FirstFT: Emmanuel Macron warns of ‘new imperialism’ in Indo-Pacific

By Editor On Jul 28, 2023

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Good morning. French president Emmanuel Macron has warned against “a new imperialism” in the Pacific on a visit to the region, where China has been extending its influence with security and trade pacts.

In a speech on the island of Vanuatu, a French and British-governed territory before it became an independent republic in 1980, Macron said the Indo-Pacific region’s sovereignty was being undermined by “predatory big powers” and that their interference was growing.

The Pacific has become a fulcrum for geopolitical tensions in the past decade as China has increased its diplomatic and financial presence in some of the smallest countries in the world.

Beijing’s push culminated in a security pact with the Solomon Islands last year, which triggered a more concerted effort from Australia, the US and New Zealand — the region’s traditional powers — to rebuild economic and strategic partnerships in the Pacific and to better engage on issues including climate change.

Hervé Lemahieu, director of research at the Lowy Institute think-tank, said: “Macron is looking to distinguish France from the Pacific power plays of both China and the United States. But Paris comes from a long way behind in regional engagement stakes.” Read the full story.

Here’s what else I’m keeping tabs on today and over the weekend:

US and France wrap up Pacific tours: Emmanuel Macron visits Papua New Guinea, following US defence secretary Lloyd Austin, who was there on Thursday. Austin and US secretary of state Antony Blinken will meet their Australian counterparts in Brisbane on Friday, the last leg of their Pacific tour aimed at boosting Washington’s Indo-Pacific strategy.
Japan monetary policy: Investors are widely expecting the Bank of Japan to opt for no change to its policy at a meeting today, but heavy-hitting investment banks are warning them to brace for a shock.
Super Typhoon Doksuri: The storm is expected to make landfall this morning in south-east China. Strong winds from Doksuri led to a ferry to capsize in the Philippines, killing at least 25 people. (Reuters)

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. European Central Bank has raised interest rates by a quarter-percentage point to 3.75 per cent, matching a high last reached in 2001. Thursday’s move was the ECB’s ninth consecutive rate rise, though investors are betting this increase will be the bank’s last as inflation falls faster than expected.

US economy: Economic growth in the US was stronger than expected in the second quarter of 2023, as activity proved resilient in the face of the Federal Reserve’s campaign of aggressive interest rate rises.

2. Kering has agreed to buy 30 per cent of Valentino from Qatar’s Mayhoola, as part of a “strategic” deal that gives the French luxury group the option to take full control of the Italian fashion house by 2028. The €1.7bn all-cash purchase is “part of a broader strategic partnership” between Kering and Mayhoola, which could lead to Mayhoola becoming a shareholder in Kering, the French group said. Read the full story.

3. Yevgeny Prigozhin, founder of the notorious Wagner paramilitary group, has appeared on the sidelines of a Russia-Africa summit in St Petersburg, despite agreeing to go into exile following his failed mutiny last month. The warlord’s continued presence in Russia indicated Prigozhin remains an important part of the Kremlin establishment.

4. Coutts chief executive Peter Flavel has stepped down, saying that he bore “ultimate” responsibility for the bank’s treatment of former UK Independence party leader Nigel Farage. Here’s more on the crisis engulfing the private bank and its owner, NatWest.

5. Shares in Chinese electric-vehicle makers climbed on Thursday after Volkswagen announced a tie-up with Chinese rival Xpeng designed to boost the German car manufacturer’s lagging sales in the country. The deal will give VW a 5 per cent stake in the Guangzhou-based EV maker as well as a seat as an “observer” on its board. Read more on VW’s EV push in China.

The Big Read

Mongolian leader Luvsannamsrain Oyun-Erdene — © FT montage/Bloomberg

Luvsannamsrain Oyun-Erdene, Mongolia’s Harvard-educated prime minister, wants western mining groups to tap his country’s vast deposits of copper, uranium and other critical minerals essential to the world’s fight against climate change. The government is making sweeping reforms to win over western investors and become less reliant on China and Russia.

We’re also reading . . .

China’s heft in Brics: The grouping risks looking less like a steering group for the emerging world and more like a fan club for Beijing, writes Alan Beattie.
The problem with centrism: The ideology is defined really only by what it is against and often claims a political middle that doesn’t exist, writes Jemima Kelly.
FT Magazine: Two shocking murders, 25 years apart, framed an Italian mafia family’s fight for a seat at the top table of organised crime.

Chart of the day

Chart showing that July is set to be the hottest month on record

“The era of global warming has ended; the era of global boiling has arrived.” That’s what UN secretary-general António Guterres said on Thursday as scientific forecasts showed that July is expected to be the hottest month ever recorded.

Take a break from the news

The buzz around this summer’s Ashes series between England and Australia disguises the fact that the pulse of global cricket has moved decisively elsewhere: India. Here’s how the cricket-mad country is revolutionising the game.