FirstFT: ‘Strong case’ for tough new action against China, says senior UK minister

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Good morning. We start today in the UK, where the revelation that a British parliamentary researcher was arrested on suspicion of spying for Beijing in March has focused a spotlight on the government’s approach to China.

Cabinet Office minister Oliver Dowden said on Monday there was “a strong case” for tough new action against Beijing, and that ministers were looking at whether to include China in an “enhanced tier” of countries under the government’s new National Security Act, which is intended to “protect the safety or interests” of the UK.

However, the Treasury is concerned about any new government moves against China that could damage the UK economy and Rishi Sunak has resisted pressure from Conservative MPs to label Beijing “a threat”.

“It’s not like all of our partners are taking an ever-tougher line against China — they are not,” said Lord Kim Darroch, a former UK national security adviser. “If you designate China they will retaliate.” Read the full story.

Calling Financial Times subscribers: join our webinar this Wednesday (0730 ET/1230 UK) on China’s economic slowdown. Register for your free ticket now and send in your questions for James Kynge, Yuan Yang, Eleanor Olcott, Yu Sun, and UBS economist Tao Wang.

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

• Economic data: Opec publishes its Oil Market Report for September.

• Apple: The tech giant will unveil the iPhone 15 at its latest product launch, as it closes in on Samsung as the world’s largest handset maker. But will China worries overshadow Apple’s moment of triumph?

• Vladimir Putin-Kim Jong Un meeting?: Neither Russia nor North Korea has said when the meeting to discuss weapons sales will take place. But it’s expected to happen in Vladivostok, where Putin speaks today at the Eastern Economic Forum.

Five more top stories

1. The banks underwriting Arm’s $50bn listing will close orders for shares a day earlier than planned owing to strong demand for the biggest initial public offering in nearly two years. The IPO for the UK-based chip designer, which is more than five times oversubscribed, will close on Tuesday, instead of Wednesday as previously intended. People familiar with the matter said pricing could land towards the top end of the initial range of $47-$51 a share or even higher than that. Here are more details.

2. The US and Vietnam have agreed billions of dollars in business deals and partnerships led by companies including Boeing, Microsoft and Nvidia. US president Joe Biden hailed the move to strengthen co-operation in areas including cloud computing, semiconductors and artificial intelligence while in Hanoi on a two-day trip to mark the formal upgrading of the countries’ relationship, in response to China’s growing influence.

3. Nato is preparing its biggest live joint command exercise since the cold war next year, assembling more than 40,000 troops to practise how the alliance would attempt to repel Russian aggression against one of its members. The Steadfast Defender exercise will start in the spring as part of Nato’s rapid push to transform from crisis response to a war-fighting alliance.

4. Beijing gave a strong warning against bets on renminbi depreciation and released a batch of positive lending data earlier than usual, spurring China’s currency to bounce back from a 16-year low touched last week. “The central bank showed its muscle this time and made a difference,” said a Shanghai-based currency trader. Here’s more on the People’s Bank of China’s statement.

5. Alibaba’s former chief executive Daniel Zhang has unexpectedly stepped down as head of the company’s cloud computing division as the Chinese ecommerce group starts its break-up into six units. Zhang had been expected to continue to lead the company’s cloud business into a planned spin-off. “The timing is peculiar on the day the transition was set to take place,” said one Alibaba insider.

The Big Read

A billion-dollar money laundering investigation in Singapore comes at a sensitive and destabilising time. The city-state is wrestling with rising inequality — linked to unrestrained capital inflows, especially from China — as it prepares for its first change of leader in almost 20 years. While Singapore’s open, trade-reliant economy has proved resilient to external shocks, some are questioning whether the model is still working.

We’re also reading . . . 

• North Korea’s reopening: The country is embarking on a belated reopening from some of the most stringent Covid-19 restrictions in the world.

• Western banks in China: The era when foreign lenders in China were immune to geopolitical tensions between Beijing and the west has come to an end, writes Patrick Jenkins.

• History wars: Sins of omission and distortion from politicians are complicating the real point of the discipline, writes Stephen Bush.

Map of the day

The powerful earthquake that struck Morocco on Friday night has killed some 2,681 people and levelled scores of mountain villages in the north African country. The FT’s Alice Morrison reports from Ouirgane in the remote High Atlas region, which has borne the brunt of the most powerful quake to strike the country in 120 years.

Take a break from the news

Biographer Walter Isaacson tells the FT’s Gillian Tett what he learnt during two years spent with “total access” to Elon Musk, and why the tech tycoon “is driven by demons.”

Additional contributions from Grace Ramos and David Hindley