FirstFT: Jake Sullivan and China’s top diplomat resume critical back channel

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Good morning. We start with news from Washington that US national security adviser Jake Sullivan and Chinese foreign minister Wang Yi will hold a private meeting in the coming days.

The pair will meet in Thailand, resuming communications in a back channel that has been critical to stabilising relations. The meeting will be their first since President Joe Biden met his Chinese counterpart Xi Jinping in San Francisco in November, according to two people familiar with the plan.

US and Chinese officials last year restarted high-level engagements that were aimed at easing tensions between the two powers.

But in contrast to the meetings between US cabinet secretaries and their Chinese counterparts, which were announced in advance, Sullivan and Wang held two secret meetings — in Vienna and Malta — that were key in paving the way for Biden and Xi’s meeting. The FT’s Demetri Sevastopulo reports why the Sullivan-Wang channel has been effective.

Here’s what I’m keeping tabs on today and over the weekend:

• Bank of Japan: Minutes from the BoJ’s monetary policy committee meeting will be released today.

• ICJ genocide case: The International Court of Justice is expected to make their first decision today in a case that is likely to take years: whether to grant South Africa’s request for emergency measures meant to rein in Israel’s assault on Gaza.

• Emmanuel Macron in India: The French president visits India today and meets Indian Prime Minister Narendra Modi for the 75th anniversary of Republic Day. Financial markets are closed.

• Holidays: Australia Day is today, marking the arrival of the first ships carrying British convicts in Sydney in 1788. More recently, the holiday has become a point of contention for Australians.

• Sport: The Australian Open women’s singles final will be held on Saturday and the men’s singles final on Sunday.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Several Chinese shipping lines have been redeploying their vessels to serve the Red Sea and the Suez Canal, in what analysts have said is an effort to exploit China’s perceived immunity from the Houthi attacks that have driven most other operators out of the area. “It’s opportunistic, it’s risky and it may appeal to some less risk-averse cargo owners,” shipping consultant Sean Heaney said.

2. Qatari-mediated talks to broker a deal for the release of the remaining hostages held in Gaza have become deadlocked over Israel’s refusal to agree to a permanent ceasefire. The latest Qatari proposal included a pause in hostilities in Gaza for about a month, during which Hamas would release the remaining hostages in exchange for Israel freeing Palestinian prisoners over three phases, said two people briefed on the negotiations.

• More on the Israel-Hamas war: Israel’s foreign ministry has written to diplomatic missions in the country to ask if they have back-up generators and satellite phones in case of a “security escalation”.

3. Chinese retail investors who loaded up on derivatives that rely on calm market conditions have been hit with heavy losses. Despite their small size relative to the Chinese equity market as a whole, analysts said the wipeout for some holders of so-called snowball derivatives could exacerbate the country’s stock rout.

4. The US economy grew at a 3.3 per cent annualised rate during the final quarter of last year, capping off a strong 2023 that defied recession fears. The numbers will also be a boost for President Joe Biden ahead of November’s presidential election, as his strategists try to reverse widespread public dissatisfaction with his handling of the economy.

5. Chipmaker SK Hynix reported its first quarterly operating profit in more than a year as it benefited from booming demand for high-end artificial intelligence memory chips. Here’s more on the South Korean company’s turnaround.

FT Magazine

In 2017, journalist Samantha Cole introduced the world to deepfakes with the following sentence: “There’s a video of Gal Gadot having sex with her stepbrother on the internet.” Since then, warnings about the technology have grown more numerous and cynicism is becoming more widespread. In a crucial year for elections around the world, Tim Harford writes that it’s only a matter of time before disinformation leads to disaster.

We’re also reading . . . 

• Military service in South Korea: A quiet debate over conscription is heating up, writes Song Jung-a. But a move to an all-volunteer armed force risks filling units with the most disadvantaged members of society.

• South African Jews: In a community with members who played prominent roles in fighting apartheid, many are looking on with unease as their government pushes a landmark genocide case against Israel.

• Unexpected consequences: Leo Lewis explains how Japan’s demographics could drive a giant cohort of young Americans who still live with their parents to at last fly the family nest.

Chart of the day

Lithium miners are cutting costs and scaling back plans to expand production after slowing demand in China for electric vehicles crushed the price of the battery metal.

Take a break from the news

Here are our six films to watch this week, including Oscar nominee The Holdovers. Alexander Payne’s bittersweet nostalgia trip finds a grouchy teacher cooped up at a private school over Christmas.

Additional contributions from Tee Zhuo and Gordon Smith