Good morning. We begin today with a mysterious development in Chinese elite politics. China has announced the replacement of foreign minister Qin Gang, one month after the former high-flying favourite of President Xi Jinping abruptly vanished from public view.
China’s state news agency Xinhua said on Tuesday that the rubber-stamp parliament, the National People’s Congress, had removed Qin and replaced him with the country’s most senior diplomat, Wang Yi, his predecessor as minister. The terse statement did not give further details.
The affair has threatened to become an embarrassment for Xi, who analysts say handpicked Qin for the foreign minister role late last year.
Qin abruptly vanished from public view on June 25 as he was preparing to attend a meeting of south-east Asian nations. The foreign ministry said at one point that his absence was due to “health reasons”, but it subsequently refused to give further explanation despite being constantly questioned about the matter at its daily press briefings.
Jude Blanchette, a China expert at the Center for Strategic and International Studies think-tank, said the situation was “unique” because Qin was a trusted subordinate of Xi.
“This doesn’t mean Xi’s power has been shaken, just that he occasionally makes a bad bet,” said Blanchette. Read the full story.
Confusion around Chinese diplomacy: Analysts, diplomats and officials are trying to make sense of Qin’s sudden disappearance, which threatens to complicate US efforts to revive dialogue and China’s bid to win back investors.
What are your thoughts on Qin’s shock departure? Email me: benjamin.wilhelm@ft.com. And check out China Focus, the FT’s hub that brings together our best work on Asia’s biggest economy.
Here’s what else I’m keeping tabs on today:
Economic data: Australia releases its June consumer price index.
Results: Earnings season continues with reports from companies including Nissan, Rio Tinto, Airbus, Deutsche Bank and Meta.
Blinken in the Pacific: US secretary of state Antony Blinken dedicates a new US embassy in Tonga, a Pacific island deemed strategically important by Washington as it competes with Beijing for influence in the region.
Storm season: Super Typhoon Doksuri is hurtling towards east Asia and is likely to be the most powerful typhoon to land in China so far this storm season. In Taiwan, authorities suspended annual military drills and warned that Doksuri could be the most damaging typhoon to hit the island in nearly four years. (Reuters)
Five more top stories
1. PacWest, one of the hardest-hit lenders from the regional banking crisis, has agreed to merge with Banc of California. The deal is a sign that the fallout from the collapse of Silicon Valley Bank continues to reverberate across the industry. Here are more details on the merger.
2. Exclusive: US national security officials are scrutinising an Abu Dhabi sovereign wealth fund’s planned $3bn takeover of New York-based Fortress Investment Group, amid concerns in Washington over the UAE’s ties to China, people close to the situation told the FT. Read the full story.
3. Spotify slumped to a €302mn loss last quarter as the group racked up costs axing podcasts and cutting jobs, overshadowing the record number of new users signed up during the period. After investing heavily in an ambitious push into podcasts during the pandemic, Spotify has retreated over the past year as investors have grown impatient with the strategy.
Alphabet results: Google parent Alphabet’s revenues surpassed analysts’ forecasts in the second quarter, sending shares up in after-hours trading after showing signs of resilience in its digital advertising business
4. The risk of a crash landing for the global economy has receded, the IMF’s chief economist said as the multilateral lender predicted 3 per cent growth this year. But Pierre-Olivier Gourinchas cautioned that advanced and emerging economies were not “out of the woods yet”. Read the full interview with Gourinchas.
5. GlobalFoundries has criticised subsidies that Berlin is planning to offer TSMC, the world’s biggest contract chipmaker, for a planned plant in the east German city of Dresden. The US chip company’s chief executive warned the funds to its Taiwanese rival would distort competition, he told the FT.
Explainer
At a highly anticipated meeting of Xi Jinping’s 24-member politburo on Monday, China’s leaders produced a statement calling for strong “countercyclical” measures to support the world’s second-largest economy. While markets welcomed Xi’s acknowledgment of growth headwinds, the readout from the meeting provided few details. The FT has parsed the Politburo’s statement for clues on what Beijing’s economic measures mean in practice.
We’re also reading . . .
Sam Altman interview: The OpenAI chief is on a collision course with regulators. He says the public sector has a “lack of will” to lead innovation.
Fentanyl: In less than a decade, Mexico’s drug cartels have created a highly profitable business to feed US demand for the synthetic opioid.
Oppenheimer: Christopher Nolan’s atomic bomb biopic is a great film about the wrong man, writes Janan Ganesh.
Chart of the day
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Today’s India is an “illiberal democracy”. Freedom House, the US think-tank, puts it at the same level as Hungary, but it rates the components differently: political rights, notably electoral politics, are healthier in India than in Hungary, but civil rights are weaker. Worse, the latter have deteriorated substantially under BJP rule since 2014. Martin Wolf breaks down India’s illiberal trend in his latest column.
Take a break from the news
The marketplace is awash with wireless earbuds at every price point, but these ones don’t play music. The QuietOn earbuds provide glorious silence in the most unobtrusive way possible, making them perfect for bedtime or long-haul flights. This week’s HTSI features these “sleep buds” and other essential gadgets.
Additional contributions by Tee Zhuo, Darren Dodd and David Hindley
Source: Economy - ft.com
