FirstFT: US and China hold ‘candid’ talks in effort to defuse tensions

Good morning. Relations between Washington and Beijing are at their lowest level since diplomatic ties were normalised in 1979. In an attempt to defuse the tensions, US national security adviser Jake Sullivan and China’s top diplomat Wang Yi have just completed two days of talks in Vienna.

The White House said they held “candid, substantive and constructive” discussions on issues that included the US-China relationship, global security matters, Russia’s war against Ukraine and Taiwan.

Efforts to kick-start high-level dialogue between the US had China earlier this year were largely unsuccessful.

Secretary of state Antony Blinken cancelled a planned visit to China in February after a suspected Chinese spy balloon flew over North America. Blinken later met Wang at the Munich Security Conference but it was tense and unproductive. He is now trying to reschedule his visit, but the two sides have so far failed to reach an agreement, unless Sullivan negotiated one with Wang in Vienna.

We also learnt that Beijing told Washington it was unwilling to schedule a meeting between its defence minister, and his US counterpart.

And here’s what I’m keeping tabs on in the days ahead:

• Imran Khan in court: The former Pakistan prime minister will appear before the Islamabad supreme court today after his arrest was ruled illegal.

• Earnings: Allianz, Société Générale, Tata Motors, and Toshiba results are due.

• Elections: On Sunday, Turkey holds its presidential and parliamentary elections, Thailand has parliamentary elections and Italy and Albania both have local elections.

Five more top stories

1. Turkish presidential candidate Muharrem İnce has withdrawn from the contest, boosting the main opposition contender Kemal Kılıçdaroğlu’s chances of ousting President Recep Tayyip Erdoğan in Sunday’s election. İnce said he would step out of the race for the good of the country after an alleged sex tape surfaced this week.

2. SoftBank Group has posted record annual investment losses of ¥5.3tn ($39bn) in its tech-heavy Vision funds and warned that the war in Ukraine and the US-China dispute continue to pose big market risks. With the poor performance, which was worse than analysts expected, SoftBank has turned to what founder Masayoshi Son has called “defence mode”.

3. Elon Musk has hired a new Twitter chief executive to lead the social media platform. The billionaire did not name his successor but said that she will start in about six weeks.

4. The biggest US banks will be hit with nearly $16bn in extra fees over two years under a Federal Deposit Insurance Corporation plan to recover its losses associated with rescuing Silicon Valley Bank and Signature Bank. Here’s more on which banks will be hit by the so-called “special assessment”.

5. US Treasury secretary Janet Yellen has called on G7 nations to co-ordinate action against Beijing’s economic coercion, as Washington finalises a new approach to outbound investment-screening aimed at China.

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

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Additional contributions by Tee Zhuo and Emily Goldberg