FirstFT: Biden offers harshest criticism yet of Netanyahu government

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Good morning. Joe Biden said Benjamin Netanyahu must change tack, warning that Israel’s “indiscriminate bombing” in Gaza risked leaving the country isolated.

Offering his harshest criticism of the Israeli prime minister’s far-right coalition since Israel began its military offensive in response to Hamas’s October 7 attack, the US president said Israel is “starting to lose . . . support” around the world.

Speaking to donors at a political fundraiser, Biden described Netanyahu’s coalition as “the most conservative government in Israel’s history . . . [that] doesn’t want a two-state solution”, adding: “I think he has to change, and with this government, this government in Israel is making it very difficult for him to move.”

Biden until now had largely resisted publicly pressuring Netanyahu even as US officials said they have had tough conversations in private.

Earlier yesterday, Netanyahu acknowledged that his government and the Biden administration disagreed over how Gaza should be run once Israel’s war with Hamas ends. Here’s more on the emerging differences between the two leaders.

• Related: Washington expects the most intensive phase of Israel’s war on Hamas in southern Gaza to be scaled back and become more targeted as soon as early January, US officials said.

Here’s what else I’m keeping tabs on today:

• Economic data: EU reports monthly industrial production figures, while the UK releases its monthly GDP estimate for October.

• Monetary policy: The US Federal Reserve is widely expected to hold rates steady when it announces its latest monetary policy decision.

• Reports: Opec publishes its monthly Oil Market Report.

Five more top stories

1. China’s President Xi Jinping lauded Beijing’s security and commercial ties with Vietnam yesterday as he kicked off a state visit to the south-east Asian country. Vietnam has become a critical global supply hub not only for western companies diversifying out of China but also for Chinese manufacturers. Xi’s trip also sought to counter growing ties between the US and Vietnam.

• US-China news: The Federal Reserve should be required to stress test US banks’ ability to “withstand a potential sudden loss of market access to China”, according to a congressional committee.

2. The UN climate summit was headed towards eleventh-hour negotiations yesterday as the majority of countries present clashed with Saudi Arabia and other oil-producing nations over whether to commit to the phaseout of fossil fuels. Diplomats said Riyadh was the key obstacle to a stronger declaration and was backed by other Opec and Opec+ countries such as Iraq and Russia.

3. The US has hit companies in Turkey, the UAE and China with sanctions as part of a sweeping effort to stop the Russian defence industry easily obtaining sensitive technologies for Vladimir Putin’s war in Ukraine. More than 250 entities were covered by the measures, which also reached deep into Russia’s war economy, even targeting a provincial bakery refitted to make drones.

4. Indian authorities have stepped up efforts to control domestic supplies and prices of agricultural commodities such as sugar, onions and wheat ahead of next year’s general election. The moves came on top of existing restrictions on exports of rice, wheat and sugar that have sent shockwaves through global markets.

5. UK businesses in China see 2024 as a “pivotal year” for Beijing to address growing concerns over its flagging economy and investment environment, the British Chambers of Commerce said yesterday. A survey of UK companies across China showed sentiment had improved from record levels of pessimism last year, but 60 per cent of respondents still believed business was more challenging than in 2022.

News in-depth

India’s appeal as a “China plus one” manufacturing hub may depend on how the country and foreign investors resolve one glaring issue: how and where to get enough workers in the right place. As the likes of Apple and Foxconn shift more production to India, executives hope staff will be willing to leave their homes and families to live on site at factories — with a dormitory bed as their only private space.

We’re also reading . . . 

• Iran’s ‘first lady’: It is highly unusual for the wife of an Iranian leader to promote her own views. But Jamileh-Sadat Alamolhoda has broken with tradition to speak to the FT.

• Kishore Mahbubani: The west is losing the respect of the rest of the world, writes The Asian 21st Century author, who calls for the west and the global south to talk to each other as equals.

• China’s deflation challenge: The country should stimulate consumption with spending on education, healthcare and public housing, writes Morgan Stanley’s chief Asia economist Chetan Ahya.

Chart of the day

A boom in private equity helped turn Kirkland & Ellis into the world’s most profitable law firm. But as dealmaking slows amid rising interest rates, the Chicago firm faces a reckoning, its fortunes entwined with those of the $13tn private capital industry.

Take a break from the news

Four years after it was razed in a bushfire, Australia’s Southern Ocean Lodge has risen from the ashes and welcomed its first guests last week. The FT’s Maria Shollenbarger recounts the emotional reopening of the celebrated wilderness lodge on Kangaroo Island.

Additional contributions from Tee Zhuo and Gordon Smith