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Good morning. We start today with rising tensions between China and the US surrounding the planned trip by House Speaker Nancy Pelosi to Taiwan.
The 82-year-old Democrat is expected to land in Taipei tonight and ahead of her arrival Chinese fighter jets have ratcheted up operations close to the median line dividing the Taiwan Strait.
Military units across the People’s Liberation Army’s Southern Theater Command, which is in charge of the South China Sea and some Taiwan-related missions, have entered a status of high alert, according to military officials in two neighboring countries.
China also announced another series of war games in the South China Sea scheduled to last from this morning until Saturday night, following various drills last week.
Beijing issued a strong warning to Washington ahead of Pelosi’s trip to Asia that a stop-off in Taiwan, which China regards as sovereign territory, could provoke a military response.
US secretary of state Antony Blinken yesterday urged China to act responsibly and “not to engage in any escalation” if the visit goes ahead.
The US military has been preparing to protect Pelosi, who is flying on a US Air Force aircraft.
Rising tension led to falls on equity markets across the region today. Hong Kong’s benchmark Hang Seng index fell as much as 3.2 per cent while China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks dropped as much as 2.8 per cent.
Pelosi, who has been a longtime critic of China, particularly over human rights abuses, is expected to meet Taiwan’s president Tsai Ing-wen tomorrow. She will be the most senior US politician to visit Taiwan since then-Speaker Newt Gingrich won in 1997.
Instant Insight: Beijing could have dismissed Pelosi as a lame-duck Speaker and ally of an unpopular president engaged in a feeble act of grandstanding. Instead the Xi administration has imbued the visit with more importance than it deserves, writes Tom Mitchell.
Thanks for all your replies to my question yesterday. I will feature excerpts from some of them in tomorrow’s edition of FirstFT Americas. Meanwhile, here’s the rest of the day’s news — Gordon.
Five more stories in the news
1. Exclusive: Instagram head to relocate to London Adam Mosseri’s move to the UK capital signals a strategic shift for the social networking app that is in a fierce battle with viral video platform TikTok to attract and retain younger audiences. Mosseri, who developed Facebook’s News Feed, will focus on expanding Instagram’s product team dedicated to retaining its community of influencers.
2. US says it killed al-Qaeda leader Ayman al-Zawahiri was killed in a drone strike over the weekend in Afghanistan, US intelligence officials said. President Joe Biden authorized the operation to target the former Osama bin Laden number two in a safe house in Kabul in what was the first known counter-terrorism operation in Afghanistan since the fall of the Taliban almost a year ago.
3. Ukraine warns grain exports will take ‘months’ to reach prewar levels Ukraine’s infrastructure minister has warned that it will take months before grain exports from Odesa and neighboring ports reach prewar levels and alleviate the global food crisis despite the relaxation of Russia’s Black Sea blockade.
4. BP reports highest quarterly profit in 14 years BP has become the latest oil supermajor to profit from the turmoil in commodity markets following Russia’s invasion of Ukraine. The UK-based group reported a threefold increase in profits compared with the same period a year ago. ExxonMobil and Chevron last week reported record earnings, while Shell broke its profit record for a second consecutive quarter.
5. SEC charges 11 in ‘massive’ crypto Ponzi scheme The Securities and Exchange Commission accused the operators of Forsage, as the scheme was known, of raising $300mn from January 2020 through an unregistered securities offering. The charges come just weeks after the regulator charged a former employee of crypto exchange Coinbase with insider trading related to coin listings.
The day ahead
Company earnings Uber reports earnings today with the price of fuel surging and labor costs rising. Investors will be interested to see if the ride-hailing company’s rosy growth outlook provided three months ago is still in place. Coffee chain Starbucks, industrial bellwether Caterpillar, airline JetBlue and private equity firm KKR are among the other companies to report this morning. After the market closes, PayPal, Airbnb and Match Group report.
Fedspeak: Chicago Fed president Charles Evans will host a breakfast conversation to discuss the US economy and monetary policy with members of the media this morning. St Louis Fed president Charles Bullard will speak to New York University’s Money Marketeers to discuss monetary policy, recent economic trends and the outlook for the US economy.
Kansas abortion vote The first vote on abortion access since the Supreme Court stripped away federal protection for the procedure takes place in Kansas today. Kansas Democrats and Republicans also choose their nominees to contest November’s congressional elections. There are also primary elections in Missouri, Michigan, Arizona and Washington state.
What else we’re reading
Crunch looms in China-US wrangle over delistings Alibaba is one of about 200 companies that will be delisted from New York stock exchanges in 2024. The ban will end a two-decades-long bridge that has ensured a steady flow of capital between the world’s two largest superpowers. Overhanging preparations for this market upheaval is a bill currently under consideration in Washington that would accelerate the timeline by a year.
New media venture Semafor takes shape as economic backdrop darkens When Justin Smith and Ben Smith, two of the best-known figures in US journalism, announced in January they were quitting their prestigious jobs to launch a new media venture, the pair were met with curiosity and some scepticism. Seven months later, the early contours of their new venture are starting to emerge ahead of a planned launch in October.
England victory a commercial breakthrough for women’s football When an event provokes a public response from the Queen, the prime minister and the Spice Girls, questions about relevance are quickly dispelled. While the main challenges for the game remain — generating commercial income, attracting spectators and giving more women and girls the opportunity to play — there are reasons to be hopeful.
Madagascar’s famine is an alarm bell for the planet The UN has called it the world’s first climate-change-induced famine. Some experts contend it is a consequence of poverty and poor governance. For people in Madagascar’s south, unaware of the international furore and desperate to survive, it is known as times — the hunger.
Ifeoma Ozoma: tech workers must be silenced no more After suffering discrimination on the basis of gender and race, the former Google, Facebook and Pinterest employee-turned-whistleblower is on a mission to end the abuse of non-disclosure agreements.
The first renderings of the new Saudi city of Neom were released last week. It is intended to house 9mn residents over a length of 170km in a channel slicing through the Tabuk desert. The similarities with a 1969 plan for a continuous city cutting through the Arizona desert are irresistible, writes architecture critic Edwin Heathcote.
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