FirstFT: China warns Russia on using nuclear weapons

Receive free World updates

We’ll send you a myFT Daily Digest email rounding up the latest World news every morning.

Chinese president Xi Jinping personally warned Vladimir Putin against using nuclear weapons in Ukraine in private while publicly offering glimpses of support to Russia, according to officials inside and outside China.

The warning was delivered during a trip by Xi to Russia in March, his first state visit in almost four years. Since then, Chinese officials have privately taken credit for stopping Russia from issuing nuclear threats.

For Putin, the Chinese leader’s visit was a setback as it failed to produce any meaningful wins. Most prominently, Beijing has still not given approval for the Power of Siberia 2 pipeline that would give Moscow an outlet for gas that previously flowed to Europe.

Even though Russia has issued fewer threats to use nuclear weapons since China’s intervention, Ukrainian officials still worry that Moscow could cause an accident at Zaporizhzhia, Europe’s largest nuclear plant, which Russia has occupied since March 2022.

Here’s what I’m keeping my eyes on today:

• US Federal Reserve: The Federal Open Market Committee publishes minutes from its meeting last month.

• Fedspeak: John Williams, president of the New York branch of the Fed, is to participate in a moderated discussion at the 2023 annual meeting of the Central Bank Research Association in New York City.

• Factory orders: Activity in the US manufacturing sector has been lacklustre of late, with data on Monday showing activity in June was at the lowest level in three years. That should help keep factory order data today in focus, with economists expecting a 0.8 per cent increase in May after an increase in defence spending helped propel a 0.4 per cent gain in April.

Five more top stories

1. Israel’s military has said it has withdrawn its forces from the Jenin camp in the West Bank. The military also said that it conducted an air strike within the Gaza Strip targeting an underground weapons-making facility. The recent flare-up of violence has fuelled fears that the Israeli-Palestinian conflict could be moving towards an escalation. This year is already on course to be one of the deadliest since the UN started collecting data in 2005.

2. Investors have spent almost $200mn trading theoretically worthless shares in Bed Bath & Beyond since the homewares retailer went bankrupt at the start of May, while the company’s bonds are trading at less than 2 cents on the dollar. Bondholders typically get paid before equity holders at the end of bankruptcy proceedings. Here’s more on the latest manifestation of the meme stock craze.

3. Asset manager CVC has raised $800mn for a loan fund that could signal strict corporate lending is starting to fade. The fund will provide equity for $10bn in collateralised loan obligations which have seen a downturn in volume as interest rates have increased. CVC is one of the largest players in the market and expects that companies will start seeking funding for corporate buyouts in the latter half of the year.

4. The People’s Bank of China has a new chief, Pan Gongsheng, who is also expected to be named as the bank’s governor. His appointment comes at a pivotal moment for China as it attempts to shake off the lingering impacts of the country’s post-Covid recovery. But many expect Pan’s appointment will not signal a radical change in policy, not least because the bank has lost many of its policymaking tools in a series of recent reforms.

5. Cash buyers able to avoid rising borrowing costs are snapping up more high-end London property, with equity buyers purchasing 71 per cent of homes in prime central locations in the city between January and May this year, compared with 60 per cent in the same period last year, according to data from estate agency Savills. The rise comes despite wider pressure on homebuyers caused by higher mortgage rates.

FT Investigation

Three women who used to work for Sir David Adjaye, the internationally renowned British architect, have alleged he sexually assaulted or harassed them and oversaw a toxic workplace culture over the course of several years.

We’re also reading . . .

Chart of the day

Last year, companies in the S&P 500 index paid just 3.2 per cent more in audit fees than in 2021, compared with a 6.5 per cent headline inflation rate in the US, defying predictions that fees could rise to accommodate higher salaries in a profession where qualified accountants are in short supply.

Take a break from the news

Film critic Danny Leigh lists his six best films of the year so far. What are your favourites of 2023? Share your picks in the comments below the article.

Additional contributions by Tee Zhuo and Benjamin Wilhelm