Water Is Key for China: Sullivan

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Nov. 4 (Bloomberg) –- In today’s “All In Discussion,” Kim Eng Securities Head of Asia Trading Andrew Sullivan discusses China’s 3rd Plenary Session and what could potentially come out of the meeting with John Dawson, David Ingles, Angie Lau and Rishaad Salamat on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)

Third winery -- plenary session of the weekend coming up.

A lot of expectations.

It is also the first time we have seen the management style, whether we are going to have -- the consensual version or the presidential version.

Does that mean they're going to dr.

-- doctor?

I think there is a lot of excitement that we will get the footprint of how they will change things.

A lot of what we have heard so far is the realization that there are problems in china.

That is something new for the leadership to really admit.

We will be looking to see whether anybody gets done for corruption.

That seems to be a headline area for them.

Policy is going to be the key thing.

It looks like they stepped off the gas when it came to the anticorruption drive because we had services pmi beating expectations.

People went to the banquets and hotels and forests.

They do spend a ridiculous amount of money on these floral arrangements.

Why not?

It is a good barometer.

The civil services in china have always looked at the company credit card as part of their salary.

Changing that is going to be difficult.

Making a headline out of some of the top people as well as some of the lesser people is probably a good move.

I do not think they are chasing the people that are ordering flowers, but they will try to stop them a little bit if they can.

This could be groundbreaking.

It could be a pretty big one.

Biggest in the last couple of years.

Rural areas, enterprise, bond issues, financing, all of these to be tackled.

Could be massive.

It has been hyped up.

That means we could be in for disappointment.

People would not hyped it up if it was not at least something.

The ones that are really important, the ones they will put their key focus on, are the key issues for them.

We will see the next key issues as far as management is concerned.

The sec had a luncheon with a doctor and his foremost foreign- policy guy in china.

A lot of people attending that luncheon.

What is very interesting, pollution.

He spent five minutes of his speech talking about pollution and addressing pollution.

What do you think of that?

I think it is very important for them.

China is short of water.

At is one thing you cannot really buy or import from other countries.

There is a lot of debate about the himalayas and how the water gets collected from there.

If china wants to build its water-based, -- its industrial base, water is key.

Having industries that do not pollute your water is a very important thing for them.

That has been something -- they have been relying on a lot of the policies over the past few years.

A are trying to clean up the battery industry, which is a big polluter.

They are getting rid of the smaller ones that do pollute.

Would that also be a q2 stake of these industries.

They are trying to cut overcapacity.

That is how they are framing it.

I think the key thing is you look at companies that are investing in technology, the last man standing.

They are meeting or setting the standards.

These will be the brand names for china going forward.

These are the ones that mostly have to be exposed.

You need to pick the ones that will be the leaders at the end of the day.

We have a lot of these up- and-coming, small -- probably the firms that will really make money are the guys that do the technology, the guys that put the technology into the chimneys that extract a lot of these particles before they get out to the atmosphere.

It is like a lot of these industries.

The shale gas industries and the guys who make the pipes.

At is what investors should be looking for at this stage.

We build up this week.

It starts off quietly and then we get u.s. gdp, nonfarm payrolls, the bank of england, and congress here as well.

What will you be focusing on?

The ecb is under a lot of pressure.

The euro has been strengthening.

It will be a litmus test as to whether they are worried about that strength are not.

Do they have scope to reduce rates?

The recovery out of europe has been white good so far.

We have seen a slow recovery out of the u.s. if they are going to start turning around, europe does not want to be left behind.

It has seen a lot of money inflow and it does not want to see that going out.

And the payroll numbers are the first time in the u.s. for a while.

It will be the -- an interesting one to watch.

Quantitative easing, it is very relevant for the east and the influence.

What are you hearing recently?

A lot of people feel that they did miss an opportunity in september.

They had a chance where they could say the data is not going to be that relevant.

Bernanke previously said that the fomc should be forward looking.

We all know what is going to happen.

We were all expecting it to happen earlier in the year and it has not.

September would have been a great opportunity.

You have a couple of months before december.

If it is not working, you can on wind it.

It will really be nominal.

I do not think they will want to leave as late as march.

The problem is that it is an ongoing thing then and a binary decision as to when you do it read if they do it sooner rather than later, the market wants to know, how good is the economy?

The fomc or the fed starting to draw up the new rules for the next test of the banks.

Are these banks -- have they

This text has been automatically generated. It may not be 100% accurate.

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