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Good morning. Our top story today takes a closer look at China’s military spending, which experts believe far outstrips the official defence budget announced this week at the annual session of the rubber-stamp parliament.
China’s defence expenditure will increase by 7.2 per cent in 2024, the same pace as last year. But analysts say that the figure masks a much bigger boost for military capabilities as leader Xi Jinping seeks to transform the People’s Liberation Army into a more potent force while lowering the cost of weapons acquisition as China’s economic slowdown bites.
“Xi has been talking about the need to accelerate defence modernisation and pushing for reforms that enable the economy to support a wartime footing. That requires more rather than less resources,” said Tai Ming Cheung, director of the Institute on Global Conflict and Co-operation at the University of California San Diego.
Cheung said that after extensive research and development over the past three decades, production of a number of systems such as missiles, fighter jets and warships was now moving into higher gear.
This suggested a need for larger spending outside the official defence budget, which does not include military R&D, some procurement, paramilitary forces and the coastguard. “I would assume that it is at least a double-digit [year-on-year] rate of growth overall,” he said.
Here’s the full report from Kathrin Hille on how China is transforming its military-industrial complex to get more bang for its buck.
And here’s what else I’m keeping tabs on today:
Five more top stories
1. Nikki Haley has ended her campaign for president but stopped short of endorsing her rival Donald Trump. The decision came a day after Trump defeated Haley in all but one of the Republican primary contests held on Super Tuesday. Haley congratulated Trump on his primary victories but said Trump still needed to “earn the votes” of her supporters.
2. A Russian ballistic missile struck “very close” to Ukraine’s President Volodymyr Zelenskyy and Kyriakos Mitsotakis while the pair were visiting the port of Odesa yesterday, according to the Greek prime minister. Five people were killed by the missile, Ukraine’s navy spokesperson Dmytro Pletenchuk told the FT, which struck a few hundred metres away from where the two leaders’ motorcade was.
3. The campaign of attacks by Yemen’s Houthis on commercial ships claimed its first fatalities yesterday when an attack on a Barbados-flagged dry bulk carrier in the Gulf of Aden left at least two seafarers dead. The attack seems likely to have been a result of the ship’s previous ownership by US private equity group Oaktree Capital, which sold the boat days ago.
4. OpenAI has hit back at Elon Musk, releasing emails to show that he supported its plan to create a for-profit entity and raise billions of dollars — decisions at the heart of the Tesla boss’s lawsuit against the artificial intelligence start-up that he co-founded. Here’s more on the deepening feud over OpenAI.
5. ExxonMobil has filed for arbitration to claim rights associated with a valuable oil find off the coast of Guyana that is central to rival Chevron’s planned takeover of Hess. The move threatens to derail the $53bn deal, which is the biggest acquisition in Chevron’s history.
The Big Read
PDD, the Chinese owner of ecommerce site Temu, is engaged in what might be the fastest and most ambitious retail expansion in history. The faster, leaner, cheaper version of Amazon has spread from China to 49 countries in under two years. While Temu’s rapid growth has made it a darling of Wall Street, its finances are a black box and its operations shrouded in secrecy. FT investigative reporter Dan McCrum delves into the mysterious rise of PDD and why investors are willing to tolerate such opacity.
Go deeper into the mystery in the latest FT Film, “The rise of Pinduoduo and Temu: profits and secrets”
We’re also reading . . .
China’s invisible women: In an era of shrinking population, the political underrepresentation of women in China is not good for the country’s sustainable development, writes Lijia Zhang.
Putin’s spies: Intelligence officers say that Russia has aggressively relaunched its spy war with the west. Espionage activities are “as high or even higher than during the cold war,” said one official.
Diplomacy race: China has a diplomatic advantage over the US in crucial developing nations, writes Ryan Neelam of the Lowy Institute.
Chart of the day
Donald Trump’s landslide Super Tuesday win underscored the wide support he enjoys among Republicans. But the results also revealed sore spots for Trump — for example, he has underperformed his pre-election polling averages in eight states out of the nine where a significant number of polls have been conducted.
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Take a break from the news
Refik Anadol watched Ridley Scott’s 1982 neo-noir classic Blade Runner at a tender age. A key scene between the film’s android leads imprinted what would become the Turkish artist’s life’s work: exploring the apparently infinite terrain of what a machine imbued with “deep learning” can do with the artefacts of both personal and collective memory.
Additional contributions from George Russell and Gordon Smith
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Source: Economy - ft.com
