Good morning. The US and Taiwan agreed yesterday to begin formal trade and investment talks amid flaring tensions between Washington and Beijing over the self-governing island that China claims as its own.
The discussions stem from a joint initiative announced in June and are expected to begin in the early autumn. They are aimed at deepening economic engagement in areas including agriculture, digital trade and climate. The Biden administration said late on Wednesday that the sides had reached “consensus on the negotiating mandate”.
The announcement came after weeks of acrimony between the US and China following a trip to Taiwan earlier this month by Nancy Pelosi, the speaker of America’s House of Representatives.
The visit infuriated Beijing. After Pelosi left, China fired missiles over Taipei, scrambling fighter jets and simulating an assault on the island. China’s ambassador to the US accused Washington of escalating the current crisis over Taiwan. “Some Americans do not recognise and correct their mistakes,” said Qin Gang in a press briefing on Tuesday. “The basic fact is the US took the first step to provoke China on the Taiwan question. This has openly infringed on China’s sovereignty and territorial integrity.”
Fresh efforts by China to further isolate the island nation were triggered this week by the visit of a second delegation of US lawmakers to Taiwan. The fallout has forced multinational firms to draw up contingency plans in the event of a US-China military conflict.
Go deeper with today’s Rachman Review podcast: Would China go to war over Taiwan?
In case you missed it, FT reporters are gathering thoughts on US student loan debt and its impact on Americans via a short survey. Take a look if you have a spare moment, and your experience may be featured in an upcoming story. Thank you and have a great day — Georgina
Five more stories in the news
1. Liz Cheney’s fight against Trump continues Cheney is planning to launch a political movement — which will probably be called “The Great Task” — whose primary purpose will be to prevent Trump from being re-elected, as he remains the Republican party’s frontrunner to become president.
2. Fed minutes signal restrictive rates to stay Federal Reserve officials discussed the need to keep interest rates at levels that restrict the US economy “for some time” to contain the highest inflation in about 40 years, according to minutes of their July meeting, when US central bankers implemented a second consecutive 0.75 percentage point rate rise.
3. Quant funds ramp up bets on US stocks Quant funds, which attempt to ride the momentum of market trends, are increasing bets on US shares, fuelling a rally that has added $7tn in value since June even as data points to a slowdown in the world’s largest economy.
4. China’s largest property group warns of profit dive Earnings at Chinese property developer Country Garden fell as much as 70 per cent in the first half of the year, as the country’s largest real estate group by sales was drawn into a crisis that has raged through the heavily indebted sector.
5. Japan’s alcohol advice: please drink more The unorthodox government-backed “Sake Viva!” contest calls on people aged 20 to 39 to help revitalise an industry hit by demographic changes, the pandemic and long-term diminishing consumption that has cut into tax revenue.
The day ahead
Rocket arrives at launch pad Nasa’s Space Launch System arrives at Launch Pad 39B at the Kennedy Space Center ahead of the Artemis 1 moon mission. The 98-metre tall rocket is scheduled to embark on its first mission to space on August 29.
Serbia and Kosovo meet Serbia’s president Aleksandar Vučić and Albin Kurti, Kosovo’s prime minister, will hold joint discussions in Brussels with Josep Borrell, the EU’s foreign policy chief, over a road map to resolve tensions under the threat of conflict.
Opinion: The EU and Nato have crucial roles to play in stopping Russia from exploiting regional rivalries, writes Misha Glenny, rector of the Institute for Human Sciences in Vienna.
Economic data The EU and Canada publish July inflation figures, while US initial jobless claims are forecast to have risen slightly last week. (FT, WSJ)
US existing home sales are expected to fall for the sixth consecutive month to 4.89mn in July from 5.12mn the previous month, against the backdrop of high mortgage rates and record prices causing buyer demand to cool.
Esther George, president of the Kansas City branch of the Federal Reserve, is expected to make comments about the economic outlook today. Neel Kashkari, president of the Minneapolis Fed, is set to take part in a Q&A session at a Young Presidents’ Organization Gold Twin Cities Chapter luncheon.
Corporate earnings Investors will be watching for signs on the state of consumer spending when several retailers report earnings this morning. Among them are Estée Lauder and Tapestry, the luxury fashion company known for brands including Coach, Kate Spade New York and Stuart Weitzman. BJ’s Wholesale Club and Kohl’s also report before the bell.
What else we’re reading
Brazil’s other deforestation: has the savannah farming boom gone too far? Deep within the country’s interior, the conversion of huge swaths of a region known as the Cerrado into pasture and arable land over the past few decades has helped transform Brazil into an agrarian powerhouse. But intensive farming in the region threatens its wildlife and vital role as a carbon dioxide “sink”.
The village wedding caught in the Taliban’s battle for Kabul In August 2021, people in Dost Kol — a hamlet in the hills an hour west of Kabul — prepared to celebrate the wedding of Mohammad Ullah to a bride from a neighbouring village. But the next 24 hours brought tragedy.
Central bank independence is on the decline In the US, UK and Turkey, politics are gaining sway over central banks, writes economics editor Chris Giles.
France’s magnificent rusting giant The coat of paint that the Eiffel Tower will receive for the 2024 Olympic Games can hardly hide that it is rusting. Paris bureau chief Victor Mallet assesses the wear and tear on the pre-eminent symbol of France — and explains why Parisians could be waiting a decade for proper repairs.
Beware patronising the marginalised How would you feel if you were told, by someone who knew very little about you, that because of your immutable physical characteristics you must have been the victim of oppression? Treating people as victims deprives them of agency, writes Jemima Kelly.
Food & drink
Ravinder Bhogal presents a menu that is a taste of Sicily, from caponata to pasta with sardines and apricot ricotta cake, all borrowed from a christening she gatecrashed this summer.
Source: Economy - ft.com
