Is China Uninvestible?

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The program today brought to you by the word uninvestable after Commerce Secretary Gina Ramanda, who as you know, is in China right now, told reporters she's hearing from US businesses that China is indeed becoming uninvestiable. As I read on the terminal the quote from the secretary, there are traditional concerns that they've become accustomer dealing with, and then there's a whole new set of concerns, the sum total of which is making China feel too risky for them

Baya had asked me to come here to conveying message that we.

Do now seek to decouple.

We seek to maintain our.

Seven hundred billion dollar commercial relationships wape China.

Does that mean diversifying is over? It was decoupling, then it was diverse. Right now we're maintaining. I think I missed one in there too. I'm sure Nick Watams remembers it.

The risking.

Thank you, Nick Bottoms. I think they heard you say that. So is decoupling and de risking the diversifying. Are we really replacing that with that we're maintaining because sounds like nothing's changing.

Well, So the big issue that Gino Raimundo and other US officials have said is listen, there are all sorts of areas where we can do business with China if you look at you know, US companies like restaurants. She even mentioned beauty care products, lotion, suntand loation, stuff like that. There's all sorts of stuff that we can do and places where US companies can invest. Where she's saying the US does not want want to work with China is

So all the stuff China really wants. But there's a path forward here somehow and we can compartmentalize all of this. Is that the message we're getting when you think about all of the various comments from the president on down.

That is the US message. The problem is that it gets to this fundamental difference between how the US and China view the relationship. The US says, Okay, there are certain places that we're going to ring fence, but then we want to get along with you on all this other stuff climate change, combating fentanyl crisis, more trade, more growth.

So have any of these trips from blinkn to yellin to now Romando actually move a needle on this? Are we understanding each other better or we just kind of prolonging a really difficult conversation down the road.

I think what you're seeing here is a desperate attempt to make it look like there is actually progress. But what often happens in these meetings is both sides are essentially reading talking points. And this is something that has bedeviled the relationship for so long because so many informal contacts have basically been severed. You have these meetings where they go over and there's this big expectation of progress, and then it's basically like, well, we delivered our message.

No spending time with Nick Wadams before we bring in the ambassador, we're going to talk with Max Bacchus In just a moment, we understand that Vladimir Putin's making a trip to China. It's an interesting one on the heels of this parade of administration officials here from the US his first foreign trips. It's a warrant for his arrest on alleged war crimes was issued by the International Criminal Court. What's the message here from Beijing?

Well, I mean, it's always tempting to get into the timing of these things. Raimondo is in China as we speak, and then we get this announcement that Putin is going to Beijing. It's hard not to see that as a slap in the face. Whether the timing is coincidental or not. I mean, there's that's a rabbit hole. Don't need to necessarily go down there. The point is that you have an accused war criminal, the great greatest adversary that the United States has at the moment, going to China, where

No doubt, do they get the treatment over there, they're rolling out the car for US officials the way you will know.

I thought you were talking about Putin. People will certainly get the treatment. Donald Trump got the treatment. I was there for that when he visited Beijing, and he, I mean the city was shut down for him. He got the literal red carpet basically everywhere he went.

Now, granted, Joe Biden's not going here, but what should a cabinet official receive?

Well, it was interesting, I mean, Raymondo got about what you would expect. She got a meeting with the a meet and greet with the premiere. She got a more substantive meeting with the Vice premier. But interestingly she did not get a meeting with President Chijinping. Blincoln did get a meeting. Raymondo is slightly lower level, so it's not like she's being mistreated or frozen out. Yeah, but you're certainly not seeing the sort of fanfare that you will see for Vlatimir Putin.

I always love to spending time with Nick Wadams. Thanks Nick, great to have you a pleasure back here, as always Bloomberg national security reporter with an eye on Beijing. Let's bring in the former ambassador Max bocchus Is with us, of course, former US Senator from Montana. Mister ambassador, welcome back to Bloomberg. It's great to have you. What's your

Well, first, thank you, Joe. I think that's a pretty big deal. It's China is showing to the world that is aligned with another authoritarian government, in this case Russia, and I think China intentionally wants to convey that message, especially to the developing countries, the South countries, and to help guide them into the she orbit in juxtaposition to the United States and Western countries who are more aligned with NATO, etc. It's a big deal, and I think

Well, so the word today, ambassador from the Commerce Secretary who's in China is that she's hearing from American businesses that China is becoming uninvestable, that it's becoming too risky of an investment. You do wonder if she says we're not decoupling. We're maintaining, but it feels like we might be decoupling.

How do you see it?

Well, I think that what you're implying is accurate. If it's not decoupling, some say's deep risking maintaining, it's all words, nearly what amounts is the deeds? What are the acts and actions? But both sides are negative towards each other. For example, the President Biden just announced his executive order limiting US companies investors in China. That's a negative action. I mean, it's just we keep adding on more sanctions,

Yeah, the jargon has been kind of entertaining, I have to admit, but uninvestable is really the word that we I feel like should be focusing on here, Max Bochus, that sounded like an honest moment from the Commerce secretary talking to those reporters on the train. How do you feel about that?

Well, I think it's a bit of exaggeration. No, but it's true there are really Oh yeah, I think US businesses are taking a second look at China. That's they're building in more risk into investments into China. But they're still looking at China positively, positive, if at all possible, because it's such a large market. It's huge. I mean, people in America, we tend to forget the scale of

Well, you understand better than most state craft on the international stage. Is that exaggeration a necessary part of whatever we call this negotiation?

Well, I think she said that as a sobering message to the Chinese. So they get it. Hey, you Chinese, you know you want American investments, you want a world investment to grow, and you're taking actions they're causing China to be uninvestable, think that that was the main message. It's important to remember that some of those actions China's taken a reaction to US actions that are adverse to

At what point does greed kick in? Though, I mean, with so much money to be made, mister ambassador, we've seen the losses in just in US investments in Chinese stocks alone, never mind going beyond the market here, when you consider fixed income, when you consider expansion, look at what Apple is doing pulling back from you know, all of its partnerships in China or trying to moving things to India at what point does China say, wait a minute, we're losing a lot of money here, guys, we need

Well, clearly this you put the finger on the problem that China's facing. The one hand, it's ideology. President. She is much more of a maoist. He's much more of a sort of a socialist and wants to control the economy and wants them to grow in his way, which is more industrialization, more exports, rather than spend time on

See this is why you talk to a four were ambassador for an explanation like that, because so much of this is cultural. Ambassador, I just wonder what the aim is for the administration by which metric should we be judging this as we go forward here in the next year.

Well, I think the administration is in a bit of a box because China policy is driven basically by domestic politics. Both members both houses, House and Senate, both parties are very anti China right now, and so the President of Congress I find it difficult to take positive, constructive actions towards China. I think today, if any member of the US Senate were to stand up and to say something gets struck about China, he or she'd have his head

To find an ambassador. I think we need a therapist. We need a marriage therapist, although that was his old job. Max Bak is the former ambassador to China. Thank you. I always wish we had the hour to do that. Many thanks to the ambassador and Nick Watdams. I'm Joe, Matthew and Washington the panels up next.

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The Commerce Secretary Gina Romando, making her way across China and speaking to reporters on the train from earlier today the train from Beijing to Shanghai, talked about she's hearing a lot from US businesses China uninvestable because it's too risky. This after she told officials earlier in Beijing that we were here not to decouple, but to maintain. And it's a big word. Suit I realize. Let's assemble our panel here.

What is the message?

You know, Look, I think the messages tried to initiate some kind of engagement. I think, you know, Nick Wadams talked about climb a, fentanyl, agriculture, other things that we have in common that aren't really in dispute, things that we need to find ways of working together on and manage the areas that are in dispute, and a laundry list of those covered under national security, trade and economics

We'll see.

I think the troubling area is still around national security. You don't see the engagement on a military to military lefele that we used to have. I doubt if we're still getting calls returned from you know, the chief of the army in China, like we had a situation earlier in the year. But you know, I think that we're trying to put it on more constructive grounds rather than conflicting grounds.

Well, Rick just laid out a lot for us, Matt Bennett, I'm curious to unpack a couple of these, beginning with our business relationship, because we have had this kind of evolution of messaging from decoupling to diversifying now maintaining. I know there was another one in there, but it seems like the real message from Gina Romando is this increasing level of risk that she's hearing about from US business is Max Bachus just told us he thinks that's an exaggeration.

Mat Well, I think they would like to move the needle. Nobody thinks it's the relationships in a great place right now. But I think we have to just acknowledge that it's really hard because there are some enormous differences between us. I mean, the Chinese have a million people living in concentration camps or have disappeared into their prisons. The Wigers are being persecuted. They are threatening Taiwan, which produces something like eighty seven percent of all the high level chips

Yeah, that's quite a picture you paint. And Rick Matt points us to a real source spot there on the map, which is called Taiwan. We're talking about withholding ai technology and these graphics cards that are made by Nvidia, keeping them out of the hands of the Chinese, so they are not used to military benefits, so they are not getting the same level of technology that we have when

Yeah.

Look, I mean, the Biden administration is as hawkish as any Republican administration that I can remember when it comes to China, and it's all rooted in in the kind of expansionist, uh national security policy they've had as as as Max was just talking about, you know, he's got

You know that our UH.

Trade relationship UH ultimately funnels to the Red Army, and and and that the Red Army's ambitions to take over Taiwan are about timetable, not if they would try to take over Taiwan militarily. So when when when you're sitting in Wall Street or in an investment UH committee meeting and you're you're looking at the riskless So stated with that, it's not surprising that you pick up the phone and tell Jine Ramendo on our way to China, Hey, it's uninvestable.

There was kind of an irony as well. The technology we want to keep from them is actually you know, sourced out of Taiwan. But Matt, the idea now that Vladimir Putin gets the big invites of Beijing. Is that an insult, as was suggested earlier this hour, or just a middle finger to the Biden White House.

I mean, I guess those are, you know, roughly the same thing. It was definitely a message to the Biden White House, and not a great one. I mean, consider that China has enormous influence, with a very substantial percentage of all the nations on Earth. I mean, China owns the port of Piraeus in Greece. That means they have a lot of control over how Greece votes in the EU,

Well, that's true. How should the administration react to this, Rick, You've got Gina Romando in the country when Beijing announces that, guess what, Vladimir's.

On the way. Yeah.

Look, I mean I think that there's no dispute that Vladimir Putin and g are bros.

Right.

I mean, they hang out together, they celebrate each other's birthdays.

You know.

It's like last big trip that.

Putin took out of the country before he became a criminal, international criminal, was to the Bay you know, Olympics. I mean, like, we can't underestimate what's going on between those two leaders and the impact that it's having in places all around

You know.

The only conversations he has or visits he's made is to BAYLORUS, which is you know, a satellite state of Putin's, you know, Russian Empire, and so like, he's probably feeling pretty isolated and embarrassed that his one buddy outside of you know, Baylor, Russ is China and they're making good with the US. So look, I think she should be happy that somehow he feels so intense on pushing back on her trip that he's got to get out of his bunker and go visit Beijing.

Unbelievable stuff. Remember the friendship without limits, I believe, is what they called it when he made the Olympic visit. It's like a lifetime ago, but it.

Really is not.

Great analysis from Rick Davis and Matt Bennett. We've got breaking news from the campaign trail here. I know you've been wondering a lot. You've been asking a lot about the campaign of Francis Suarez. All right, you haven't been asking, but the Miami mayor has suspended his presidential campaign according to reports. Remember, he was not able to make it on the debate stage. He didn't have a pulling or the fundraising to make that happen.

All right.

Another one of the Tennessee three is Silence. We're going to go there next to Nashville with our panel.

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History repeats itself in Nashville Recent history as Republican state lawmakers vote to silence one of the Tennessee Three again, recalling the three Democratic lawmakers who were threatened with expulsion over their role in a pro gun control protest inside

Yeah, sounding a.

Lot like they did earlier in the year the first time we did this, and Representative Jones filmed a video on his phone after walking outside the chamber the stairs were lined with state troopers, so.

We just left the House chamber. The Democrats walked out of the chamber in protest after Cameron Sexton decided to abuse his gavel and call for a boat so that I could not even speak for the rest of session. He said it was because of speaking off topic. And so what we're seeing is this misapplication, this abuse rules. I'm under leadership Speaker Cameron Sexton.

Is followed by again a whole walkout by Democrats. Let's reassembled a panel for their take on this. Bloomberg Politics contributed Rick Davis is with us Matt Bennett as well from Third Way. Matt, your thought on this. Back in the spring when this happened the first time with the so called Tennessee three people including myself said, my goodness, they're making stars out of these guys. What exactly is the strategy here? I remember bumping into them at the

It tells me that the Testi Republicans apparently are gluttons for punishment. I mean, how they could not see that what they did the first time was bad for them, idiotic, terrible for their state. I mean, both of the representatives were quite rightly returned by their voters and by their constituents to the legislature immediately detail And now, yes, now they've expelled him for making a speech. He was not holding a sign, he was not protesting, he was not

Rick Jones was criticizing this legislation that would allow more law enforcement officers in schools, and he was talking around the matter. You might hear in a debate the speaker Cameron Sexton, who you heard him mention, warned Jones not to stray off topic. Is this a matter of following the rules or is this punitive beyond measure?

Well, I think all of it comes during this special session that was called by Governor Bill Lee because of the you know, Christian elementary school shooting, and so the hope was that they would actually pull together and do something that would help the community. But after the last go round that Matt accurately described in every way, Uh, they pass these rules to sort of get control of the floor.

Uh.

And all they did is find new ways of of of elevating the minority in the legislature, Right, I mean, like, if you just let them talk and then take a vote, you've got the majority, it kind of just passes. But if you do these kinds of shenanigans where you say, oh, I'm going to silence you, well, you know, part of having a legislature is so that you won't be silenced. They represent the will of the people and they're there

So you guys are both in the business of making candidate stars, helping politicians improve their career trajectory, maybe seek higher office. Matt, what happens to Justin Jones as he's continually empowered and made a national star by the Republicans in this chamber who want him out, Well, there's.

No question that we would not be spending this much time on Justin Jones's speech on the floor if they hadn't thrown him out of the chamber. So to your point, they've really made him into a star. Whether he can turn that into national office or statewide office is unclear. Tennessee is very, very red. It has trended as far to the right and as quickly as basically any state in the country. I mean, remember, not that long ago Al Gore was the Senator from Tennessee at least in

Just a minute left, Rick, is it higher office for someone like Justin Jones in a situation like this, or does he go into media or is it something totally different?

Oh, you know, sky's a limit for a town young man like him. But I certainly would put on my calendar once a month, speak up, get kicked out, and be on radio again.

I mean it's like clockwork. I would do it literally once every three weeks.

If I were his advisor.

They seem to be ready to take the bait. That business what we saw again in Nashville. Rick Davis and Matt Bennett, many thanks, of course. With some final thoughts.

Next is.

The music wars get underway again. Rick Davis is no stranger to this. What do you do when a famous musician calls and says, stop playing my songs at your rally. I think the answer is nothing, but we'll talk to Rick about that in Matt as well. Straight ahead, I'm Joe Matthew in Washington. This is Bloomberg.

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It's a story that comes up every four years. Maybe it's every two actually, at the rate we're going here, But certainly with each election cycle we talk about music, popular music, and it's never quite the same when it ends up, at least for the most part in the campaign rallies. And that's the case here. Rick Davis knows a little bit about this, having run the McCain campaign. Think Barracuda. Donald Trump knows a bit about this, Think the Rolling Stones. When an artist says cease and desist,

Oh, I don't know about that.

I mean, song may change, but the times are the same. And that is we got sued by Jackson Brown, one of my favorites for using running on empty in a campaign add and he used the Landham Act to go after us and was successful.

So we had to apologize, we had to pay him. I mean, it was not a healthy thing for you know.

Music in America.

But the bottom line is you're right. Everybody gets sued.

I guess that's the way, Matt Bennett. Your advice for vivike Ramaswami. He made a lot of fans on the stage.

Listen. I'll stipulate that he's a better rapper than Joe Biden, but he is not a better rapper than Slim Shady, and he should let the real Slim Shady do his thing. One thing I'll say, though, is Democrats have an advantage here because we tend not to get sued by rappers and rock artists. We don't tend to use country music because those people will sue us. So you've got to go where you think you're gonna be successful.

I guess there's some truth to all of that. Matt and Rick, thank you analysis. You can only get here on sound on the fastest show in politics. I'm Joe Matthew in Washington with a lot more to folog you hear the news on drugs being negotiated by Medicare, we'll have that next.

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The headline says it all Jay and j Bristol blockbusters targeted for Medicare price cuts. This this dropped before the bell and it's something that we wanted to talk about with Riley, who's our healthcare reporter here in the bure. Riley Griffin, it's great to see you, Thanks for joining. We've got ten drugs here targeted by Medicare. They will be allowed to negotiate the prices for these drugs. You

Indeed, this is the first batch. So we saw ten drugs today, We're going to see another fifteen drugs named in February of next year. These ten drugs will see their prices slashed for Medicare, which has sixty five million beneficiaries seniors in the outset of twenty twenty six, and the batch of drugs that gets tagged next year will be twenty twenty seven, So it's a rolling sweep. But you know, arguably this is one of the government's biggest ever efforts to tackle drug costs.

Yeah, this is one of the promises by Joe Biden.

I guess you could say agree with.

Them or not.

He's making good on that promise. These are not unknown drugs. These are some of the most widely prescribed drugs. Which ones stand out to you the most? When I see Lily, which has been at a fifty two week high, I think every day in recent memory, people start thinking diabetes, weight loss drugs. Those are in the mix.

Yes, Lily is certainly an investor of favorite this past year. And all together, the ten drugs named today account for fifty one billion, or twenty percent of the Medicare part d's annual prescription drug costs. Some notable ones I want to call out Bristol Myers Adfiser's blood thinner Eloquist accounts for sixteen billion annual in Medicare costs. A Lily's diabetes drug as you mentioned, Jardians accounts for seven point one billion, and Jay and Jay's zerelto another blood thinner for you

Yes, they're all on the table, and they were chosen because they are the most widely prescribed or was there more involved in more criterion.

So everybody who's been looking. They were chosen out of a bucket of fifty drugs, and as we just mentioned, there's going to be another fifteen up to bat of these were surprises, some are broadly expected, and for these companies, I wouldn't say these are the growth drivers for the future. These are some of the bigger earners, but not the biggest now. And as you're seeing the Wall Street reaction,

The first cuts will take effect in twenty twenty six. In this case, does that matter who the president is in twenty twenty six or this is happening one.

Way or the other.

You know, that's a great question. I think the bigger question would be how does the lawsuit? How does the litigation play out? Every one of these companies is going to be suing.

The US delay implementation potentially we'll see.

Potentially, potentially a lot is still in the cards, and the US has believes it has a really strong case against these companies.

The big argument is that this will stifle innovation. That's what the pharma companies would tell you, that the trade associations would tell you. But if these are not big drivers of growth, is that true?

Yeah, that's pharma's line forever and always. I think it's a real question. Another thing we're hearing from analysts today actually is that some pharmaceutical companies may actually already be raising drug prices. This is counterintuitive sure to mitigate those effects. So you have to wonder, what are the so double the price now that cut it in half later exactly exactly,

We talk to Dona Shalala. Put this in perspective for us. You come in to talk to us about a lot of important developments in this sphere in the world that you cover. How significant is this for big farmer? Because it seems like a pretty darn big deal for consumers too.

I will say that every two every four years, both Democrats and Republicans come to the table before an election and say we want to tackle drug prices, we want to come after the pharmaceutical industry. This is really the biggest play that we've seen to date.

There you have it from Riley Griffin. Great have you been.

Thank you always.

Riley Bloomberg, healthcare reporter with us here on Bloomberg Sound On, and we do want to add the voice of Donna Shalala, who spent time, of course as the Secretary of Health and Human Services, also former congresswoman from Florida's twenty seventh districts. Madam Secretary, welcome back to Bloomberg. It's wonderful to have you here. I'd love your perspective on this as well.

It's very significant, and I think it's important to point out that this is not an executive decision by the President of the United States. He is fulfilling the obligations that were put on him with his support by Congress. This was passed by both the Senate and the House of Representatives when the Democrats controlled the House, so it's

That was amazing, Secretary, you just asked yourself two of the questions that I was looking to ask you. So we're making progress here. It sounds to me like you think the big pharma argument is bunk. Is that fair to say?

Well, I don't take it as bunk. I never have because I come out of the great research universities in this country. All I can say to them, is I believe the government is going to be careful. More importantly, they are huge supporters of the NIH. They get much of their licensing. Their pipeline is very dependent on the National Institutes of Health. So we're paying on one end and we're going to get some money out for consumers on the other end. So I'm very respectful of the

Well, I do think it's interesting that this is obviously something closely associated with Democrats. You know this firsthand. But Donald Trump was frequently talking about wanting to be able to buy drugs from Canada and sell them back to consumers here in the US. So there does seem to be some bipartisan nature when it comes to lowering the price of drugs. It plays well on the campaign trail never happened. We heard him talk about.

It a lot.

Yeah, he talked about a lot. Why would the pharmaceutical companies give extra drugs to Canada so that they could transport them back to Florida. It makes no sense. They sell to Canada based on the number of Canadians. And I always thought that was funck And I kept saying to everybody in Florida when the governor, Governor Desantras was trying to do it, this is not going to happen.

We'll ask you about Governor DeSantis because he's got his hands full this week. He's come off the campaign trail as a return to your state of Florida here with a massive storm approaching. He did hold a news conference earlier today to give you a sense of the tone and the seriousness. If you're not following this, if you're not in Florida, here is the governor no longer campaigning

He absolutely has to do that. Florida governors and the governors along the East Coast simply must do that. This is far more important than any political campaign. Florida has always had a bipartisan preparation. I have to say whether whoever was governor, we watched them closely, but they've always had an infrastructure in Florida. Floridians take hurricanes very seriously and we get advanced notice. It's not like an earthquake.

He was in Jacksonville just the other night as well. He was booed at a vigil following a mass shooting that took place there over the weekend. Tell me your thoughts on the way that was handled. Did he deserve that?

No, No elected official who's doing the right thing and paying their respects should be booed. It happens all the time with Democrats and Republicans. Actually, the public doesn't much like politicians when they show up for some of these events. My own view is, and I've said that the students at every university I've run is that you've got to

Sure, and those in the crowd want his respect as well. Can the Black community in Florida count on this governor.

No, He's done everything he could to offend not only the black community, but the gay community, all of us by picking on the most vulnerable in our communities. But it doesn't mean that I think publicly we should show disrespect. I'm just old school on that.

Donna, thanks for coming in to talk to us today about any number of topics. Donna Shalela the interim president at the New School, former congresswoman from Florida is twenty seventh, and of course, former Secretary of Health and Human Services. Thanks for listening to the Sound On podcast. Make sure to subscribe if you haven't already, at Apple, Spotify, and