Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight ahead on the program, and look at what some of the top fed officials may have to say at this year's Jackson Hole Symposium. I'm Tom Busby in New York.
I'm Karlin Hepburn London, where we're dissecting the UK's immigration dilemma.
I'm Doug Prisoner looking at Tim Walls's relationship with China as he prepares to take the stage at the Democratic National Convention.
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. Come and buya the Bloomberg Business app.
Good day to you. I'm Tom Busby. We begin today's program with a look at the Annual Economic Policy Symposium in Jackson Hall, Wyoming this week the Federal Reserve Bank of Kansas City will host dozens of central bankers, policymakers, academics, economists.
From all over the world.
FED Chair J Powell expected to give remarks on Friday, and the big questions will he set the table for a September interest rate cut and how big a cut could we see? For more, we're joined by Michael McKee, Bloomberg International Economics and Policy correspondent. Well, Michael Powell has said all along any change in rates will be a data driven decision. Let's talk about the data and what you're expecting this week.
Well, we've got data driving the economy towards a rate cut in September. This past week, we saw inflation come down significantly and also symbolically as the headline CPI number comes in two point nine percent, the first time it's been below three percent since the beginning of the pandemic. So good news on the inflation front. And then we saw late in the week the retail sales numbers come in strong, stronger than expected certainly, and Americans are still spending.
So the idea of a recession is kind of off the table, but this kind of lines everything up for a rate cut in September. Now there's more data to come in September, but no significant data before Jay Powell speaks.
Let me take a step back. Two weeks ago, we saw the Dow tumble one thousand points. Some people on Wall Street, yes, there was the carry trade in Japan, which was a big part of that. But also some people on Wall Street said it's because the Fed missed the boat on just prior to that, leaving rates unchanged for I think the eighth meeting in a row. But
the Fed didn't budge, no emergency cut, no panicking. What does this tell you about Jay Powell and the Fed that they just ignore the noise and carry on.
How did you survive the great recession of August date? It tells you that the Fed is not the market. The market is trying to adjust on a day by day basis, and people get into herd behavior or panic behavior, and we see that all the time. The Fed is going to be much slower to react. First of all, they don't really care whether the market goes up or down as long as you can still trade. If the market is functioning, then the Fed tends to leave it alone.
The only time they really jump in with any kind of emergency help is when the market sees up because people won't trade, and that's not the case. It wasn't the case that week either. It was just that those who were trading were losing money, and that's not the Fed's job to keep them to keep them there. And what's funny is you see we saw this at the beginning of the year, six rate cuts, price did and then we got down to like one, and then we got down to is the Fed going to cut it all?
And then all of a sudden we had people panicking and saying we're going to get four or five rate cuts, and the Fed through all this hasn't changed anything. The interest rate has stayed the same.
Now.
I know you mentioned the jobs report though, or what we're going to get before the next meeting September sixth. We're going to get the August jobs report. I know it's far off, but we have seen what the FED was expecting, a little slow down in job creation. Are you expecting more of the same for the month of August.
We are.
I've talked to a number of economists. It's too early for them to make forecasts, but basically they're thinking that we are going to rebound from the July numbers and go back up in terms of job creation and maybe even go down in terms of the unemployment rate. But they don't have a great firm grasp on number. But they do think that we may not go above job creation as we saw it for much of this year, but that it will be higher than the number we saw in July.
Well that's good. Now, eight meetings in a row, rates have been left unchanged. The last change in rates a hike in July of last year. The last cut was over four years ago, at the start of the pandemic, so historically there hasn't been much movement since then, you know,
little incremental certainly the past year. What do you hear from not just Jerome Powell, but other FED governors and presidents about what's coming up in September and what are the hints allegations of what we can expect to see.
Well, they basically are kind of united around the idea that it is almost time to cut interest rates. There's some difference between them in terms of whether they really think they need to go in September or whether they could wait. But I think when you get to the September eighteenth meeting. If we don't see any big data surprises between now and then, you'll get another unanimous decision, because there isn't a real argument for keeping rates as
high as they are right now. The housing industry would certainly love to see rates go down. That's the one lagging part of the economy. And so if they get December September eighteenth, I think they start the process, and probably not with a fifty basis point cut, but they may cut two more times this year and into next year as they feel their way toward what a neutral level will be.
Now a little plug here, Michael, you're going to be in Jackson hole. Who are you going to speak with this coming week?
I'm Tom Keen. He's welcome, He's welcome. We're going to speak with raphae Albostik from Atlanta, who justice last week said he's open to a September rate cut. We'll talk to Austin Goolsby from Chicago, who's been one of the more dubbish and interested in seeing a rate cut. And we'll talk to Patrick Harker from Philadelphia, who has been somewhat quiet about his views, but I think he's going to be on board with the idea of a rate
cut as well. We're also going to talk to Est George and lare Mester, two familiar names who are no longer at the FED, but are still invited to the conference, so they'll give us their views from the outside of what the FED could be doing.
Well.
It's always nice to be invited.
Well.
Our thanks to Michael McKee, Bloomberg International Economics and Policy correspondent. While we wait for that Jackson Hole summit, we focus now a bit more on the US consumer now. Last week, after a strong Q two earnings report, Walmart raised its sales guidance for the full year, expecting even more bargain hunting shoppers to head to its stores and its website. This week. A top discount competitor, Target Stores, reporting second
quarter earnings on Wednesday. That follows a disappointing first quarter. The question though, how is the chain holding up in this high inflation environment? What will its results tell us about the health of the US consumer? And for more on that and what to expect, Joined by Jennifer Bartasha's Bloomberg Intelligence Senior analyst Retail, Staples and packaged Foods. So Jennifer A. Lot of consumers. Well, they are spending money, but they want bargains. My question to you are they
finding them at Target? And what do you expect to see in its earnings report.
It's a question at the top of everyone's minds. So with regards to Target, one of the things to remember is that they have a much easier comparison in second quarter than they did a year ago because last year at this time, it was the quarter where they had the backlash from all the consumer boycotts with regards to their Pride assortment. So they had a very poor quarter a year ago, So the comparisons are a lot easier
now that said, consumers are still seeking value. One of the things that Target has done is they made an announcement in July about rolling back prices, especially on food and essentials, and that seemed to resonate with people. So hopefully we'll see some stronger traffic into stores for the second quarter.
Now, I think the of the Target customer for many people a little bit of a higher earner than your typical Walmart customer. How do you think Target compares to Walmart? It's customer, it's offerings, its prices, price points.
Historically there was a gap between the typical Target consumer, which was a little bit higher income versus the Walmart consumer, and their core consumer was usually associated with the lower to middle lower income bands. But we've heard Walmart talk about the last two quarters that reported earnings that they're pulling more higher income households into its sphere and that
more higher income households are shopping at Walmart. That is a bit of a concern for Target because that's kind of creeping into what has traditionally been their core consumer. So in order to combat that, it really comes down to things that Target is good at but just needs to continue to execute well. Private label and their fashion, you know, being fashion forward, being exactly what consumers want
before they realize they need it. Those are the things that historically have made Target it really stand out from Walmart. And you know, it's a little bit hard when discretionary spending is still a bit soft, but that's really where they differentiate and can continue to differentiate from Walmart.
Yeah, and I think their brands is Market, Pantry, Good and Gather. Then they have home furnishings like deal Worthy, really a big draw I think for a lot of.
Consumers it really is. And you know, part of what what Target is very good at is being fashion forward, whether that's in a parallel whether that's in home decor whether that's in food and finding things that are you know, the developing trends, I think is the way you want to say it. And so as long as they can stay agile and continue to meet those that is a
draw for their consumers. One of the things that could be in an area of concern for this quarter is that in the last three quarters, beauty has been sort of something that Target has highlighted. We ran a Bloomberg Intelligence Survey consumer survey on beauty and for the first time in multiple years, we've seen softening in demand and for beauty. So it will be interesting to see if
that translates through to Target as well. But it is kind of a broader indicator that that category, which has been pretty strong for Target, is starting to show a little bit of weakness.
Yeah, the lipstick indicator in the economy, that's not that scary. Well, I have another question about Target, and it's about e commerce. You know, obviously Amazon is the king, but are they in the same league as some of their competitors. Are they a little behind?
Well, Target executes very well on e commerce, but they have a different strategy. They're not trying to conquer the world with regards to e commerce. So Target traditionally has been very has taken an approach it's more curated. So it's a curated a selection that's on their website. So although they have third party sellers, it's only items that they think their consumers will want, versus kind of those endless aisles that you expect from Amazon or even from Walmart.
And so by kind of keeping that that tailored environment, it's easier for them to dish up results when people are searching for things that are relevant to them. So that has helped make targets e commerce platform pretty successful. And the other thing that is a strength for them is that a lot of those orders that they get
are fulfilled in stores. When they fulfill orders from stores, it means that the product is actually closer to the customer, which means it's cheaper to deliver it to the customer, and that helps make the profitability of e commerce a lot better. And so those are sort of the strengths that Target has and I think that investors appreciate that they're doing it. Their own way and not just trying to chase any sale at the cost of the profitability of the business.
Well a lot to look forward to. Second quarter earnings from Target out this Wednesday are thanks to Jennifer bartashis Bloomberg Intelligence Senior Analyst, Retail, Staples and packaged Food. Coming up on Bloomberg day Break weekend, we'll dissect the UK's immigration dilemma. I'm Tom Busby and this is Bloomberg. This is Bloomberg Daybreak Weekend, our global look ahead at the top stories for investors in the coming week. I'm Tom
Busby in New York. Up later on our program, we'll look at vice presidential candidate Tim Waltz's relationship with China as he prepares to take the stage at the Democratic National Convention. But first, the UK still reeling from its worst rioting in over a decade, fueled by anti immigrant sentiment. As even more arrivals are expected, it's become a major flashpoint for Prime Minister Keir Starmer's new government, which has promised to limit the number of new entrants to the country.
For more, Let's go to London and bring in Bloomberg Daybreak. Europe banker Caroline hepger Tom.
More than a thousand people have now been arrested following several days of anti immigrant disorder across the UK at the end of July and beginning of August. The rioting was sparked by the fatal stabbings of three young girls attending a Taylor Swift themed dance class in Southport, in the northwest of England on the twenty ninth of July. Misinformation about the attacker being a Muslim asylum seeker spread swiftly online and encouraged by far right activists and protesters.
It resulted in days of anti immigration demonstrations that turned violent,
targeting the police, migrant support facilities and mosques. Prime Minister Kirs Starmer has now placed an emphasis on speedy and tough punishment in a bid to restore calm That seems to have largely worked, but it remains to be seen how his Labor Party will approach the issue of migration, a political flashpoint over the last few years that successive governments have been forced to reckon with Bloomberg's EMEA Equalities editor Syrage Datu says that the recent disorder fueled by
that online misinformation lay is bare the scale of the challenge.
And very very quickly things online turned quite violent. And so you had that misinformation right from the start that largely at the beginning happened on X and then you started having groups organizing on different platforms, places like Telegram, places like discord where they're not necessarily available to their public.
You really had a very quick virality of this misinformation that the key thing that happened in this time was that it played on the fears that people have, and very quickly y had that they're escalated into violence.
How much do you think that foreign states have been interfering in this in this business, the.
Government is very much looking into the idea of foreign interference and foreign involvement, and this is you know, this is not necessarily new. We know that our style states have been involved in missing and spreading sharing misinformation for
some time. But what I will say is I spoke to a called Logically, a group that counters disinformation, and they spoke to me about a group called Channel three now, which is a fake news channel, and they were one of the first accounts on x to share this fake name. And it started out as a YouTube channel that was sharing Russian home videos. It then made the shift to
Pakistani content. It went through a cycle of different branding, different fake news organization names, and then now it's registered in Lithuania. And what they said to me is it mirrors the tactics of a Russian disinformation campaign. But then cautioned and added, but the problem is that real people, especially in their ways, people who are extremely online people tend to post online in a way that mirrors bots. That's why it's so hard to retell who's behind some of this.
What about Elon Musk and his role you mentioned x he has found the flames one can argue of extremism in the UK. What's his involvement here?
This is a really interesting one. So obviously, even masked the owner effects, he's made really provocative posts on his own platform saying that civil war is inevitable. Henry Parker from Logically told me that actually he's really going against the terms and conditions off his own platform. This, you know, this isn't really this sort of language isn't acceptable. But of course he has the owners. I don't think they're
going to delete his account. But what we have seen recently, people like Tommy Robinson whose real name is Stephen Yaxley Lennon, who's been inspiring a lot of the protests in person, but while he's been abroad reportedly in Cypress on holiday, he wasn't allowed on Twitter. Just a few years ago he was banned and he's been allowed back on x
so I think Mask's role has been twofold. It's not just potentially, you know, getting into clashes with Prime Minie, but also the way that he has led his company.
Something that you must posted about people being arrested for social media posts, people being arrested on the Communications Act for posting on social media. But this is a controversial error, isn't it. Can the UK really police the Internet in this way?
Yeah? Again, this is a of course it's going to be controversial. I guess it comes down to the idea that should incitement of hatred only apply in person or should you be charged for incitement of hatred wherever it happens.
And obviously the Communications Act means that you know, and the government decided that it should be so that it's not necessarily it's not really new, something that's been happening for quite a while, but obviously in situations like this, where there are inflamed tensions where we do have violence. Perhaps we're hearing about these charges being made more whereas
in normal circumstances it just happens behind the scenes. I should terrify you know that the people who have been charged on this, who have been saying things like go and burn hotels that have asylums because in them it's not language that is it's not tempered language. Obviously you know that it is quite a violent language.
That was Sirage Datu speaking to me on the Bloomberg UK Politics program. Well aside from questions about social integration, immigration is also heavily tied to the UK's economic performance. Just last month, the Confederation for British Industry, the main business lobby here, one that curves on migration could hinder the country's economic outlook. So what will the government's approach
be to this issue. Kirs Starmer has talked about wanting to quote smash the gangs, quite similar really to Rishi Sunac's stop the boat's message when it comes to people who are coming illegally to Britain. But the new government has yet to settle on its overall migration policy. Since the landslide elect victory of July. Join me now to discuss this in greater depth is Bloomberg's UK economics reporter
Lucy White, Lucy Fogods, have you on the program. There are various different kinds of migration statistics and that can get a lot of people into a lot of trouble very quickly. What do you think though, that the migration numbers overall are looking like for the UK and the debate in Britain at the moment.
So we had the last time we had migration data out that was from the Office for National Statistics, a big set of migration data, and that was around long term migration to the UK, and that showed migration falling to six hundred and eighty five thousand net migration, so that the total number of people coming in compared to those going out falling to six hundred and eighty five thousand in twenty twenty three from seven hundred and sixty
four thousand a year earlier. That's obviously quite a big drop, but it's still showing migration at very high levels and away off the tens of thousands that David Cameron spoke about when he was trying to get elected back in twenty ten. Brexit has changed the type of migration coming into the UK. So before we tended to have a lot of European migrants coming to the UK, many of whom would fill you know, kind of more casual roles bar work and you know, hospitality as well as other roles.
But while there's a huge focus on the small boats elements, as you just mentioned, they only constitute a tiny proportion of the people coming in to the UK. The vast majority of people who are now coming into the UK are through government approved routes, So that's work visas, that's through humanitarian routes, although that is falling off now. So that was such as you know, the people coming in due to conflict in Ukraine and conflict in Hong Kong.
So what does the relationship then look like between immigration and economic performance in the UK.
I mean, there's varying takes on this, depending on whose research you look at, and what data they are looking at, how they interpret it, what other factors they're taking into account.
But it is.
Widely accepted that migration does generally boost productivity in developed countries, so the value of work done per hour. Essentially it gives employers more choice over who they employ. You know, you've got you've got a bigger labor pool to look at, so you can you can pick and choose a little more.
There is some worry that among some people, and you know, this is possibly what we saw inflaming some of those riots that you were talking about earlier, that this can lead to fewer job opportunities for people in the country and lower wages for people in the country. But according to the government's Migration Advisory Committee, who've looked at a lot of evidence on this historically, there's actually been very little evidence that migration does have a huge impact on wages.
So what do you think it means then, for this still quite new Prime minister, I mean only about six weeks into his term of office, Kirs Starmer. I mean he's got to balance then the warnings that I mentioned from the CBI about curbs on migration hurting or stunting economic growth and then at the same time public services being very very stretched.
I think Britain does have to face a reckoning at the moment. I mean, the truth is that we are hugely reliant on migrant workers in many sectors. I mean I spoke about the increase in the number of people coming for work. A huge number of those are coming on health and social care visas. These tend to be lower wages, lower paid jobs, you know, in the care sector,
and we are hugely reliant on these people. If we're to raise wages and you know, encourage more British workers to work in this sector, that's going to take a huge amount of public funding and possibly a whole rejig of the social care system. So, I mean, Kirs Darma really does have a balancing act here. And I obviously migration does pose worries about pressure on public services. You know, there are more people who'll be wanting houses, more people
who'll be wanting to use education, to use hospitals. But at the same time, you know, we do have to remember that migrants do also you know, kind of add to the demand in the economy, so will also be you know, kind of paying their taxes as well. So we do have to balance at the end of the day, whether we can afford to be less reliant on migrants.
I suppose yeah, Well, especially with an aging population within the UK. I mean, the other big theme has been about kind of talent UK universities could be at risk from have been at risk from immigration and crackdowns that then deter foreign students. You know, that's long been the kind of golden goose for universities and colleges in the UK, you know, for an advanced economy like ohs tell us about that.
Yeah, I mean, I've heard a lot of concerns from academics in universities. They are becoming more and more reliant as we've seen you know, kind of pressures on domestic funding for universities. They are becoming more and more reliant on the international students who are paying higher fees. And we're seeing a huge reduction in the number of students who are coming to use UK universities at the moment, since the government imposed a ban on most students bring
their dependence into the country. That has for some people made it less attractive to come to a UK university when you're comparing that with you know, very good institutions in Europe, in the US where they might otherwise go. So there is a lot of concern within universities that on a global stage, we are becoming less competitive.
It remains a potent topic, a huge you know, economic issue for Britain. As well many thanks to Bloomberg's UK economics reporter Lucy White. I'm Caroline Hepge here in London. You can catch us every weekday morning for Bloomberg Daybreak. You up beginning at six am in London. That's one. I am on Wall Street, Tom.
Thank you, Caroline. And coming up on Bloomberg day Break Weekend, we'll look at Democratic vice presidential candidate Tim Waltz's relationship with 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. The Democratic National Convention will take place in the week ahead. Democrats rallying around Kamala Harris and her running mate, Governor Tim Walts of Minnesota,
who has a long history with China. Let's look now at how that relationship might play out during the campaign. Here's Bloomberg Daybreak Asia co host Doug Krisner.
Tom. This connection goes back decades. Walls taught English in Foshan, China, in nineteen eighty nine and nineteen ninety. That city is in the southern Guangdong province and Walts was in China after the Ken Men's Square massacre in nineteen eighty nine. You know, he is the first person on a presidential ticket with experience of living in China since George H. W. Bush, who served as US ambassador to Beijing in the nineteen seventies and as a Minnesota congressman in two thousand and seven.
Walls aligned with politicians on both sides of the aisle focused on China's weak human rights record. He often spoke affectionately about the Chinese people. As a member of the House Agriculture Committee, Walls was interviewed for Agripol's Communications in twenty sixteen.
I lived in China, and as I said, I've been there about thirty times. But if someone tells you and they're an expert on China, they're probably not telling you the truth because it's complex country, but it's critically important for us. I don't fall into the category that China necessarily needs to be an adversarial relationship. I totally disagree, and I think we need to stand firm on what they're doing in the South China Sea, but there's many areas of cooperation that we can work on.
That's Tim Walls speaking in twenty sixteen, and after he returned from China in nineteen ninety, he described the Chinese people to a local newspaper in Nebraska. He said, if they had proper leadership, there are no limits on what they could accomplish. He went on to say, they are such a kind, generous, capable people. I got reaction earlier from Michael Sobolik, he is senior fellow at the American Foreign Policy Council.
Governor Walls tapped into something that is still true today in twenty twenty four, which is, the Chinese people are not the enemies of the American people at all, nor should they be. I've been to China as well, and I've experienced that same hospitality and generosity that Walls experienced when he was there too, and I think many Americans would attest to the same thing. The problem for Washington policymakers is not the Chinese people, it's the Chinese Communist Party.
And that distinction is quite meaningful, and I am gratified greatly that Governor Walls recognizes that difference.
That's an important distinction to make. But in terms of influencing policy, imagine a world where Kamala Harris is the next president. Is it the role of the vice president at all to kind of get involved with setting the agenda?
So that's going to vary from administration to administration to be sure, but ultimately, if she wins, she is going to face this million dollar question in American foreign policy? Is China the Chinese Communist Party a potential competitor or an adversary? And Hijinping, the leader of China, is not really leaving America with much of a choice. We're going to have to choose one or the other.
How do you imagine Beijing would react to this type of situation where you have someone in the administration who knows so much about China.
I think they'll probably try to play this much like they have attempted to work with President Joe Biden and what not, just she at the most highest levels.
But what Chinese diplomats will often do is try to fall back on mutual feelings of friendship and cooperation and shared cultural experiences to try to get American politicians to give a little bit on the competitive agenda. I am certain they will try to do the same thing with Walls if he assumes the Vice Presidency. In fact, as governor of Minnesota, he's already received some of those diplomatic overtures.
How do you think he's going to frame the conversation around the South China Sea.
So he's on record as a member of Congress saying that the United States needs to stand up to China and call out their illegal territorial claims in the South China see And listen, that's great. We need to hold the Chinese Communist Party accountable for their illegal actions with our rhetoric, but we are at a point in our security situation where we need to move beyond words. We need to start making the Chinese Communist Party pay for endangering the security of our allies and our partners and
frankly American interests in the South China see. And this is the big question with Governor Wallas.
He has a.
Strong rhetorical record on human rights with China, but he hasn't, in the position of a representative, really been in a position to make those hard executive level decisions on how do you assess those tradeoffs, because if you want to hold them accountable, you're probably going to have to give a bit on the cooperative agenda with Beijing, and it's really unclear how he's going to make that calculation if he wins the selection.
With Kamala Harris, he is Michael Soberlik, Senior Fellow at the American Foreign Policy Council. Joining me now for some discussion is Nick Waddams. He is Bloomberg US National Security Team leader. Nick is based in Washington, d C. Thanks for making time to chat with us, Nick, So I laid out a bit of the Walls backstory as it relates to China. Is there anything that you would like to add for context?
A couple interesting things there. One, it is notable, amid all the questions about Tim Walls's attitude towards China, he got married on the anniversary of the Tieneman Square crackdown because he said he wanted to have a memorable anniversary date. But also I think that was meant as a sort of signal for himself that he did really side with the Chinese people and he really believes quite strongly in
human rights. The other thing to point out is that we have heard a fair amount from Tim Walls, but only as you indicated, from around twenty sixteen, that's eight years ago, and in the time. Since then, both parties, Democrats as much as Republicans, have really undergone this fundamental shift in how they view China. Generally, the policy is much more adversarial, and Democrats as well as Republicans have really shed this idea that it is possible to have
a really strong cooperative relationship with China. And in twenty sixteen you really did see still some of the sort of vestigial belief that it wasn't quite clear where Shi Jinping was going with China and that it would be
possible to have a relationship. I mean, I remember living in China for five years myself, seeing John Kerry and Hillary Clinton go to Beijing, and the line they often repeated was, you know, there's room enough in the world for an established power and a rising power, saying essentially there was room for China and the US, and that is an idea that's very definitively been put aside.
What do we know about GOP criticism of Walls, his history in China, and particularly in the context of being on the Democratic ticket.
I think what you're going to see here is an attack line from Republicans, whether or not it's true. You know, we still have not heard a really definitive account from Tim Walls lately, though I think it's safe to assume that his thinking now is very much in line with what Kamalah Grris' thinking is, which is also going to be very much in line with what Joe Biden's thinking is, which in some ways has been even more extreme in the desire to sanction and punish and impose terrorists on
China than even Donald Trump was. So this is really a situation where the two parties are in a race to the extreme end of the spectrum to beat up on China. I mean, there is just no political advantage either side sees and suggesting even the little bit of sort of softness towards China. So I think you have already seen and will see Republicans raise the specter of potential softness or sympathy towards China from Tim Walls based on the fact that he lived there thirty years ago
or so. But we are still waiting to hear from him, and I think he has already given an indication given his strong support for human rights that and given the pressure he'll also face within his own party that there's not going to be much daylight between him and the current position from the Biden administration on China.
One of the other things that I think of when I think about current policy is the export controls for the most advanced semiconductor technology that the Biden administration has placed on Beijing, and from the China side, the view that these export controls are essentially aimed at holding China's economic development back. Is there anything that you feel could change under a Harris Walls administration or not?
Well, it's very interesting, you know, the question may not necessarily be Tim Wallas. It may be some of the other national security folks around her. One in particular is a guy named Philip Gordon, who is essentially Kamala Harris's
top national security advisor. He was the signatory of a letter during the Trump administration, one of these letters that get circulated and signed by former ambassadors and national security people saying hey, listen, yes, we need to compete with China, we need to protect our interests, make sure that they don't steal our intellectual property, but essentially saying this tit for tat the rising rhetoric, the belief of China as
an enemy is really a race to the bottom. Things have moved on even since that letter, and you have, as you say, seen the Biden administration really hit China with more and more severe export controls and essentially adopted a policy where they say, Okay, we're not even going to let you get your hands on some of the
most significant technology, particularly around microshifts. They see that as so grave a national security threat that they're going to do everything they can to make sure that China can't get that technology. And that just sets up this fundamentally oppositional relationship that China is not going to be willing to see past if there are people within the administration who say they want cooperation on things like fentanyl.
For example, in my conversation we heard a segment of with Michael Sobolik from the American Foreign Policy Council. I ask him how he might imagine Beijing reacting to a situation where you have someone inside an administration who has such familiarity with China culturally. Do you have a sense of what it may mean for Beijing to have walls in an administration.
Well, at the moment, they're very much keeping in the background. This is not something where China, the Communist Party, the current leadership want to interject themselves. I mean, particularly with all of the talk around foreign interference in the elections in twenty sixteen, then twenty twenty then now, this is not something where China wants to publicly take a side,
so they have not really said anything publicly. I think there are a couple in interesting things because on the one hand, yes, they can say, Okay, this is a person who ostensibly could be a better ally or a potential conduit. Maybe he understands China a little bit better. However, all of the public comments we have from Tim Walls in the last many years about China have been very much human rights focused and critical of China's human rights records.
So that's going to make China very uneasy if the vice president is willing to be an outspoken critic of the Chinese human rights record, and that's going to suggest to them that he's going to be very much in line with what the Biden administration policy has been thus far.
And this relationship over the last twenty or thirty years between the US and China certainly has become a lot more complicated. Thanks for helping us understand it a bit more. Nick Wadams there. Bloomberg US National Security Team leader Nick joining from Washington, d C. I'm Doug Krisner. You can join Brian Curtis and myself weekdays Hereloomberg day Break Asia, beginning at eight am in Hong Kong eight pm on Wall Street.
Tom, Thank you, Doug, 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.