Good morning. Jamie Dimon has warned that tensions between the US and China have upended the international order, making it more complex for business than during the cold war.
The JPMorgan chair was speaking at a banking conference in Shanghai, as fresh data showed the recovery of the world’s second-largest economy was slowing. Dimon also argued that “uncertainty” caused by Beijing could hit investor confidence.
“Hopefully, we can work out all these differences, you know, with China and America and what it is doing to other allies, relationships and things like that,” he said in comments behind closed doors.
Dimon’s first visit to mainland China in four years came as a contraction in Chinese manufacturing activity cast doubt over the country’s growth prospects, shaking regional equity markets against the backdrop of worsening relations with the US.
Meanwhile, the US-China geopolitical rift continues to impact the financial industry in both nations. Just earlier this week, Goldman Sachs’s private equity business in Asia said she has stopped trying to raise money in the US.
Related read: FT reporters detail how China’s economy has made a sluggish recovery six months after authorities began to roll back President Xi Jinping’s tough zero-Covid regime.
Here’s what else I’m keeping tabs on today:
Nato meeting: Foreign ministers will meet in Oslo to discuss the Ukraine war as recent evidence shows that Kyiv’s long-awaited counter-offensive is about to get under way.
Manufacturing data: Purchasing managers’ index figures will be released for Japan, China, the EU and UK.
Eurozone inflation: Falling inflation in France and Germany has boosted hopes that today’s eurozone inflation figures will show cooling prices.
Brics meeting: Foreign ministers will gather in Cape Town for geopolitical discussions. Ministers will also review applications of at least 20 nations as they consider increasing the size of the group. (The Japan Times)
Five more top stories
1. US House Speaker Kevin McCarthy predicted a bill to avert a damaging default would “overwhelmingly” clear a vote in the lower chamber of Congress as he raced to secure backing for the bipartisan deal. The vote today will mark a crucial moment for McCarthy and whether the US will hit the debt ceiling.
Go deeper: This helpful explainer details what is in the debt ceiling deal.
2. Bank of Japan policy shift risks causing eurozone bond turmoil, the European Central Bank has warned. If the BoJ ends its ultra-loose monetary policy Eurozone bond markets are at risk of a sell-off caused by a sudden retreat of Japanese investors, the ECB said.
3. A federal trial over Beijing’s alleged attempts to forcibly repatriate citizens began in Brooklyn on Wednesday. The case centres on a former New York police officer and two Chinese nationals accused of attempting to intimidate a Chinese dissident and his family in the US. Read the full story.
4. A Chinese fighter jet performed an “unnecessarily aggressive manoeuvre” near a US military aircraft that was flying over the South China Sea last week, the Pentagon said. Video footage of the incident — the latest in a number of similar encounters — was released as US defence secretary Lloyd Austin was en route to visit Japan, Singapore and India.
5. A failed North Korean satellite launch triggered air raid sirens and an evacuation order in Seoul yesterday, but the order was retracted about 10 minutes later after South Korean authorities admitted it was a “false alarm”.
Deep dive
Fearing a potential conflict in Asia, western companies are looking to move production out of Taiwan, but turning away from the self-ruled island will come at a high price for manufacturers. Explore how Taiwan became an indispensable economy for the production of everything from Chinese smartphones to US fighter jets in this visual story.
We’re also reading . . .
AI and the climate trap: The failures of global co-ordination on climate change offer lessons on artificial intelligence, writes Pilita Clark.
Chinese private equity: State-backed investors have poured money into western companies even as the political mood has shifted.
Into the bunker: A series of assaults has highlighted Russia’s vulnerability to blowback from its war on Ukraine.
Chart of the day
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Just as Singapore Airlines was giving employees an eight-month salary bonus after record profits, Hong Kong was giving away more than 4,400 free tickets for regional rival Cathay Pacific. Their financial divergence reflects Singapore’s post-pandemic success as Hong Kong struggles to recover.
Take a break from the news
. . . and meet the woman dressing Gen Z. Sofia Prantera created streetwear label Aries as a move into denim with a more high-fashion offering. In this excellent profile of Prantera, fashion writer Kate Finnigan explains how Aries gained a cult following with young people.
Additional contributions by Amy Bell and Tee Zhuo
Source: Economy - ft.com
