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Good morning and welcome to FirstFT Asia. In today’s newsletter:
Chinese exit bans stoke tension with US
Japan’s PM clings to power
Land sales slump in small Chinese cities
The US embassy in China has expressed concerns about damage to bilateral relations from exit bans, following reports that a commerce department employee had been prevented from leaving the country.
What to know: The US commerce department official was a Chinese-American who works for the Patent and Trademark Office and who had travelled to China to meet relatives, according to the Washington Post, which first reported the case. The US embassy said it had “raised our concern with Chinese authorities about the impact these arbitrary exit bans have on our bilateral relations and urged them to immediately allow impacted US citizens to return home”.
Exit bans are usually issued without an official public explanation. China’s foreign affairs ministry said it had no “information to share” on the case.
Why it matters: The tensions over exit bans come as the two superpowers are locked in a trade war, and ahead of a potential meeting between US President Donald Trump and Chinese leader Xi Jinping. The latest case is likely to prompt concerns among business groups, officials and others planning to travel to China. Wells Fargo, the US bank, halted travel to the country last week after an Atlanta-based managing director was hit with an exit ban.
Here’s what else I’m keeping tabs on today:
Economic data: Malaysia reports June inflation data and Taiwan publishes employment figures for the month.
Europe-Asia relations: EU leaders visit Japan today as part of an Asian tour that also includes a summit with China on Thursday. Brussels’ chief diplomat told the FT that the bloc must strengthen security ties with Asian countries despite US pressure to focus only on Europe’s domestic security.
Five more top stories
1. Shigeru Ishiba said yesterday he would continue to lead Japan as prime minister and press for quick talks with Donald Trump on trade after the Liberal Democratic party lost its majority in both houses of parliament for the first time. Ishiba appeared to have secured support from senior LDP figures to remain in office, but analysts said the party’s backing for the prime minister was probably temporary.
2. US Treasury secretary Scott Bessent has called for an inquiry into the “entire Federal Reserve institution”, in the latest sign of how top Trump administration officials are cranking up pressure on the central bank. Bessent’s comments follow repeated allegations made by the president’s budget director that a $2.5bn renovation of the Fed’s headquarters has been grossly mismanaged.
3. Twenty-five countries, including the UK, Japan and more than a dozen EU states, have condemned the “drip feeding of aid” in Gaza, demanding an immediate end to Israel’s war with Hamas in the shattered enclave. They also lambasted the repeated killings of Palestinians trying to collect aid, a day after Hamas accused Israeli forces of killing more than 60 people as they waited for a food convoy in north Gaza.
4. Russia’s “swarm” tactics are increasingly cutting through Ukraine’s defences, with drones striking targets at three times the typical rate in recent months, according to official data. Mass attacks of Shaheds, an Iranian-designed drone now made in Russia, appear to be overwhelming Ukraine’s beleaguered air defences.
5. Brazil is rallying to defend Pix, the instant payment system loved by Brazilians but which has fallen foul of Donald Trump. Washington said earlier this month it would investigate whether Brazil discriminates against US credit card companies in favour of its government-developed electronic payment system. Brasília has responded with outrage.
The Big Read
Europe’s dependence on US companies for digital infrastructure is causing growing concern among executives and policymakers, over fears that Donald Trump could suspend or block the operations of these groups on the continent. But as the region pursues “tech sovereignty”, it must also grapple with its own lack of alternatives.
We’re also reading . . .
‘Fiscal populism’ is coming: Attacks on central bank independence, including in the US, are rising, writes Andy Haldane.
Europe’s far right: Donald Trump is succeeding in dividing and weakening Europe, largely thanks to his supporters inside the gates, writes Nathalie Tocci.
Tech shocks: The disruption from technology that is hitting the manufacturing sector could come for healthcare next, writes Rana Foroohar.
Chart of the day
Land sales across smaller and less wealthy Chinese cities have fallen to their lowest levels since at least 2011, highlighting the bleak prospects for a full recovery across a national real estate market mired in a slowdown.
Take a break from the news
Younger workers who don’t say hello when they answer a call need to know it’s a problem, writes Pilita Clark, after seeing a baffling post from a recruiter.
