FirstFT: US and China hold ‘frank’ talks in bid to defuse tensions

Good morning. Relations between Washington and Beijing are at their lowest level since diplomatic ties were normalized in 1979. In an effort to defuse the tension, US National Security Adviser Jake Sullivan and China’s top diplomat Wang Yi have just completed two days of talks in Vienna.

The White House said they had “frank, substantive and constructive” discussions on issues including the US-China relationship, global security issues, Russia’s war on Ukraine and Taiwan.

Efforts to start high-level dialogue between the US and China earlier this year have been largely unsuccessful.

Foreign Secretary Antony Blinken canceled a planned visit to China in February after a suspected Chinese spy balloon flew over North America. Blinken later met with Wang at the Munich Security Conference, but it was tense and unproductive. He is now trying to reschedule his visit, but the two sides have so far failed to reach an agreement unless Sullivan negotiated one with Wang in Vienna.

We also learned that Beijing has told Washington it is not willing to schedule a meeting between its defense minister and his American counterpart.

And here’s what I’m watching in the days ahead:

• Imran Khan in court: The former Pakistani prime minister will appear before the Islamabad High Court today after his arrest was declared illegal.

• Earnings: The results of Allianz, Societe Generale, Tata Motors and Toshiba are available.

• Elections: On Sunday, Turkey holds its presidential and parliamentary elections, Thailand has parliamentary elections and Italy and Albania both have local elections.

Five more top stories

1. Turkish presidential candidate Muharrem İnce withdrew out of the contest, boosting main opposition contender Kemal Kılıçdaroğlu’s chances of ousting President Recep Tayyip Erdoğan in Sunday’s election. İnce said he would step down from the race for the good of the country after an alleged sex tape surfaced this week.

2. SoftBank Group posted record annual investment losses of ¥5.3tn ($39bn) in its tech-heavy Vision funds and warned that the war in Ukraine and the US-China dispute still pose major market risks. With the poor performance, which was worse than analysts had expected, SoftBank turned to what founder Masayoshi Son called “defensive mode.”

3. Elon Musk appointed a new Twitter CEO to lead the social media platform. The billionaire did not name his successor, but said she would start in about six weeks.

4. The biggest US banks will be hit with almost $16 billion in extra fees more than two years under a Federal Deposit Insurance Corporation plan to recoup its losses related to the bailout of Silicon Valley Bank and Signature Bank. Here is more about which banks will be hit by the so-called “special assessment”.

5. US Treasury Secretary Janet Yellen appealed to G7 nations to coordinate action against Beijing’s economic coercion, while Washington finalizes a new approach to outbound investment screening aimed at China.

How well have you been keeping up with the news this week? Take our quiz.

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Additional contributions by Tee Zhuo and Emily Goldberg