Data Dependency and the Global Energy Pivot

Published Mar 3, 2023, 2:17 PM

Opinion columnist John Authers reflects on the week in markets and looks at the Fed's rate hike path. He explains why the phrase "data dependent" carries more meaning than it might seem. Opinion's David Fickling describes the unintended consequences of Russia's war in Ukraine as it relates to energy. And columnist Shuli Ren previews China's National People's Congress.

Welcome to Bloomberg Opinion. I'm Vonnie Quinn this week. If you threaten other nations and try to use energy as a geopolitical weapon, energy importing nations will find alternatives. All they want is energy, and if you tell them that the energy you provided insecure, they will alternatives. And at the moment, obviously there's an energy transition was already in a degree of swing, and it's really being fueled by what's happened. David Fickling on the year that hastened the greatest global energy transformation since the nineteen seventies. Later in the path, President Duping didn't quite have all the political power, but the next premiere will probably be his men, and the heat will probably be change. And that means that the economic hurrican is likely to be met, and that will have global financial implications going into commodities at the asset prices. Shulie Wren on expectations for China's annual parliamentary meeting the National People's Congress starting Sunday. First though of Bloomberg Opinions, John Authors, as we kick off new months in markets, John, is this a market in the process of repricing coming to a conclusion, or do we still have completely disparate opinions on what's going on out there. It certainly looks at the moment as though we are repricing that we are at least in the process of another wave towards accepting that rates will be higher for longer and that bond yields will have therefore to be higher. Briefly, you had ten year yields here in the States hit four percent on Wednesday. You now have German two year bunt yields at a post crisis high. They haven't been as high as they currently now, which is above three percent, since the actual eve of the Lehman bankruptcy way back in two thousand and eight. So the move towards some kind of an acceptance that rates will have to stay higher, but also it's not all negative, and some kind of an acceptance that we're back to an economy that looks a bit more like what it was for many decades before. I noticed we're not using the word normal because we still don't know what normally. I'm not sure how much that helps to use that, but where in obviously we're back in the world where inflation is relevant and affect of life to be concerned about really for the first time in three decades, I'd say, and that obviously matters a lot. And we're also in the world therefore where permanent minimal interest rates can no longer I think we've now reached the point where everywhere outside of Japan accepts that that's no longer going to be the case, that we have got out of that regime into a different way. You have to imagine that because four percent caused such a I don't want to say shudder, but it definitely caused a reaction that we're not done yet. That's not the peak now, and again it depends which countries you're looking at. Again, bear in mind, all of this is balanced against the fact that the economic uses broadly good. It's spectacularly that's part of the problem, yes, exactly, particularly in China, it's spectacularly good because it looks as though what many people must admit, include myself, were worried about is that when they released the COVID restrictions, you would have a really serious dose of the pandemic which would slow them down for a while before they began then to enjoy economic benefits. It looks as though it hasn't been that severe, judging by how strongly their PMI data has improved. We're only just starting to get post reopening data now, though, so we don't really know yet right so it's possible we were in the course of an overreaction, but the first data that takes into account all of February does look very positive, and that makes that makes a difference. That brings up the question of being data dependent, which is obviously what the FEND says it is all the time. What does that even mean anymore? Do we want strong data or do we want weak data? I think I think data dependency really is more meaningful myself than it has been for a while, in the sense that trying to work out what the fed's reaction function would be, how hawkish it feels it needs to be is beside the point for the time being. If inflation doesn't come down pretty swiftly, they will have to keep tightening the screws. The data we got last month, it wasn't that people change their minds about how the FED would react that really there was really no Fed speak that really shifted the market. It was just a series of data points that made it clear that higher rates are going to be needed, or at least rates are high for longer. Yes, And I think that's probably where we are for now. Like there is enough uncertainty that we are all probably better trying to work out where the economy is going. Then we are trying to work out how the FED would react to it. As it stands at the moment. It's obviously reasonable to think that that rates will be rising faster than people thought a month ago. John, is it possible in any scenario that the major economies, and I suppose i'm talking, you're the US and China avoid recession completely? It's a bit like that line in Dumb and Dumber and Carrie says, so you're telling me there's a chance. I mean, yeah, yeah, there's a chance. I still find it very hard. I still find it very hard to see that happening. You. I mean in the case of the US. Obviously, there is this this issue that the FED is almost certainly not going to under hike. It might over I believe them when they say that they are convinced that the greater risk is of letting inflation get under control than of overdoing it. Therefore, the more the economy does rally, the more there will be no choice but to squelch it. Is it conceivable that it's such a mild recession we eventually yet that we don't really think if it is a recession. I guess that's possible. You had the one, the recession of the early nineties, the recession after the dot com bubble were not the apologies to anybody who did happen to lose their job during those episodes, but in general, they were not major moments that really affected the quality of life. And we didn't hear any complete horror stories out of earning season. We didn't hear any well. Again, that's another intriguing one, is just how long that ball can stay here? But yes, I think with earnings, the issue is that it's very difficult to raise rates, to have a slowdown in activity without there being a very significant effect on profits. No, you're quite right, we haven't seen that big an impact thus far. When companies are still making profits, they still have money to reinvest or to inject into the rest of the markets via dividends or buy backs. It would probably suit the FED to better, or those fighting inflation better if companies weren't doing so well Yeah, so I think that's another instance where the fact that the lag in terms of really crimping economic activity after rates start to go up, that lag is proving longer than some had hoped, and that probably means ultimately that the chances of an overcorrection at the end of the cycle rise. Well, it's fascinating because even in places like Australia and New Zealand where the lag isn't as long, usually because it goes straight to housing, we're still seeing those central banks continue to have to raise rates. So it really as a phenomenally strange time. Will there have to be books written about this? Monetary policy wise, have we learned a lot? I'm not sure we've learned very much yet. I mean, we were still learning about the financial crisis of two thousand and eight. I can remember thinking at the time, I'm probably going to have to spend the rest of my career trying to understand what just happened. There are some very important senses in which the world is only now coming out of the post crisis environment. And yeah, there's a very good argument that particularly COVID, possibly also the reaction to the invasion of Ukraine were the shocks that were needed to knock us out of it. Whether in years to come there'll be an analogy with World War two ending the depression after a similar amount of time, it's conceivable that, you know, a really bad, truly shocking event knocks the economy out of this sort of post financial crash condition. Is it fair to say that when this is all over, if there is this to be over problems that plagued economy is like, for example, stagnation in Japan, no inflation in Japan, that those won't be the problems that those economies are dealing with anymore. A lot of that comes down to demographics, I think. In these particularly in the case of Japan, which is obviously of the leading country is the one that dealt with a declining population first. It is quite intriguing Japan does actually seem to have inflation. It's also quite intriguing for the first time in a generation. It's also quite intriguing that even the new guy coming in at the Bank of Japan doesn't seem to be convinced that you can actually start tightening yet, that he still sees the return of inflation as something fragile. We are I suppose you could say Europe really does seem to have. Europe had suffered Japanification for over a decade, and Europe does seem to have lifted out of it through a combination of COVID nineteen and Vladimir Putin. It looks to me as though Japan probably has as well, but it's not that clear, and it certainly does. Europe has similar kinds of issue, gemographic issues coming to those that are arrived a while ago in Japan. But there is the issue that that shrinking population is less likely to makes it more problematic. Not to mention China, well, there is that too, Bloomberg Opinions, John Authors. Next, the big consumers and the big exporters of oil agreed not to use this as a geopolitical weapon, and that's worked very well for our exporting nations ever since. And so I think what's really striking about what happened over the past year is that Putin's actions around energy broke that five decade packed between our producers and consumers. David Fickling on some of the unintended consequences of Russia's war on Ukraine. This is Bloomberg opinion. You're listening to Bloomberg opinion. I'm Vanni Quinn. Just more than a year ago Russia invaded Ukraine. That said in motion a series of catastrophic events, including a shifting of decades long energy relationships. Moscow didn't perhaps bang on that accelerating the energy transition, but that's what it did at least one silver lining, perhaps in a very dark cloud. Numberg Opinions. David Fickling joins, so, David, Russia's invasion of Ukraine hastened a global energy transformation. As you put it in a recent article, that's really a phenomenon of graphics and just information. There was an energy transformation in the works. By how much has the war actually hastened that transition? I think certainly early on after the invasion, there was an expectation that this was going to renew an underline the world's addiction to the fields that Russia exports, apollowing gaps and to a lesser extent coal. I think what we can see now is how much those predictions have not been the case. I mean, you know, there was a report out just a couple of weeks ago via a Rice Stadded Norwegian oil and Gas consultancy. They reckon fossil fuel emissions globally will peak by twenty twenty five. This is something you no one was predicting a few years back. Wind and solar generates a fit of the U electricity last year, and the IA. The wreck in generation globally from gas and coal will stagnate through twenty twenty five, while renewal output goes about nine percent a year. All these things are pointing in the same direction. And it's actually quite an old lesson of energy geo politics, which is that if you threaten other nations and try to use energy as a geopolitical weapon, energy consuming nations, energy importing nations will find alternatives. All they want is energy, and if you tell them that the energy you provided insecure, they will look for alternatives. And at the moment, obviously there is an energy transition was already in a degree of swing, and it's really being sort of fueled by what's happened. But David, twenty twenty five is literally two years away. Are we saying peak fossil fuel in two years? Yeah? I mean that's the foecut from Writer, which is a Norwegian consultancy. Their roots are in oil and gas. These are not sort of energy transition advocates, But this is just looking at the numbers. The driver of that is what's happening in the power sector. And of course in the power sector, one thing that we saw over the past ten years was a sort of frena move situation between renewables and gas, where sometimes gas would just support renewables, but sometimes gas was sort of especially in Europe, the competition for renewables, gas in particular, and especially pipeline gas has been the fuel that has suffered from this. Russia's vast exports of pipeline gas to Europe have gone away, and Europe's looking alternative now a lot of fat. Some of that is coal, some of that is ELMG, the same gas, but a huge amount of it if you look at the Repower EU program that they put through, is just advancing that end transition. So David, what happens to the OPEC hegemony then, well, I mean, I think it's very interesting if you look at the history of the OPEC hegemony and how they have maintained their position over the past five decades, it's really been by not doing what Russia has done over the past year. Obviously, famously in nineteen seventy three, OPEC, or rather OAPEC, the Arab nations in OPEC threatened to use oil as a geopolitical weapon over the October War, and you had the crisis that resolved to come out over the seventies, and as a result of that, you did see a lot of demand destruction. You saw oil consumers switching to more efficient cars. Fuel oil generated a quarter of the world's electricity in nineteen seventy two. Now it's about two and a half percent. That was given up because it was seen as too risky. You saw the building of nuclear power stations, cold power stations. You saw the first start of serious sort of renewable work with Jimmy Carter putting solar panels on the white hats and that sort of thing. But the pack that came at the end of that was really that the big consumers and the big exporters of oil agreed not to use this as a geopolitical weapon. And that's worked very well for our exporting nations ever since. And so I think what's really striking about what happened over the past year is that Putin's actions around energy, around the invasion of Ukraine sort of broke that five decade packed between oil producers and consumers, and that's a problem for all oil exporters. Most of the others will probably do better, but it's potentially a very severe own goal for Russia. Yeah, for sure. Now we do know that Russia is still managed two salads oil at a discount to shadow markets and so on. We know that things like smaller, older vessels are being used to ship this oil. They're literally being repainted and sort of vessel chop shops, I guess somewhere. And then also the possibility of oil spills has grown because of this. So what has changed beyond the fact that poorer countries are getting cheaper oil and Russia still gets some revenue from oil. Well, that's right, And I think you know, one thing that we see with this is that no one has a vest interest in rocking the boat too much. You know, Europe did not want to cut off its imports of Russian petroleum, and it was sort of really dragged, kicking and screaming into it a lot of the time by Russia's own actions. And at this point, you know, we see you mentioned developing countries. I mean, I think one of the most interesting dynamics we see right now is that a lot of this Russian CREWD is getting exported to India. India has some of the world's biggest oil refineries and a lot of it is being refined in India and then exported back to Europe. And Europe's fairly happy to turn a blind eye to that because it wants cheeko refined products. It wants che gasoline and diesel. So there's a gray market that's flourishing there. This has always happened. I mean, if you look at Glencore across the world's biggest country trader, the real roots of grain Core at the time when that business really starts to take off was very much in the aftermath of the seventies oil crisis, when Mark Rich Glencore was formerly Mark Rich and Co. Celebrated commodities trader. I mean, he made a lot of money from selling Iranian oil to Israel after the Iranian Revolution, which obviously neither Iran nor Israel wanted to admit that that was going on. By acting as a middleman, Mark Rich is able to do very well out of that, and that's the sort of dynamic that we will see increasingly now. How much is a mild winter in northern countries contributed to this energy transition or to this ability to get past this difficult phase. And is it significant that this winter was mild or would every winter need to be mild in order for this to continue? Yeah? I think that has certainly been a very lucky adventure arity for Europe that it didn't face those big draws on gas. I mean, if you look, it's remarkable really that the prices of oil and gas are lower now than they were before the war. Now, this winter is a crucial one. Next winter will also be a crucial one. They're not out of the woods yet, but I think beyond that the threat of the weather starts to change. Because you know, the great advantage of fuel and fossil fields in particular is that they're very flexible. There is a global market for it. You can move it from one corner of the world to another. You can fairly easily increase production from the fields. And obviously, you know, people at the IA and an OPEC track demand month by month or indeed week by week and produces a sort of adjusting their plans according to that. So there's that flexibility there. Of course, we just transition to renewables. Renewables don't have that. You cannot produce more power from a wind farms than its sort of rated capacity, so that becomes a problem. And also it takes a while to develop those new wind farms. It takes several years to plug them in to build transmission lines. However, beyond this winter, we really start to see the picture changing a lot. You know, Europe is locking down supplies of alternative energy that doesn't need Russia. So if we have another mild winter that Europe is able to make it through this year, then the sort of threat of that weapon really goes down substantially. So when you talk about renewables, we know that there are certain environmental problems with some of them still, right, so things like battery power and nuclear power, are they uncategorically better for the environment. The big problem we're facing at the moment is that there is a fixed amount of the common duck side that we're able to pump into the atmosphere, and each year we pump about thirty six thirty seven billion tons of conduck side into the atmosphere, and we're heading for geological limits about how much of that we can take before the atmosphere itself starts warming, and that's a battle that we have to sort of fight over the next thirty years. So certainly you can certainly point to things. You can point to gus, there's a lot, there'll be a lot of end of life waste from solar panels, you know, thirty years from now when we have to reconfigure them. But none of those really compared to the global scale of the challenge that we face with climate change at the moment, so I think they're clearly superior. Yeah, I'm also thinking about things like cobalt mining and so on. I mean, I think that's an interesting thing. But I think if you look at the scale of different commodities, one thing to bear in mind is that an unusual thing about fuel is that we use it every single year. You know, every time you feel a car, you need more oil to fuel that car. Every ton of coal, you need to burn more coal. Whereas something like cobalt is used once. The volumes of global cobalt production are in the hundreds of thousands of times, whereas the volumes of cross and fuel productions are in the tens of billions of tons. So in terms of the effect on the planet. There's some pretty awful labor conditions and things like cobalt mining. But you know, I don't think any of us surreiling for a sort of world of perfection where the resources that we're using produce no problems anywhere in the world. I think we know we have a sort of global challenge that we have to face about keeping this vanish the planet where we can live in the sort of conditions that we've been used to living. Bloomberg Opinions. David Fickling Next. A lot of things will get decided at this time, and it will be one of the most interesting National People's Congress in recent years. Surely ran on the China Communist Party's National People's Congress kicking off Sunday. This is Bloomberg Opinion. You're listening to Bloomberg Opinion. I'm Vannie Quinn. Markets are eagerly awaiting what emerges from the China Communist Parties National People's Congress starting someday. Blueberg Opinions. Shuley Ran joins now for a discussion around what in particular markets will be watching. Shuley, first of all, give us an idea of how many people are involved, who are the key characters to watch and what we'll get decided at this event. A lot of things will get decided at this time, and it will be one of the most interesting National People's Congress in recent years because at this point we're going to find out who the new premiere will be and all the key economic posts will be announced, such as the next Central Bank governor, the next head of Bank Regulati et c. And also very interesting is how China will say its world target, because that's going to affect a lot of global asset prices, such as commodities. The reason is that you know, in the past, President Shifting didn't quite have all the political power within him, right like oftentimes China's GDP targets were not met, and then he can toss the ball to current Premier League Chin and say, okay, they could chandn't do the job. But the next premier will probably be his men and the heat will probably be the change. And that means that whatever the economic target that they're study is likely to be met, and that will have global financial implications going into commodities and asserprises. Now, officials have been debating apparently whether to put that target at five percent, which would be faster than last year's three percent. Would that suggest though, that Beijing would have to engage in more stimulus if it were to be a five percent target. I think five percent is durable because China has been opened and they are hoping that a consumer rebound could get them close to the five percent target. But the real debate there has been some talk that that, you know, China may even target around five point five percent, in which case the government will have to use the normal stimulus measures and that could say something about global inflation and as serprise, Yeah, and there will be positive and negative implications from that. Because local government balance sheets are completely ragged after the property crisis and COVID zero, what can Beijing ask of them, particularly when we know that seventeen out of thirty one are already at one hundred and twenty percent debt to GDP, which is far higher than Beijing would ever want the local municipality to have that at. Yeah, so that's going to be the very interesting thing to watch. I think for the Congress, people should look at true members. One is the GDP target, One is the ciscal deficit, or as a third member is how much quota that the central government allows local government if you the bomber quota, because as you said, the local government they are very very broke. I mean last year's COVID control, just finding rapid text and the PCRT taxt and loan cost one train area. And also like local governments rely on a quarter of their actually thirty percent of their income on lend shales, which was not happening because the property is flum so really local governments have no money. And then if the government is still targeting say around five point five percent GDP growth or like they do, allowing a lot of bump quota, that means China will be even more intended than before. Like I mean, China stat to GP ratio is already at the round three hundred percent. If we're seeing five point five percent world target, that number will have to be a lot higher. That's starting three. That's the central government stat to GDP ratio. No, it's the whole country. So the central government balanship is actually very clean. If you like hear about China's debt problem, it usually either comes from like real estate factor or from the local government. The local government has taken on a lot of that. In fact, in China, there is this thing called the central government baking clutches the wallets and the local government's hold a shovel, and the ones that hold a shovel don't have any money, so so they have to keep on borrowing. And that's a problem there. Well, CLSA is actually saying that regional governments are already spending ten point eight percent of the revenue on just interest payments. How can that be sustainable? Beijing will have to step in. And by Beijing, I don't mean the municipality, I mean obviously the central government. Yes, the central government will have to stopping. And the central government has been trying to say, okay, let's just cut interest rates right and then lower the constant borrowing for local government. If the cons oft borrowing was the same as before, it would be more than ten percent. But the problem is right now, like everyone in mainland China, all investors in mainland China, no local government has this issue, right, they have become more apprehensive in terms of buying local government bars. So just cutting interest rate alone it's not going to be enough going forward. So at some point, I mean economists have been saying for years that the central government has to take confirm of the burdens. I mean, that's what the US government is doing, right, Like, what would that look like, Shulei, if the central government were to take on some of the bursion. I mean, it certainly seems like it could if it's debt GDP ratio is pretty healthy. Yes, So what the central government could do? I mean they could take a page out of the US playbook, right, Like, basically the Finance ministry is to allow of the bombs and then People's Bank up China by a lot of the bombs. It's the modern monetary policy. But China has not done that at all. So that's one thing they could do. Another thing that it's more the Chinese policy with Chinese characteristics is those so called policy banks giving our loans to local governments. The policy bank, for instance, China Development Bank, that's a major policy bank. The other risk is that Presidenties and Pink will want to talk about common prosperity, which will probably turn off investors around the world because common prosperity is not really what they want to hear about because that would probably necessarily mean more crackdowns. Right, Yeah, So I think what's happening with the China market is that you know before like investors will say, oh, China is a long term play because of its economic prospects. But China is changing, like we already know. The Chinese demographics is changing, right, like population started to dip, young people now having enough children. And then another problem is all the crackdown. So what global investors will do. You will start to see a lot of so called macro tourists. They come in and out, in and out, you know, when there's some reopening, they come by very quickly and then they take profit after thirty forty percent capitalking And we are already seeing that right. And basically China is becoming like Japan in that sense, it's becoming rather than a long term play, it's becoming a macro tourist play. Wow, will President chess playing worry about macro tourism or really accepted? He probably wouldn't like it. I mean, no government, one portfolio heart flows in and out, he probably wouldn't like it. Yeah. The other thing is the developers. Surely it looked like there was going to be this massive crackdown. Then he eased off. For perhaps it was because COVID zero was just so negative for the economy. But what's to become of the property sector. Is China already overdeveloped? I think so China has a property factor has two stories. If you look at like compure one's cities like Shanghai and Staging, those property markets have stayed pretty firm because they are the financial and commercial hubs where everyone wants to go by. But if you look at like the third year of fourth tier cities, they weren't being very very much overdeveloped. I mean, China's urbanization rate has bought at President shimping. Actually it doesn't wound so many people in like a smallst city, right, So the property sector's biggest problems are the smallest cities, the ones that you have never heard of. They just have so much inventory. I don't know what the government is going to do about them. And then, of course, as the tech crackdown, and the most recent chill that went through markets was when Boo fun disappeared, who was apparently the banker to know most of the tech companies. So then his company Renaissance said that he was helping the authorities with investigations. What does that phrase mean, Suli helping is better than he is investigated that's for sure. So the market speculation is that he hired this act their own enterprises banker at a very high salary because that guy's expertise and social network in the s banks. I think the all month somehow got mare into President Shipping and high corruption cracked down the financial services industry because you know, like their own bankers, they have a lot of power in the economy right in terms of who they lend money to. And there are now concerns regarding how those tech companies five years ago got so much funding in the first place. But it doesn't necessarily mean that we'll see a massive sell off from these tech companies or that many of the move put out of business. This might be just president and been trying to ride the ship. Yes, he's just trying to basically try to have a really crazy credit cycle. And everybody got drunk from ship credit and now we are left with bad debt and a bad investment, and President Shiching Cain got mad and he's like, I'm going to call back some money or punish some people. That's what he's doing. It's a new term for season paying as well. Right. He recently sort of consolidated powers so he will want to appeal to his people. He will want to sort of not a tone necessarily for COVID zero, but he will want to I'm sure, and I'm speculating, but put a very positive outlook out. There is there a chance that he might do something for consumption in that case, like give out vouchers or some kind of stimulus on that front. So far, China has not done that, like there was the ninety sixties for his production first and then consumption next, And so far the siminius all goes to supporting small businesses and enterprises, so that government somehow is very reluctant to send consumption checks like what we have seen in the US. Somehow President Shouching Pain thinks that that will make people become very lazy and not want to see jobs. So surely, in terms of the geopolitical implications of next week, what kind of president Chi and Ping will we see? We've definitely seen amped up face offs between the United States and China. Even when there were opportunities to sort of back down, it seemed like the whole spy balloon thing got out of hand. The semiconductor chip four is getting a little bit perhaps out of hand, On the one hand, these are not relationship ending moves, but on the other hand, they all point towards a more aggressive stance between the two countries. Will she be a little bit less amenable on the stage next week, That's a great question. I mean, like at the last congress, that Communist Party Congress in October, she thinking was very defiant, you know, talking about a separate world order, etc. I think he may have learned his lesson because after that there was a huge market staff, a lot of following investors basically use in a sense that they just exo China almost completely, right. I think this time he would be a little bit more tom And it's not just foreign invests, I mean Chinese style market also did terribly. People just felt like, oh, a war is coming. So this time, if he's really focusing on economic growth, he will try to come down job politic pretension. Well. An added to that is the fact that he seems to be getting more and more ingrained with Russia again. So for many months he was sort of standing on the sidelines. Now it looks like he might actually meet with Vladimir Putin or meet with some Russian representatives. Do we know if it's in order to try to negotiate some kind of peace or some kind of armistice, or is it to actually provide Russia with some kind of aid. I truly feel that China has nothing to gain, nothing economic to gain from this war, because Ukraine used to be a major agricultural act order into China as well. For some reason, President she wanted to be the peacemaker. He wanted to be the elevated world leader. But I don't know how that can be achieved. So the cheaper oil that China may or may not be getting from Russia but probably is that is not enough to offset the lack of grains from Ukraine. Is that correct? That's correct? Huh. So if you were to guess, and I guess most investors are making educated guesses now, you would say that that situation is getting incrementally more dangerous. I agree. So, I mean I think it can need that Russia is obsessed when this war. I mean, what can President She do to stop that as obsession? Right? Like, there has to be some kind of grateful on a military burn. It cannot be still made right at this point, But would she go as far as to actually provide weaponry. I don't think so. I mean she has been very careful over the last year not to pass US section. Yeah, what about Taiwan? Very careful? Yeah, exactly what about Taiwan? Surely the US again in sort of poking the maneuver, and Taiwan has been asking for this. I guess did up the number of people that it was sending to Taiwan to help train the Taiwanese army. But really the number is two hundred. It had been thirty. These are probably extraordinarily competent and excellent people, but you know, two hundred only go so far. Is the US getting a lot more worried about China breaching the Taiwan security wall? Well, I think the US is generally worried that China has gone through right as a computing suit of power? And how one is the proxy? Bloomberg Opinions Shui Ran. That does it for this week's opinion. Do feel for you to get in touch. I'm at Vonnie Quinn on Twitter or email me at v Quinn at Bloomberg dot net. We're produced by Eric mollow. Stay with us. Today's top stories and global business headlines are coming up right now.

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