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This is Bloomberg day Break Weekend, our global look at the top stories in the coming week from our day Break anchors all around the world. And straight ahead on the program, we'll look ahead to some key inflation data in the US how that may impact FED policy moving forward. I'm Tom Busby in New York.
I'm Caroline Headker in London, where we're looking ahead to a G twenty meeting without the United States.
I'm Doug Chrisner looking at the evolving relationship between Presidents Trump.
And she That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg eleven to three, Yeero, New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg ninety two to nine, Boston, DAB Digital Radio, London, Sirius XM one twenty one, and around the world on Bloomberg Radio, dot Com and the Bloomberg Business App.
Good day to you. I'm Tom Busby, and we begin today's program. But we'll look at some key economic data here in the US. PCEE read on inflation as well as personal spending and personal income data all for the month of January that is out on Friday for more on what it all means and how this may impact Fed policy. We're joined by Stuart Paul, us economists with Bloomberg Economics. Stuart, a lot of uncertainty out there, possible
impact of threatened US tariffs. We've got federal job losses, We've got even Walmart this past week seeing sales growth slow. One constant is stubbornly high inflation. What's behind it? What do you expect to see in the January PCE report the Fed's preferred measure of inflation.
As you mentioned, the core PCE price Index is the Fed's preferred measure, and we estimate that monthly core PCEE inflation is going to register zero point three percent. That's faster than the zero point one percent measured and reported in December. So, as you mentioned, stubbornly high inflation, we can estimate PCE with a pretty good deal of precision because most of its components come from the CPI and
from the Producer Price Index. So seeing those items earlier this month allows us to estimate the PCE index with a bit more precision, and from the CPI we're able to identify that it's really the price of some discretionary services categories, things like accommodations, recreation services that are going to be buoying the core PCE measure. From the PPI report, we get things like hospital services, and again that's going
to be boosting the core PCE measure as well. So the thing that we now need to consider is whether this January increase is really something that's indicative of persistent price pressures. We see persistent price pressures, for example, in shelter, in auto insurance, some of the some of the category is that take a long time to sort of catch up to pass price hikes. For example, if it costs more to replace your car, it's going to cost more to ensure that car as well. So we're still seeing
some persistent price pressures there. But I do think that the January report is going to show some residual seasonality, that's to say, annual price increases that aren't fully accounted for by the Bureau of Labor Statistics and the Bureau of Economic Analysis. I think that we are going to see some of that residual seasonality in the January report.
What about food and energy, you can't ignore those. Everybody has to, you know, eat everybody has to heat their home, put gas in the car, a real driver for CPI and PPI in January, and there's not a whole lot of seasonality about it. I mean, except for heating your home, that's right. But in the summer you're cooling your homes.
That's right. So for some energy goods and for some energy services, you do have some seasonality. So for example, there's summer driving season that boost gasoline prices. Sometimes that's more accounted for than at other times in the seasonal adjustment factors. What we did see with energy prices, So you bring up a really good point about this, is that in January it was so incredibly cold that demand for power and other utilities was exceptional, and that is
that is continuing to contribute to headline inflation measures. That's why we saw, for example, the major upside surprise in headline CPI during the month. It was in large part because of energy goods and services. And so that is something that consumers are feeling. It is hitting their pocketbooks and it is causing them to rain and spending in some other categories.
Well, let's talk about some other data coming out I think will tell us a lot personal spending and personal incomes for January, the latest monthly jobs report showed that wages still increasing. That's not good for inflation. Holiday retail spending was strong slowed a little bit just in January. But what do you expect to see in those reports?
It's interesting. I think that the January report is going to show a pretty clunky transmission between incomes and spending. I think that based on what we saw in the jobs report, wages were accelerating during the month, hiring slowed, so that tempered personal income growth a little bit, and labor intensity, the average number of hours worked per week actually declined, so that tempered personal income just a little bit.
But in January we also get cost of living adjustments two and a half percent cost of living adjustments for Social Security recipients. We're going to see a higher Medicare and Medicaid receipts in a personal income report, and we're estimating nearly one percent interest income growth for those who are holding financial instruments. So if you factor all of those together, we're estimating nearly zero point four percent month
on month personal income growth. We're a bit higher than consensus, and that's a pretty strong personal income growth reading for the month of January. On the spending side, though, things looked pretty terrible. So nominal spending.
Don't sugarcoat it.
No, I'm not going to sugarcoat it. You know that. I'll always you know, shoot straight with you here. So we estimate that personal income growth declined zero point one percent during the month. That's a major retreat from the zero point seven percent growth that we saw in December. And a big part of that is autos, right, vehicles.
People purchased vehicles at a way slower pace during the month of January, an annualized pace of about fifteen point six million units, down from I think nearly sixteen point eight million units in December. As I mentioned, weather was so terrible you don't want to be out walking on an auto dealer's lot in the month of January, especially
when there was a polar vortex. But beyond that, it does look like consumers rained in spending on some of the key discretionary goods and services categories, things like furniture, clothing, all of those items during the month, even online spending. It looks like they really reined it in in January. Now here's the thing. Consumers aren't exactly both. During their balance sheets, we saw that income growth is pretty high
and steady. People are raining in their spending, but we still think that they're going to have a personal saving rate of just about four point three percent during the month. That's still exceptionally low. Personal savings is about six and a half percent pre COVID, So even as consumers reined it in in January, it's still just a lot of spending going on on a monthly basis.
January's Personal Consumption Expenditures Price Index out this Friday, our thanks to Stuart paul, Us, economist with Bloomberg Economics. We move next to fourth quarter earnings from the artificial intelligence chip Giant and Video that is out this Wednesday after the close. Now for more on what to expect, we're joined by Mandeep Singh, Bloomberg Intelligence Senior tech industry analyst, man deep an almost insatiable demand for AI cloud computing,
data center infrastructure. Are there any headwinds for in Video or is it go go go?
I mean, I would say they're still in their hyper growth phase, so that you know, triple digit growth will decelerate to maybe you know, fifty percent plus growth this quarter is still very impressive and it's still all about data centers when it comes to this company. So look, there were a few things that happened during the quarter, notably the Blackwell shipments. I mean, Jensen said last quarter that Blackwell will be a multi billion contributor to this
quarter's revenue. And then obviously the deep Seek development was quite interesting because Nvidia clearly believes that the scaling laws are intact when it comes to the scaling of these foundational models, and that is the biggest driver of why companies are building, you know, massive clusters when it comes to two hundred kgpus to one billion GPUs in a cluster.
So that is supposed to be one of the biggest drivers of Nvidia's chip demand, and it would be interesting to see if those kind of drivers have changed because of Deep Seek.
Now, Deep Seek, when that bombshell hit Wall Street, they say it was using in Vidia chips which they got kind of backdoor from Singapore. But let's talk about the losses to Nvidia when that happened. Almost six hundred billion dollars in market share.
Yeah, I mean, look, they've recovered a lot of that market cap, so it's not as if the losses were permanent. I mean, the stock is pretty much back to where it was rating prior to Deep Seek. And I think in the end it comes down to training versus inferencing.
These are the two things that everyone is sort of focused on when it comes to Invidia's opportunity because a lot of these hyperscalers are developing their own chips, and hyperscalers make up forty five percent of Nvidia's data center revenue.
And that's Meta and Amazon, Microsoft.
Alphabet.
Yes.
So, and when you think about Nvidia's data center revenue, that's a one hundred and twenty five billion dollar rund rate every hyperscaler this quarter guided to CAPEX going up and CAPEX going up almost forty to fifty percent for
twenty twenty five. So if you extrapolate that guide to Invidia's numbers, you know, forty five percent revenue exposure, that means, you know, Nvidia could very well be doing two hundred billion dollars in data center revenue for twenty twenty five at you know, and then you layer in the project's target announcement, the EU announcement to you know, invest in chips. That's incremental revenue from sovereigns, which is a load double
digit revenue contributor to Nvidia right now. So when you put all these things together, the drivers are there for Nvidia to do maybe two hundred billion dollars in data center revenue this year.
And some of those hyperscalers are doing their own in house GPUs and are they is in Vidio five finding new clients new revenue sources besides them.
Yeah, So that's an interesting point because hyperscalers do have their ambitions to use their own chips. I think Google is the furthest along in terms of using their own TPUs for training and inferencing. Other hyperscalers plan to do that. But whether it's going to impact in Video's revenue this year or is it more for you know, three four years out. I'm more in the camp that this is not going to have a big impact this year. But
clearly that's a big threat. When you have, you know, a forty five to fifty percent exposure to four or five customers, there is always that concentration risk.
Well, and that leads to what's next for in video this year? Because I know that Blackwell line they've got some new products coming out. What are you expecting to see.
I mean, to me, the key KPI is gross margin because last quarter, even though they talked about Blackwell, they said gross margins would sort of get compressed a little bit in the near term because of the Blackwell ramp and they will go back to mid seventy percent once Blackwell is fully ramped up. That to me determines the supply demand imbalance. The demand commentary is there because there is still more demand, but supply seems to be catching up when it comes to you know, TSMC adding capacity
for manufacturing more GPUs. So gross margins is how you determined what kind of imbalance we still have.
Well Nvidia QBOUR earnings out after Wall Street's closing bell this coming Wednesday, Our thanks to Mandeep Sing, Bloomberg Intelligence senior tech industry analyst. Coming up on Bloomberg day Break weekend, we look ahead to a G twenty meeting without the United States. I'm Tom Busby, and this is Bloomberg. This is Bloomberg Day Break Weekend, our global load at the top stories for investors in the coming week. I'm Tom Busby in New York. Up later in our program, we'll
look at the evolving relationship between Washington and Beijing. But first global finance ministers will descend on South Africa for a G twenty summit this week, following a G twenty Foreign ministers meeting just a few days ago. This time, though, it's without US Treasury Secretary Scott Besson attending. Can the talks be productive without such an important global player choosing to be absent? For more, Let's go to London and bring in Bloomberg day Break europe Banker Caroline hepgar.
Tom This year's G twenty gatherings are significant for a number of reasons. For one, they're the first meetings to take place under the helm of South Africa. They're also the first multilateral forums of their kind to be held during the new Trump administration, a government that has so far made clear its intention to do things differently. In terms of the Finance Minister's meeting due to take place in the coming days, there couldn't be more on the agenda.
Trump's paradigm shifting taris will surely likely feature, as will growing pressures to ramp up defense spending in the EU but perhaps elsewhere. But one leader who won't be participating in discussions is US Treasury Secretary Scott Bessent. His decision to skip the event comes as Secretary of State Marco Rubio also foregoes attending the G twenty Foreign Ministers meeting. Now. Rubio said that he was not taking part in those discussions because he did not want to quote, waste taxpayer
money or coddle anti Americanism. Rubio's comments echo President Donald Trump's criticism of South Africa's land policy and a threat to cut off future funding to the country. In response, South Africa's Foreign Ministry reiterated that no land has been confiscated and that the expropriation legislation announced by South African Presidency Rampa Hoser last month is similar to eminent domain laws elsewhere in the world. It also stressed the South
African government's commitment to addressing global inequality. Now it's unusual for a Secretary of State to skip a G twenty summit, and Rubio's absence carries perhaps some risks that the US is left out of deliberations by some of the world's wealthiest countries, and the same is true for Scott Bessent. So can a G twenty meeting be effective without the United States and what are the implications of this edition of the Global leaders gathering for South Africa and for
the rest of the world. It's something that I've been discussing with Bloomberg's Chief Africa correspondent, Jennifer Sabasaja.
It's important in the sense that this is the first convening of the G twenty members as part of South Africa's presidency hosting right, and especially if you consider that we've seen a changing administration in the US, we're seeing changing ties geopolitically with the number of the nations that actually make up the G twenty, it is important and no doubt it will also carry over into the Finance
Minister's meeting next week. Now, as you were just mentioning, Marco Rubio has said Secretary of Saint Marco Rubio, of course from the US, has said he is not attending over what he says, our focuses on climate change and also DEI we also got word that Finance Treasury Secretary excuse me, in the US, Scott Bessett, will also not be attending next week, and so you have to wonder, really what does the US, how does the US see
their role within the G twenty moving forward. There are still representatives from the US that are going to be here. But still South African leaders and officials are planning to continue on with this theme of solidarity, equality and sustainability and continue to or at least try to strengthen some of the relationships of the member nations that are attending.
And there is a big question about whether discussions can be productive without the United States, whether the G twenty is still relevant. I mean, these are slightly perennial questions, aren't they about G twenty versus G seven or other sorts of gatherings, But it's particularly acute now with the US.
You know, you do bring up a really interesting point, especially when you look at the first few weeks of the US administration and President Trump choosing to pull from a number of multilateral institutions. What we've heard from at least South African President Zerial Ramaposa is that he is at least trying to get a lot of these more developed countries to the table to try and reform some
of these institutions. And so if we see at least a pulling back of the US on the multilateral front, what does that mean for a lot of these reforms that we are going to see.
Still, President Ramaposa does believe that he can get a lot done.
There's a number of other issues on his agenda, including many things that he has talked about before, including talking about debt relief or a number of the nations, a number of the Global South as he calls it, and
also a lot of that being climate finance. Right, we talk a lot about how a number of emerging economies are the hardest hit when it comes to climate change, but of course it's a lot of the developed economies that were the actual contributors to that going forward, and so there can be some movement on some of these to top line priorities, but getting the US to buy into some of them is going to be the challenge for President Ramoposa, South Africa and the G twenty moving forward.
Yeah, and how important is it for South Africa that these meetings actually go well? I mean they are surely banking on this, as you say, to sort of boost soft power, but also you know, real things including aid for example. Maybe how important is it that these talks go well? And we know that South Africa has got very high unemployment, there was a dissipation of the support for Rama Posa's party at the last election. He's in
a kind of coalition government. How important is this forum then for a proposer and for the future of South Africa.
Well, the timing of this is pretty unique, especially you just talked about how the ruling party or the previously ruling party, the ANC, is now in a coalition government and so really for the first time we're seeing South Africa take the helm as this multi party government on the world stage. One person described it to me as potentially this is showcasing that democracy is working, at least
in South Africa. But you know, President Ramaposa is really taking this on to progress on a lot of the issues that he believes not just South Africa, but a lot of African nations the global self.
As I was mentioning.
Before, they can put forward a lot of the challenges that they've not necessarily been able to because they haven't been at the table before. Now they can do that, and as the first African nation to hold this G twenty presidency, potentially that's an opportunity.
And it's not just that.
I mean you take a look at a lot of the partnerships here. The EU is a major investor in South Africa. China is one of the biggest trade partners here with South Africa as well, and so there is incentive for a lot of the other member countries to also get on board with this. And so yeah, you know, I think a good outcome is beneficial for most of the members. But you just take a look at the geopolitical divisions that we're seeing in the world right now, and it's surely going to be a bumpy road.
Yeah, And with the absence of Marca Rubio and Scott Best said, do you think I think that that signals that the Trump administration is actually serious about this row? You know that their accusations against the South African government in terms of the legislation in South Africa, do you think that they are going to make good then on the threats, for example, to hold AID.
That's that's the concern here, really, Caroline, because.
We have seen the back and forth really ramping up. Right.
It started, as you were mentioning just a few weeks ago, when when Trump was criticizing that land Exproporation build that you were referencing there, that's a remopos that President Ramoposa signed earlier.
This year.
But then, of course we've seen in the US the retreat from from DEI h and many people would describe South Africa at least in its state right now, as you know, an example of DEI and so you have to wonder what else potentially could the.
US administration target. It's not just that.
There's also climate financing, which has been very important for South Africa to get on board.
We know that we've seen the US administration rolling that.
Back, and also South Africa taking Israel to the ICJ over what they see as war crimes, right which we know President Trump has a cordial relationship let's call it, with Benjamin Netan Yahoo, and so the concern is what
does this relationship look like. But over the past few weeks I've been speaking to a number of South African officials about this, and some of them say, on the one hand, of course it's a setback if you take a look at something like USAID, which has provided a number of benefits health benefits for South Africa that could be detrimental to this country and to the Africa continent more broadly, but it also potentially creates an opportunity for
other partners. We take a look at bricks, which is this block of Brazil, Russia, India, China and South Africa. Potentially we see them stepping in. We've seen that over the past few years, them trying to make inroads. And if we continue to see this retreat, that opens the door to some of these other countries to them potentially.
Fill the gap.
For what it's worth, before I wrap up, we have seen a country like China continue to reiterate its support for South Africa, and so you have to wonder whether or not this is a gamble the US actually wants to take, especially because South Africa is the US's biggest trading partner on the African continent.
Yeah, and I suppose. Finally, then, do you think that there is any possibility that South African can try to mend its relationships with the Trump White House.
We've heard President Ramoposa say he is up for negotiation, and I think that is key.
We You know, the expectation was that.
We were going to see Scott Best and Treasury Secretary next week attending the Finance Minister summit. But then also later this year, the expectation was that President Trump was also going to be here. We don't know yet, what this relationship looks like, whether he is physically in attendance or not. Though South Africa needs to pass off the G twenty presidency to the US for next year, and so there needs to be discussions of some sort if
the US is to remain in the G twenty. But yes, you know, we've heard from President Ramoposa saying he wants to discuss and to talk about some of the critiques that we've heard from the US administration. Many people have criticized what we have heard from President Trump about his disputes over the land expropriation law, saying it is similar to what we see in other countries, and so you know, it's going to take quite a bit of mending on
both parts. And of course we have to note that President Trump's very close ally Elon Musk, was born in Pretoria here in South Africa, so and he has some other advisors that are also from South Africa.
So definitely one to watch for the next few months.
Well, my thanks to Bloomberg's Jennifer Zabasaje for speaking to me. We'll have full coverage of the upcoming G twenty Finance Minister's meeting here on Bloomberg. I'm Caroline Hepka. 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, we'll look at the status of US China relations. I'm Tom Busby and this is Bloomberg. This is Bloomberg day Break Weekend, our global look ahead of the top stories for investors in the coming week. I'm Tom Busby in New York. With the threat of even more US tariffs looming over China, this may be a good time to get a temperature check on relations between Washington and Beijing.
For more, let's get to the host of the Daybreak Asia podcast, Doug Prisner.
Tom and the week ahead. We'll get China's official PMI figures.
Now.
The pmis are a great way to understand sentiment in manufacturing and the service's economy. Bloomberg Intelligence says early indicators point to weak momentum in both. Now the headwinds for the Chinese economy have intensified since President Trump took office. For a closer look, let's bring in Jenny Marsh team leader for Greater China ECO GOV. She joins us from the Bloomberg Studios in Hong Kong. Jenny, thank you for
making time to chat with us. I think we have to begin with the tariff story as a way of understanding where US China relations are at the moment. Is that fair?
Absolutely, it's probably you know, the biggest sort of unknown factor right that's sort of hanging over the economy this year.
We know that the US did hike tariffs by ten percent on all Chinese imports in early February. Is it fair to say that that came a little bit before Beijing was prepared for tariffs.
I would imagine Beijing was prepared for tariffs on day one. You know, I remember that first day Trump took office and sort of actually the surprise was nothing on China on day one. Then of course on day two he started talking about tariffs. But you know, I think despite all of the sort of claims he's made about sort of tariffs on chips and steel and the threats with Canada and Mexico, China is the only country right now that Trump was actually enacted at tariff on since he
came into office. And so while it's only ten percent right now. They are sort of actually the first in the firing line, and there's plenty more reason to think that more is to come with that April one deadline hanging over them for reviewing the first trade deal that Trump has ordered.
Before we address kind of the US and A relationship, how is the impact of these US tariffs impacting sentiment right now in China.
It's actually kind of interesting because you know, the trade has been there for a long time, but when you speak to economists and sort of people on shore in China, what they're actually talking about right now is Deep Seek. And so this sort of surprise AI breakthrough from deep Seek, which was the consumer platform, was unveiled the day Trump came into office. That has sort of given this massive sort of boost to animal spirits. So it sparked I think it was a one point three trillion rally in
China stocks. And then she is trying to sort of capitalize on that momentum by meeting Jack mar for the first time since the crackdown on his company back in twenty twenty, and a whole other sort of range of sort of tech luminaries earlier this week. So I think people.
The sort of the negativity from the prospect of tariffs is built in, and people have been very prepared for that for a while, and really they were facing a lot of sort of pressures under Biden too, So in terms of sentiment, it isn't this sort of gloomy, worried sentiment permeating China necessarily. What actually is capturing the mood right now is the AI breakthrough in this sort of momentum behind tech and finally some hopes that the private sector might be getting back into swing.
So I'm understanding that as a way to say that she is capturing this moment to maybe make the case that China can be less reliant on its export economy and become a little bit more domestically driven on the demand side, which is something that he has been after for quite some time exactly.
And the meeting earlier this week, you know, he had the bosses from buid Chow, me Deep Seek, you know, Jack Maler was there. It was really a display of like these all of our national champions which are rolling out well beating innovations. There's plenty of reason to believe
in this economy. And they have said that boosting domestic demand is the number one priority this year, you know, and that is the best way they can insulate themselves from these tarves that are coming by really sort of reving up demand at home.
So how would you describe the current relationship between Beijing and Washington right now?
I think it's sort of in this holding pattern of wait and see. But on the surface of things, you know, you've got a US president who is very happy to be very sort of dubvish on Sijin paying in public, he calls him a great guy. He said that he thinks he's brilliant. So in that side of things, I think, you know, things are actually warmer than during the Biden administration.
But obviously, you know, they have this trade war that is now underway, and I think for China they're really just sort of waiting to see exactly what it is that Trump wants. There are all kinds of reports out there sort of citing people who are advising Trump saying that he now is sort of thinking about this as a grand deal that he could strike with Beijing that would go beyond trade, So looking at all kinds of things like nuclear sort of weapons, rolling back those programs.
So I think the silence from Beijing during this first month of the Trump administration has been extremely telling. They're kind of just sitting back and really waiting to see what Trump does, sort of what his biggest sort of demands are going to be from China, I think, and being very very careful not to provoke anything, you know.
I think it was jd Vance who said overnight sort of criticizing Trump is one of the worst negotiating tactics that you could ever possibly try to do, and I think basically understands that, and you can see from state media they're being very very careful not to take any swipes or do anything which could sort of hurt themselves.
One of the things that we've heard from the president is his intention on ending war in Ukraine. Can you imagine a world where China is a part of this conversation?
Absolutely. I mean, it's really interesting because a lot of what Trump is actually in our sort of saying and agreeing to is kind of what China had put forward in this peace plan years ago that we was sort of derided in the West, but they basically sort of advocated for a frozen conflict, a ceasefire that obviously wasn't acceptable to UK because it would have involved seeding territory. But China's priority is always sort of just to try and stop the conflict, and so the deal that Trump
is trying to strike with Putin is exactly that. And Trump himself has sort of talked about having a three way meeting with she, Putin and himself. So I can see China coming to the table. What China would offer in terms of a peace deal, I think is much trickier. You know, there have been reports that perhaps China could be involved in peacekeeping operations. I think you know, it does that in other parts of the world as part
of the UN framework. I don't see any benefit to China for directly sending in troops, particularly with the risk looming that you know, this isn't Putin's sort of last rodeo in Ukraine. He came for Crimea in twenty fourteen, then he went back in in twenty twenty two. You know, if you've got Chinese peacekeeping troops on the ground and Putin makes another strike in sort of four or five years time, that would put China in a very different,
different and difficult position with Moscow. So I think, you know, what China can actually offer really remains to be seen.
I'm wondering if you look at the Trump administration's approach to Ukraine and you maybe draw a conclusion on how the Trump administration would deal with China visa VI Taiwan, is that a fair statement.
I think that is one of the big questions, you know. I mean, China sees the Ukraine and Taiwan sort of differently. But essentially, if the message that putin that Trump gives to putin is you have a you know, there was a free pass to make this invasion. He blamed. He blamed the war on Zelenski, right, So if you're if you're cheating paying you know, how do you read that in the Taiwan context? You probably think, Okay, you're not
going to get so much pushback. But I would say there's a lot more holding back the Chinese government from evade in Taiwan than just US pressure. You know, when you go to China and you speak to people there who sort of inform the foreign ministry and are in policy circles, I've never met anybody who thinks that China
is on the very of invading Taiwan. You know, they much prefer this idea of a peaceful reunification and the way that the government is composed right now in Taipei, you know the KMT, which is more pro China is very very powerful. So it isn't to say that this is going to give shooting Pinks for a free pass to invade Taiwan, but it certainly gives them a lot more space to be bolder.
So next month in China will have the annual Plannary Sessions. That's when the National People's Congress and the Chinese People's Political Consultative Conference hold their annual meetings. This is known as the two Sessions. Is it likely that the relationship between the US and China comes up for discussion during this period.
Well, Foreign Minister Wan Yi will have his annual briefing, and that's actually one of the only times in China that any sort of senior official takes questions from foreign journalists. Obviously it's all very scripted and the questions are submitted in advance, But for sure the trade war will come
up during that session. I imagine Wang Yi, who is a very very sort of seasoned top diplomat, he'll be very very cautious and how he responds, but it's going to be one of the top talking points I imagine behind closed doors as well.
I remember when President She met with President Biden and San Francisco a while back, and one of the things that she aimed to do was try to increase foreign direct investment into China, and some of the latest figures that we have seen on inbound investment in China, I think it's the weakest start that we have seen in about four years. Right now, What do you think that China can do that will allow capital if this is even a possibility to allow capital from the US to flow into China.
I think if they want to win back sort of the confidence of American investors, they have to stabilize the business environment. And you know, I think foreign companies, for a start, have been asking for a long time for a level playing field for their companies, so you know, the same access to sort of procurement and bidding on deals that state owned companies get, the same sort of preferences. So just stability, and that was really the big signal
from she meeting Jack Marer earlier this week. Jack mar was sort of the face, if you like, of the regulatory crackdowns because he was the biggest target. I mean that meeting was sort of taken by economists to sort of signal that era of crackdowns is truly over and
there's a stable business environment here. The government that's going to give private enterprises a free hand, take his full off the pedal and sort of really let enterprise flourish and you don't have to worry about raids on foreign consultancies or the rug being pulled under an industry you just invested in. With also the specter of a trade war hanging over by the actual ties, you know, it is a hard job that she has to convince American
investors in particular and American companies they're welcome. I mean, particularly when the retaliation that China took towards Trump's initial tariffs included an antitrust probe into Google, and that was mostly symbolic because Google doesn't do much business in China right now, but it was a signal to other American companies. But if this continues, then you know their fair game in the tit for tat responses.
Jenny, Before I let you go, I have to ask you about President Trump's advisor, Elon Musk. We know that Tesla, his electric vehicle company, has a big presence in Shanghai. What is Musk's relationship with Trump and Musk's relationship with Beijing. How does that kind of come together in understanding the dynamics that may end up playing out as we look to the future.
Now. I think Musk is probably one of the most sort of dubvish on China voices in Trump's ear. And it's really notable actually that since Trump came to office, Musk has said nothing about China. In the interview bis Sean Hannity, there was one question that was put to Musk that was framed in China context, and he didn't answer. He mentioned the Taliban, I think in response. Instead, he has huge business interests in China, very very good ties
of the Chinese government. When he visits Beijing, they roll out the red carpet. He gets meetings with Premier Li Chang, you know, and I think the Chinese government see him is a very very useful person in this administration because they have an interlocutor who is directly into Trump's air, who is a business person with huge interest in China.
So someone who has a vested interest in maintaining business ties and who actually is aligned with President cheated and paying on many many sort of policy points, including their position on Taiwan. So I think for Beijing, Mosk is a very useful person and it'll be interesting to see how that sort of plays out.
Oh, no doubt about that, Jenny. Thank you so much, Jenny Marsh, their team leader for Greater China ECO GOV. Joining from our studios in Hong Kong, and I'm Doug Prisner. You can catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast.
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 Buzby. Stay with us. Top stories and global business headlines are coming up right now.