FirstFT: Xi Jinping visits Europe amid escalating trade tensions

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Good morning. Xi Jinping arrived in Europe yesterday on a mission to ease escalating tensions that threaten to ignite a trade war between China and the EU.

On his first trip to the region since 2019, Xi will face tough talks in France on trade and Ukraine before enjoying a warmer welcome in Serbia and Hungary, where soaring Chinese investment underlines both the benefits of close ties with Beijing and EU divisions on international policy.

“China is determined not to let its relationship with Europe slide further towards the direction of its ties with the US,” said Yu Jie, an analyst at UK think-tank Chatham House. “There will be a renewed charm offensive from Beijing, but it will equally give the EU tough warnings on trade protectionism”.

Xi’s top priority for his six-day visit would be damage limitation, Chinese officials said. The president is intent on countering a litany of trade investigations by the EU into Chinese companies, including a blockbuster anti-subsidy probe into electric vehicles expected to conclude in weeks.

But Xi also intends to play hardball. Behind the expected displays of public bonhomie and promises of Chinese investment, he would warn European leaders that duties on Chinese exports would elicit an uncompromising response, analysts added.

• Related: The EU is lobbying China to exclude agriculture from a series of escalating commercial disputes, calling for the “strategic sector” to be protected from trade tensions in the renewable energy and electric vehicle industries

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

• Economic data: S&P Global publishes services purchasing managers’ indices for China and India, and whole economy PMI for Hong Kong and Singapore.

• Elections: Chad’s leader will seek to shore up his fragile position in today’s presidential election amid signs of his desire to dilute alliances with the west and pivot towards Russia and the United Arab Emirates.

• Japan/South Korea: Financial markets closed are closed for Children’s Day.

Five more top stories

1. European intelligence agencies have warned their governments that Russia is plotting violent acts of sabotage across the continent as it commits to a course of permanent conflict with the west. Assessments from three different European countries suggest Kremlin agents are preparing covert bombings, arson attacks and damage to infrastructure.

• Russian finance flows slump: A US crackdown on banks financing trade in goods for Vladimir Putin’s invasion of Ukraine has made it much more difficult to move money in and out of Russia, according to senior western officials and Russian financiers.

2. Joe Biden’s attempt to challenge Chinese supremacy in commercial shipbuilding will probably do little to revive US shipyards, analysts say, but it could help producers in South Korea and Japan withstand competition from Beijing. The US president’s investigation into alleged unfair Chinese economic practices in shipbuilding and maritime logistics could lead to duties for Chinese-built ships calling at US ports.

3. Israel’s far-right government has voted to shut down Al Jazeera, the Qatari-funded satellite channel, and prevent it operating in the country. The motion was passed unanimously during a cabinet meeting on Sunday, with Prime Minister Benjamin Netanyahu accusing it of being a “mouthpiece” for Hamas. Al Jazeera described the decision as a “deceptive and slanderous” move. Read the full story.

4. Two of Hollywood’s biggest names have thrown their weight behind Skydance’s bid for Paramount. The endorsements from James Cameron, whose film Titanic is the biggest hit in Paramount’s history, and Endeavor chief executive Ari Emanuel come as exclusive talks end without a deal and Sony and private equity group Apollo push a rival $26bn offer.

5. Warren Buffett said Greg Abel should have the final decision on investments at Berkshire Hathaway, making clear that his successor will have authority over not just takeovers but the sprawling conglomerate’s mammoth stock portfolio as well. Here’s more on Berkshire’s annual general meeting in Omaha on Saturday, where Buffett gave his most direct answer yet on how responsibilities will be doled out when he is no longer in charge.

FT Magazine

Since Taiwan became a democracy in the early 1990s, most of its people have resisted the dictum that they are part of China. But Chinese President Xi Jinping has made it clear he will not accept such self-determination. The People’s Liberation Army, fed on the proceeds of a 40-year economic boom, has grown into a force that vastly dwarfs that of its neighbour. As the threat of a Chinese invasion intensifies, one soldier is waging his own battle on defeatism.

We’re also reading . . . 

• K-pop: A star producer’s battle with entertainment company Hybe has captured the imagination of young Korean women inspired by her criticism of her male superiors.

• Elon Musk: There is lots to criticise about the Tesla boss, but working out wrong from right is not as easy as many people think, writes Jemima Kelly.

• How Goldman Sachs grew up: Lloyd Blankfein, Hank Paulson, David Solomon and others on what has changed since its seminal listing in 1999.

Chart of the day

Shell sold to Canada’s largest oil sands companies millions of carbon credits tied to CO₂ removal that never took place, raising new doubts about a technology seen as crucial to mitigating greenhouse gas emissions. The subsidy scheme in Alberta allowed the oil major to register carbon credits equivalent to twice the volume of CO₂ captured.

Take a break from the news

What do Michelin stars say about the world? FT columnist Janan Ganesh explains what geopolitics and fine dining have in common, and how the west’s relative loss of power is reflected in the restaurant guide.