FirstFT: US lawmakers to vote on financing weapons exports to Taiwan

Good morning. The US Senate Foreign Relations Committee is about to vote on a bill that would fund arms exports to Taiwan for the first time and significantly alter relations with Taipei under increasing pressure from China.

The Taiwan Policy Act, to be voted on Wednesday in the US, would provide Taiwan $4.5 billion in weapons and security assistance over the next four years. It would also create a $2 billion loan facility to help Taipei buy weapons and make Taiwan eligible for a war reserve weapons mechanism.

The bill would also punish China for taking military action against Taiwan by requiring the White House to impose sanctions on major Chinese financial institutions for “escalating hostile actions in or against Taiwan.”

The bill, which follows China’s large-scale military exercises in response to House Speaker Nancy Pelosi’s trip to Taipei last month, has sparked debate in the US on how to support Taiwan. Proponents of the bill say the US needs to do more to help the country, while some worry that certain provisions will antagonize China while doing very little to secure Taiwan.

Thanks for reading FirstFT Asia. How do you think lawmakers should vote on the Taiwan Policy Act? Tell me what you think firstft@ft.com — Emily

Five more stories in the news

1. Wall Street has its worst sell-off since June 2020 The benchmark S&P 500 stock index plunged 4.3 percent, its worst day since June 2020, with 99 percent of its companies depreciating after official data showed that U.S. inflation had risen unexpectedly in August. The Nasdaq Composite fell 5.2 percent as tech groups most exposed to higher tariffs took the brunt of the sale.

2. Evergrande promises to restart all stalled real estate projects The developer has pledged to resume construction on 38 remaining projects by the end of September and accelerate 62 restarted projects to “normal levels,” according to a company statement released late Monday that named its chairman, Hui Ka Yan, at a weekly meeting. meeting .

Related reading: Hong Kong’s real estate developers need to create more flexible rental offers to attract businesses, as the city will have more than 246 football fields with an oversupply of office space by 2025.

3. Vedanta and Foxconn build chip factory in Gujarat, India The two companies are set to invest Rs1.54tn ($19.4 billion) in Gujarat, the home state of Prime Minister Narendra Modi, to build one of India’s first semiconductor manufacturing complexes – part of a government-backed effort to build domestic chip manufacturing capacity .

More about the semiconductor industry: The US is struggling to mobilize its East Asian “Chip 4” alliance amid internal tensions and concerns about China undermining the proposed grouping with South Korea, Japan and Taiwan.

4. Ukraine continues its offensive eastwards through Donbas. to penetrate Ukraine’s armed forces battle for control of a series of cities in the Donbas region as Kiev’s counteroffensive pushes east against Russian forces. Serhiy Hayday, the exiled Ukrainian head of the Luhansk region, said heavy fighting was ongoing in Lyman, a town east of Izyum, a large military command post from which Russian troops had fled days earlier.

5. JPMorgan warns of a 50% drop in investment banking costs
One of the bank’s top executives has said he expected investment banking costs to fall 45-50 percent in the third quarter from $3.3 billion a year earlier, after dropping 44 percent. percent in the first six months of 2022. will announce the results on October 14.

the next day

Xi Jinping’s first trip abroad since Covid pandemic The Chinese president will be among friends and allies — including Russian President Vladimir Putin — when he travels to Kazakhstan today to attend a meeting of the Shanghai Cooperation Organization in Samarkand, Uzbekistan, starting tomorrow.

Japanese economic data The results of the Tankan survey on company sentiment will be released, as well as monthly industrial production data.

queen “able” Queen Elizabeth II’s coffin will be placed on a platform in Westminster Hall, the oldest part of the Houses of Parliament, from today until her funeral on Monday.

What else do we read

Queen’s death sparks nostalgia for Hong Kong’s ‘golden age’ Beijing and the Hong Kong government are increasingly denying Britain’s role in the development of the financial center. Yet thousands of mourners lined up outside the British consulate in the area to pay tribute to the Queen, and many lamented the area’s loss of freedoms since the handover in 1997.

Shareholders challenge India’s new crop of publicly traded technology groups Last year’s new-age IPOs marked a historic moment for Indian technology. But the experience of Patym’s botched listing should be a wake-up call for India’s publicly traded technology companies. Investors are getting tired of inconsistent messages and struggling to make a profit.

Globalization does not die, it changes There is some evidence that natural economic forces have been largely responsible for changes in the pattern of world trade in the past. Growing concerns about supply chain security will undoubtedly contribute to these changes, although it is doubtful whether the result will be “reshoring” or “friendshoring,” writes Martin Wolf. More likely is a complex pattern of diversification.

Debt monsters in the recession As central banks raise interest rates to contain inflation, indebted companies face the uneasy prospect of paying higher interest bills with tight cash flows. Which groups are flashing warning signals? The Financial Times has compiled a list of companies with debt that trade more than 10 percentage points above government bonds.

‘Stop silently’ is worse than nonsense According to Gallup, about half of Americans are “silent quitters”: people who “don’t go beyond their job and just fit their job description.” HR specialists quickly provided advice on how to solve this problem. But Sarah O’Connor states it’s no problem at all – the staff who do exactly what’s asked of them are still working.

Welfare

The Theragun massager, which promises to relax and strengthen facial muscles, apparently received enthusiastic approval from football player Cristiano Ronaldo, who signed a sponsorship deal with Therabody in 2021 and is a long-time champion of the brand. Therabody is determined to take ownership of the sports recovery market. Can it hit the perfect pressure point?