FirstFT: China suffers setback on regional security plan

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China has suffered its first setback in an escalating tug of war with western powers for dominance in the Pacific Islands after it failed to win support from countries in the region for a comprehensive partnership centred on security.

At a virtual meeting yesterday with Wang Yi, the Chinese foreign minister, leaders from eight Pacific island nations agreed to co-operate in five areas including health, disaster management and agriculture. But Wang said that more discussion was needed on the China-Pacific Islands Countries Common Development Vision that Beijing had proposed.

The blow to China came after the US and Australia strongly pushed back against Beijing’s efforts to entice more of the small, mostly impoverished Pacific Island nations into its embrace.

The Chinese embassy in Fiji said Beijing would lay out its plans for the region in a “position paper” in response to the questions Pacific leaders had raised at the meeting. They had agreed to discuss the draft communique prepared by Beijing “until we have an agreement”, said Qian Bo, China’s ambassador to Fiji.

Thanks for reading FirstFT Asia. Here’s the rest of today’s news. — Emily

1. Oil breaches $120 a barrel as petrol and diesel prices soar Oil rose higher than $120 a barrel on Monday as increasing prices for fuels, such as petrol and diesel, combined with lingering concerns over supplies from Russia to propel crude to its highest level in two months.

  • Related read: EU leaders at a summit are struggling to agree an oil embargo against Russia that exempts a key supply route — a concession aimed at appeasing Hungary, which has been blocking the sanctions for nearly a month.

2. US will not send Ukraine weapons that can strike Russia Joe Biden said the US would not send Ukraine long-range rocket systems that could be used to attack Russian territory, dealing a blow to Kyiv, which has repeatedly asked for such weapons.

3. France apologises for chaos at Champions League final France has apologised for the botched security that marred the Champions League final in Paris on Saturday, but sharp differences over who was to blame risked turning into a diplomatic row after Downing Street called the scenes “deeply upsetting and concerning”.

4. Tether has held some reserves at Bahamas bank The stable coin issuer has held some of its reserves at a small Bahamas bank called Capital Union, people familiar with the matter said, shedding further light on how the group manages the $73bn stablecoin that underpins the crypto market. Tether has generally declined to reveal where exactly it holds the assets that back its eponymous token.

5. SoftBank cuts top executives’ pay SoftBank slashed the wages of its top executives after its Vision Fund posted a historic loss of ¥3.5tn ($27.6bn) caused by a rout in tech stocks, rising interest rates and a regulatory crackdown in China.

The day ahead

India GDP figures Economists expect that Tuesday’s gross domestic product report will show that India’s slowed in the fourth quarter. (The Economic Times)

Japan economic data April unemployment rate, retail spending figures and flash industrial production data are set to be released today.

The World Trade Organization meeting The group’s dispute settlement body will hold its monthly meeting.

Eurozone inflation Eurozone inflation is expected to hit a new high of 7.7 per cent when figures for May are published on Tuesday — nearly quadruple the European Central Bank’s 2 per cent target.

Join the FT for The Global Boardroom on June 7-9, featuring US secretary of state Gina Raimondo, Bank of Japan governor Haruhiko Kuroda, former Google chief executive Eric Schmidt and more. Register free today.

What else we’re reading

The Bank of Victor Orbán Hungary’s prime minister has long sought economic influence to match his political power. Now his plan to merge three of the country’s largest banks into a single institution is coming to life, realising hopes of serving his political goals as much as its customers.

Private equity cannot avoid the reckoning in markets Both the real economy and the financial system have entered a phase that is uncertain and destabilising. That spells trouble for private as well as public market investors, writes Mohamed El-Erian.

Talk of doing good rings hollow among global elite Following the World Economic Forum in Davos, FT’s Rana Foroohar writes that she came away feeling that the 0.1 per cent was more out of touch with the state of the world than it has ever been in the 20-odd years she’s attended the conference.

Hard lessons from the crypto crash Subbaiah, 29, an IT worker in Bangalore, made enough trading crypto that he started to dream about quitting his day job and trading full-time. He moved his entire $7,000 portfolio into luna — only to see it reduced to $150 when the coin’s value collapsed this month. FT’s Claer Barrett explores whether anything can challenge the belief that investing in digital assets is a guaranteed route to riches.

How tech companies are betting on the metaverse The $180bn gaming industry, twice the size of the film business, already attracts hundreds of millions of players. But as tech leaders vie to create the next iteration of the internet, gaming has become a battleground. The FT explores how gaming got so big, and whether it really can be the gateway into this new world.

Food

Our Summer Food & Drink special includes a definitive guide to cooking and preparing sardines, three strawberry desserts from Ravinder Bhogal and a fantasy dinner party by Ukrainian London-based chef Olia Hercules.

Picture of a sardine
Fresh, frozen or tinned, sardines are the perfect match for a sunny evening © Carmen Palma

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