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Eurasia Group Analyst Nicholas Consonery joins Yahoo Finance Live to discuss Evergrande and President Biden's speech to the UN.
JULIE HYMAN: The US President Joe Biden speaking before the United Nations General Assembly there in quite a broad-ranging speech, touching on humanitarian issues around the globe, from Asia to Africa and beyond. And emphasizing at the top of the speech, really, that the US does not want a new Cold War.
He said that the country wants to move beyond a period of relentless war to relentless diplomacy under the shadow of various challenges at home, including, of course, the US withdrawal from Afghanistan. He did reference that and talked about moving beyond that era for the United States.
Let's talk more about that speech and the takeaways from it. I'm going to bring our own Rick Newman into the conversation, as well as Nicholas Consonery. He's Eurasia analyst who has been tracking this speech as well, and of course, Emily and Brian are still here.
Nicholas, I want to start with you, because as I said, it was really a broad-ranging speech. But if I take anything away from it, it is that Biden was really drawing, of course, a sharp contrast with his predecessor and talking about global cooperation that sort of everyone should be working towards a series of common goals. Is that how you read it or what really stood out to you?
NICHOLAS CONSONERY: Yeah, I thought-- well, good morning. And I thought what stood out most was the speech was very much steeped in this Biden foreign policy framework about democracy versus authoritarianism and just trying to draw that kind of line explicitly.
I thought there was a lot of explicit and implicit criticism of China in a number of areas. He kind of alluded to the Belt and Road, infrastructure, spending programs. He talked about rules of order and international law and geostrategic hotspots around the world. He mentioned Xinjiang explicitly and human rights concerns there.
So despite this tone of kind of a call for global action, I thought in many ways the speech kind of reinforced what we already know, is that it's hard to be optimistic about the potential for the global community to come together if the US and China aren't finding ways to work together and it didn't seem to give a lot of indication that we should be particularly optimistic about that outlook.
EMILY MCCORMICK: Rick, to Julie's point earlier, thinking about the speech and what Biden really laid out here, it really seemed like one of the messages in the undertones here was he was trying to convey the US is back. we're re-engaging with the Paris Climate Agreement, re-engaging with the World Health Organization with covax. Is that the read that you got here as well and how well received you think that has been at the global stage?
RICK NEWMAN: Yeah, that was the message, for sure. But he also didn't say anything new and there are some things that he could have said that might have been new. For example, what about trade between the United States and the European Union? Trump imposed some tariffs there.
I think there's a broad expectation that Biden might ease some of those tariffs and other trade barriers, but he didn't have anything to say about that today. I mean, he really only made a couple of specific references that I heard. He said the Biden administration, I should say, still wants to reinstate the nuclear deal with Iran, not new, but he's reminding everybody about that. Committed to denuclearizing the Korean Peninsula. Again, not new, but he's reminding everybody about that.
And I think he was trying to make the point-- I actually was interested whether he was going to make any kind of reference at all to Afghanistan, because that was a black eye for his administration. And he did.
And I think he's making the point that, you know, he didn't say this, but we don't want to be using the military all around the world. We need to pull in the military and start using, as Julie pointed out, relentless diplomacy that he referred to. So what does all this mean? What's really going to change? I think, he didn't give a lot of indication of that.
BRIAN SOZZI: I'll put this one to both Rick and Nick. Nick, I'll start with you here. One tone or one thing that I came across or just picked up here is that big government is back. Nick, did you pick up on that and what do you think that will mean to financial markets moving forward?
NICHOLAS CONSONERY: Well, I think certainly that that is the case. I didn't, I guess, take as much away from that tone from Biden's speech, but I would very much agree with that. The argument being that that's the trajectory of policy here.
And I think in a number of areas, to me, what's the global community really looking for here? It has to do with, I mean, the two big priorities this year: climate change and obviously response to the pandemic and just how to think about how the global economy will continue to emerge from this terrible and tragic couple of years that it has faced.
And there I thought Biden alluded and talked explicitly about the large role the government is going to play. The US government could be doing more on vaccine donations and supplies around those issues. And on climate, he made that commitment to another $100 billion in financing in the emerging world for climate-related initiatives.
And also talked explicitly about the need for additional financial resources for emerging markets to recover from the pandemic generally. So, hey, these are huge challenges for policymakers this year and I think we did at least get a little bit of a sense of some of the Biden administration prioritization of those issues.
RICK NEWMAN: And, Brian, you're right. Big government is back in Biden's domestic agenda, for sure. I mean, we've been talking about that a lot and markets do care about that. In terms of what he's talking about the United Nations, I guess, to the extent the big government is back. It's going to be in these alliances Biden wants to form. And we should keep in mind the last US president to address the UN was Donald Trump with a very different set of approach.
So Biden is making the point that the United States does want to join up with other nations, any nation that shares the cause. Basically, whatever the cause might be to address these problems. That is different from Donald Trump. Really, stiff-armed many US allies and just said the United States is going to go it alone with regard to China, for example.
But again, Biden didn't really say anything new here. So Biden he's sort of talking the talk here. He's doing what you do at the United Nations, which is just give a long speech and grab the hand with a bunch of world leaders. But they have a lot to do. There's a long to-do list in terms of showing that they really mean what Biden is talking about.
JULIE HYMAN: And, by the way, speaking of things that financial markets care about, Evergrande is certainly on the list. That's one of the reasons we first brought Nick in to talk to us and or at least they cared about it for a hot second. We're seeing stocks come back today.
But if when you look at the Evergrande situation, coupled with the various sort of rolling regulatory rhetorical crackdowns that we've gotten in China, what does that tell us about China's standing at home, relative to its global standing? In other words, do you see it as struggling at home as all of this is going on or is it firmly in control?
NICHOLAS CONSONERY: Yeah. I think, well, to me, the biggest takeaway from the Evergrande story is that it reveals this underlying financial fragility within China's economic system, and that's a fragility that has clearly deteriorated. It's gotten worse over the past few years as Beijing relied even more on basically, leverage to boost the economy through the pandemic.
And the financial pressures that we see presenting themselves around Evergrande are in some ways idiosyncratic to that institution but I would argue are much more representative of the kinds of challenges that the financial system faces across a broader set of actors in the real estate market and in the financial industry, frankly so.
I think there's a lot of questions now about how far this is going to go when Beijing might intervene. And I think if we're seeing some level of assurance in financial markets today, it's because investors think that ultimately Beijing is going to come in with a solution here.
JULIE HYMAN: Interesting. We'll see if indeed that is the case. Nicholas Consonary, Eurasia analyst, thanks for joining us, as well as our Rick Newman.