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Investment flows between China and the US fell to their lowest level in almost a decade in the first half of the year, as the coronavirus pandemic and political tensions cast a shadow over cross-border activity.
Capital flows between the two countries amounted to $10.9bn in the first six months of 2020, lower than any period since 2011, according to a report from consultancy Rhodium Group and the National Committee on United States-China Relations, a non-governmental organisation.
The report also warned about pressure to “unravel existing investments” in the US after President Donald Trump ordered a sale of the US operations of TikTok, the video app owned by the Chinese company ByteDance.
ByteDance has agreed to list TikTok on a US stock market at some point after its proposed partnership deal with American software group Oracle, as part of its effort to satisfy the Trump administration’s national security concerns. (FT)
In the news
US plans $7bn arms deal with Taiwan The Trump administration plans to sell billions of dollars of weapons to Taiwan to help the country defend itself amid concerns that China could use military force against it. Beijing has said it would make a “necessary response” to a US diplomat’s trip to Taipei. (FT, SCMP)
Taiwanese president Tsai Ing-wen, centre, agreed an $8bn arms deal with the Trump administration last year © AFP via Getty Images
The global drama over Brexit US Democratic presidential nominee Joe Biden delivered a direct warning to Boris Johnson that he can forget a US-UK trade deal if the UK prime minister allows the Northern Ireland peace process “to become a casualty of Brexit”. Ursula von der Leyen, European Commission president, is “convinced” a EU-UK trade deal is still possible. (FT)
BlackRock joins Hang Seng Tech index bandwagon The US asset manger launched a Hong Kong-listed exchange traded fund on Thursday that focuses on the new Hang Seng Tech index, becoming the fourth fund provider to do so in recent weeks. Also expanding into Asia, private equity powerhouse KKR raised over $11bn for its new Asia-focused fund. (FT, Reuters)
Biden to portray Trump as defender of Wall Street and wealthy On a visit to northeastern Pennsylvania, Mr Biden will seek to draw a contrast between his plans for higher taxes on wealthy individuals and Mr Trump’s 2017 tax bill, aides to Mr Biden suggested. (FT)
One-third of likely voters say they are not better off financially than they were at the start of Mr Trump’s presidency, according to our latest poll. Answers fell squarely along partisan lines.
Navalny nerve agent found in Siberia hotel room, tests show The nerve agent used to poison Alexei Navalny in Siberia last month was found on a water bottle from his hotel room, the Russian opposition leader’s aides said on Thursday. (FT)
Premier League secures China broadcast deal with Tencent English football’s top tier agreed the one-year digital streaming deal with the Chinese internet group on Thursday, according to people familiar with the talks, after scrambling to find a new broadcast partner in the country over the past two weeks. More on the business of sport in our Scoreboard newsletter. Sign up here. (FT)
Brighton and Hove Albion in action against Chelsea on Monday. The Premier League’s previous deal in China was among its most lucrative overseas contracts © Richard Heathcote/Reuters
Thais question king’s spending Thailand’s royal family has amassed an airline-sized fleet of 38 jets and helicopters, a leading opposition figure has disclosed after undertaking an unprecedented probe into spending by King Maha Vajiralongkorn, his family and employees. (FT)
Richard Branson enters Spac race Britain’s best-known billionaire has joined the rush of blank-cheque companies, pitching a $400m vehicle to hunt for deals that would expand Virgin Group’s brand in the US. The Spac craze is also spreading to Asia, stoking investor concerns. (FT)
An obscure British tech company called iAbra claims it has produced a coronavirus test that takes how long to process a result? 5 seconds? 20 seconds? 2 minutes? Take our quiz.
The day ahead
Retail figures Data are expected from the UK and Canada on Friday. Figures remain well below normal levels in much of the world. (FT)
Russian central bank Russia may well end its easing cycle when policymakers meet on Friday. Earlier this month, the central bank said it expected the economic recovery to begin to slow. (Reuters)
Jewish high holy days Rosh Hashana, the Jewish new year which kicks off the high holy days season, begins at sundown on Friday, just hours after Israel’s second coronavirus lockdown goes into effect. (Haaretz)
Starting September 21, the Council on Global Affairs and the Financial Times are hosting a weeklong series of discussions on foreign policy topics central to the 2020 US presidential election. Join US managing editor Peter Spiegel on Monday at 10:30am EST for a conversation on defence priorities for a new decade. Register here.
What else we’re reading
The climate crisis is here Scientists say this year’s sequence of natural disasters and record temperatures have exceeded their worst fears as the economic and social costs of a warming planet are revealed. A firefighter weighs in on this year’s historic season. (FT, The 19th*)
A message for the emperor On a holiday in China’s Sichuan province, Yuan Yang finds that journalists, under pressure from Xi Jinping’s regime, are valued as a way of exposing local cover-ups, and experiences the news as most do: as it happens to you. (FT)
Equity investors should raise a glass to low rates The Bank for International Settlements found that loose monetary policy accounts for “close to a half and a fifth of the rebound in the US and euro area equity prices, respectively”. This deserves attention, Gillian Tett writes, given the Fed’s plan to maintain rock-bottom rates — a decision met with mixed reviews. (FT)
© Ingram Pinn/Financial Times
The Sony-Microsoft gaming wars As Sony announced the pricing of its PlayStation 5, analysts predicted that this could be the last round of the console wars as games streaming and digital downloads push content across different devices and the technology evolves away from a large box under a TV. (FT)
America is drifting into a perfect storm The coming weeks will show whether the US can manage a fair election amid a likely second wave of coronavirus when most Americans believe a win for the other side could only be because of fraud. America has had no dress rehearsal for a situation like this, writes Edward Luce. (FT)
Johnson’s Brexit plan will break the UK union Boris Johnson’s readiness to tear up the UK’s reputation for honest dealing has grabbed the headlines. But the news is worse, Philip Stephens warns: the PM is inviting Scotland to leave. In Europe, the pandemic has undermined trust, sending voters in search of new answers, Simon Kuper says. (FT)
© Ingram Pinn/Financial Times
The difficulties of getting a divorce in China Even in the case of domestic violence, obtaining a divorce in China remains extremely difficult. The case of Liu Zengyan, who jumped out a second-floor window to escape her husband as he beat her, reveals the challenges women face in Chinese courts as marriage remains seen as a bedrock of society. (NYT)
The surprising resilience of container shipping Global lockdowns have strangled economic activity, resulting in a deep drop in container shipping traffic. Yet after six months of chaos, the $180bn industry has found ways to navigate the crisis, with many lines making more money than before. (FT)
Correction: Yesterday we referred to Ma’ruf Amin as president of Indonesia. He is the vice-president.
Podcast of the day
Rachman review From the poisoning of Russian opposition politician Alexei Navalny, to the refugee catastrophe in Greece and headaches over Brexit, Germany has no shortage of foreign policy crises to deal with. Gideon Rachman discusses how best to handle them with Norbert Röttgen.
From the episode: “If we were forced to face a situation where we couldn’t rely on the legal word and treaties with Britain, then the very basis of our co-operation would be destroyed.”
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