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Good morning and welcome back to FirstFT Asia. In today’s newsletter:
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China-Japan fallout worsens
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Meta beats the FTC’s antitrust suit
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The growing problem with China’s murky economic data
China has intensified its economic pressure on Japan in response to Japanese Prime Minister Sanae Takaichi’s blunt comments on Taiwan. Here’s the latest on the dispute.
Travel bans and cancelled events: Staff at four separate Chinese state-owned enterprises in Shanghai and Zhejiang and Hunan provinces said managers had told them to cancel all trips to Japan over the row, following a government travel warning last week. China has also cancelled tour groups to Japan and travel agencies have stopped promoting it as a destination. In the Chinese movie industry, an internet platform tracking new releases said two Japanese films had been postponed.
‘Fundamental damage’ to relations: The moves are part of a broadening response by Beijing to Takaichi’s suggestion that a Chinese attack on Taiwan might prompt military intervention by Tokyo. Talks in Beijing yesterday between Masaaki Kanai, head of the Japan foreign ministry’s bureau covering Asian affairs, and Chinese counterpart Liu Jinsong made no obvious progress in easing tensions. The Chinese ministry said Liu told Kanai that Takaichi’s remarks had “caused fundamental damage to the political foundation” of ties between the two countries.
In another measure of the severity of the plunge in relations, the Beijing-Tokyo Forum, a flagship annual meeting of scholars from both countries, will be postponed this year for the first time since it was launched in 2005. Read more about the growing fallout from the dispute.
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US-China competition: An influential congressional commission said the US government needs an overhaul to tackle security-related economic threats from China.
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UK warns China against spying: London has told Beijing that it will never accept attempts to “interfere in our sovereign affairs” after MI5 alerted MPs that Beijing’s intelligence services are trying to recruit people who work in parliament.
Here’s what else we’re keeping tabs on today:
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Economic data: Japan and Malaysia report October trade data
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Chinese diplomacy: Premier Li Qiang begins a two-day official visit to Zambia ahead of travelling to the G20 summit in South Africa. Meanwhile foreign minister Wang Yi embarks on a four-day tour of central Asia, beginning with a visit to Kyrgyzstan.
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Monetary policy: Indonesia’s central bank announces its rate decision. The US Federal Reserve will publish the minutes from its latest rate-setting meeting.
Five more top stories
1. Meta has won the antitrust case brought by the US Federal Trade Commission that threatened to break apart the company after a judge ruled the social media giant does not hold an illegal monopoly. The FTC had sought to force the $1.5tn tech company to unwind its acquisitions of messaging platform WhatsApp and photo-sharing app Instagram.
2. The US House of Representatives has voted overwhelmingly to force the Department of Justice to release its files on Jeffrey Epstein, after Donald Trump abruptly changed course and encouraged Republicans to back the measure. The long-running scandal has piled pressure on the US president and raised fresh questions about his links to the late convicted child sex offender. Here’s what comes next.
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Related news: Former US Treasury secretary Lawrence Summers said he would step back from public commitments after documents showed he asked Epstein for advice on pursuing an extramarital relationship with a female mentee.
3. Two cabinet ministers in the Philippines have resigned after being linked to alleged graft over flood-control projects awarded by the government. The mounting scandal has undermined investor confidence and economic growth, while hundreds of thousands of Filipinos have taken to the streets calling for accountability.
4. Trump dismissed questions about journalist Jamal Khashoggi’s murder yesterday, as he defended his “friend” Saudi Crown Prince Mohammed bin Salman and touted up to $1tn of investment from the kingdom. Speaking alongside Prince Mohammed in the Oval Office, the US president lashed out after reporters asked him about Khashoggi’s killing by Saudi agents.
5. A majority of global fund managers think companies are overinvesting, as market anxiety grows about the sustainability of the AI spending boom. The findings from a Bank of America survey come amid a pullback on Wall Street in recent weeks, triggered by growing concerns about the sustainability of this spending.
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‘Frothy’ AI valuations: US tech stocks sold off yesterday as worries mounted over high valuations for AI companies and investors braced themselves for earnings later this week from industry titan Nvidia.
The Big Read
The disappearance from public life for almost a year of a Chinese economist who cast doubt on the country’s official growth figures highlights the political sensitivity surrounding government data. The reliability of China’s economic statistics has drawn scrutiny for years but the questions have become more urgent as the economy has lost momentum and trade tensions with the US have mounted.
We’re also reading . . .
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‘Baby Shark’ IPO: Shares of Pinkfong, the South Korean company behind the hit children’s song, jumped in the studio’s trading debut.
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India retail war: Mukesh Ambani’s Reliance, the country’s most valuable company, is battling mom-and-pop stores for Indian shoppers.
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Trump vs BBC: The US president has ample motive to go after the British right’s most relished target, writes Edward Luce.
Chart of the day
The degradation of the vast Congo Basin, known as the world’s “second lung”, is taking a toll across the African continent and threatening one of the world’s most traded and beloved crops: cocoa. Here’s how chocolate makers are responding.
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Take a break from the news . . .
In Paris, a coffee revolution is brewing. In most neighbourhoods, you can find micro-roasteries and shops championing state-of-the-art techniques. Meet the pioneers reimagining the French capital’s café society.
L’Arbre à Café at Le Bon Marché department store
