US and China resume high-level military contacts

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Good morning. The US and China have resumed high-level military contacts that have been suspended since a bitter falling out over Taiwan in 2022, with the Pentagon’s top officer yesterday holding his first call with his counterpart in Beijing.

General CQ Brown, who took over as US chairman of the joint chiefs of staff in October, held the call with General Liu Zhenli, his counterpart in China’s People’s Liberation Army, the Pentagon announced.

US President Joe Biden and Chinese President Xi Jinping agreed last month to restart military to military communications that Beijing halted in August 2022 after then-House Majority Leader Nancy Pelosi visited Taiwan.

The renewed talks came ahead of a year that “promises to pose some important tests for US-China relations,” said Jacob Stokes, an Asia expert at the Center for a New American Security think-tank. Keep reading for more on the year ahead in US-China relations — and how US officials described yesterday’s call.

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

• Monetary policy: The Bank of Japan releases minutes from its recent meeting, where it held off on lifting negative interest rates.

• Economic data: The UK publishes November retail sales figures and final third-quarter growth data.

Thank you for reading FirstFT this year. We’re taking a short break but will be back in your inboxes on Wednesday, December 27. We wish our readers a restful and happy holiday.

Five more top stories

1. Exclusive: China’s BYD is in final negotiations with the Hungarian government to secure a multibillion-euro investment into a new electric car factory, in a deal that could be announced as early today. The Chinese group already has a bus facility in Hungary, but the company wants a fully fledged car plant to realise its ambition of dominating the European electric vehicle industry by the end of the decade. 

• More China-Europe news: Belgium suspected for years that a Flemish far-right politician was a Chinese intelligence asset but has lacked the legal basis to prosecute him, according to the country’s justice minister.

2. Japan plans to ease weapons exports curbs to allow several dozen domestically-produced Patriot air defence missiles to be shipped to the US, a move that will help Washington step up critical supplies to Ukraine. The Japanese government plans to announce the relaxation of its strict guidelines on arms deals today, as part of a more proactive defence policy that Japan adopted after it increased military spending plans last year.

3. At least 14 people have been killed in a shooting at the main university in the Czech capital, Prague, according to police. The shooter was a 24-year-old student who had planned his attack and had probably been inspired by similar terror acts elsewhere, the head of the Czech police, Martin Vondrášek, told local journalists. Here are more details.

4. Rudy Giuliani, the former attorney for Donald Trump and mayor of New York City, has filed for bankruptcy. The filing comes just days after he was ordered to pay $148mn in damages for defaming two Georgia poll workers in the aftermath of the 2020 US election.

5. Angola, Africa’s second biggest oil producer, has said it is leaving Opec after disagreements over its production targets, delivering a blow to the oil cartel chaired by Saudi Arabia. The decision comes after the producer group lowered Angola’s oil output target last month as part of a series of cuts led by Saudi Arabia to help prop up prices.

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

The Big Read

India has been in the global spotlight this year. The country has surpassed China by population and is being touted as an alternative investment destination in response to western tensions with Beijing. Narendra Modi, India’s 73-year-old leader, will be seeking a third term in office in polls due early next year. In an exclusive interview, the prime minister discusses his country’s growing relationship with the US and responds to claims that he represents a threat to democracy.

We’re also reading . . . 

The Financial Times’ award-winning podcast series Hot Money is back. Season two investigates a mysterious murder in a small town that leads to a web of drugs, money laundering and state-sponsored assassinations stretching from Dublin to Dubai. Listen on Apple Podcasts, Spotify or wherever you get your podcasts.

Chart of the day

China’s renminbi has surpassed the Japanese yen’s share of global payment transactions for the first time in almost two years. Economists said the rise was in large part due to lower Chinese interest rates which have made the currency more competitive in the realm of trade finance.

Take a break from the news

What began as a resolution to see more of the US snowballed into seeing it all. From Alabama to Wyoming, the FT’s Joshua Franklin completed the quest to visit America’s 50 states, part of a rising phenomenon of “completist” travel.

Additional contributions from Tee Zhuo and Gordon Smith