The first day of the four-day Bloomberg New Economy Forum concluded 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.
US-China tensions were a major focus, with former and present heads of state calling on Xi Jinping and the incoming Biden administration to get the relationship back on track. Singapore Prime Minister Lee Hsien Loong urged a truce, while former President Bill Clinton said a more coordinated approach to dealing with Beijing would be needed as Xi's long-term reign upended relations. Henry Kissinger said the new administration should move quickly to restore lines of communication or risk drifting into a crisis that could escalate into war.
On the economy, health and environment, former US Treasury Secretary Lawrence Summers called for a stronger coordinated global response to the crisis caused by Covid-19. Former Federal Reserve Chair Janet Yellen said fiscal policy was "essential" to back up the stimulative policies of the central bank and help the US economy recover. United Nations Secretary-General Antonio Guterres said he sees Biden rejoining the Paris climate agreement and eventually committing to a net-zero pledge by 2050.
The New Economy Forum is organized by Bloomberg Media Group, a division of Bloomberg LP, the parent company of Bloomberg News.
Adnoc CEO Optimistic on Global Growth Led by US and Asia
There's very good reason to be optimistic about global growth, Sultan Ahmed Al Jaber, the United Arab Emirates's minister for industry and advanced technology and CEO of Abu Dhabi National Oil Co., said at the Bloomberg New Economy Forum. The US rebound is very robust despite Covid-19, while Asia is recovering very well and European growth is slowing due to new pandemic restrictions, he said. -- Sharon Cho
Brexit Deal Landing Zones Becoming Clear, Irish PM Says
The contours of a Brexit deal between the U.K. and European Union are clear to both sides, Ireland's prime minister said, as the two struggle to reach a trade agreement.
Negotiating teams understand "the landing zones" around an accord, Micheal Martin said at the Bloomberg New Economy Forum, warning it's not yet fully clear if his U.K. counterpart, Boris Johnson, truly wants an accord.
"Having met Boris Johnson, having talked to him, my sense is deep down his gut instinct is that he would see the sense of a deal," Martin said in an interview with Bloomberg's Stephanie Flanders. -- Peter Flanagan
China Regulator Sees Little Fallout From Ant IPO Suspension
International investors have responded to the suspension of Ant Group's initial public offering "quite well," Fang Xinghai, vice chairman of the China Securities Regulatory Commission, said at the New Economy Forum. In the past week, inflows from international investors and investors in Hong Kong have also done quite well, he said.
Fang also said the US is pushing too fast for change from China and should instead take a more patient approach, adding that he's hoping for better relations under Biden.
"I sense US negotiators demand to get something from China quickly and hope China will change quickly," Fang said. "The US needs more patience."
-- Jonas Bergman, Evelyn Yu, Enda Curran, Michelle Jamrisko
US, China Could Heal Rift By Cooperating on Climate Change
President-elect Joe Biden and China's Xi Jinping can begin to mend their nations' fractious relationship by avoiding any provocation on Taiwan or the region's disputed waters, Australia's former prime minister Kevin Rudd said.
The two could also cooperate on fighting the effects of climate change, Rudd, now the president of the Asia Society Policy Institute, said in an interview Tuesday at the New Economy Forum. -- Ruth Pollard
Bill Clinton Says China's Direction Under Xi Upended US Ties
Former President Bill Clinton said Xi Jinping's long-term reign has upended US-China relations, and will require Joe Biden's incoming administration and its allies to take a more coordinated approach to dealing with Beijing.
"The old Chinese system, which was by no means a democracy, still guaranteed enough debate, and play, and openness because there was a regular rotation of leadership," Clinton said. "Now that it appears that a person is in charge of China who intends to stay there for life, in essence, that changes things. But we shouldn't accept or assume that it's all going to be bad without working to make it better."
Speaking in conversation with former U.K. Prime Minister Tony Blair at the Bloomberg New Economy Forum, Clinton said the US 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 PM Calls for US-China Truce After 'Tumultuous' Years
US 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."
Lee also said Singapore is concerned about the situation in Hong Kong and hopes the financial hub could "settle down to a new normal." He sees the government running a budget deficit at least through early next year, and perhaps "a while" longer, as the coronavirus-hit economy bends the city-state's traditional fiscal prudence. -- Philip J. Heijmans and Michelle Jamrisko
China's Zeng Calls for More Policy Coordination
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 US, China Talks
The incoming Biden administration should start a new round of bilateral negotiations with China aimed at fair trade and competition, former US 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 US closing itself off to the world. Two years ago, Paulson warned that the US-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
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.
She said fiscal policy was "essential" to back up the stimulative policies of the central bank and help the US economy recovery from the pandemic.
"Fiscal policy has a very important role to play now," Yellen said during a panel discussion. "I believe it's essential."
-- Rich Miller
Summers Calls for More Coordinated Global Response
The Covid-19 economic crisis requires a stronger coordinated global response to reflect the worldwide dimension of the problem, former US 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.
"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
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 US 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
China Vice President Urges Shift From Protectionism
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."
Wang didn't address US-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. -- Peter Martin
Supply Chains Less Efficient in Pandemic, FedEx COO Says
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. -- Thomas Black
Malmstrom Says EU May Have to Wait for US Trade Talks
The European Union's former trade chief, Cecilia Malmstrom, warned that negotiations for a transatlantic deal may have to wait, even with a US 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 US 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
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 US, said Moreno, who completed 15 years at the helm of the Washington-based institution at the end of September. -- Eric Martin
Jordan's King Urges Ensuring Covid Vaccine for All
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."
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. -- David Wainer
Kissinger Warns US-China Divide Risks Catastrophe
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 US 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
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." -- Leslie Patton
IBM's Rometty Sees 'New-Collar Jobs'
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.
Rometty also said the digital economy has not been inclusive and noted that the global pandemic and "systemic racism" have made the issue worse. -- Isabelle Lee, Rosalind Mathieson
Schwarzman Says Teachers Shouldn't Pay Income Taxes
The chairman, co-founder and CEO of Blackstone Group Inc. said the US 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 US who are exempt from paying income tax.
"It will mark them apart from other types of employment as a valued class," he said. -- Sabrina Wilmer
Singapore Minister Cites Underlying Workforce Issues (9:01 a.m. NYT)
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. 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
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." -- David Wainer
Michael Bloomberg Sees Lessons Learned From Pandemic
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."
Michael Bloomberg is the founder and majority owner of Bloomberg LP.
The four-day summit comes amid the virus's resurgence, particularly in the US 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 US
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." -- Bill Faries
Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement