Taiwan looms over summit aimed at easing US-China tensions

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Good morning. Joe Biden and Xi Jinping are expected to hold frank talks about Taiwan when the US and Chinese presidents meet in San Francisco tomorrow in a renewed effort to stabilise relations between the two powers.

One year after their first meeting as leaders — at the G20 summit in Bali, Indonesia — Biden and Xi will resurrect attempts to halt the steep deterioration in ties, which are in their worst state in four decades.

US officials have stressed that the summit would not produce big agreements, particularly as tensions remain high over Taiwan, which holds a presidential election in January.

“The goals here really are about managing the competition, preventing the downside risk of conflict and ensuring channels of communication are open,” said one US official.

Over four hours of talks, Biden and Xi will discuss a range of issues, from US concerns about Chinese military activity in the South China Sea to China’s anger at export controls on sensitive US technology. Here’s what to expect from the meeting — and how it could help ease concern in the Indo-Pacific.

And read how Beijing’s propagandists are preparing for the summit: by pushing a warmer message on US-China relations after years of portraying America as a rival in decline.

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

• Economic data: The US releases the consumer price index for October, which is expected to show headline inflation fell to 3.3 per cent, down from 3.7 per cent in September.

• Reports: The International Energy Agency publishes its November oil market report.

• Companies: Foxconn, Sumitomo Mitsui Financial Group and Toshiba report.

Five more top stories

1. US President Joe Biden said yesterday that hospitals in Gaza “must be protected”, after Israeli forces surrounded the strip’s largest medical facility. Al-Shifa hospital, in the heart of Gaza City, ran out of fuel over the weekend, local officials and the World Health Organization said, risking the lives of patients as fighting raged just outside its doors.

2. Rishi Sunak stunned Westminster yesterday by restoring David Cameron to the political frontline as foreign secretary, in a dramatic cabinet reshuffle that included the sacking of controversial home secretary Suella Braverman. The reshuffling signals a shift by the UK prime minister towards the centre ground that has alarmed some on the right of the Conservative party.

3. The US Supreme Court has adopted its first-ever code of conduct. The landmark move follows controversies over some justices’ undisclosed relationships with powerful figures that sparked a fraught debate around oversight of the country’s most powerful bench.

4. India is considering a request from Tesla to lower tariffs for imported electric vehicles, according to Indian government officials, as Elon Musk’s company explores setting up a plant in the country. Here are the details of Tesla’s request.

5. A robot has used meteorite extracts from Mars to help make oxygen from water, melding artificial intelligence’s powers of chemical discovery with efforts to explore and even populate the red planet. The experiment conducted by researchers at the University of Science and Technology of China boosts the possibility of sustaining future manned outer space missions.

The Big Read

At the height of his power, FTX co-founder Sam Bankman-Fried was seen as the crypto industry’s most likely route to respectability, winning backing from top investors including Sequoia and BlackRock. But following his conviction, the industry he championed must choose between becoming part of mainstream finance or retreating to the fringes as a niche market.

We’re also reading . . . 

• Artificial intelligence: Sam Altman, the chief executive of ChatGPT maker OpenAI, tells the FT his company is seeking more funding from Microsoft to build more sophisticated AI models.

• American retreat: If the US seriously scaled back its military commitments around the world, China, Russia and Iran would all try to take advantage of the resulting power vacuum, writes Gideon Rachman.

• The office whipround: Electronic services such as Collection Pot, Giftround and Thankbox have resulted in some new and not always pleasant politics.

Chart of the day

Only 14 per cent of American voters believe they are better off financially now than when Joe Biden took office, according to a poll conducted for the FT and the University of Michigan’s Ross School of Business. The new results are the latest sign that the president’s economic record could undermine his re-election prospects.

Take a break from the news

FT senior business writer Andrew Hill selects his must-read business books of 2023 — including Bethany Allen’s “Beijing Rules”, an eye-opening chronicle of the multiple ways in which China’s Communist party seeks to exert its power abroad.

Additional contributions from Grace Ramos and Gordon Smith