to say. Of course, as we count down to President Trump and Xi meeting at the sidelines of APEC there just a few days there in South Korea. So big, big week. Absolutely. Big week. We're counting down to the opening of trade. The first one of the week we're called higher crossed futures. 13 minutes away, the opening bell. You're watching the China show. Good morning. Least international rules should not be applied to like the Goodman College once only. Welcome back to morning. And watching the China show. You're in time for the strongest renminbi fix in a year. In fact, first time I think we're seeing a seven or eight handle on the midpoint today. As you can see, we're looking at already some weakness in the dollar, even more so following the strong finish. Yeah, perhaps, potentially it could be a bit of an olive branch, of course, as the two leaders meet, set to be there later on this week. So maybe this is a sign that China is keeping the currency at least strong before those negotiations and, of course, that final signing of that trade deal.

Let's talk a little more about South Korea, because the president says that talks with Washington on a $350 billion investment pledge remain stuck on all major details. He spoke to me on ahead of his Wednesday meeting with President Trump on the sidelines of the APEC summit in Jamaica. And they have stolen jumbo tuna. The negotiations between Korea and the United States are proceeding in two areas: the security and economics. Simultaneously. Negotiations in the field of security issues are going very well. For negotiations in the area of economics, especially trade, have reached a preliminary agreement, and we're in the process of hashing out the details. The discussion is ongoing and there are some differences of opinion. But the delay does not necessarily mean that this is a failure. We already have a comprehensive agreement and we're currently working on the details. So I would appreciate your patience. It helps. Okay. So so and then when it comes to Japan's deal, there have been some divergent interpretations. Is South Korea trying to make it more specific than Japan's? And if that's the case, could that become more burdensome for Korea later on?

I mean, given everybody and Korea is not Japan, I do not fully know what deal the U.S. and Japan have struck. But from our point of view, we have our own circumstances and we will reach a rational result that suits us. Of course, the example of Japan or Europe could be a base that we can refer to, but in the end we must find a way which takes into account Korea's circumstances that is acceptable to Korea and also helps the United States in its manufacturing renaissance as we search for a mutually beneficial path. There will be differences as well as alignment of opinions topped online opportunities in finding common ground. Could the size of the US Investment Fund to become smaller to Japan shape the method of investment? The amount of investment? The timeline and how we will share the losses and divide the dividends. All of these are main sticking points. The U.S. will, of course, try to maximize its interests, but it must not be to the extent that causes catastrophic consequences for South Korea. The United States is the leading country in the world when it comes to democracy and rationality. South Korea is an ally and friend of the United States. So we believe that we will be able to reach a rational result that is acceptable to all sides. And this is what has to be done.

Even a pivotal highlight of the APEC summit is the upcoming meeting between President Trump and Xi Jinping. How important is this dialogue for South Korea, hunger and so on?

When it comes to the supply chain, the world is divided into two blocks facing off each other, one led by the United States and one by China. Korea is situated both geographically and economically between these two. We are situated in between two grinding stones, and it's a situation akin to having both arms pulled by China and the United States. This is both a challenge and an opportunity. We cherish our baseline policy, emphasizing the Korea-U.S. alliance and Korea, US-Japan trilateral cooperation. At the same time, we do not seek to sever ties or pursue excessive confrontation with China or socialist nations. Korea will continue to cherish and emphasize this alliance with the United States and at the same time manage its relationship with China.

All right. That was the South Korean president, everyone there speaking to our very own Sherri on a very, very big interview. Of course, as we count down to a peak. And certainly low risk assets are right now looking very, very upbeat on this Monday morning. Dave, you have a very good morning. If you're along these markets, 1.3 to the upside and the Hang Seng index, plenty more ahead. This is the China show. Good morning. Welcome back to the show. We're counting down to the opening of trade. Risk assets are ripping higher. Our starting point this Monday is a record high on Asia Pacific. We're looking at the Nikkei for the first time ever. We're trading at 50,200. We'll see whether we close at these levels here. Yeah, I think the vibe could continue when it comes to the China market. Open just minutes away here. We already seeing futures popping here this morning on the back of this framework that has been set out between President Trump and Xi to sign at a peak in just a few days as well. And there you go. The open is coming up next. You're watching the China show. Welcome back. You watching the China show? Counting down to the open of trade, 40 seconds away. Almost every single sector is up across the Asia Pacific. You have I.T., industrial cyclicals. Everything that's pro risk is back on the table. We're watching gold as well, going the opposite way and how that will show up across these Chinese markets once things open up in a couple of seconds. Also, a very strong fix coming through out of the PBOC. So a lot to be encouraged about today. Yeah, there is mojo behind momentum. Once again, we have a new set. What's not to be happy about really? I had to get used to talking to you from a distance now because I'm not used to it. I'm not. Why are you so far away? Usually we have much closer proximity, but right now we have so much to showcase here on our news set. The different corners of the market, of course, of the set that we have to really show here in the next few days as we count down to a peak. So certainly the good news and good vibes continue here today on the China show. You take a look at how these markets are set up and opening up. It is looking to be a very, very good one here. So we saw the records are still set here when it comes to Asia. China right now seems to be adding to that here as well. We take our CSI 300. We're up 8/10 of 1% here right now. Yields are on offer. Her 30 year yields are up one basis points as well. And you're seeing commodities are bid up. Copper, steel, iron ore, Shanghai are all catching a bit here this morning. Interesting enough, you're watching, of course, some of these chip names like Haberkorn. The local names are doing quite well. Take a look. Cabochon. We're up 2% here at the moment. Cattle Asia is are also up 1%. So tech should actually do very well in the face of this because we mentioned about what was reached in terms of a consensus. Right. Whether it was shipping fentanyl, soybeans, what perhaps was not mentioned as much or perhaps maybe is a good sign for the market is that we didn't hear too much about air technology. Right. And what these export curbs are going to relate to. So that certainly might be a sign of maybe the good times can continue for at least now. Right. Let's take a look what it comes to Hong Kong. And this is what the open is looking like, just like we talked about already seeing a massive bid, the pre-market. There you go. We're up close to 2% here right now. And you are seeing, of course, Alibaba up around 170, 435 bucks here. Right now. BYD is up some close to 3%. Tencent also up one and a half percent here. So certainly tech could be the key beneficiary right now and certainly the most sensitive sort of sector to any sort of trade headlines we're going to get for the next few days. I keep mind watch the renminbi as well. Right. We have the strongest fixing from the PBOC in about a year. So at least when it comes to what the PBOC, what policymakers are doing is that they are keeping this currency as strong. And in light of these kind of trade negotiations. So maybe it could be a good olive branch here. We're hovering around 711 levels for dollar China here right now and some of the wars watch sectors in particular. So Rare Earth certainly is in focus here. So the US has said that China will defer when it comes to its export curbs around rare earths. Right. We're still waiting for maybe confirmation on the Chinese side of that. You see some reports for the readouts on the Chinese side. May not specifically confirm that, though. But then again, you are seeing some of these rare earths stocks are doing quite well here today. We're also watching everything from soybean, fentanyl and shipping stocks. Right. These were seen to be the ones where we did reach some sort of agreement. A mixed picture here right now, but we're certainly watching some of the shipping stocks, agriculture, soybeans and the like here. But what is really clear is what we're seeing is this unwinding of havens here, Right. Whether it is the Aussie pair where you are, continue to see a bit on that pair. But then again, gold is getting a bit of a sucking sort of sapping sound here because it seems like it is a little bit more risk on here right now rising you are seeing when it comes to the gold miners their marginal losses, though. I mean that while Google is still doing quite well here today. But take a look at some of the China gold ETFs. We are seeing a bit a slight slide now selling off here right now. So that certainly is a good indication of where resources are going to go for the rest of the day. Dave.

Yeah, you know what? I'm still getting used to it. Number one, because of this new asset. Here's another flex. I'm still getting used to my new chair. The other thing I'm still getting used to seeing is actually gold might actually break below 4000. So like lots of lots of things to watch here as well. Also just breaking right now is industrial profits. And here's an exciting number for you. 22%, I'm calling it even 22% year on year. That's for September. That's the highest, fastest growth clip for industrial profits going all the way back about two years or so. So that story might also be the low base keeping right might also be the low base also playing out as far as that is concerned. And I involution this is a conversation we've had, of course, around those lines as well. Now back to our top story today. Energy One is pointing out rare earths is just a very good example of look at what the US said, look at what the Chinese side said or maybe the lack of details on that side. Look, all the Chinese media are saying, do you split the difference until we get more information from both sides? It's really what that story looks like. So in other words, we did hear from Scott Bastian, of course, and he said that they have come to terms on this range of very contentious points, which is a good thing. Have a listen.

"Those soybeans were all. He's going to be on the market. It's a global market. The three leading suppliers are Brazil, Argentina and the U.S. And I believe that we have brought the market back into equilibrium. And I believe that the Chinese will be making substantial purchases again. I'm also anticipating that we will get some kind of a deferral on the rare earths export controls that the Chinese have discussed. Again, this will all be, you know, we the the my my counterpart, the vice premier and I have set the framework and it will be up to the two leaders to discuss the final terms."

Well, joining us now from Virginia is Scott Kennedy, senior adviser and trustee, chair in Chinese business and economics at CSIS. Scott, it's great to have you here. Obviously, we can't kind of underplay the significance of what we heard over the weekend. What do you think was sort of the key sort of message here? Is this deal good to go?

I think it's likely good to go. We still don't know all of the details because the Chinese have been pretty quiet about what they've committed. And we've not really heard from the U.S. what they've committed to do. So there's still some news to learn. But I do think that the signals and breadcrumbs that have been sprinkled are positive. And so I don't want to rain on markets parade, but we'll have to see. And this probably means that we'll get a few months of stability in the relationship. And folks who are in agriculture and shipping and use rare earths should be happy about what's likely to transpire when the two leaders meet later this week.

Yeah, Scott, the I mean, it just I mean, I think you hit the nail on the head there and I wonder if is it a reason to be pessimistic or measured? Let's put it that is it a reason to be measured that we haven't yet heard? To the extent that we've heard from the Americans, We've heard from the Chinese?

I think so. Sometimes this U.S. administration over advertises the depth and breadth of deals. We heard that in secretary percent's comments that you played. He said some kind of delay. Is that going to be a delay that covers dual use or everything? And so what will what will the size of the purchase of soybeans be? Well, fentanyl tariffs go down simultaneously with China's implementation of their commitments. Those are things that we have to learn. And, of course, there's a lot of things that are very important to the US and other countries about China's economic behavior, which don't appear to be part of the ongoing negotiations. There is also this sort of interpretation that the US export controls will stay. We haven't heard that from the Beijing side.

I'm just wondering, Scott, what are you hearing right now?

My sense is, is that if China is going to announce that they are delaying imposing their new rare earths export control regime, we're probably going to see the U.S. do something similar with regard to the 50% rule that they announced at the end of September, which caught the Chinese by surprise, at least the breadth and breadth of it. And so in some ways, what what we may see on Thursday is the fourth taco where the Chinese countered and got the U.S. to back down to find some amount of stability. And that's good in the short term. It doesn't address the two countries fundamental disagreements about economic fairness and about economic security, but it does keep us from going over the cliff.

Hmm. The Scott we heard from Marco rubio that Taiwan was was not this case. Is Taiwan off the table, you think, completely, at least as far as this round is concerned?

My guess is it's unlikely to be part of an agreement because I think in the conversations they've had over the past few months, I think the Chinese were fishing for a greater commitment for the U.S., both in terms of language and arms sales and other things. But and I don't think the administration gave way. And I think the Chinese actually still like are find more acceptable. Some of the specific things the administration has done in the last few months with regard to Taiwan. And so I don't think they see that as something that is pressing that must be achieved. That might wait. Perhaps if they meet in the first quarter of next year in China.

What are you going to be looking for specifically when we do see those pictures of Trump and Xi at a park? I mean, what is going to confirm what we're seeing now, you think, and what would be most influential and I guess more impactful for markets?

Yeah, I want to hear specifics about the various elements that have been discussed regarding fentanyl. What are the Chinese saying they're going to do? And will the tariffs that the U.S. has imposed, those 20% tariffs come off now, or will it be dependent on future Chinese actions and results? And then I want to see what kind of if their dollar numbers to the sales of of soybeans. Is this tick tock? Well, both sides say that tick tock is a done deal. And will there be some more clarity and specificity about when President Trump will go to China? Or is that still something that is just potentially going to happen but not really laid out in stone?

Hmm. Scott, you mentioned the the US side, you know, might tend to over advertise. Obviously a bit more measured and cautious on the Chinese side. What I'm trying to figure out early and who knows what the week will hold, is is what the Chinese side got from all of this. What do you think? What do you think they walked away with?

My guess is a commitment for the U.S. to pull back some of those fentanyl tariffs and and probably delay the 50% rule on subsidiaries of companies that are already on the entities list that weren't originally covered. That seem to be the two most likely areas where they got got something. But we'll have to see as a lot of specifics, a lot of individual market issues that they've been talking about. And and so whatever come, a lot of different things could come out of this. But I want to emphasize, we are not talking about China changing its industrial policy, rebalancing its economy, issues that the U.S. has had for a long time. If you look at the recent summary of the forthcoming next five year plan. China is really not changing course in terms of emphasizing technology. So a lot of these bigger issues are still going to be with us and affect the relationship for quite some time.

Yeah, well, as they say, the long road to recovery. And Scott, the reason I frame it that way is we understand you just finished a marathon. You stayed up for us. How would you. How would you do, Scott?

I did all right. I was happy. Marine Corps Marathon for not so. For me, that's personal best for this marathon. My legs are happy with me, but I'm glad I did it well. And you can still make it on the show, cause. Amazing. Thank you. Thank you. I get you there. Senior advisor on the procedure and studies, business and economics. I see us. I see you. Have a nice rest, please. Coming out. We'll be live at the Bloomberg Business Summit in K.L.. Speaking with a former Philippine central bank governor, Benjamin now will discuss the outlook on rates, governance issues that do threaten potentially to stunt the economy. We are putting more ahead. This is Bloomberg. Welcome back. You watching the China show, not partaking of this party today. And something that we've seen really recently is the underperformance. And we're down across the benchmark in Manila today. This is going to make sense in a couple of seconds. April Hong is with us out of call with her next guest. April, what is Segway? I try to provide some of that illuminated context for you. But when it comes to emerging markets, I mean, we've been keeping watch on some of these Southeast Asian economies. Right. The tariff, in fact, a lot of them are very exposed to the external environment. And how does this play out with monetary policy? Joining me exclusively now is Benjamin Diokno, monetary board member at the Philippine Central Bank. He was, of course, also former BSP governor. Dr. Ben, really great to see you. Thanks for having me. Pleasure. The last time we spoke was actually in the depths of the pandemic. So it's been a long, long time and a lot has changed since then. We now have trade war 2.0. I wonder, given the tariff backdrop, what is your sense of the Philippine economy cannot avoid a slowdown next year?

I think it will slow down a little bit because of the uncertainty due to trade uncertainty and of course, the reconstruction controversy in the Philippines. So there will be some kind of adjustment. So I see 20, 26 as kind of a transition period. But I expect the president to fix this quickly and boldly because he has three more years history. And if the Philippine president useful. Yes, this has a six year fixed term. Yeah, no re-election. So thinking of your legacy, you got to fix this. You're alluding there to the government scandal and your colleague, the BSP governor Alfa Romeo, now has talked about how that could crimp private investments. Is that what you're seeing as well?

Yes. Yes. First of all, government construction was slow down because as they fix this problem, they have to lay off some people, change some rules, etc.. But also the sentiment of investors has actually gone chase a bit. And so I think a big part of 2026 will be a transition period. So we will probably be able to recover from this mess by the end of next year and 2027 and 2028 will be good year. We'll be on track.

But what do we need to see for there to be, in your words, a recovery from this mess?

Well, he has to strictly enforce the budget rules because I think Congress mangled his his budget, what they called the president's budget. He has to quickly give signal to Congress, respect my budget. So I keep saying. But the real test will be what they will do for the 2026 national budget. So and then, of course, the implementation will be unique and we need new people, new rules, etc.. And then, of course, if if he was bold actions in his bold actions, which hopefully will recover the investment countries.

So your sense is that this is something that can be fixed. It just might take time. And to your point, maybe something that's cleared up by the end of next year. But in the interim, between now and then, do you see complications for Philippines in terms of raising money? Does this affect its credit rating?

No, no, no. In terms of raising money, we don't have problems with that. I think it's really the implementation and this something sentiment of investors, those who are already invested in the Philippines, maybe they will postpone a little bit their expansion plan. And for those who are still planning to come in, they may have to evaluate based on what's happening. Right. But as far as wasting money, I think we don't want to have that problem in terms of monetary policy. Do you expect to support a December rate cut? Is that something you would be backing?

We're we're still on an easing cycle, so we just got it 75 basis points plus October, and there will be another meeting in December. I would expect another 25 basis points.

But there are some estimates out there that the Philippines does have more room for easing, some say 50, 75 basis points. Is that not part of your calculus?

That would be part of the calculus, but it depends on the timing. It would be 25 basis points in December and the rest maybe sometime next year.

But would it take to trigger that ensuing rate cut?

Well, we would love to say that we are data dependent. And so usually we look at the the data on growth and unemployment. And of course, inflation is pretty much under under control. We're stuck where we're below our target rates of 2%. We're below 2% right now and we expect to be in the middle of that range up to 2027. As far as inflation is concerned, we're okay. So it's really growth and employment.

What do you see in terms of the tariff impact? I mean, for the Philippines, maybe it's not the direct impact on exports demand. It's more about the second order effects. How are you seeing that playing out in the Philippines?

It's not as open as other Asian economies like maybe Malaysia and Singapore. So I think trade as part of our growth strategy is not that huge. We're not a big trader country, so we're not much affected by it. We are, of course, affected by the secondary effect, as you mentioned, but not as much as the developing countries in Asia. So not much of an impact.

What about the impact on the currency? Do you see 59 to the past? I saw some talk out there about potential for the weakness as well.

You know, the BSP does not target a specific rate. We we have adopted the free exchange rate floating extensively. We only intervene if there is the the adjustment is persistent and it could affect our inflation target. But right now, we're very comfortable with our huge international reserves, something like 109 billion. That's equivalent to seven months worth of imports based on the received option.

Is three months worth of imports Enough. So. Well, can you remind me I want to pick up on the point on coal reserves, but I think we'll save that for our panel later on. It's Bloomberg event for the moment. Not to jump. Noah has been great to chat with you. Thank you so much. Thanks. Thanks again for having me. Benjamin Diokno Bangko Sentral ng Pilipinas Monetary Board member. Guys, it's good to see him back on the airways there. Of course, there are three events to avail of. Bring that interview for us out on call. And as our conversation continues in the next hour, we're going to be having that conversation with the former U.S. Assistant Secretary of state for East Asian and Pacific affairs here, Daniel Rittenberg. We'll also have more coverage from Malaysia with our guests from Cosan on national. And c, i am b, this is bloomberg. Okay. We are just getting some while you look at some of the shipping names on the screens. And the reason we're looking at that is because of what was discussed at the Asian meetings on the weekend. And we're now looking at live pictures, of course, also of K.L. and the airport there. We understand that president

US President Trump is set to, of course, move on from progress there. We call it that from those discussions in KL, and I think he's about to make his way to Tokyo for his next stop here, Asia Pacific stop there.

In terms of how markets are interpreting this as a pretty significant de-escalation of the trade relations between the U.S. and China. Before, of course, he embarks on Air Force One to head to Tokyo, of course, and he's going to be meeting with the new Japanese Prime minister, Sonia Takeuchi, and certainly going to be a really interesting meeting there, given the fact that they did speak on Saturday to lay out the groundwork of this upcoming in-person meeting. And of course, she's fresh into this new role. So she is determined to elevate that Japan-U.S. alliance to even greater heights as well. So from K.L. all the way to Tokyo, we'll be tracking the president all this week. You're watching the China show.

There he is. All right. We are taking you straight back to Malaysia, where US President Trump, as you can see, is about to board. No dancing? No. Well, we don't know. Maybe one one was enough. Of course, as we as he of course descended into into Malaysia there for what looked to be very largely successful talks, of course, with many of the trading partners. And his next stop will be on to Tokyo, where, of course, our man on the ground there, Stephen Engle, he'll be covering, of course, that. So we've got the story covered for you from all across The Asia Markets are dancing, though, right, Dan, when you talk about what came out all that night in the last two days, as well as seems to be some consensus, some sort of trade deal that is going to be all systems go as far as the top trade negotiators bring that deal to President Trump and Xi for its final confirmation there as he steps into Air Force One heading to Japan.

So welcome back. What a day to launch our new sat here at the China show. And you know how markets are concerned. We talk about it, right? Momentum is back in quite a big way. Here. We take a look at how that the fanfare there you're seeing in KL looks like those good vibes are continuing here, especially how you see the offshore market is doing here. Hang Seng up 1%. David Yeah, well, taking off really, we're borrowing that from Air Force One, which is about to take off two markets right now where we are at a record high on MSCI Asia Pacific. Coming up on your screens very shortly is really a look at the Nikkei, which is now trading for the first time ever, 50,400 on the Nikkei leading the charge across the Asia Pacific. A lot of these, of course, are very momentum in growth driven equity markets. Cosby P is topping 4000. The clock from Jp morgan is 5000. The bull case is very likely to happen there. And Taiwan is also better by about 2%. Flip the page, please, if we can and have a look at that as we follow the US president around his Asia tour.

And all roads will lead to Korea, where of course that big meeting is set to take place with US President Trump and Chinese President Xi Jinping and what they can work out, the meat and the balance following the framework agreement that was agreed on over the weekend. Yes, everything from soybeans, shipping levies, they talk about fentanyl. I think those are some of the clear cut sort of things that came out from the U.S. side. I think there's still a lot of lingering questions on what we got and what we heard when it came to export curbs. Right. Is this really going to be a deferral when it comes to export curbs on rare earths? And what about the tech side from the US as well? We didn't get too much in terms of clear cut details on that. No, and that's really where the gap of information is right now. I think for markets that really is perhaps where you will find either your risk or opportunity because as you want to pointing out. Right. So we've heard a lot more details on merit. One year was was the time frame given as far as the pushback was concerned, Nothing so much from the Chinese side of things, which is really been spending a lot of the morning and we will be spending more of the program asking our guests really what they expect specifically from this meeting that will take place, really also to inform us of what this relationship looks like beyond this meeting. We've been counting down to four months and we can sort of underscore just how crucial this week is, not just in terms of the diplomacy front. Right. You talk about what else is happening in terms of macro risks. Right? You have the Fed, Bank of Canada and DOJ, They're all going to be meeting here this week as well. So I think four of the G ten are going to be having meetings here when it comes to monetary policy. The Fed's proposed a cut as well. And then you also have the megacap, you know, the max that is going to be reporting as well. So it's a busy, busy week, not just in the US, but also here in Asia, too. Yeah, it's, I think, the busiest earnings week as far as the number of firms reporting in the Asia Pacific, 500, 500 this week. Right. So there's that. It's going to be the busiest earnings day as far as China goes on Thursday. So, I mean, this Thursday is probably what I'm going to call in sick. I'm going to be in Korea. Yeah, we need to hear the Newport News is going to be. So I can imagine now what Thursday looks like. Right. So you have a Fed decision speaking Asia time Fed decision at 2:03 a.m. Barclays forum. Do there is there there's the five of the mag seven I believe reports Wednesday Thursday. I think all three of them actually report 2 hours after the Fed. So and then you have to be a DJ. Yeah. And at some point you'll be freezing in Korea waiting for this meeting to take place. And then we get to the BOJ and hopefully we were looking at November one as the deadline for China. Hopefully we don't need to talk about that. In other words, we've taken that risk off the table.

But yes, you have top trade negotiators for the US and China say that they have come to terms on a range of fairly contentious points. Those soybeans were always going to be on the market. It's a global market. The three leading suppliers are Brazil, Argentina and the U.S. And I believe that we have brought the market back into equilibrium. And I believe that the Chinese will be making substantial purchases again. Anticipating that we will get some kind of a deferral on the rare earths export controls that the Chinese had discussed. Okay. Again, this will all be you know, we the my my counterpart, the vice premier and I have set the framework and it will be up to the two leaders to discuss the final terms. All right. Let's bring in our China correspondent to break this all down for us here. So what do we reach a consensus on what's still missing right now? Yeah, overall, it seems like a very productive weekend, at least from the Chinese side. The Commerce Ministry saying it was in-depth, it was constructive, and there were a list of things that he sort of had a framework consensus on. Right. Ranging from agricultural imports to fentanyl to shipping levies that the Chinese retail was a little bit vague. They talked about the key themes, but we don't really know what the Chinese is getting out of this deal. The U.S. side has been a little bit more outspoken. They have been saying that China is going to buy a significant amount of soybeans, that they're going to defer the implementation of those export controls by a year. But I can't see China really agreeing to all of these without some big concessions from the U.S.. But so far, the U.S. is saying that they're going to keep their export controls unchanged, even though they're going to sort of remove all those threats of extra additional 100% tariffs on Chinese goods. So what else is China getting out of this? That it's not so clear at this point is that China will want the tariffs to come down to be on par with other countries. And that's also something to keep an eye out for. Yeah, but, you know, the starting point on tariff still was Donald Trump ratcheting up that rate. And then if that comes out to be the only way and a bit of a bit of a mental exercise for me. Ukraine and Taiwan, where, you know, Marco Rubio said Taiwan wasn't on the table. Was it on the table? Is it going to be on the table? Well, we were hearing different things. So Marco Rubio said that it's not going to be on the table, but President Trump on Air Force One kind of left it a little bit open. He refused to answer the question directly from reporters, saying that he doesn't want to talk about it. Now, that trip is really very complex as it is. I mean, sort of less definitive about this. So possibly it's still going to be on the table because President Trump did mention that he wants to talk about the Ukraine war and get to a peace deal on that with China. He wants to discuss the lowering of these purchases of Russian oil with which China has already done by Chinese state oil company has been cutting purchases of some of these sanctioned oil from Russia. But bear in mind, analysts are saying that actually China buys a lot of these oil from intermediaries. So while they might cut the direct purchases from the likes of Rosneft and look, oil, they might get it from other sources and they might not be willing to do a lot more given the strategic partnership between U.S. and China unless they get a key concession possibly on Taiwan, is the US decide to roll back their longstanding stance on Taiwan and agree to oppose Taiwanese independence. Then maybe we're talking about something here. Okay. Yeah, well, that that that's going to be quite something as you look ahead to amendment. Thank you so much. Amendment Lower China correspondent there. Let's get instant analysis right now on the market reaction so far. And as you were just pointing out here, the bulls are out today. This money. Mark Cranfield is with us out of Singapore for some color and context. Market price action. Does this make sense to you and how long does this last? Yeah, this is the Christmas rally coming earlier this year, I think in Europe. To last, though. Yeah. I think the surprise for for investors over the weekend is based on bias from the Chinese side as much as the I don't think anyone was too surprised that Scott Bessen would sound very upbeat about anything. I mean, that's his job to do that. But it sounds as though China is on board as well, which is a big improvement from where we were last week. I think last week people were very, very cautious. They were worried about Trump and see he could meet with hardly anything to agree on and that it might just be a meeting where they say, okay, thanks for coming, but there's no big announcements. Completely different scenario. Now. It looks as though they will be able to sign off on some trade meaningful trade issues, which are very positive and probably most important of all for global markets. It really kicks the problems into 2026. Investors will now be reading this as very unlikely that we will get another big trade problem between the US and China this year, which really clears the way for people to look at the earnings. As you were saying, it's a very big week for earnings and even after this week there's still a few more to come. We still got the media to come as well. There'll be the big Chinese tech companies to come in November as well so people can get back to looking for more fundamental issues for equity markets, for the other commodity and forex markets as well. And they probably don't need to worry about US-China until 2026 again. Hmm. Okay. That's interesting, too, Mark, when you look at the fix from today, the P, B or C, a seven way handle, we haven't seen something like that since October of last year. What's the message for traders today? I think the PBOC is just doing its part to be part of the overall positivity in terms of trying us, it's been pretty clear that the PRC has been guiding the yuan stronger, even on even on days when there was really no necessity for them to move. But don't forget the yuan is a basket of currencies and the moves in dollar. One should reflect the overall moves in G10 currencies. Well, really, there was no justification based on G10 currencies for $4. You want to be seven over eight today. They could have held back, but it probably again, is just to add to the overall picture that China is doing what it can to try and get closer to the United States. The central bank is playing its role in making sure that yuan's a strong and stable, which is what the United States would like to see. So it's all just part of that big picture. But China is on side for the US. Another confirmation for investors that markets are in a good position. Mark, Mark and to just ask you about. So I'm looking at my screen. Hang Seng vol index is down, VIX futures are down if fairly consistent with the risk appetite we're seeing. But the Nikkei vol index is is catching one off a bit alongside of course the cash market trading above 50,000. Do I is there anything I should read into that? I think more than anything, people have been a little bit caught out with Japan. I think people were exiting that market when they were worried that the the LDP would not be able to clearly choose a leader. And in fact, it would look didn't look as though Japan was going to have a prime minister in the first round of voting. Everyone's got behind taking Ichi. The story is developing very quickly, and I suspect what you're seeing is a big catch up trade going on in Japan, particularly with foreign investors. If you look at some of the numbers in the third quarter, they were clearly exiting the Japanese markets and putting money into Korea, into Taiwan, into other places. It looks as though they're coming back, even though the yen is relatively weak. They're piling money back into Japan. The numbers so far in October are pretty significant. It looks as though October will turn out to be the biggest month this year for net inflows from foreign investors. So all of that means that there's a much more relative activity in Japan than there is in the other Asia markets. And that probably helps to explain because some of that will go through the option market as well. That helps to explain why Japan is outperforming in that respect. Mark, thank you. Mark Kroeker there kicking off what looks to be a very, very busy week for all of us here and for subscribers. You're going to want to turn to your terminal for more on what's going to be driving market share this week to you live Go is your function for the latest updates was commentary analysis from Mark of course and his fellow expert editors there on it's our first match of Air Force One taking off and heading to Japan to play what I call this is the shot of Joe. Thailand will also begin the process of releasing the 18 detained Cambodian soldiers. We have a responsibility to act in earnest and in good faith and that we restore livelihoods and protect the well-being of our communities along our shared border. Cambodia reaffirms a strong commitment to fully and faithfully implementing this joint declaration and to continuing to work closely with Thailand and all our partners to ensure that this peace endures and brings tangible benefit to our peoples. ASEAN is a cohesive form and the group did impress. The things that we do share in common. There was a consensus built on the need to. Maintain those centrality to continue to engage with the United States and China and the rest. Very, very busy on the diplomatic front. In the last 48 hours. And that's just going to go up a notch, if not exponentially, over the next few days or so. Asian leaders just now speaking around their summits in KL. That's over the weekend as we make our way into Tokyo, where President Trump is headed next in a couple of hours and then into, of course, Korea, where the big meeting between Chinese President Xi Jinping and U.S. President Donald Trump is scheduled to take place for. Right. Let's bring in our next guest, Ambassador Daniel Curtain Brink is the partner at Asian Group and a former U.S. assistant secretary of state for East Asian and pacific affairs. Ambassador, good morning from Hong Kong and a pleasure to have you on your show. Good morning. I believe I understand you're in Shanghai for us. So really, what a what a place and time to be having this conversation. This is short and there's a longer term component to these conversations. I want to understand what your take is off in terms of the what short term expectations do you have over this relationship between the two? Well, David invited thank you so much for having me on this morning and with Asia group are obviously following this very closely. But I think we see the readout of the talks between Secretary Bessant and Vice Premier Li Fung in Kuala Lumpur to be very positive. And I think we're on track for a very positive and constructive meeting between President Trump and President Xi. They've also laid out, it sounds like a diplomatic calendar over the next year that could portend relative stability in the US-China relationship for the next six months to two year. And I think that's very good news overall, especially for the business community. Can you tell us? I mean, we've heard the consensus when it comes to soybean purchases, when it comes to fentanyl, when it comes to shipping levees, for example. I think there's still a lot of lingering questions about export curbs and where they stand, whether it's rare earths, whether it's tech curbs from the U.S. as well. What is your understanding of what could come out when it comes to the export curbs side of things? And what do you think each side got out of it? Well, driven. I think the devil will be in the details. But again, I'm probably impressed on the up side by what we've heard thus far. I think both sides, after having fought this trade and supply chain war to a relative standstill over the last year. Both sides now seem to be focused primarily on stability. I think for the US side, you've seen President Trump. He's talked about he wants to see a resumption in Chinese purchase of US ag products, especially soybeans. They want to see some sort of assurance that we're not going to face these supply chain issues regarding rare earths. And so it sounds like we're on track to have China hold that licensing regime in abeyance. And it also sounds like for the Chinese, what they're looking at primarily is, I think, tariff relief and a relaxation or at least a freeze on various U.S. tech controls. So it sounds like both sides are teed up in the near term to get generally what they wanted. And Ambassador, you mentioned it and it's a good thing it's a good thing for businesses to have at least arguably the best visibility on relations that we've had in as far as I can remember, really, in terms of just the stability that you just said will likely hold for the next few months or so. Do you think this will lead to a lot more on the ground people to people business to business exchanges that this relationship sorely needs? Well, I hope so, David. And again, we'll have to see. I guess the way I would see it is I see in the near term a tactical stabilization of the US-China relationship, which, as I said, is probably a good thing. But none of the fundamentals in this relationship have changed. So the long term drivers that are pushing this relationship into a highly competitive state, none of those fundamentals have changed. So I do think this is not a strategic transformation of the US-China relationship. We're still going to see ups and downs without a doubt. And again, the devil will be in the details for what the two leaders agreed to. I think our read overnight is that Secretary Betts, in a vice premier who have agreed on some sort of a framework that the leaders will will approve. But Yvonne, to your question, we really have to see what does it mean if both sides are going to freeze some of the competitive measures they've taken against one another, How far back will that freeze go? Well, both sides agree to undo some of the escalatory steps that we've taken. I think we have to focus on that. Another thing that really got my attention overnight is it does sound like the two sides also talked about the fentanyl problem. Of course, I think China has done a great deal to crack down on the flow of fentanyl precursors, but they can and should do more. And if they were to do more, they could potentially get 20% tariff relief. So I think that's quite interesting as well. And then, of course, the measures that both sides have taken against one another are on shipping have been quite significant. And it sounds like that was discussed and there's the potential for a freeze or rollback there as well. So again, I think we should expect some continued ups and downs over the next year. But as long as this diplomatic calendar that the two sides have apparently outlined holds, I think that competition will take place within a larger frame of relative stability. Right. And we've seen a flurry of deals that have happened, you know, in the U.S. with ASEAN over the weekend here with Malaysia when it comes to chips and the like. And I wonder, you know, if I'm a U.S. company, what's going to be the bigger risk for me is that China is going to retaliate on anything that the US does on trade or is there going to be this sort of fight between U.S. allies and their allegiance to whether U.S. and China now? Is there going to be a future potential kind of alliance that or the allies that are going to see a bit more of a divergence now? Well, Yvonne, we'll have to watch that very carefully. But it's been quite striking to me over the past year that really, other than China, almost every country in the region has responded to the Trump administration in quite a positive and constructive way. I give the president a lot of credit for attending the ASEAN summit. I think his trip has gotten off to a very strong start. I think concluding the formal trade deal with Malaysia for me is probably the most significant outcome of the trip thus far. I think that is a hugely consequential outcome. I think that agreement is likely to be held up as a model for other, especially Southeast Asian partners in the region. So that is quite significant. And then, of course, the signing of this peace agreement, an extension of a cease fire being between Cambodia and Thailand, I think is also a significant accomplishment. And then you saw the deals that accompanied that that peace agreement with Cambodia and Thailand. Those are also highly significant. I noted as well that there was a joint statement issued by the United States and Vietnam. There aren't a lot of details there. I think the two sides are still a long ways away from formally concluding a trade agreement. But nonetheless, I also saw that as a positive sign and hopefully that will impart some momentum. So I do agree that there has been some tension and concern on the part of US partners in the region regarding U.S. trade policies. But I think the trip is off to a strong start. And again, most countries have engaged the US positively. And if we can continue to make momentum on formalizing those trade deals, that will be again, very good for the US and the region and I think for businesses and investors as well. Ambassador. Thank you. Ambassador Daniel Creighton, their Asia great partner, joining us in our Shanghai studios. And later on this hour, we're going to focus a bit more on trade and really how that impacts a cargo side of things in this world. Qatar Airways cargo chief Mark Dreyfus joins us here in Hong Kong with us. Guys, global trade tensions and the impact on their business. That conversation coming up next. This is Bloomberg. Welcome back. You are watching the channel show diver. Watch, of course, what's going on in the Asia rally here right now. Yeah, very consistent to the point that Jason Louis was just making. Right. This is really a global market still taking place amidst the volatility over the last, let's call it, two weeks or so. This one, it's really been consistent, flat to slightly higher every single week. In fact, so much so that we're now 15 points flipped a page from the Shanghai Composite, topping 44000 to 40000. Okay. Okay. There we go. I didn't want zero there, but anyway, I know that audio's actually down for most of you. So you didn't hear that 4000 for the first time in ten years. Do we get there very quickly? About an hour into the session here, we've topped 1 trillion. I get the number right. Hopefully first 40 minutes of trade into the onshore market turn now. Plenty more ahead here on the China show. This market is rallying and running hard. This one, plenty more ahead. All right. We're getting closer to about 1130 in Tokyo. Japanese markets are handing out lunch break in just a moment. And look, everyone's very happy right now for a lot of these markets, about 2% for the Nikkei, 2 to 5, first time ever, right above that 50,000 level for that benchmark as well, of course, as President Trump heads to Japan after what has been seen as a pretty successful trip in Malaysia. Yep, he is. She's just airborne. In fact, just about 20 minutes ago, there wasn't much visibility out there, though. Yeah, well, it's looking like he's flying into a clear sky Tokyo today. Yeah. And of course, our man on the ground is Stephen Engle. He'll be covering that leg of the trip before things get a bit dizzying. And Yvonne leaves me here as she makes her way to Korea tomorrow. But then, because we have the story coverage for you. Speaking of airplanes, that's the Segway here. So Embraer, of course, Brazilian plane maker is warning that it may see order cancellations and delays if President Trump's punitive tariffs are implemented. The CEO told us that the levies could add $2 million to the cost of each aircraft. But this additional costs to our customers, they might decide to delay to receive the aircraft they have ordered to us and not to buy new ones. This would be bad for them. As you delay the renewal of this. It's very bad for us and for the US industry because if we make fewer aircraft, we buy fewer equipments from the US. It's going to take from our next guest, Mark Trish is chief cargo officer at Qatar Airways cargo, cargo and joins us today here in Hong Kong. Mark, it's great to have you here. Thank you. It's great to be a great to be in. Your new associate staff said we'll keep it for the special guests, almost as big as the Q suite. But yeah, it was close. We're just talking about the complexities of this trade war between U.S. and China here right now. How do you see this really evolving when it comes to, you know, cargo volumes and the like? How is this all going to kind of play out for your business? Well, at the end of the day, the US and China are always going to have a very rich and deep trade relationship. You can't avoid that. It's just a matter of figuring out what it's going to look like and then we'll get back to New Balance and new status and then we'll continue to move on. I mean, you know, what's very interesting is Chinese exports have really increased this year versus last year. Just where they're going has changed a little bit. And despite what a lot of people think, exports between China, the US are not they're not they didn't disappear. They're just a lower rate now until everything is settled. What have you seen in your business specifically into a window of in terms of cargo flows? Because you have a very unique perspective. Because of where we sit in Qatar, we sit in the middle of the what I call the modern Silk Road. So we see all the travel back and forth, both for the passenger side and cargo side. What we saw this year is a lot of capacity was shifted from the trans transparent China to the US into Europe. So what we saw is demand in Europe was up a little bit, but most importantly, prices were down a little bit because there's a lot of capacity that went in for us. Specifically, what we saw is growth in our traffic from China, Hong Kong, Macao into the GCC and into Africa. So we've seen a little bit of a shift of the market as Chinese exporters have had to adjust to the slightly less demand in the states. They've had to focus on additional markets. So those of us best opportunities for growth for you guys. Well, actually, opportunities for growth for us are still really strong. I mean, keep in mind one thing, and you guys follow this as much as we do, the global economies are still very strong, resilient, trade is resilient. Knock on wood, you have wood here, knock on wood. The global economy is very strong. The GDP's, all the major GDPs are actually slightly up to a little bit, even more than up since last year. The Chinese GDP is up, the US GDP is up. Your UK GDP, India, GDP, all the GDPs are still very strong. So we expect once all of these trade issues are resolved, as I said, we'll get to a new stage, this new balance. And assuming that the GDPs continue to be strong, we expect cargo next year to actually do quite well again. Is there a sense, though, that we'll get some payback because of the potential for frontloading of these trade numbers? I mean, I think can the momentum continue through the trade deal and beyond? Yeah, I think it's a very good question. I do think you will see a period of time once the trade deals are resolved, you'll see a refilling of stock, if you will, and that we could see a nice big jump. And that's really for the trans pack carriers, the carriers that are operating between the Asia and China in particular in the US, we're not really a big player in that market where you make kind of long term planning. Then how do you look at these kind of changes in geopolitical influences, what customers need? To what extent is what are the things that you're doing and planning is permanent and what's not permitted? That's a great question and in fact is part of what we do every day. There are two things to keep in mind. Number one, we at Qatar Airways, both the passenger side and the cargo side, we're very agile. You saw that during the COVID as an example of what we did, passenger side and cargo side. So agility is one of the things we're focused on. And our job then in the cargo side is to understand where trade flows are, how they're moving, how they're growing, and then to address them accordingly. The second part of what we do is we look at what are the forecasts, the GDP growth numbers and then where do we see the most opportunity? What do we expect the most opportunity to be? But again, that is how we plan it. But then we respond to the actual marketplace by being agile. We actually looked at something recently to see how much we moved our capacity around versus our competitors, and we were much more reactive to understanding how the trade flows move because we want to follow the customers. Right. So on aggregate, what how does how do all these projections and GDP growth inform you? What is what is your aggregate growth forecast for the business next year? And within that, of course, where do you see? I would love to tell you, but we haven't focused. We haven't resolved that yet. Our team is right now literally working on it the last couple of weeks, the end of 2025. Yes, it is. It is. But because of the uncertainty in the market, I wanted to get as close as possible to the end of the year so that we don't have wild swings in our forecast. So we're in the middle of doing it right now. But knock on wood, as I said, you know, economies are can GDP is expected to continue to have a nice solid growth rate. So I don't expect they'll be significantly different. Can you tell us you're a key customer in terms of your freight to your key customer and the 777x program? Freighters. Yes, right now. What's the latest communication you're getting from Boeing on Wendy's, this first part of when you got it? Well, I think Boeing has been very public about there may be some delays. And I think they they won't have an idea what any additional delays may be until the U.S. government shutdown is resolved, because the U.S. government shutdown means that the certification process is slowed down because employees are not working at the same level as they were. So we're waiting to hear once it all gets resolved, Boeing will be able to give us an idea. Is that a 2028? I believe that at the 2028 of four, the freighter 28 is the right now what we expect. But, you know, new aircraft programs can move either way. So what we really have to wait to see when the FAA gets back to full work. Are you in the market for more freighter planes? That's a great question. We actually, in the next 12 months are taking seven new aircraft. Five of them are converted freighters and two of them are direct from Boeing. So that sort of answers the question he had earlier. David, you know, we are expecting next year to be robust. And part of the if I'm getting back to the question he asked is, will we not only look at the GDP growth, but we also look at what industries are growing, what what products are growing. And one thing we've identified, we've had really great growth and lately it's a growth in high tech and aerospace. And that's something we've focused on very much and building unique products around those so that we can offer something better in those two very fast growing, very important markets. And that also sort of offsets what's going on with any individual regional GDP. Right. Interesting product category there As far as so what route is that take that specifically, what route do you see that growth in? Actually aerospace and aerospace all over the place? It's not limited to one area, which is very interesting. That's great. And when you think about it, I mean, you've seen all the forecasts for aerospace for the next ten, 15 years straight. It's just going to continue growing as quickly as possible. So for aerospace in particular, it's important that those products, those components are delivered as quickly as possible. We know there's no slowdown. You guys watch our eyes. Stocks are just driving markets around the world. That's not going to slow down any time soon. So that's why we said we have to develop very specific products and solutions, growth markets that we already are leaders in. And we want to continue being leaders in another way that you are building. The business is with these sort of partnerships with other airlines when it comes to the global trade lines, whether it's British Airways, Malaysian Airlines or the like. How actively are you now in expanding this pact and where are you in terms of regulatory, you know, backdrop environment and commercial integration? Great question. And two questions are around our our JBI, our joint business. Number one is, you know, in June, we announced the joint business with IAG, which is BA, Iberia and Airlink. It's a malaysian we have received already from EU, UK and US and Qatari authorities the ability to move forward with it. So we're waiting for the Malaysian authorities to grant approval. We expect that'll come sometime the end of this quarter, May beginning next quarter. We will once that's all I'm pleased probably in the first quarter we're going to launch the JBI. It's a first global cargo job. You all are used to the passenger jobs where you fly between. This is a first global job, the first time these very vast networks with unique geographies or linking together. And I have to tell you, it's been a lot of work and I've done passenger for 30 years. The cargo side is much more complex. So we've spent ways that I'm just curious, it's for a bunch of things. And number one, there isn't as much digitalisation in this industry, so there's a lot of that. But operationally there are a lot of differences because we've got warehouse here, warehouse there. You've got to make sure that together safety and security regulations have got to be aligned. So there's a lot of work around alignment and understanding how to provide the customer that same seamless product you have as if they were just on your network alone. Yeah. So we've invested a lot of time and energy and then we're very excited about it. It will be like for the passenger side, it will be groundbreaking. It really will open up markets that aren't open today because we'll make it easier for that trade to to occur. Do we have a name for it? Because the passenger side of the world. Yeah, we don't have a name, but if you've got any suggestions, share it with me. You got it. Okay. Yeah, well, think about it. Okay, well, we'll. We'll. We'll get back to you then. Yes. All right. We'll let you go. We know you. Of course. You're headed to Singapore next. That was my question. I thank you so much, sir. Thank you for coming here on set with us. There was chief cargo officer at Qatar Airways Cargo right just ahead here on the shows. The South Korean president tells us that someone, Washington, actually remains stuck on details of this massive dollar, $350 billion investment pledge. That conversation's coming up next. Plenty more ahead. This is the China show. Well, South Korea's president says talks with Washington on a $350 billion investment pledge remain stuck on all the major details. We spoke to Lee Jae Moon ahead of his Wednesday meeting with President Trump on the sidelines of the APEC summit. Humming. They have stolen jumbo tuna. The negotiations between Korea and the United States are proceeding in two areas of security and economics simultaneously. Negotiations in the field of security issues are going very well. The negotiations in the area of economics, especially trade, have reached a preliminary agreement, and we're in the process of hashing out the details. The discussion is ongoing and there are some differences of opinion. But the delay does not necessarily mean that this is a failure. We already have a comprehensive agreement and we're currently working on the details. So I would appreciate your patience. Evelyn Guo helps. Ong is also known when it comes to Japan's deal. There have been some divergent interpretations. It sounds good. We are trying to make it more specific than Japan's. And if that's the case, could that become more burdensome for Korea later on? I mean, given everybody and Korea is not Japan, I do not fully know what deal the U.S. and Japan have struck. But from our point of view, we have our own circumstances and we will reach a rational result that suits us. Of course, the example of Japan or Europe could be a base that we can refer to, but in the end we must find a way which takes into account Korea's circumstances that is acceptable to Korea and also helps the United States in its manufacturing renaissance. As we search for a mutually beneficial path, there will be differences as well as alignment of opinions topped online opportunities in finding common ground. Could the size of the US Investment Fund become similar to Japan? She talk of the method of investment, the amount of investment, the timeline and how we will share the losses and divide the dividends. All of these are main sticking points with the US will of course try to maximize its interests, but it must not be to the extent that causes catastrophic consequences for South Korea. The United States is the leading country in the world when it comes to democracy and rationality, like South Korea is an ally and friend of the United States. So we believe that we will be able to reach a rational result that is acceptable to all sides. And this is what has to be done. Hunger cannot be equal to one hand and tighter. Do you Even investing in the US seems somewhat unstable, as we saw with the immigration raid in Georgia. We understand Koreans can now work on US factories with B-1 and ESTA visas, but when can we expect a more fundamental solution? Peter Teacher funding. And I believe we can find a realistic solution to the visa issue in the not too distant future. In fact, the visa issue is less a problem for Korea than it is for the United States. Korean firms are taking risks by investing in the United States. As a result, they create jobs and help the manufacturing renaissance. Providing an environment for Korean firms to quickly build their factories will be in the interests of the United States. If there are restrictions on Korean workers who build factories and train employees, this will stall the construction of factories. Thus, it's in the interests of the United States to quickly resolve these issues. Even a Peggy to look at the highlight of the APEC summit is the upcoming meeting between Presidents Trump and Xi Jinping. How important is this dialogue for South Korea? I warn when it comes to the supply chain, the world is divided into two blocks facing off each other. One led by the United States and one by China. Korea is situated both geographically and economically between these two. We are situated in between two grinding stones as a situation akin to having both arms pulled by China and the United States. This is both a challenge and an opportunity. We cherish our baseline policy, emphasizing the Korea-U.S. alliance and Korea, US-Japan trilateral cooperation. At the same time, we do not seek to sever ties or pursue excessive confrontation with China or socialist nations. Korea will continue to cherish and emphasize this alliance with the United States and at the same time manage its relationship with China. Can the e me to go generation? Well, we already have oceans. US subsidiaries are caught in the middle, though. Are you concerned that the other Korean companies might become targets, too? And do you feel this is somewhat an unfair situation? Hunger game you go into. It's obvious trade is from Korea's point of view. It's very regretful and hard to understand that Korean subsidiaries in the US have been sanctioned by China because we were cooperating with the United States. It's highly likely that this is China's way of applying pressure, signaling that such incidents could continue to occur in the future. Despite this, we will continue to pursue our basic stance, which emphasizes the United States while working to maintain good relations with China in any case. We will not directly face off against China. On the outside, it might seem that the United States is very confrontational against China, but at the same time they continue to ceaselessly communicate and cooperate in areas where possible. Hong Kong NGOs on the issue. The Bank of Korea has left interest rates unchanged again. If there are no more rate cuts, will the government need another extra budget to on you regarding the economic situation in Korea? The interest rate is not the issue. Rather, it's more a matter of fiscal policy and economic policy. From these three, I believe a stable economic policy is most important. Next would be the fiscal policy that supports economic policy. If we were to lower interest rates, this could stimulate real estate prices, which is already an issue for us. The BOK made the right decision by keeping rates unchanged instead of cutting them in order to revive Korea's economy and ensure sustainable growth. The fiscal policy of the past may not be sufficient, but it's not lacking either, with additional measures such as expansion of productive financing in areas like high tech development, which we are focusing on, we'll be able to build a foundation for economic revival and sustainable growth, engagement and prudence. And together I need to know how to promote them. What's surprising is that people invested heavily in real estate, and even my parents always told me to buy a house first. But now they're saying I should buy stocks. How do you view this new trend of growing assets to mingle with? The truth is, the Republic of Korea is sitting on a very dangerous potential crisis, a ticking bomb that is excessive real estate investment. Just look at Japan. Its real estate bubble burst more than 30 years ago, and the country is still dealing with the economic pain today. Unfortunately, Korea is heading down a similar path. Our property prices are among the highest in the world. If this trend continues, the bubble will inevitably burst. When this happens, it won't just be an economic crisis. We're facing severe crisis not only economically, but across all sectors. We must prevent that from happening. That means creating channels for capital to flow into more productive sectors of the economy. That's why I've been working hard to remove unnecessary regulations and irrational barriers in our capital markets. We're beginning to see the results. Funds are gradually shifting from real estate into financial and capital markets, and public trust in those markets has improved significantly. You can see the results reflected in the new record highs of the cost index levels we've never seen before. We need to stay on this course. If we continue implementing national policies that curb speculative real estate investments and direct capital towards productive areas, we can sustain this positive momentum. That's the only way to normalize green economy back to a healthy, sustainable path for growth. We cannot give up in this path. And that was the South Korean President Moon there, speaking to Bloomberg ahead of his meeting with President Trump later on this week. And if you are a subscriber and want to rewatch that interview, you can watch it, of course, through our interactive TV function. TV go, we play. This is Bloomberg. All right. Take you back to live pictures out of Kuala Lumpur here this morning. You just saw those live pictures of Lee Chang. The Chinese premier is there about to start off with this ASEAN Plus three summit there, of course, So that is underway. You are seeing him being rolled out the red carpet for, of course, the premier. This on the back of what we saw, this framework of some sort of trade deal between us and China that was ironed out at K.L. And the next stop, of course, is Japan, where President Trump is currently en route to the country after leaving Malaysia. There you go. Could you see Anwar there with, of course, the premier? So do our chief national correspondent, David Engel. He joins us now from Tokyo on the ground awaiting the president Steve. What's on his agenda today? Well, waiting patiently. Obviously, President Trump will be leaving Malaysia, what, late morning? His time will be arriving here in Japan just after 5 p.m. local time. I'm standing in front of the state guesthouse at the Akasaka Palace where I was here as well the last time Donald Trump came here in May of 2019, we saw the beast roll by. I'm talking about the car, of course, with Donald Trump inside, going inside a meeting, then Prime Minister Shinzo Abe this time where we can't necessarily confirm that he will be coming here to Akasaka Palace. But it is where the state receptions are usually held for these official meetings, bilaterals, which are scheduled with the new prime minister taking each his. Obviously, they probably will have the most interesting dynamic ahead of, of course, Donald Trump meeting Xi Jinping on Thursday in Gwangju, Korea. This one will be very interesting. She's new on the job. She is said to admire strong nationalistic leaders. One of her heroes is Margaret Thatcher. She wants to rejuvenate the Japanese nation. She wants to rejuvenate military spending. She said already she wants to accelerate by a couple of years upping of the defense budget to 2% of national GDP ahead of schedule. That is even something the Trump administration has said might be too conservative. So there's lots to be seen on the Trump talking to son dynamic here in Tokyo. All right. Fantastic.