Aurelia Butler

The F-22 Raptor fighter that flew from Virginia to South Carolina on Saturday and downed an alleged Chinese spy balloon with a missile strike brought high drama to the latest crisis in US-China relations.But hopes for a possible stabilisation of the rocky relationship had already been punctured after the balloon — which Beijing insisted was a wayward “civilian unmanned airship” collecting meteorological data — flew over North America in the week that US secretary of state Antony Blinken was preparing to go to China to meet President Xi Jinping.Blinken cancelled his visit on Friday, saying the balloon, which transfixed America in its flight across the country, had violated US sovereignty. In a rare apology, Beijing expressed “regret” and said the meteorological balloon strayed off course due to high winds. The US rejected the explanation, saying it was clearly a spy balloon.As US navy ships sailed to the coast off South Carolina to recover the debris for analysis, Beijing said the use of force was a “clear overreaction and a serious violation of international conventions”.Bonnie Glaser, a China expert at the German Marshall Fund, said the Biden administration had concluded that China had undertaken a “hostile act” and that the impact on the relationship “should not be underestimated”.“The window of opportunity to put China-US relations ‘back on the track of steady development’, which Biden and Xi agreed to do in Bali, may be missed,” she said, referring to the leaders’ meeting held at the G20 in November.One person familiar with the US administration’s thinking said China had “completely undermined” efforts to set “a floor” under the relationship. “When China is so flagrantly undermining it in a such a visceral way for the American people . . . it really undercuts what Blinken was setting out to do,” the person said. While the US was committed to trying to calm the relationship and advancing common global interests, it would “take two to tango” for that, the person said. “Our goal remains the same . . . but we need to see sincerity.”Evan Medeiros, a former top White House Asia adviser, said the two countries were now in “jump-ball territory”, meaning it was unclear how things would unfold but that much would depend on Beijing’s next steps.“They have been contrite because they are so obviously at fault, but if they now play the indignant card, we will enter very contentious ground,” said Medeiros.One question that could suggest how China will respond is whether Xi approved the mission or was unaware of it. In 2011, the US assessed that then Chinese president Hu Jintao was unaware that the PLA had tested a stealth fighter hours before he met then US defence secretary Robert Gates.The person familiar with the administration’s thinking said the US did not know if Xi was aware of the mission.Some experts believe the regret that came from China on Friday suggested that Xi had been caught off guard. One theory is that the Chinese president would have been unlikely to approve such a mission at this time because he is on a charm offensive to woo business back to China and needs to secure better relations with Washington.Dennis Wilder, a former top CIA China analyst, said the incident could lead to greater tension, particularly if Washington confronted Beijing with iron-clad evidence. “There’s a danger of more aggressive Chinese surveillance of US reconnaissance flights that fly daily over the East and South China Seas, increasing the chances of an accidental collision.” Blinken said that flying the balloon over the US had been “detrimental to the substantive discussions that we were prepared to have” on his visit. But Chinese officials were already sceptical about US willingness to take measures, especially after Washington recently agreed more technology controls aimed at China and struck a base-sharing deal with Manila.The balloon episode also comes as Chinese officials brace for a possible visit to Taiwan by US House Speaker Kevin McCarthy, a Republican lawmaker. The PLA launched its biggest-ever exercises around the island in August after then Speaker Nancy Pelosi visited Taipei. “If McCarthy visits Taiwan everything goes back to zero,” said one former Chinese diplomat.In Washington, Biden came under pressure from Republicans to shoot down the balloon even before it reached the Atlantic. The US has not said if the balloon transmitted information back to China in real time during the flight or whether the PLA would have had to retrieve the balloon to access any intelligence it had collected.

Wu Xinbo, director of the Center for American Studies at Fudan University, said the situation had been inflamed by members of Congress. “The balloon issue was played up by hawkish Congressmen to stop Biden gradually improving relations with China,” said Wu.Wu argued that the US would have taken action “much earlier” if it really was a spy craft. US officials have said that the balloon was not shot down over land to avoid potential casualties on the ground and said they had gleaned intelligence as it flew over the US.Medeiros said that while China had been relatively measured in its response, much would depend on whether Xi came under pressure as Chinese citizens watched the video of the incident.“Maybe Xi Jinping will change his tune and feel pressure to respond assertively . . . Then we’re off to the races,” he added.Follow Demetri Sevastopulo on Twitter More

Truss’s tenure was cut short last year after her largely unfunded mini budget and tax cuts pushed up borrowing costs and mortgage rates, sent the pound tumbling and shattered Britain’s reputation for financial stability. Writing in the Sunday Telegraph newspaper in her first major foray into politics since the abrupt end to her premiership after just over six turbulent weeks in power, Truss wrote she believed her recipe for Britain by cutting taxes and removing some regulation was the right one.But she was not successful, she wrote, because she had underestimated “the blob of vested interests” and orthodoxy.”I am not claiming to be blameless in what happened, but fundamentally I was not given a realistic chance to enact my policies by a very powerful economic establishment, coupled with a lack of political support,” she wrote.”I assumed upon entering Downing Street that my mandate would be respected and accepted. How wrong I was. While I anticipated resistance to my programme from the system, I underestimated the extent of it.”She blamed the reaction not only on what she described as the left-leaning orthodoxy of the economic establishment but also on liability-driven investments (LDI), which pension funds use to cover their obligations. LDI’s were at the centre of the market turmoil following her mini-budget.Truss also said she had underestimated “the resistance inside the Conservative parliamentary party to move to a lower-tax, less-regulated economy” and a drive on the global stage to “limit competition” between major economies.”As I had spelled out during the leadership campaign, I wanted to go for growth … But this was not in line with the instinctive views of the Treasury (finance ministry) or the wider orthodox economic ecosystem.”Grant Shapps, business minister, said everyone wanted lower taxes but Prime Minister Rishi Sunak’s government had to focus on reducing debt, bringing down inflation and boosting growth first.Britain’s opposition Labour Party said it was time for a change of government.”The Conservatives crashed the economy, sank the pound, put pensions in peril and made working people pay the price through higher mortgages for years to come,” said Rachel Reeves, Labour’s financial policy chief. “After 13 years of low growth, squeezed wages and higher taxes under the Tories, only Labour offers the leadership and ideas to fix our economy and to get it growing.” More