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FirstFT: Biden pledges to defend Taiwan militarily if China invades

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Joe Biden has pledged to use military force to defend Taiwan if China invades, in remarks made during his first visit to Japan as US president.

Biden’s remark appeared to overturn the decades-old US policy of “strategic ambiguity” on whether it would defend Taiwan, but the White House insisted its policy on the democratic island had not changed.

The president’s comments have reignited speculation about his stance on Taiwan. Some defence experts had urged Biden to make it clear that the US would defend Taiwan as a way to deter an increasingly powerful China.

But there has been no sign of a formal policy shift apart from his comment in Tokyo and two similar remarks last year. On all three occasions, the White House immediately rolled back on the remarks.

Speaking alongside Japan’s prime minister Fumio Kishida, Biden reaffirmed Washington’s “one China” policy, which recognises Beijing as the sole legitimate government of China and acknowledges its position that Taiwan is part of China. He added that if China were to take Taiwan by force, “it will dislocate the entire region and be another action similar to what happened in Ukraine”.

Elsewhere on his trip to Asia, the US president has launched a new trade initiative with 12 Indo-Pacific countries — including Japan, Australia, New Zealand and South Korea — in his first serious effort to boost economic engagement in the region and help other nations resist Chinese pressure. India and seven south-east Asian nations — Singapore, Malaysia, Indonesia, Vietnam, the Philippines, Thailand and Brunei — will also join the Indo-Pacific Economic Framework, which includes nations that represent 40 per cent of the global economy.

Over the weekend, Biden and South Korean president Yoon Suk-yeol committed to exploring “new and additional steps” to reinforce deterrence as North Korea continues to develop nuclear weapons.

Thanks for reading FirstFT Asia. Here’s the rest of the day’s news — Sophia

1. Didi investors vote to delist in US in bid to revive China business The Chinese ride-hailing group has notified the New York Stock Exchange that it will move to delist after shareholders overwhelmingly backed the plan designed to get the company’s services back on to Chinese app stores. The company has endured a months-long crisis after a botched $4.4bn IPO.

2. Binance promoted terra as a ‘safe’ investment before $40bn collapse Just weeks before the stablecoin and its counterpart Luna collapsed, the world’s biggest crypto exchange advertised an investment scheme in which clients lend out their Terra to earn a yield of almost 20 per cent as a “safe and happy” opportunity, according to a message Binance sent on its official channel on the Telegram messaging app.

3. Eurozone to end negative interest rates European Central Bank president Christine Lagarde has signalled that ECB’s eight-year experiment with negative rates will end, and that borrowing costs are on track to hit zero by the end of September. ECB officials estimate the neutral rate for the eurozone at between 1 per cent and 2 per cent, but economists are divided on whether it will raise rates above that level.

4. Zelensky calls for global plan to rebuild Ukraine after war The Ukrainian president has urged the international community at Davos to help fund his country’s reconstruction after the war, which he estimates will cost $500bn. In addition to rebuilding war-torn areas, Zelensky has also proposed using frozen Russian assets to compensate victims.

5. Iran vows revenge after commander assassinated in broad daylight Colonel Hassan Sayyad Khodaei, a member of the Revolutionary Guards, was shot in front of his house in Tehran on Sunday afternoon. Iran’s president Ebrahim Raisi blamed “global tyranny” for the death of the commander, a phrase that is usually a reference to the US and Israel.

The day ahead

Quad leaders summit Japan’s prime minister Fumio Kishida will host US president Joe Biden, Australia’s newly elected prime minister Anthony Albanese and India’s prime minister Narendra Modi. The Indo-Pacific security grouping is aimed at addressing China’s assertiveness in the region.

Elizabeth line opens in London The city’s £18.9bn east-west express rail link, the Elizabeth Line, is set to open, three-and-a-half years later than originally planned.

Eurozone business activity data A key test will come today from S&P Global’s latest survey of purchasing managers, which European Central Bank policymakers will watch as they weigh how soon to stop buying more bonds and start raising interest rates.

What else we’re reading

How the war in Ukraine convinced Germany to rebuild its army Three days after Russia invaded Ukraine, the German government said it would spend €100bn on modernising its army. Germany has previously promised. to spend 2 per cent of GDP on defence, but has never met that target. Now, some are left asking why it took so long — and whether it will be enough.

US-China rift poses challenge for Hong Kong stock exchange chief At the first in-person World Economic Forum in two years, Nicolas Aguzin will attempt to persuade executives and officials that China is open for business. But the plan to reinforce HKEX’s role as the bridge between east and west has been “defeated for the time being” a person close to the HKEX said.

The uncertain future of urban transit Cities as diverse as Paris, Auckland, and Ho Chi Minh City are pressing forward with building new urban metro systems. But these come as improved cycling infrastructure, disruptive technologies such as ride-hailing apps and new patterns of work are already changing travel patterns worldwide.

Graphic showing metro journeys in cities worldwide

FT Executive Education Ranking 2022 France’s HEC Paris has topped the FT’s twin annual executive education rankings for open-enrolment programmes and custom courses for corporate clients for the first time, as leading academic institutions reported a surge in demand for non-degree courses. Read the full rankings and profiles of all the top schools.

Vive la différence between work and play France’s attempt in 2017 to allow employees a “right to disconnect” is now being taken up across Europe. Italy and Spain are taking similar steps and Portugal forbids companies from contacting employees outside working hours. Meanwhile, the EU is drafting a directive to reduce work-related digital overload.

  • More on work: Employers believe the impression of productivity is just as important, if not more so, than actual productivity. But leadership consultant Nels Abbey urges an end to the curse of presenteeism.

How To Spend It

From Lake Como to Colombia, Bordeaux to the Bahamas, How To Spend It is full of ideas for getting away this summer in the special travel issue, with an opening letter from editor Jo Ellison.

The Vineyard House is a two-bedroom cottage on the Château Troplong Mondot estate in Bordeaux
The Vineyard House is a two-bedroom cottage on the Château Troplong Mondot estate in Bordeaux © Cécile Perrinet-Lhermitte

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