FirstFT: Blinken to visit China in sign of easing tensions

Good morning. US secretary of state Antony Blinken will visit China this month, the latest sign that Beijing and Washington are beginning to stabilise a turbulent bilateral relationship that had sunk to the lowest point in decades.

The US diplomat had abruptly cancelled a trip in February in response to a suspected Chinese spy balloon’s flight over the US, which derailed efforts to repair relations.

Blinken’s visit would be a sign of renewed progress between Washington and Beijing to re-establish high-level engagement.

At the G7 summit in Hiroshima last month, president Joe Biden said he expected an imminent “thaw” in relations, and the sides have resumed a flurry of contacts recently.

The FT reported last week that CIA director Bill Burns made a secret trip to Beijing in May, making him the most senior Biden administration official to visit China. His trip came at China’s invitation, according to two people familiar with the matter.

Here’s what else I’m keeping tabs on today:

• Economic data: Revised first-quarter GDP figures are due from Japan and the EU. Economists expect the EU’s data to show the eurozone economy is shrinking.

• CRH: The world’s largest building materials maker holds an extraordinary general meeting for shareholders to vote on shifting its primary listing from London to New York.

• India: The central bank announces its interest rate decision. Economists expect policymakers to hold rates steady through the rest of the year. (Reuters)

Five more top stories

1. Thick smoke from Canadian wildfires has spread across North American cities, with New York’s air quality falling below New Delhi as the worst of any big urban area in the world. The plumes have triggered health warnings for millions of people in the eastern US and Canada.

2. Thousands of Ukraine residents struggled to escape from flooded homes and towns yesterday, and large areas were left without clean drinking water following the destruction of the Kakhovka dam. In his nightly video, Ukraine president Volodymyr Zelenskyy repeated his belief that Russian forces occupying the dam had deliberately blown it up from inside. Read more on the evacuation of residents.

3. Turkish lira experienced its largest fall since late 2021 after president Recep Tayyip Erdoğan’s new finance minister’s pledge to restore “rational” policies. The currency dropped 6.9 per cent to a record low of 23.17 against the US dollar.

4. Australian tax officials have said they are working with international peers to explore any potential offences outside the country related to the PwC tax leaks scandal.

5. India and Germany are discussing a submarine deal that could be worth about €5bn, aimed at reducing the south-Asian nation’s dependence on Russian military equipment and boosting Berlin’s defence industry.

Deep dive

Rising tensions between the US and China have precipitated the break-up of Sequoia Capital. The announcement from Sequoia shattered the view that one of the world’s most successful venture capital empires could navigate the tricky geopolitics of investing across the world’s two biggest markets. In an interview with the FT, Sequoia Capital boss Roelof Botha described how much investing conditions had changed.

We’re also reading . . . 

Chart of the day

Chinese exports contracted more than expected in May on weaker global demand for the country’s goods, as the world’s second-largest economy struggled to revive growth after a pandemic-induced slowdown last year.

Take a break from the news

. . . and read the FT’s timely interview with Charlie Brooker, creator of the darkly satirical Netflix series Black Mirror, now in its sixth season. Brooker discusses avoiding Elon Musk and NFTs, and asking ChatGPT to write an episode summary.

Additional contributions by Tee Zhuo and Gordon Smith