(Bloomberg) — The four-day Bloomberg New Economy Forum kicked off with business and political leaders taking on issues from the economic fallout of the coronavirus pandemic to the future of global trade and climate change.
Former President Bill Clinton said Xi Jinping’s long-term reign has upended U.S.-China relations, and will require Joe Biden’s incoming administration and its allies to take a more coordinated approach to dealing with Beijing. Singapore Prime Minister Lee Hsien Loong said Biden should look to develop an “overall constructive relationship” with China following “quite a tumultuous ride” over the past four years.
The New Economy Forum is organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.
Bill Clinton Says China’s Direction Under Xi Upended U.S. Ties (9:03 a.m. HKT)
Former President Bill Clinton said Xi Jinping’s long-term reign has upended U.S.-China relations, and will require Joe Biden’s incoming administration and its allies to take a more coordinated approach to dealing with Beijing.
Speaking in conversation with former U.K. Prime Minister Tony Blair at the Bloomberg New Economy Forum, Clinton said the U.S. could strengthen its negotiating position with China by enlisting partners, from Europe to Asian nations which were part of the Trans Pacific Partnership trade pact abandoned by President Donald Trump. — Iain Marlow
Singapore Watching Hong Kong Turmoil With ‘Concern,’ PM Lee Says (8:47 a.m. HKT)
Singapore is concerned about the situation in Hong Kong and hopes the financial hub could “settle down to a new normal,” Prime Minister Lee Hsien Loong said.
“We watch carefully and with some concern what’s happening in Hong Kong,” Lee said in an interview with Bloomberg News Editor-in-Chief John Micklethwaitat the New Economy Forum. “That something was going to happen — was very much on the cards — and could not have been avoided because the demonstrations and the expressions of defiance could not have carried on indefinitely, certainly not to the end of ‘one country, two systems’ in 2047.” — Philip J. Heijmans
Singapore PM Calls for U.S.-China Truce After ‘Tumultuous’ Years (8:26 a.m. HKT)
U.S. President-elect Joe Biden should look to develop an “overall constructive relationship” with China following “quite a tumultuous ride” over the past four years, Singapore Prime Minister Lee Hsien Loong said in an interview.
A new framework between the nations would allow both countries “to develop the areas of common interest, and constrain the areas of disagreement” on issues such as trade, security, climate change, North Korea and non-proliferation, Lee said in an interview with Bloomberg Editor-In-Chief John Micklethwait at the New Economy Forum. Singapore’s leader also rejected any attempt to divide nations “Cold War style.”
“We all want to work together with the U.S., we all want to work together with other vibrant economies, we would like to cooperate within the region,” said Lee, who has already offered his congratulations to Biden. “I think not very many countries would like to join basically a coalition against those who have been excluded, chief of whom will be China.”
Lee has been one of the most vocal global leaders calling for the world’s biggest economies to avoid a destructive clash that could force smaller countries like Singapore to choose sides on everything from trade and technology to Covid-19 vaccines and territorial disputes in the South China Sea. A city-state dependent on trade, Singapore supports a strong American presence in Asia by allowing the U.S. to use its military facilities while also counting China as its top trading partner. — Philip J. Heijmans
China’s Zeng Calls for More Policy Coordination (8:01 a.m. HKT)
Zeng Peiyan, former vice premier of China’s State Council, called for more global cooperation on epidemic control and treatment and coordinating economic policies. Speaking at Bloomberg’s New Economy Forum, Zeng said the top priority was to establish and improve global dialog and competition mechanisms.
He made a plea for a stronger commitment toward multilateralism and efforts to improve global governance. Without naming any specific countries, Zeng denounced “some forces” acting against that trend by trumpeting decoupling and willfully walking away from international commitments. He said those behaviors have undermined market rules and hampered sound global growth. — Zhu Lin
Paulson Calls for New Round of U.S., China Talks (11:23 a.m.)
The incoming Biden administration should start a new round of bilateral negotiations with China aimed at fair trade and competition, former U.S. Treasury Secretary Hank Paulson said at Bloomberg’s New Economy Forum Monday.
“We’ll need to deal with structural and process issues that include services, not just goods,” he said. “The agreement should be done in phases with regular deliverables, beginning with easier issues that build momentum to tackle the tough ones.”
Paulson also called for a shift away from what he called “reflexive reciprocity” to “targeted reciprocity” to ensure that the strategic competition between the world’s two largest economies won’t result in the U.S. closing itself off to the world.
The U.S. and China signed the first phase of a trade agreement in January — which President Donald Trump initially celebrated as one of his key economic achievements — but the relationship soured soon after as Trump blamed Beijing for not doing enough to contain Covid-19. His administration then issued a number of trade and investment restrictions and sanctioned Chinese officials for their crackdown on human rights in Hong Kong and China’s western region of Xinjiang.
The U.S. should consider removing tariffs on goods from the Asian nation once it has extracted a reciprocal and tangible benefit from China, defined by benchmarks in a phased bilateral trade agreement.
Two years ago, Paulson warned that the U.S.-China relationship was on a trajectory to establishing an economic iron curtain. On Monday, he said that unfortunately, many of his predictions have panned out.
Yellen Won’t Comment on Biden Treasury Secretary Job (11:07 a.m.)
Former Federal Reserve Chair Janet Yellen declined to comment on reports that she is in the running to be President-elect Joe Biden’s pick for Treasury Secretary.
“I don’t have anything for you on that I’m sorry,” Yellen during a panel at the forum. Asked if she thought she’d be good at the job, she said “It’s for other people to decide, I think.”
Bloomberg News reported on Nov. 13 that Yellen is under consideration to be President-elect Joe Biden’s Treasury secretary, according to people familiar with the matter.
Biden has promised to pick a diverse cabinet, which means he could choose the first Black or female Treasury secretary in history. His team is also eyeing Fed Governor Lael Brainard and former Fed Vice Chair Roger Ferguson for the job, Bloomberg News reported in September. –Rich Miller
Summers Calls for More Coordinated Global Response (10:52 a.m.)
The Covid-19 economic crisis requires a stronger coordinated global response to reflect the worldwide dimension of the problem, former U.S. Treasury Secretary Lawrence Summers said.
Summers, who has been advising President-elect Joe Biden’s campaign and is a paid contributor to Bloomberg, lamented the Trump administration’s opposition to an allocation of $500 billion in reserve assets, or special drawing rights, by the International Monetary Fund, a stance that he hopes will change with a Biden administration.
Photographer: Kiyoshi Ota/Bloomberg
“The last crisis had a major response from the IMF, issuance of SDRs, big increases in lending from the World Bank, that was driven by the global community,” Summers said. “There has been no boldness at the global level comparable to the boldness at the national level, and that could get us in real trouble down the road.” –Eric Martin
King Warns of Straying From Central Bank Mandates (10:47 a.m.)
Former Bank of England Governor Mervyn King said he was worried that the “new generation” of central bank leaders were getting into areas that are not core to their mandates.
King echoed former U.S. Treasury Secretary Lawrence Summers in challenging central banks’ current interest in generating policies to help tackle climate change.
“If we’re going to do stress tests on climate change, we need to do stress tests for the next pandemic. There are many ways that the financial system is threatened other than climate change,” King said. –Jeff Black
Yellen Says Fiscal Policy ‘Essential’ for Recovery (10:43 a.m.)
Former Federal Reserve Chair Janet Yellen said fiscal policy was “essential” to back up the stimulative policies of the central bank and help the U.S. economy recover from the pandemic.
“Fiscal policy has a very important role to play now,” Yellen said during a panel discussion. “I believe it’s essential.”
Photographer: Andrew Harrer/Bloomberg
Bloomberg reported on Nov. 13 that Yellen is under consideration to be President-elect Joe Biden’s Treasury secretary, according to people familiar with the matter. –Rich Miller
China Vice President Urges Shift From Protectionism (10:34 a.m.)
Chinese Vice President Wang Qishan called for global solidarity and a shift away from protectionism as Beijing grapples with the prospect of a new administration in Washington.
“Countries must rise above exclusive blocs and reject the zero-sum mentality,” Wang said via video link. “We should build an open world economy that works for all. We must firmly safeguard the multilateral trading system under the WTO and unequivocally reject unilateralism and protectionism.”
During the last four years, Chinese leaders have often used rhetoric about free trade to differentiate from President Donald Trump’s “America First” policies. Wang’s comments suggest China will keep up that approach even as the incoming Biden administration pivots away from unilateralism.
Photographer: Justin Chin/Bloomberg
Wang didn’t address U.S.-China ties directly, instead calling more generally for countries to “build platforms for dialogue and keep communications open.” He also urged nations to develop “a collaborative mechanism for epidemic control” to help battle Covid-19.
China was initially slow to recognize Joe Biden’s election win, and U.S. tensions are likely to continue. Biden has frequently criticized China’s assertive policies in its neighborhood as well as Beijing’s human rights record, branding President Xi Jinping a “thug” in February. –Peter Martin
Supply Chains Less Efficient in Pandemic, FedEx COO Says (10:25 a.m)
Supply chains are getting shorter, more regional and less efficient as companies and countries stock up on supplies to prepare for a crisis, such as the coronavirus pandemic, said FedEx Corp. Chief Operating Officer Raj Subramaniam. In a “tug of war” between supply-chain efficiency and bigger stockpiles, consumers will pay for bloated inventories, he said.
As companies move from just-in-time inventory to just-in-case, “there is a price to be paid and that price is going to be, at the end of the day, in the cost of goods sold,” he said.
The pandemic hurt global commerce but international commercial trade had already peaked, Subramaniam said. In 2008, trade made up 25% of the global economy, rising from 14% in 1990. Trade had slipped to 21% of the global economy in 2018, he said.
As world commerce recovers from the pandemic, manufacturing is recuperating faster than services, he said. –Thomas Black
Malmstrom Says EU May Have to Wait for U.S. Trade Talks (10:20 a.m)
The European Union’s former trade chief, Cecilia Malmstrom, warned that negotiations for a transatlantic deal may have to wait, even with a U.S. administration under President-Elect Joe Biden taking office in January.
“We shouldn’t expect Europe or the Biden administration to rush to the negotiating table to take that out of the freezer,” Malmstrom said. “There has been a considerable lack of trust between the EU and U.S. in the trading area over the past years so we need to rebuild that.”
Malmstrom said that she doesn’t expect the resumption of talks “in at least the first two years” of the Biden administration. –Richard Bravo
Moreno Says Trade Can Aid World’s Hardest-Hit Region (10:12 a.m)
The countries of the Americas should look at ways to enchance regional trade to help speed a recovery in Latin America, the region of the world hit hardest by the Covid-19 pandemic, said Luis Alberto Moreno, the former president of the Inter-American Development Bank.
Latin America has an opportunity to improve integration and agree to a common set of rules to benefit its countries, particularly by better incorporating Central America and creating opportunities for nations that are a large source of migration to the U.S., said Moreno, who completed 15 years at the helm of the Washington-based institution at the end of September.
“There is clearly an opportunity to move into an area that, at a minimum, begins to converge on a set of rules that you can have in the exchange of global supply chains, not just things not just made in America, but made in the Americas,” Moreno said. –Eric Martin
Jordan’s King Urges Ensuring Covid Vaccine for All (9:55 a.m.)
Jordan’s King Abdullah II said the Covid-19 crisis showed why countries must work together to tackle global challenges, as he urged world leaders to ensure vaccines are made available to all.
“The pandemic has shown us how connected we truly are,” he said. The vaccine “must be treated as a global public good.”
Health advocates and poorer nations are concerned that wealthier countries will monopolize supplies of coronavirus vaccines, especially in the early days of a rollout. The U.S. and Europe are in line to get the first doses of the vaccine developed by Pfizer Inc. and BioNTech SE.
A program aimed at supplying low- and middle-income countries with Covid-19 shots said this month it has raised more than $2 billion but needs an additional $5 billion for next year. The king said the pandemic offered an opportunity to build the resilience needed to confront other global crises, including climate change and food insecurity.
The number of people at risk of hunger is expected to almost double to 265 million this year, in part due to the economic impact of steps to contain the virus, the king said. –David Wainer
Kissinger Warns U.S.-China Divide Risks Catastrophe (9:45 a.m.)
The incoming Biden administration should move quickly to restore lines of communication with China that frayed during the Trump years or risk a crisis that could escalate into military conflict, former U.S. Secretary of State Henry Kissinger said at the forum.
“Unless there is some basis for some cooperative action, the world will slide into a catastrophe comparable to World War I,” Kissinger warned.
“America and China are now drifting increasingly toward confrontation, and they’re conducting their diplomacy in a confrontational way,” the 97-year-old Kissinger said in an interview with Bloomberg News Editor-in-Chief John Micklethwait. “The danger is that some crisis will occur that will go beyond rhetoric into actual military conflict.”
The diplomat who paved the way for President Richard Nixon’s historic 1972 trip to China said he hoped that the shared threat of the Covid-19 pandemic would provide an opening for political discussions between the two countries when President-elect Joe Biden takes office on Jan. 20. –Peter Martin
McDonald’s CEO Sees Long-Term Covid Impact From Pandemic (9:39 a.m.)
McDonald’s Corp. will need to be thinking about personal protective equipment (PPE) and tracking transmission rates for in-restaurant staff for the foreseeable future, Chief Executive Officer Chris Kempczinski said.
It’s an “evolving area of consciousness,” he said. “There’s now a much higher level of appreciation and understanding on the safety component. We have, like I think everybody, learned through this.”
Prior to the pandemic, “we were not initially set up to think about running our businesses from almost a public safety standpoint,” Kempczinski said. Earlier this year, the fast-food chain engaged the Mayo Clinic to help counsel it on health and Covid-19 infection prevention and control. McDonald’s restaurants, which are 93% franchised worldwide, are the second-largest private employers in the world.
While the dining industry has been largely decimated by stay-at-home orders this year, fast-food has done relatively well with its drive-thru windows and take-out business. –Leslie Patton
IBM’s Rometty Sees ‘New-Collar Jobs’ (9:21 a.m.)
International Business Machines Corp. Executive Chairman Ginni Rometty highlighted the importance of what she called “new-collar jobs” as a way to attract candidates with different backgrounds to the technology industry.
IBM has tried to hire based on skills as opposed to college degrees, and the company has partnered with high schools and community colleges to promote this effort, the executive said.
Photographer: Alex Kraus/Bloomberg
Rometty also said the digital economy has not been inclusive and noted that the global pandemic and “systemic racism” have made the issue worse.
Singapore’s Tharman Shanmugaratnam picked up on the focus on quality of education Rometty raised, saying there’s potential to utilize more artificial intelligence tools to match workers to jobs, to allow for better hiring on skills rather than just credentials. And he pushed back on the idea of a universal basic income.
“It’s extremely regressive, the idea of giving everyone a certain quantum of money is very different from giving the poor, the lower-middle income group, what they need,” Tharman said
–Isabelle Lee, Rosalind Mathieson
Schwarzman Says Teachers Shouldn’t Pay Income Taxes (9:12 a.m.)
The chairman, co-founder and CEO of Blackstone Group Inc. said the U.S. must bolster its education system, noting that only 5% of children in public schools are learning computer science.
Stephen Schwarzman also said the business community needs to help provide apprenticeships for schools and that teachers should be the only group of workers in the U.S. who are exempt from paying income tax.
“It will mark them apart from other types of employment as a valued class,” he said.
Blackstone, the biggest manager of alternative assets with $584.4 billion, has benefited under President Donald Trump. The 2017 tax cuts encouraged Blackstone to convert its publicly traded partnership to a corporation. Shares of the firm have climbed 45% since it announced the move in April 2019.
“We have an income insufficiency problem and we need to solve that with a different type of minimum wage,” Schwarzman said. “We need a Marshall plan for the middle class. We need to make sure there’s enough income for people.”
After taking a hit to its business from the Covid-19 pandemic, Blackstone has seen its funds rebound and assets rise. It has benefited from investments in life sciences, logistics and technology, resilient sectors during the health crisis. –Sabrina Wilmer
Singapore Minister Cites Underlying Workforce Issues (9:01 a.m.)
Singapore Senior Minister Tharman Shanmugaratnam began a panel on a “New Deal” for workers by pointing out there were issues for the workforce well before Covid-19 hit.
By that he meant not just the most vulnerable workers, but also the middle class, which has suffered from stagnant incomes and fewer opportunities in rural areas. And in many advanced economies, Tharman says, job creation has centered on relatively insecure service sector jobs.
“When we address the problems of Covid we can do it in a way that also addresses these longer slow burn problems,” he said.
He proposed two solutions: Greater intervention by both government and the private sector in boosting lifelong learning, and greater investment in “public goods” including infrastructure. –Rosalind Mathieson
UN Chief Sees Biden Election Aiding Climate Goals (8:45 a.m.)
United Nations Secretary-General Antonio Guterres said he sees President-elect Joe Biden rejoining the Paris climate agreement and eventually committing to a net-zero pledge by 2050.
“With a government committed to move forward, I believe the extraordinary dynamic of the American society will allow us to arrive at net zero by 2050,” Guterres told the forum. “This is the moment for a great global coalition for net zero.”
Guterres said extreme inequality is fueling popular discontent with governments around the world, including doubts about the election results in the U.S.
“Inequality is a serious threat to development,” Guterres said. In order to recover from the economic crisis caused by the pandemic, he said the world needs a “strong commitment to reduce inequality, to improve opportunities for all.” –David Wainer
Michael Bloomberg Sees Lessons Learned From Pandemic (8:00 a.m.)
Michael Bloomberg said that the lessons learned from the global fight against Covid-19 could help the world take on challenges including climate change and racial and economic inequality.
“We can right the ship of the global economy and put it on a smart course for the months and years ahead,” the former New York City mayor said at the start of the annual forum. “The truth is the pandemic has also reminded us what’s possible when the public and private sectors collaborate.”
The New Economy Forum is an annual gathering of leaders in business, government, energy and trade to discuss some of the world’s most intractable challenges. The coronavirus pandemic and the impact it has wrought on the global economy is a centerpiece of those talks this year.
Photographer: Andrew Harrer/Bloomberg
Michael Bloomberg is the founder and majority owner of Bloomberg LP.
The four-day summit comes amid the virus’s resurgence, particularly in the U.S. and Europe, and early but promising developments regarding a potential vaccine. To date, the virus has infected at least 54 million people and caused about 1.3 million deaths, including an estimated 240,000 in the U.S.
Speakers at the four-day summit include Ginni Rometty, the executive chairman of IBM, Indian Prime Minister Narendra Modi, Ray Dalio, the co-chairman and founder of Bridgewater Associates and Christine Lagarde, president of the European Central Bank. The focus of the forum will shift from finance and trade on Monday to cities, climate and global trade in the coming days.
“Every big challenge we face requires cooperation and collaboration,” Bloomberg said in his remarks. “If we act wisely, we can invest in ways that reduce greenhouse gases and build resilience, that address economic and racial inequality, that reduce poverty and improve public health, and that spur growth and job creation.”
After Bloomberg, United Nations Secretary-General Antonio Guterres is scheduled to address participants. –Bill Faries
Rometty, Kissinger, Schwarzman Open Bloomberg Forum
With the coronavirus pandemic impacting everything from the global economy to geopolitics, leaders from government, finance and industry will address the world’s most pressing challenges at the Bloomberg New Economy Forum starting on Monday.
The four-day event will cover issues from the economic fallout of the pandemic and the logistics of vaccine distribution to the future of global trade and climate change.
Business and finance leaders taking part on Monday include Stephen Schwarzman, CEO of Blackstone Group Inc; Chris Kempczinski, president and CEO of McDonald’s Corp.; and IBM’s Rometty. They will be joined by political leaders and thinkers including United Nations Secretary-General Antonio Guterres, former U.S Secretary of State Henry Kissinger and Chinese Vice President Wang Qishan.
The summit begins at 8 a.m. New York time and continues through Nov. 19. More information can be found online at www.neweconomyforum.com. The New Economy Forum is being organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.
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