FirstFT: Joe Biden warns China against attacking Filipino vessels

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Good morning. President Joe Biden has warned China not to engage in dangerous and unlawful activity towards the Philippines and warned that any attack on the US ally would trigger Washington’s mutual defence treaty with Manila.

Speaking alongside Australian prime minister Anthony Albanese, Biden said he wanted to send a “clear message” to Beijing after China’s coastguard tried to block a Filipino supply mission in the South China Sea.

The Philippines this week accused China of harassing Filipino vessels near the Second Thomas Shoal, a sandbank inside its exclusive economic zone. China says the shoal is part of its territory, which is not an internationally recognised claim.

While putting China on notice, Biden stressed that he was “not looking for conflict” with the country as he welcomed Albanese for a visit aimed at bolstering an alliance that is critical to countering Beijing in the Indo-Pacific. Here’s more on the Australian leader’s visit to Washington.

• China woos US ally: China and Colombia have upgraded their relationship to a “strategic partnership” in a sign that Washington’s principal ally in South America is orienting itself towards Beijing.

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

• New Morgan Stanley CEO: The Wall Street bank has named Ted Pick as its new chief executive, replacing James Gorman who will bow out from the role after nearly 14 years. Follow the developing story here.

• US-China relations: China’s foreign minister Wang Yi arrives in Washington. Here’s Edward Luce on why the upside to dialogue between the US and China should never be overlooked.

• ECB interest rate decision: The European Central Bank is expected to keep rates unchanged for the first time in 15 months.

• Economic data: The US publishes flash third-quarter GDP data.

Five more top stories

1. Benjamin Netanyahu said Israel was “preparing a ground invasion” of the Gaza Strip, in one of the clearest statements yet that his government is planning to enter the Palestinian enclave in its war to topple Hamas. The Israeli leader did not specify when any ground operation would occur, but said the timing would be made by a unanimous decision of the war cabinet and senior army commanders. Read the full story.

• Gaza fuel shortage: The main UN agency bringing humanitarian aid to Gaza has said it will soon run out of fuel, threatening its ability to help roughly 1mn people displaced by the war.

• US moves to deter Iran: The US is rushing defensive systems into the Middle East amid growing fears that Iran and its proxies will escalate attacks on US forces once Israel’s invasion of Gaza begins.

• Visual story: With its leafy boulevards, beauty salons and shopping malls, the Rimal neighbourhood of Gaza City was known for its buzz. Here’s how Israeli air strikes reduced much of it to rubble.

2. Mike Johnson, a loyal ally of Donald Trump, has been elected Speaker of the House of Representatives. The vote ends weeks of congressional paralysis and signals a sharp tack to the right for Republicans in the lower chamber.

3. Sam Bankman-Fried intends to take the witness stand in his criminal case over the multibillion-dollar collapse of crypto exchange FTX, potentially as early as Thursday. Bankman-Fried’s decision, which goes against the advice usually given to white-collar defendants, is a high-stakes bid to appeal to a jury that could soon condemn him to life in prison.

• Go deeper: When he takes the stand, can Bankman-Fried explain away the documentary evidence and the damning testimony of his former lieutenants?

4. Hong Kong will offer HK$20,000 (US$2,556) handouts to parents of newborns and ease stamp duties on some home sales as the city struggles to revive an economy hit by a population exodus and slowing Chinese growth. The measures were outlined yesterday in Hong Kong chief executive John Lee’s annual policy address.

5. Japan has surpassed China as a driver of investment banks’ revenues from equity fees for the first time in almost 25 years, as global investors shun Chinese markets and a sustained rally in Tokyo stocks drives listings. A rush of equity business in Japan has pushed the country’s contribution to banker fees to more than $440mn so far in 2023, about 30 per cent of the total in the Asia-Pacific region, according to data from Dealogic.

News in-depth

More than 820,000 people fled Russia after last year’s invasion of Ukraine, in one of the biggest waves of emigration from the country since the early 1990s after the fall of the Soviet Union. Now, some have changed their minds — a sign of how the Kremlin has managed to maintain a vestige of normality in Moscow and contain some of the biggest economic shockwaves from the war.

We’re also reading and listening to . . . 

• Books on China: Are we right to fear China? These three new books urge greater understanding of an evermore powerful player.

• Opinion: Israel’s longer-term goal should be to stabilise Gaza and prevent the violence flaring into regional conflict, writes John Sawers, the former chief of M16.

• 🎧Unhedged podcast: The Chinese stock market is below where it was in 2019. Is this a warning or a bargain? Listen here for free.

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Chart of the day

Turkey’s stock market tumbled on Wednesday after President Recep Tayyip Erdoğan stepped up his criticism of Israel and its allies. The Israel-Hamas conflict has come at a time when Ankara is desperate to secure western investment to fuel its economic overhaul. 

Take a break from the news

When you’re carrying your life around, you need to make a sizeable investment. Check out the big men’s bag guide from HTSI.

Additional contributions from Gary Jones and Miles Ellingham