This is Bloomberg day Break Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world, and straight ahead on the program. Another earning season begins this Friday. Some of Wall Street's biggest banks reporting, plus the Archagos jury scheduled to begin deliberations this week, and we'll get you up to speed. I'm Tom Busby in New York.
I'm Caroline Hedge in London, where we're delving into the key issues facing the UK's newly minted governments.
I'm got Prisner looking at the level of worry over the economy among policymakers in China.
That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg Eleve Them three own New York Bloomberg ninety nine to one, Washington, DC, Bloomberg one O six one, Boston Bloomberg nine sixty, San Francisco DAB Digital Radio, London, Sirius XM one nineteen and around the world on Bloomberg Radio dot com and via the Bloomberg Business App.
Good day to you. I'm Tom Busby. Earning season kicks off this week. Some of Wall Street's biggest banks will be reporting and for a preview, we welcome in Bloomberg Intelligence senior banking analyst Alison Williams. Well, Allison, let's just say, what are you expecting to see from these big banks that start this Friday, JP Morgan, Chase City Group, Wells Fargo.
A couple of things that we'll be focusing on. First, net interest income. This has been an area of pressure in recent quarters, but we have seen signs that those pressures are abating. And what we're going to be specifically focusing on for the banks are what are the deposit trends in terms of seeing some of that some stabilization
on that front. Secondly, are there any changes to the outlook based on what we have seen in terms of expectations for interest rate cuts and so over the past few months, things have been a little bit more stable than the bigger changes that we sought to start this year. But keep in mind that when we heard from the banks in April, most banks were a little bit hesitant to make changes to their forecasts based on the movement, and so specifically we'll be listening for Wells Fargo to
see if there's any changes to their outlook. JP Morgan has already increased its outlook on the net interest income front. That was some of the news that we got at Investor Day. We also heard from them that their expenses are going to be higher, but some of that is because they are pulling forward some investments because they have a sizeable gain to work with. And then for Bank of America, the bank has been expecting that this quarter will be the trough and their net interest income, so
we'll look for confirmation on that. City group expecting to see some weakness, but there are some offsets on the feeline.
Now besides net interest income. Of a particular note to you, trading and fees.
Trading and fees trading really continues to be resilient, and we have said that we expect that this revenue item keeps within the historically higher range, and that is what we've seen for the past few quarters. We've seen some differences in the drivers, but we do expect that that continues this quarter and the quarters ahead. Within fixed income, it's really the credit trading business that we expect to be the outperformer. We've seen good activity in mortgage backed
securities as well as asset BAC securities. We've also seen currency trading showing some positive trends, as well as our expectations that equities trading should also be helped by some of the very strong stock price movement that we've had. We think the prime brokerage business will continue to support the bank, So when we look at trading, we're expecting
that revenue relatively resilient compared to the prior year. We do think that we'll see some seasonal decline, which we typically do see in the second quarter, but the FEAT side is really where investors are focusing on. Trading is a much bigger piece of the revenue pool, but the FEA side is a focus because we have had such lower levels following the boom that we had in twenty twenty one, we saw a big decline the following year, and then last year really the big rebound that many
had hoped for failed to materialize. What we've seen in the first half is really strong debt issue, and so that's where I think we're going to continue to see some of the biggest strength in the second quarter. On the equity underwriting side of things, we are seeing some positive activity within the US and European region, so we think that's helpful, but there's still a lot of room to run in terms of of overall issued and especially IPOs.
So we're going to be listening to hear what the banks have to say with regard to pipelines and if some of the very strong equity prices can help to give a little bit lift on that front. Finally, m and A, again, this isn't a business that was relatively depressed last year and really looking to get some improvement. We think that really after the election is when we can start to see things pick up a little bit.
There.
It's really about the uncertainty, and we think that following the election, one way or another, there will be at least a little bit more certainty to help CEOs in their decision making.
Well Our thanks to Bloomberg Intelligence channalyist Alison Williams, and we stay on Wall Street now, but shift gears to the court room. Jurors expected to begin deliberating in the federal fraud and market manipulation trial of Our our Kago's Capital management founder Bill Wong. And to bring us up to speed, I'm joined by Bloomberg Legal reporter Chris Dulmich Chris Somemer, calling this Wall Streets trial of the decade. Why what is Bill Wang and one time CFO Patrick Halligan?
What are they being charged with?
Yeah, and it's a fascinating case. The trial has been going on for nearly two months. It started in mid May. The two men are charged with kind of separate things. Archie Ghost flew up in March twenty twenty one when it's biggest position, Viacom, issued a secondary offering and kind of set off a domino effects that led the firm's counterparties to start issuing margin calls and eventually led to its collapse basically a week later or within the same week,
I should say. Wang and Halligan, the firm's former CFO, are charged with a racketeering conspiracy for allegedly lying to the banks, to the firm's banks and counterparties about the size of its positions, what investments had held, and how much credit it had at other banks, which the government alleges led to the kind of collapse of the firm
in the end. Huang is also charged separately with working with the firm's former head trader, William Tamida, to artificially increase the price of the stocks and its portfolio in order to keep it you know, get its grow its assets and continue making money. So it's it's a fascinating case. Like I said, it's been going on for nearly two months, and the two size will give closing arguments on Monday, and the jury could get the cases dudents Tuesday.
So the question for the jury were the actions of our kgos just careless, reckless or something much worse?
Yeah, the real question is whether they were material to the bank's decisions whether to extend credit to them. Really is the main question there, and what that means is essentially, would a reasonable investor or reasonable counter party have taken the alleged misstatements that they made to them into account when making the decision whether or not to extend credit. And the jury will have to decide that question. That's a very important question in most of the counts here.
So it is it's going to be an interesting deliberation. We will obviously have no idea how long it will last, but the judge will give its instructions to the jury on Tuesday morning and they'll get the case shortly after that.
Well, there's a lot for the jury to get their arms around. A thirty six billion dollar family fortune wiped out in three days and banks on the hook for about ten billion in losses. I mean, what was the bank's due diligence? How was that for?
What?
I mean, did he look like a safe bet for them or or did they just getled.
That's been well, it's it's a mixed back because they are about there are about a dozen different counterparties reading from you know, giant investment banks like Goldman, Sachs and Credit Sweets, which eventually collapsed in kind of the wake of this this blow up. Some did more due diligence than others, but a lot of them have kind of looked anxious to do business with them. They had become a massive kind of player in the family office world, and and a lot of times they were maybe taking
them at base value, like for a long time. This is a pretty profitable firm for a long time. Bill Wong's you know, thesis and kind of investment strategy was by and hold. He had his defenses that he honestly believed in these companies that he invested in, and he was making investment decisions based on fundamentals, and that he
wasn't really trying to manipulate the market. But what's clear from the trial and the testimony is that starting around the time of the pandemic, he increasingly directed his traders to trade an increasing amounts both before market and near the close to you know, and there's a lot more
activity than they had ever done before. So it's it's really going to be a big question for the jury as to what happened here, as to whether or not they're actually responsible for, you know, leading these banks into these decisions to extend credits.
And this all began, as you said, with swaps on Viacom CBS. Then he got into some Chinese tech companies. Did they look like just mundane investments? Did they look like big risks at the time. I know, twenty twenty hindsight is perfect, but you know, going back to twenty twenty one.
Certainly some of them could be considered risky bets he had.
You know, the banks consistently asked him whether he had hedges in place in you know, pretty liquid companies like you know, Google, Facebook and big stocks like that, and they wanted to be reassured that he had and he did have some edges in place, but ultimately those were not really that did not really help him in the end because of liquid they they called it, and this was a big question in the trial that Archie Ghosts claimed that this was a liquidity problem, not a solvency problem.
The government, of course says they were insolvent. They no longer were able to function as a going concern. So whether or not it was actually a problem of just being able to get the money to pay the margin calls and that they weren't able to in the end because of this domino effect, or whether or not it was because of manipulation and the statements they made to
the banks. Of course, the defense says in a lot of ways, these were not my statements at all, that he believed a lot of the things they were saying that they were true.
Wow.
Well, Closing arguments expected this week in Bill Wong's federal trial, Wall Street Trial of the Decade. Our thanks to Chris dolmech legal reporter for Bloomberg News, and coming up on Bloomberg Day Break weekend, we head across the Pond to look at what the results of this past week's UK parliamentary election could mean for that country's and Europe's economy. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break weekend, our global look ahead at the top
stories for investors in the coming week. I'm Tom Busby in New York. Up later in our program more trade and inflation data from the world's second largest economy. But first, what will last week's election results in the UK mean for that country's economy. For more, we head to London and Caroline Hepker, the host of Bloomberg Daybreak Europe.
Tom.
After a brief and different dificult election campaign, including many hard fought battles over the economy, immigration, and public services, to name a few, the British electorate has finally made its choice. Whilst the snap summer poll may have come as a surprise to many, even those well versed in the ways of Westminster, the dismal inheritance awaiting the next government will be news to no one. Britain's problems have been piling up since the twenty sixteen Brexit referendum, which
triggered years of Tory political infighting. Add to that a global pandemic alongside current geopolitical unrest, and some would argue you're left with the perfect recipe for political disaster. Former Conservative Government minister Sam Jimar has been speaking to Bloomberg, telling us that the next government's navigation of relations with the European Bloc will now be critical.
Foreign investment is a big thing. Is this going to be a government that is domestically focused or is going to really get out there, almost go on a road
show and to try and attract for an investment. I think here the public is leading opinion rather than the politicians, and I think most of the public today, if you pull them, we'll say that Brexit has been a mistake, to put it bluntly, but I think the direction of travel from here is an easy enough relations Where we've been is that anything that is from the EU has to be treated with deep skepticism and therefore not getting involved with So that's one aspect of it. You're quite
rightly pointed out. I resigned from government in twenty eighteen. I read the tea leaves that the Conservative Party was embarked on a journey that would not be constructive for the country. In fact, it's being destructive for our economy. And my personal hope is that we get back on an even keel that's not to re litigate the referendum, but to actually remove some of the sanctions we've effectively imposed on ourselves as a country.
That was Sam Timo speaking to bloom Radio. Right now, the UK is also facing a fiscal strait jacket. This is the product of years of crisis spending spurred by the COVID pandemic and a need to help families to cope with the cost of a living shock after Russia's
invasion of Ukraine. Today's government is presented with crumbling public services that desperately need money, taxes at a postwar high, and national debt at levels last scene in the early nineteen sixties, which costs sixty billion pounds per year just in order to service. As far as the list of priorities goes, it's hard to imagine a world in which minimizing the country's economic bleeding isn't high on the agenda.
On the campaign trail, growth was a real buzzword, as parties promised that the economy could expand its way out of the spending bind. Business leaders will also be key in achieving that, but they will likely have their own set of demands or the new residents of Number ten. Key bosses tell Bloomberg that they're looking for upgraded infrastructure, a focus on the skills gap, and a commitment to the climate, coupled with a strong preference for lower business rates.
Their requests won't come cheap. Can Britain's next cabinet keep up? Also personal it will be the housing crisis. Bloomberg analysis shows that the next government will need to build the equivalent of another city the size of London to make up for five decades of below target construction. The shortfall is driving Britain's worst housing crisis since World War II. Alleviating its effects will no doubt be of immediate concern,
But is it possible to make up the difference? For almost five decades, developers and local authorities have failed to bring new homes onto the market at the pace of other wealthy nations in Europe, or even at the rate that Britain managed during the nineteen sixties. So plenty for this next administration to be getting on with. Where do
they start? The new government's proverbial inbox is something that my colleague Tom McKenzie and I have been discussing with Bloomberg's senior economics reporter Philip Aldrick our City editor Katherine Griffiths and our housing reporter Jack Sitters.
It's the combination of the one hundred percent of GDP debt level with high interest rates that has caused real constraints on public spending and what the government can do. The increase in the debt servicing costs has gone up by sixty billion pounds a year since before the pandemic. That sixty billion pounds is equivalent to the size of the defense budget, and you're not getting anything for that.
So you have to take money out of services to pay for this debt servicing, or you've got to raise taxes to do this, or you could borrow more and send the debt spiraling further. These are the kind of horrific decisions that have to be that are having to be made, and that's why we've seen the tax burden just drift up to sort of the highest level since World War II, because you know, there are these ongoing public spending costs which have got no effect on the
quality of public services. Just just paying our creditors doesn't help pay for nurses. So that's been this kind of core problem.
Catherine.
Let's bring you in at this point in terms of how the city of London is adjusting to the new government. We saw a course a number of politicians fighting for the affections of the city and businesses over the last six weeks or so. What is going to be at the top of their wish list?
Well, I suppose, on the one hand, if they had a kind of ideal wish list, it would be a very very sort of tax free scenario or low taxes. So when it's banks, they don't want to have the surcharge on their profits, they don't want to have the levy on their balance sheets. But I think they are realistic. So what they're really looking for, given the constraints that
feels just outlined, is they want sort of clarity. They want consistency, they want a closer relationship with Europe, and they want the UK overall to be a kind of place where they can attract the best talent. So they want all those other things to work well, public services too, so they can get people to come and work here.
Attracting the best talent, though it means somewhere to live. In the planning system, the housing landscape has been incredibly difficult. Jack considers this is your beat, isn't it? How difficult it is going to be to solve the housing problem.
The fact that you've even got me on for this discussion, I guess, is telling of just how much housing has risen up the agenda. The reality is today that you know a huge proportion of the housing output in this country is delivered by a very small number of private developers.
They're not charities, they're focused on margin, and you know, you've had a period of suddenly increasing interest rates, so a lot of these housebuilders were very nervous about what demand would look like, so they've slowed down the amount they've been building. Inevitably, that's going to slow down, you know, the overall supply, and you just don't have the money there for the public sector to be building in significant
volume as it did. You know back if you go back to the fifties and sixties, which is the last time Britain was really building, you know what, we might enough homes. The incoming government has got a huge challenge to try and stimulate that supply, and it just it won't happen quickly.
On the question, Phil, we'll bring you back in at this point. Fiscal rules big feature of course of the campaign, and how how a new government will stick to them as they as they look to fund services like education and NHS do they do, they still need to stick to those to those fiscal rules is their rigal room. Because of course, loosening the fiscal purse to spend on things like tax cuts, it's very different to loosening the fiscal purse to spend on things like capex.
In March, the OvR forecast that Jeremy Hunt had about eight point nine billion to spend you know, headroom under under under the fiscal rules. So there is going to be real constraints on what they can do caused by you know this this you need to show, you know, fiscal sort of prudence.
Yeah, Catherine. In terms of then how that how that flows into what happens with the UK? How does Britain target foreign investment? I mean a few days before the election, I remember speaking to the country head a BNP Pariba, Menuelburi, and she was saying, you need stability, that is for more than just six months. How is Britain going to bring foreign investment in?
So I think the government will start from quite a good place, which is that the UK seems quite a stable place compared to many other parts of the world, not LEAs style continental neighbors. So it's a good starting point. But I think there are a few things that foreign investors want for a start. They do want stability. They didn't like the idea of the HS two extension project being going so far down that path and then dropped by Richie Sunak, So they don't want to feel that
kind of domestic politics. Trump's sort of long term planning, and they want to have kind of clear sight of what the government will do, whether it's green investment, whether it's housing or other infrastructure, because they definitely want to invest in the.
UK Okay that on that challenge and then domestically, and part of the challenge around building those new homes and reaching those targets has been what nimbiism who's been has been blamed, so so local populations pushing back on developments. When I speak to people about this, those who welcome the development of buildings also say what they need to also incorporate things like additional hospitals and schools that come under pressure. How is the incoming government thinking about addressing
that part of it? Are they going to rip up the regulations to just get that house building going even come what may, even if some of those issues are sidelined, or are they looking to address that as part of the mix.
Yeah, so I think it's really interesting. And you know, in the time that I've spent covering this area, I've never never before heard a political party, even though slightly whispering it in the manifesto, even ignowledged the idea of building on the green belt. Now, you know, lab we're talking about building on the gray Belt, the bits of the green Belt that aren't actually very attractive. But quietly,
that's actually really radical. You know, that's been a total taboo in British politics for ever since the Second World War. So that that is, I guess, probably the first indication of a potential significant change on the supply side. So the previous governments have done a lot on the demand side, policies like help to buy, trying to you know, stimulate demand,
tinkering with mortgages, all that sort of stuff. But yeah, as you suggested, clearly it's it's the supply side where the issue really is now, that planning constraint and you see it, you know, you see it all the time. There's a story in the BBC about you know, a development that was had a lot of objections. It quoted six people who are opposed to development, not a single one who's in favor. Just culturally, there needs there needs to be a real change in this country about I mean,
roads get clogs, schools get overfilled, there aren't enough hospitals. Absolutely, yeah, And so this is where you need to have the problem is you have planning delegated to a local level, decided by counselors who you know are very conscious that their local electorate might not like new homes built in the you know, in the field near where they live. But then you have you know, budget budgetary decisions and decisions around a lot of those bigger infrastruture things taken
at a central government level. So there's there's a lack of you know, things being joined up.
Yeah, Catherine A laughed. Were then on the balance I think important for our audience between regulation and sort of encouraging growth and prosperity.
Yes, I suppose. Actually, of course, the UK's sort of strong regulatory system is one of its key strengths. So I think the government will know that and investors, whether they're domestic or for and also know that. But there's this real tussle actually since Brexit of the UK needing to set its own policy, and that requires kind of serious thinking which we just haven't had in the last
few years. So I think a sense that people really think that through how you do balance those two things will be really important.
My thanks to Bloomberg's senior economics reporter Philip Alderick, our city ed as a Katherine Griffith, and our housing reporter Jack Siddters. I'm Caroline hepget here in London. You can catch us every weekday morning for Bloomberg Daybreak Europe, beginning at six am in London. That's one am on Wall Street.
Tom, Thank you, Caroline, And coming up on Bloomberg day Break weekend of pre review of some highly anticipated trade and inflation data coming out of China. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom Busby in New York.
Over in Asia. We'll be getting the latest liew of Chinese trade and economic data and for details in what investors are expecting, let's head to Bloomberg Daybreak Asia co hosts Brian Curtis and Doug Krisner.
Tom Earlier in the week, the official Chinese PMI data showed factory activity contracted for a second straight month in June, and at the same time, a sub index of new factory orders slipped as demand weekend. Now, this weakness in manufacturing is certain not to please policymakers. They've been looking for improvement.
In May. Strong exports capt production lines at the factory's humming, but domestic demand remained stubbornly subdued, and rising trade tensions with the United States and also with the European Union have added uncertainty to the prospects for overseas shipments.
And we got some perspective on the Chinese economy from Shazad Kazi. He is the COO and managing director at China Beijes Book.
I think if you want to talk about the gdp H, you know, I agree that we may not get to five percent this year despite what the you know, what the party claimed up front. But I think pulling back, let's talk about where the economy is. It kicked off on a pretty solid state in the first quarter, and where you're getting to now is that the pace of
improvement has faded, there's no question about it. But we are nowhere near, I think, a level where Beijing starts to feel the pressure to unleash stimulus and large enough quantities, which is exactly which is what the markets are hoping for right now.
If you're a policymaker and you had been hoping that exports and manufacturing would would help bring the economy along, knowing that the consumer side was a little bit weak, and so that's not really happening. So I think what is being suggested by some is that they need to do something. Maybe it comes out of the Third Plan, or maybe the PBOC just sort of increases the oomph of the home buying scheme, which you know, could could do the trick. It's just not big enough at the moment.
And look, you know when when they get into the plan, and one of the things I think they may also talk about is claim some victory finally housing, you know,
turning in some somewhat better news by comparison. By the way, I should point out, commercial property is starting to suffer a little bit, and so increasingly when we think about the Chinese property market and what needs to be done, in terms of a rescue plan, Investors might go from worrying solely about housing to worrying still about housing a little bit, but increasingly getting caught up with what's happening to commercial real estate in China.
So we know the story on the inflation, to what extent will the PBOC, to Brian's point, kind of lean in and do something that is maybe a little controversial, something very similar to quantitative easy.
We're increasingly thinking, you know, hearing about the fact that you know, the PBOC wants to get involved UH in bond buying and that sort of thing. So there's there's there's a likelihood that we get some more information and announcements to that end, and that can help. But but let me point something out. Liquidity in the system has not been a challenge in China, UH, and and that
is not a challenge today. If anything, I would argue, looking at the data, there's plenty of liquidity out there and there, and and banks are willing to lend, and banks are cutting back on raids, banks are cutting back on rejections the way they used to reject loans a couple of years ago.
UH.
Companies are just not going out there and borrowing. So what exactly is the problem and what exactly is the solution? We have to always think about that thing will carefully.
He is Shazad Kazi of China Beage Book and for a look at what's happening in the mainland economy. We are joined by Bloomberg's Jill Diesis. She is Bloomberg News Desk editor. She was also China ecogov editor, and we're pleased to have her joining us from our studios in Hong Kong. We can talk about the monthly activity data in a moment, Jill, we're expecting those numbers in the
week ahead industrial production, retail sales, to name two. Let's jump off what Shahzad was talking about there, particularly as it relates to the Plenum. That's obviously the big meeting top ranks of the Chinese Communist Party. So we'll concern about the economy. Do you think be the primary topic of the third Plenum?
I think at this point it's a bit tough to say. I mean, look, the economy has done at least reasonably well this year. I realized that some of those numbers recently haven't been particularly strong. I think those PMI numbers from June thirtieth, in particular a bit weaker than expected, seeing that second month straight of traction for factories. But overall, I mean, there have been other parts of the economy
that have held decently well. Exports did actually outperform in May, so, you know, leading to you know, there's a lot of concerns over obviously how much EU tariffs and the like are actually going to impact exports in the future. But I think that you know, the economy did at least hold up reasonably well from a manufacturing export perspective in the first six months of the year. Obviously demand continues to struggle, but that is, you know, at least a
question there. I think what you're likely to see, at least with the you know, this third plan of maybe there's some talk about the economy, but also I think some of those longer term geopolitical goals that Shi Jinping ultimately has run developing advanced tech do seem to be big factors that he's been focusing on, at least for the past couple of months.
What do you make of that notion that we've heard a little bit more about lately, the possibility of the PBOC scaling up that home buying scheme.
That I think is you know, maybe a possibility. So this idea is, you know, this home buying scheme introduced in May does seem to be maybe you know, there's a lot of talk about whether that's really that silver bullet to kind of help you know, the property market after so many years of you know, issues and problems. Right now, a lot of economists are still saying though that it does lack the sufficient scale needed to actually boost the economy, you know, sort of solve the property
markets issues. I think that we haven't really seen a whole lot of you know, continuous months of obviously you know, that in action to to you know, maybe affect something. But that does at least seem to point to you know, some likely you know, this the strategy that actually might be useful in helping the property market. So maybe there is some room to scale things out there.
Brian and I were talking a while ago about the very strong reading from Tai seen the manufacturing PMI data that measures kind of small and medium sized businesses. So let's weigh that against what the official PMI data was indicating. And I'm wondering, is there a bit of bycation within the Chinese economy right now, which is to say, smaller medium sized businesses maybe holding up very well, but the larger firms are having some more challenges.
Possibly. I will point out that there has actually been quite a bit of divergence between those gauges over the past year or so, the idea that the Kaishin gauge actually does outperform the official one quite frequently. I think that really comes down to, first of all, as you mentioned, it is smaller medium sized businesses. It's also a lot
more export oriented firms. Is as we mentioned earlier in this conversation, exports actually did fairly well in May, so maybe that is an indicator that there has been, you know, some continue you know that's continuing to hold firm at least a bit in June. But ultimately, yeah, I mean it's it's difficult to kind of take these things in combination with each other, but you know, there is that acknowledgement that there's some difference between these things. Does seem
to cover different firms, maybe more export oriented ones. I wouldn't really read too much into the fact that they're diverging, just because that's been a pattern that we've been following for quite some time.
Well, let me give you something else that's mildly positive. We did see a pickup in auto sales in the month of June, and the numbers from BYD at more than three hundred and forty thousand cars. That was more than one hundred and ten thousand cars more than the same month last year. And yes, we know that it was because of discounting, but you know, discounting is part of what you do in economic conditions to try to
get the sales moving again. So I wonder if some other industries might pick up on that, and whether or not, you know, that bodes well for the future.
Yeah, I think we'll have to see. I mean, certainly, China, at least when it comes to cars in particular, has been a bit smart about trying to get up demand there, So we'll see whether that continues to hold. I know that, you know, they've also introduced a variety of other schemes over the past several months to try to really really boost domestic spending in particular. I think that's been to
you know, somewhat mixed effect. Obviously, you know, inflation continues to be quite low in China, We're still seeing ongoing issues with demand there, but there have been various programs introduced to kind of get people to buy more home goods, for example. So I wouldn't be surprised if you see trying to you know, try to you know, gin up some domestic demand by turning to those types of programs.
That's kind of a nice segue into the monthly activity data. We've talked a little bit about the export economy, and that takes care of some of the industrial production component. Retail sales that's going to be key too, and the health of the China consumer. I'm wondering whether or not there is a way for authorities to dissuade a little bit of personal savings. We know that there's been a great deal of savings going on and maybe at the
expense of the retail economy. Is there any way that authorities could address that issue as a way of ginning up retail sales a bit.
I mean, this is one thing that they've really been struggling with for really the past year, right, you know, introducing you know, some you know kinds of you know, you know, this idea of introducing programs that are actually going to get people to spend more money. As we you know, China is you know, incredibly reluctant to roll out policies that you'd see and other economies, particularly in Western economies, such as offering people subsidies to try to
get them to spend more. So I'm not sure that we're going to see anything on like an extremely massive scale there, but yeah, maybe there's other types of programs, or at least on like sort of the local government level, maybe you'll see local authorities try to introduce some kinds of programs to get people spending again. It's just it's been obviously an incredibly difficult thing for the for China to really kind of get that going.
More and more programs so one that would affect people like you and me and Doug. Non Chinese residents of Hong Kong can now get five year visas going into China multiple entry, which is kind of interesting. It's a small step, but it shows that they're willing to try different things.
I'd actually say, Brian, I mean that's part of this ongoing program that China's really been doing to get you know, not just you know, residents of Hong Kong, but also in international visitors, you know, going to China more frequently. I mean, look at the number of visa waiver programs that China has implemented over the past several months, right, I mean, you just recently saw Australia and New Zealand
added to this program for allowing visa free entry. There's been some major economies in Europe as part of that program as well. I mean, China, I think, has really been trying to get on the charm offensive with a lot of these you know, these international tourists and stuff to try to you know, maybe boost you know, international spending that way, getting people into China and actually spending money improving international tourism that way.
So obviously, we are heading into a presidential election here in the States in November, there's been a lot to talked about where tariffs are concerned on Chinese goods. Do you think this is a worry for for Beijing.
Yeah, certainly they're worried about this. I mean, look, you just saw, you know, fairly recently, China has really been trying to push back against a lot of these tariffs. Even the Foreign Minister earlier this year flagged the idea of tariffs from the US or the EU, you know, as being incredibly unreasonable, as being you know, sort of a threat at least you know, some sort of implicit
acknowledgement there. Very recently you had a pretty high level delegation from Germany which has been trying to push for negotiation on these tariffs because of how important Chinese goes are to the German economy there. You know, they were visiting trying to you know, figure things out here. As of right now, I mean, you've got some provisional tariffs, you know, kicking in definitive duties really more of a
likelihood in November of this year. But China, I think, has really been trying to figure out ways to sort of negotiate some of these things down and really preserve that kind of trade. Obviously, this is going to be a big question for China.
Jill, thanks so much for sharing your perspective. Jill desis there, Bloomberg News Desk editor joining us from Hong Kong. I'm Doug Krisner along with Brian Curtis. He's in Hong Kong and you can join us weekdays here for Bloomberg day Break Asia, beginning at eight am in Hong Kong. Eight pm on Wall Street.
Tom, thank you Doug, and thank you Brian. And that does it for this edition of Bloomberg day Break Weekend. Join us again Monday morning at five am Wall Street time for the latest on markets overseas and the news you need to start your day. I'm Tom Busby. Stay with us. Top stories and global business headlines are coming up right now.