Daily briefing: US v China in World Bank, Brexit stand-off and China’s electric cars
- Fri, 13 Oct 2017 06:29
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The Trump administration is holding out against a capital increase for the World Bank until it overhauls its lending to China and other middle income countries, creating a new source of tension between Washington and Beijing. Jim Yong Kim, the World Bank’s president, has been pushing for extra financial resources and had hoped that shareholders would agree on at least a timetable for the increase at this week’s annual meetings in Washington.
But the Trump administration has been resisting those plans and this week aired its demands, saying it wanted the World Bank to examine its own balance sheet first and in particular its lending to China, which is presently the bank’s biggest borrower. (FT)
In the news
EU leaders will refuse to open talks with the UK on a post-Brexit transition at next week’s summit because of the lack of progress on a divorce settlement, dealing a blow to British efforts to break a deadlock. However, the remaining 27 member states will recognise progress made so far by starting internal preparations for future trade talks, according to a draft summit statement seen by the Financial Times. Negotiations between the EU and the UK over Britain’s terms for leaving the bloc have ground to a virtual halt, with no substantial advances made in the latest round this week. (FT)
Trump warns Puerto Rico that federal help will not last ‘forever’
Donald Trump warned Puerto Ricans — who are American citizens — that there were limits to how long he would continue federal recovery efforts on the island, and again suggested that the US territory bore some of the blame for the humanitarian crisis unfolding after two devastating hurricanes. Mr Trump has come under withering criticism for his administration’s slow response to the crisis, which some observers believe has killed over 500 people — far higher than the official government count. Mr Trump’s approach to the crisis in mostly-Hispanic Puerto Rico has stood in sharp contrast to his response to hurricanes in Texas and Florida. (NYT, Vox)
‘They threw my baby into a fire’
Rohingya refugees recount the atrocities they have suffered at the hands of the Myanmar army, as the minister in charge of repatriation issues says that the country — which has been accused of ethnic cleansing in its persecution of the Muslim minorities — will begin letting in Rohingya Muslim refugees who fled to Bangladesh. (NYT, NAR)
Mini moves to China
The Mini could be manufactured outside Europe for the first time if a deal between BMW and China’s Great Wall Motor Company goes ahead. The British-designed car is produced in the UK and the Netherlands. An agreement would boost the prospects of Great Wall, whose shares surged 14 per cent on Wednesday following speculation of a joint venture with BMW. (Bloomberg)
The North American Free Trade Agreement, long disparaged by President Donald Trump as bad for the US, is edging closer towards collapse as negotiators gathered for a fourth round of talks. (NYT)
Rival Palestinian factions Hamas and Fatah have agreed a reconciliation deal. Fatah, the western-backed mainstream party, lost control of Gaza to Hamas, considered a terrorist group by the west and Israel, in 2007. But last month Hamas agreed to cede powers to President Mahmoud Abbas’ Fatah-backed government. (Reuters)
China’s rich list
Real estate magnate Wang Jianlin has tumbled from his position as China’s wealthiest man, according to Hurun rankings, the country’s best known rich list. The shift underlines how authorities are favouring entrepreneurs who support China’s domestic growth above those who pursue cross-border trophy acquisitions. But for every multimillionaire that researchers have found, there are two they have missed. (FT)
How well did you keep up with the news this week? Take the FirstFT quiz. Who did North Korean leader Kim Jong Un promote to the national politburo?
The day ahead
US labour department data are forecast to show that the consumer price index accelerated 0.6 per cent in September after advancing 0.4 per cent in August, led by a 13 per cent increase in the price index for motor fuels. Average petrol prices surged in early September, reflecting the disruption to refining capacity caused by hurricane Harvey, according to HSBC analysts. The commerce department is expected to report a 1.2 per cent rise in retail sales in September, after falling 0.2 per cent in August. Excluding automobiles, petrol, building materials and food services, retail sales are likely to rise 0.3 per cent after falling 0.2 per cent in August.
What we’re reading
China’s highly charged power play
Central planners are staking a bet on the success of electric vehicles as part of its state-backed plan to transform the country into a high-tech industrial power. (FT)
I have a message for you
In this incredible short documentary, Matan Rochlitz tells the story of his grandmother’s neighbour, and the unfathomable decision she had to make in order to save herself from her Nazi captors in Belgium many decades ago. (NYT)
What happens if Trump decertifies the nuclear deal
European signatories could lose their battle to dissuade Donald Trump from decertifying a nuclear agreement Iran sealed with six world powers in 2015. Now they are considering how to prevent a further turn for the worse. Here are three scenarios of what might happen should the US president choose not to certify the deal to Congress by an October 15 deadline. Here’s Roula Khalaf on how Mr Trump’s refusal to certify the Iran deal has emboldened Kim Jong Un. (FT)
How Facebook outs sex workers
Sex workers often use fake names and identities to protect themselves, but Facebook is suggesting their clients as “People You May Know” on their real-world accounts, potentially — and dangerously — connecting them with people whose real names they do not wish to know. “Because Facebook insists on concealing the methods and data it uses to link one user to another, Leila is not able to find out how the network exposed her or take steps to prevent it from happening again.” (Gizmodo)
Thailand’s monarchy: where does love end and dread begin?
In a country where few dare to speak openly about the royals, how do Thais feel about their new ruler? As one person put it privately, when it comes to the new monarch: “We cannot speak the truth from our heart.” (FT)
Potion or perfume?
Essential oils have become big business — especially in the age of anxiety. Users praise these oil blends for eradicating migraines to reversing rheumatoid arthritis to helping with Tourette’s syndrome. But are they medicine or marketing? (New Yorker)
Video of the day
What history can teach us about Trump
Edward Luce and historian Michael Beschloss discuss the parallels between Donald Trump and previous presidents. (FT)