Good morning. We start today with a scoop that Xi Jinping personally warned Vladimir Putin against using nuclear weapons in Ukraine, suggesting Beijing remains concerned about Russia’s war even as it offers tacit backing to Moscow.
Xi’s warning was delivered during the Chinese leader’s state visit to Moscow in March. Since then, Chinese officials have privately taken credit for convincing the Russian president to back down from his veiled threats of using a nuclear weapon against Ukraine.
Russia’s invasion is heavily reliant on support from China, which has helped Moscow to navigate economic sanctions that have excluded it from critical global markets and supply chains.
But the war is threatening to scupper China’s efforts to drive a wedge between Europe and the US, according to a senior Chinese government adviser.
A Russian nuclear strike on Ukraine or one of its European allies would risk turning the continent against China, the adviser said, while sustained pressure from Beijing to prevent such an act might help improve relations with Europe.
Shi Yinhong, professor of international relations at Renmin University in Beijing, said that “Russia has never and will never have China’s approval for using nuclear weapons”. If Russia used nuclear weapons against Ukraine, “China will further distance itself from Russia”, he added.
China-Europe relations: The war in Ukraine exposes the flaws in Beijing’s efforts to understand Europe, writes Yuan Yang.
War in Ukraine: Ukraine’s president Volodymyr Zelenskyy warned that Russia might be preparing to blow up part of the Zaporizhzhia nuclear power plant as Kyiv’s military reports gains in its counteroffensive.
Do you think deterring Putin will help China repair its damaged ties with Europe? Email me your thoughts: benjamin.wilhelm@ft.com.
Here’s what else I’m keeping tabs on today:
US-China relations: US Treasury secretary Janet Yellen will arrive in Beijing and spend four days meeting top Chinese officials and US business leaders.
Meta’s new app: Facebook’s parent company is expected to launch Threads, its new social media app, in a direct challenge to Twitter.
Economic data: S&P Global releases construction purchasing managers’ index (PMI) for the UK and services PMI for the US, while factory orders figures are due from Germany.
Five more top stories
1. Federal Reserve officials signalled they intend to resume interest rate increases amid a growing consensus that more tightening is needed to stamp out high inflation in the world’s largest economy. Read more on the Fed’s outlook on the US economy.
Go deeper: What explains inflation’s persistence in the face of aggressive rate rises?
2. PwC tipped off Google on the timing of a controversial Australian tax law, based on inside information gleaned by one of the accounting firm’s partners. The tech company is the first to be named as a recipient of confidential information in the auditor’s widening scandal.
3. South Korea will allow new entrants to the banking sector for the first time in 30 years, as the government seeks to boost competition in an industry dominated by five lenders. President Yoon Suk Yeol earlier this year accused the country’s banks of enjoying a “feast” of bonuses amid rising interest rates.
4. Sir David Adjaye has stepped back from several roles and projects after an FT investigation revealed that three female former employees have accused the renowned architect of serious misconduct, including sexual assault. Read the full story.
5. US drugmaker Moderna has struck a deal to make messenger RNA drugs for use in China, despite the tensions between Washington and Beijing. The biotech said that it had reached an agreement with authorities in Beijing to research, develop and manufacture drugs that would be “exclusively for the Chinese people”. Here are more details on the deal.
News in-depth
Pan Gongsheng, the new head of the People’s Bank of China, is set to take the helm at an uncertain moment for the world’s second-largest economy — and for the central bank itself. The bank will be fighting to reset China’s post-Covid recovery, and will be doing so with its own authority weakened after a regulatory shake-up. But Pan’s appointment was welcomed by market participants because of his extensive experience in the sector and western contacts and training.
We’re also reading . . .
Japan Airlines: In an effort to ditch the environmentally unfriendly suitcase, passengers travelling with Japan Airlines can rent outfits by season, size, formality and colour scheme.
Electric vehicles: Upstart carmaker VinFast is hoping to become Vietnam’s answer to Tesla, but the company has hit bumps in the road.
Avoiding the evils of AI: Having botched things with social media, let’s hope we can do better with AI, writes Gillian Tett.
Chart of the day
As electric vehicles gain popularity worldwide, carmakers are constantly vying for anything that will give them the edge over rivals. After announcing that it expected to produce its “solid-state” batteries as early as 2027, can Toyota grasp this holy-grail battery technology that has long eluded the industry?
Take a break from the news
Humanity today is flirting with disaster in the ways we manage water, both on land and at sea. What is to be done? Three new books seek to help recalibrate our relationship to the water that sustains us.
Additional contributions by Tee Zhuo and David Hindley
Source: Economy - ft.com
