Aurelia Butler

Beijing accuses EU of risking global supply chains, COP26 agreement sets new rules for limiting emissions and the FT’s Andy Bounds explains Article 16 and Northern IrelandYour browser does not support playing this file but you can still download the MP3 file to play locally.Read a transcript of this episode on FT.comBeijing has accused the EU of risking damage to world supply chains by throwing up regulatory and trade hurdles to foreign businesses, and the COP26 UN climate summit in Glasgow led to an agreement among 197 countries on new rules for limiting greenhouse gas emissions. Plus, the FT’s EU correspondent, Andy Bounds, explains Article 16 and why the Brexit deal could unravel over Northern Ireland. China accuses the EU of threatening global tradehttps://www.ft.com/content/9c9dbc9e-1d33-4e41-9c79-b0df51cd678eCOP26 agrees new climate rules but India and China weaken coal pledge – with Emiliya Mychasuk https://www.ft.com/content/c891d4af-f80b-48f0-8b6f-a8763655c936Northern Ireland Brexit deadlock: what is Article 16 and what happens if it is triggered? – with Andy Bounds https://www.ft.com/content/b09a58c0-27fb-4453-a6a0-1f2cd74b9ea2Premier League closes in on record sale of US TV rightshttps://www.ft.com/content/1cb410ac-983d-43da-bd1e-e4faa808d157The FT News Briefing is produced by Fiona Symon and Marc Filippino. The show’s editor is Jess Smith. Additional help by Peter Barber, Gavin Kallmann and Michael Bruning. The show’s theme song is by Metaphor Music. The FT’s global head of audio is Cheryl Brumley.  See acast.com/privacy for privacy and opt-out information.Transcripts are not currently available for all podcasts, view our accessibility guide. More

President Alberto Fernández’s centre-left coalition was on track to lose its senate majority in midterm elections, as Argentines punished his Peronist party in the face of spiralling inflation and rising poverty. Together for Change, the conservative opposition coalition, was narrowly ahead in most races nationwide in initial results in elections on Sunday for half of the lower house and one-third of the Senate. This included an important lower-house contest in Buenos Aires province, home to nearly 40 per cent of the electorate and a traditional Peronist stronghold.A defeat in the Senate would complicate the government’s position and probably consign the president “to lame duck status”, said Jimena Blanco, Americas director at Verisk Maplecroft, a risk consultancy. She added that a loss would represent “an unprecedented position of weakness”.Fernández insisted in a television address that this was “the end of a very difficult period” for Argentina after the country endured one of the world’s longest lockdowns that has crippled the economy. The president vowed to present an economic plan to congress in the first week of December and reach a “sustainable” agreement with the IMF on rescheduling $44bn of debt, most of which comes due for payment next year and in 2023.“In this new stage, we will deepen our efforts to reach a sustainable agreement with the IMF. We must clear the uncertainties that come with this sort of unsustainable debt,” Fernández said.Inflation is running at an annual rate of 52.1 per cent, according to the latest official data, and 40.6 per cent of people were living in poverty in the first half of 2021, up from 35 per cent when Fernández took office.Cristina Fernández de Kirchner, a towering Peronist figure who served as president from 2007 to 2015, was notably absent on Sunday night. Kirchner is vice-president in the current administration and announced she would not be making an appearance for health reasons after early exit polls showed signs of a centre-left defeat, including in her family’s political stronghold of Santa Cruz province.Ignacio Labaqui, a senior analyst at Medley Global Advisors, said the most important question facing Fernández was if he would “address the deep imbalances that the Argentine economy faces”. This included whether the government would deal with high state subsidies and a fiscal deficit financed by printing money or carry on for two more years without addressing the underlying economic challenges. The midterms are seen as an early indication of the opposition’s strength as it gears up for a presidential race in 2023. The dire state of the economy has also weakened the two-party system and led to a surge in support for more extreme candidates. One standout performance in the city of Buenos Aires was Javier Milei, a 51-year-old outsider who secured 17 per cent of the vote and is likely to secure two congressional seats for the Freedom Moves Forward coalition.

A self-styled “dynamic anarcho-capitalist”, Milei chose a famous music venue on Sunday to welcome thousands of his supporters as the results were announced.Milei’s libertarian platform includes abolishing the central bank, free love and breaking up the “caste system” in Argentine politics.“Help me change this country,” he called from the main stage to raucous applause at Luna Park Stadium.Allies of Horacio Rodríguez Larreta, the popular Buenos Aires city mayor, won races in the capital and the surrounding Buenos Aires province that he hopes will make him favourite to lead the opposition in 2023. More

When we talk about risk in the context of exchanges, it is important to differentiate between emerging risks and immediate risks — and to remember that we do get some notice of the former. Immediate, or daily, risks can arise as early as tomorrow and range from the manageable to the significant. But, because of the more immediate danger, people tend to focus too much on them. This is something you can avoid if you take a bird’s-eye view — and build up a more holistic picture. It is possible to recognise patterns and correlations, and combat many of these threats.By contrast, emerging risks can be more medium or long term — and their effect all the more profound. So, first, let us consider the threats we can see emerging, and then return to daily risks.We define emerging risks as new or unfamiliar threats that will come in new or unfamiliar conditions. Any well-run organisation will discuss the implications that these emerging risks have for their strategy, and whether they can be addressed early. Often, though, the timeframe of emerging risks can be longer than the typical corporate strategic cycle, of three years.

For example, take artificial intelligence and the threats that may arise from quantum computing. Future computing power could mean that encryption standards — such as 64-bit — are not safe any more. It might take five years; it might take longer. But it is a topic that needs to be addressed now. Other emerging risks include uncertainty over future monetary policy — in particular, concerning the impact of a turning interest rate cycle. Also, the new requirement for sustainability — this is what everyone is talking about but how it will manifest itself is not yet fully clear. Then, last but not least of these emerging risks is competition from large technology companies. They are already starting to invest in stock exchange players to get access to data, and to financial technology. You might have read Google’s announcement: it has invested $1bn in CME Group as part of a deal in which the exchange operator will shift more of its trading operations into Google’s cloud data centres. But the result might have a negative effect: the crowding out of competition. Fewer players in the market could mean less competition and less specialisation.Immediate risks are much more apparent. That means they can be managed using existing controls and mitigation measures, although these require continuous investment.

For example, for exchange players like us, there are daily risks to operations and security, such as the outage of a trading system. Third parties also bring cyber security risks — if a supplier gets hacked.Similarly, we have immediate risks in areas of credit — for example, the loss of cash collateral. Then, there is the risk of non-compliance with EU and US regulations and employee conduct — a topic that has become prominent in the past few years. Legal risk can also include unforeseen loopholes, such as a custodian default not being covered by terms and conditions. Finally, the other daily risk we care about is the unlevel playing field: the different regulatory treatment of newcomers and incumbents. New trading platforms — for crypto assets and other securities — do not have the same conversations as we do in terms of regulation, so they can develop rapidly. They do not face the strong regulation that we, as a critical infrastructure provider, have to comply with. For us, the use of these platforms brings a risk of disintermediation — we could lose touch with our customers.It is important that we achieve a balance between these two worlds. On one hand, we have a business that is highly regulated and, on the other hand, we want to march into a future that is quick and innovative. The art is bringing those two worlds together without killing innovation. Which of these is the main type of immediate risk, for us? Security — the external threat from cyber attacks. We don’t want to play down financial risk and market risk but they can be managed much more easily. External technology and cyber security is a different angle.

Security: a daily risk © Getty Images/Westend61

We do have several cyber security projects running but it is not enough to conduct a project, close that project and say “the world is good!”. It requires continuous investment in security because the external threat changes — and changes fast. We started our state of the art security centre five years ago but we have to continuously invest. We have been making an ongoing investment in ransomware protection and mitigation because it is a complex topic requiring a long term focus, and one that will evolve as the threat evolves. Another long-term investment that exchanges need to make is integrating security into their IT architecture. You can program your technology in a flexible way so that, if you later realise you need another layer of protection, you can add it. But you need to have the system architect sitting next to a programmer and a risk guy. That way, they can challenge each other and build for the next five-to-seven years.Jochen Dürr is chief risk officer and a member of the executive board at the Swiss Infrastructure and Exchange (SIX) Group More

Joe Biden and Xi Jinping will discuss ways to prevent tensions from spiralling into conflict when the US and Chinese presidents hold a virtual meeting on Monday amid rising concern about Taiwan and Beijing’s nuclear arsenal.The two leaders have held two calls this year but people familiar with the virtual meeting said both sides were lowering expectations about outcomes from the discussion, which is not being billed as a “summit”.Jake Sullivan, national security adviser, last week said the US and China were in a “stiff competition” but there was “no reason that competition has to turn into conflict”. He said both sides had to make sure that was the case.The biggest hotspot is Taiwan. Washington is alarmed by China flying warplanes into Taiwan’s air defence identification zone. Beijing worries that Biden may be weakening the “one China” policy under which the US has recognised Beijing as the sole seat of government in China since 1979.In a speech to Asia-Pacific leaders last week, Xi warned other countries to avoid the “confrontation and division of the cold war”. His comments came two months after the US, the UK and Australia created a security partnership to help Canberra get nuclear-powered submarines. The move was designed to help it bolster its defences against China and co-operate more with the US.Underscoring the rising concern about Taiwan, Peter Dutton, the Australian defence minister, on Friday said it was “inconceivable” that Canberra would not support the US in any campaign to defend Taiwan against China.“The fact that he said it out loud is new and shows how much China’s coercion is changing security relationships everywhere in Asia,” said Michael Green, a former senior White House Asia adviser to George W Bush.In the virtual meeting, Biden is also expected to raise the issue of nuclear weapons, after the Pentagon warned that China would quadruple its nuclear warhead arsenal this decade. But China has shown no interest in nuclear stability talks, partly because the US has many more weapons.The US has many concerns about China, from its repression of Uyghurs and crackdown on pro-democracy activists in Hong Kong to frustration with its trade practices. China wants the US to stop meddling in its “core” interests and to return US-China relations to the days of a less antagonistic era.“Beijing is eager to use the summit to signal to its domestic audience and other countries that the US-China relationship is back on track,” said Bonnie Glaser, a China expert at the German Marshall Fund. “But the Biden administration wants to avoid a scenario in which the Chinese spin this summit as a reset of the relationship.”The meeting will take place as both leaders face big political events over the coming year. Xi will host the Beijing Winter Olympics in February and is preparing to secure a third term as party general secretary in November. Biden and the Democrats are trying to avoid losing their majorities in Congress in the November midterm elections.Myron Brilliant, head of international affairs at the US Chamber of Commerce, said “constructive pragmatism at the highest levels” was needed to make any progress, but added that it was unclear how that would be translated into concrete actions given the political constraints. “The Chinese may want to ratchet the temperature down,” Brilliant said, “but are they willing to make deliverables on issues of importance to the Biden administration? This is a big question mark.”Zhu Feng, a foreign relations expert at Nanjing University, said he did not expect any tangible progress from the meeting because of what he described as the “increasingly polarised domestic politics” in both nations.“What we can realistically expect from the summit is for the two sides to understand each other’s bottom line again,” said Zhu.Biden has taken a range of actions to address challenges from China, from bolstering alliances in Europe and Asia and imposing sanctions on Chinese officials to describing the repression of Uyghurs as “genocide”. He has faced some criticism about whether he is on the right track, given that Xi has not changed course. But US officials say Biden is more focused on shaping the international landscape in ways that will counter China.

Carolyn Bartholomew, chair of the US-China Economic and Security Review Commission, said it was also important to put more onus on Xi, not Biden, to make real changes if he was serious about having a better relationship. “Xi must treat this meeting as an opportunity to be respectful and to make concrete commitments to address a wide range of concerns shared by the US and other countries,” said Bartholomew. “[This includes] China’s increasing aggressiveness toward Taiwan and Japan, continuation of unfair economic and trade practices such as coercion and subsidies, human rights abuses against Uyghurs and other ethnic minorities, and destruction of basic freedoms in Hong Kong.” But highlighting the tense state of the relationship, Wu Xinbo, dean of the Institute of International Studies at Fudan University, said Washington should not expect much from an increasingly confident Beijing.“The Biden administration’s China policy has so far failed to work out and the US has realised that it needs to adjust,” said Wu. “I expect China to stick to its bottom line and press the US to change.” Follow Demetri Sevastopulo on Twitter  More

Beijing has accused the EU of risking damage to world supply chains by throwing up regulatory and trade hurdles to foreign businesses, warning “discriminatory” practices could strain the global recovery from the coronavirus pandemic. The Chinese ambassador to the EU said the European Commission’s drive to sharpen its trade toolkit was seen by some businesses as heralding “more inward-looking and unilateral measures” and the creation of “new trade barriers”. “The moves taken by the EU will also have global consequences, and such moves might create further stress to the global supply and industry chain,” said Zhang Ming in an interview with the Financial Times. The ambassador also attacked a recent EU-US deal on steel and aluminium tariffs that seeks to restrict imports from more carbon-intensive producers including China, saying it would “aggravate the tension” in industrial supplies and worsen inflationary pressures. The EU is engaged in what some member states argue is a long overdue effort to bolster its economic self-reliance and respond to unfair trade and investment practices spearheaded by Beijing, such as preferential treatment for state-owned enterprises and forced technology transfers. Among the lengthening list of EU tools are an anti-subsidy instrument, sharpened trade defences and a proposed due diligence mechanism aimed at unearthing labour and environmental abuses in supply chains. The EU in September inaugurated a new Trade and Technology Council in a bid to deepen co-operation with the US in cutting-edge sectors, such as semiconductors and green technology. Zhang declared the EU’s push for strategic autonomy was “in line” with the union’s status as a global power and said that Beijing supported the initiative. But foreign enterprises argued a number of EU policies could have unwelcome side-effects, he said. “They cannot help with the stability of global supply and industrial chains after the pandemic as well as the world economic recovery at large.” He called on the EU to stick to World Trade Organization rules, contending that unilateral measures would distort investment in Europe and increase prices. “Such moves deviate from the original goals of trade and economic policies and are also a distortion of market principles,” said Zhang.EU moves ‘might create further stress to the global supply and industry chain’, said Zhang Ming, Chinese ambassador to the EU © Bert Van den Broucke/Photonews/Getty In the view of some businesses, he said, “there has been an increasing amount of tailor-made tools targeting other countries and their enterprises. These tools are discriminatory and are also a violation of the market principle of fairness and justice.”The EU has been divided over how hard it should push back against the Chinese Communist party’s aggressive model of state capitalism, as it seeks to position itself between the US and China. After concluding an investment agreement last December, Brussels put it on ice this year after Beijing imposed sanctions on several members of the European parliament. That followed EU sanctions responding to the treatment of Muslim Uyghurs in Xinjiang.Zhang said China was ready to implement the investment deal, accusing Europe of being the obstacle to ratification. The EU should not permit “political manipulation” to get in the way, he said. “We stand ready to co-operate with partners from the European side to explore possible approaches to achieve the ratification of the agreement.”Nato has also hardened its rhetoric on China in recent months, describing the country as a “systemic challenge”. Its secretary-general Jens Stoltenberg has said countering security threats from China will be an important part of the western alliance’s future rationale. Zhang said China hoped that Nato “can stay within its traditional areas of functions and geographical parameters”, adding: “Do not cross the boundary with China as an excuse.” What the international community should worry about, he continued, was the Aukus defence pact between the US, Australia and the UK. “It has the potential to intensify the risks of nuclear proliferation and might lead to a new arms race,” he said. “It is not in the benefit of global and regional peace and stability.”Asked about US analysis suggesting China is seeking to quadruple its nuclear arsenal, Zhang pointed to the huge size of the American stockpile, saying it was 20 times as large. He also dismissed reports of Chinese tests of a nuclear-capable hypersonic weapon, saying the tests were to verify reusable spacecraft. “We will not pour resources into an unnecessary arms race.” More

WASHINGTON (Reuters) -U.S. President Joe Biden’s economic advisers defended his policies on Sunday amid rising inflation that they said was a global issue related to the COVID-19 pandemic, not a result of the administration’s programs.U.S. consumer prices last week posted their biggest annual gain in 31 years, driven by surges in the cost of gasoline and other goods. Republicans have pounced on inflation worries, claiming that the increase reflects Biden’s sweeping spending agenda. “There’s no doubt inflation is high right now. It’s affecting Americans’ pocketbooks. It’s affecting their outlook,” Brian Deese, director of the White House National Economic Council, said on NBC’s “Meet the Press.” “But it’s important that we put this in context. When the president took office, we were facing an all-out economic crisis.”The United States is hardly alone in enduring a bout of stiff inflation, with the Organization for Economic Cooperation and Development showing inflation running high across its 38 member countries and oil prices quadrupling in the last 18 months as economies reopened from COVID-19 shutdowns. On Monday, Biden is scheduled to sign a $1 trillion bipartisan infrastructure bill that is expected to create jobs across the country by dispersing billions of dollars to state and local governments to fix crumbling bridges and roads, and expanding broadband internet access to millions of Americans. Treasury Secretary Janet Yellen and Deese in separate television appearances said they expect that measure, as well as the $1.75 trillion “Build Back Better” domestic spending and climate investment bill to help bring down inflation. “There’s an urgency to act,” Deese said on CNN.Deese said he was confident that House of Representatives Speaker Nancy Pelosi would bring the “Build Back Better” bill to a vote this week. That, however, will only be a first step as the Senate has not yet taken up the bill, and Democratic divisions could threaten its chances in that chamber.Senate Majority Leader Chuck Schumer in an open letter to fellow Democrats on Sunday said his chamber will not take up the bill until the House passes it. Congress faces an extremely crowded agenda in the month ahead as it also needs to avert an economically catastrophic debt default by the federal government and a partial government shutdown that would be politically embarrassing for Democrats.SLIDING APPROVALHigh inflation is eroding wage gains, adding to political risk for Biden, whose approval rating has been falling as Americans grow more anxious about the economy. Broadening inflationary pressures could also complicate the Federal Reserve’s communication. The Fed this month restated that high inflation is “expected to be transitory.””The problem is the Democrats are now saying we want to go all in with this massive tax and spending bill,” Republican Senator John Barrasso said on ABC’s “This Week.” “People are going to pay higher prices.”The White House regularly cites support for the Build Back Better plan from 17 Nobel laureates who say it will ease longer-term inflation.Biden’s $1.9 trillion American Rescue Plan stimulus package in March helped Americans weather the pandemic and today spending is strong and demand is strong, Yellen said on CBS’ “Face the Nation.” However, the supply of goods and of workers remains low, she noted, and the federal government is scrambling to unblock global supply chains affected by the pandemic.Yellen has said she expects prices to go back to normal by the second half of next year if the pandemic continues to wane.”The pandemic has been calling the shots for the economy and for inflation,” Yellen said. “And if we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do.”Biden and his top economic advisers have for months predicted that inflation would be a short-term problem. Asked on CNN’s “State of the Union” if they were wrong, Deese said, “No, I don’t think so” and pointed to the strength of the U.S. economic recovery.Former Treasury Secretary Larry Summers, a Democrat who warned in February the American Rescue Plan could fuel inflation, said on Sunday he supported both the infrastructure and Build Back Better bills because they make long-term investments.”We will sacrifice our country’s future …and we won’t make any meaningful contribution to reducing inflation, if we vote down this bill,” Summers said on CNN’s “Fareed Zakaria GPS.” More