FirstFT: Today’s top stories | Financial Times

China flew 28 military aircraft into Taiwan’s air defence buffer zone on Tuesday in its largest such incursion so far, according to Taipei officials, a move that came as Beijing continues to express anger over warnings from western countries and their allies about its military pressure on the island.

The flights involved 20 fighter jets and four nuclear-capable bombers alongside anti-submarine warfare and early-warning aircraft, the Taiwanese air force said in a statement. Previously, the largest incursion had featured 25 Chinese military aircraft on a single day in April.

The operation came after the G7 group of developed economies issued a final communiqué on Sunday following its UK summit, in which it highlighted “the importance of peace and stability across the Taiwan Strait” and called for a peaceful resolution of issues between China and Taiwan.

Five stories in the news

1. Big Tech critic Lina Khan to lead US competition regulator US president Joe Biden’s has tapped Lina Khan, a prominent critic of the power of large technology companies, to chair the Federal Trade Commission. Biden’s decision elevates the 32-year old law professor as Congress vows to crack down on anti-competitive behaviour among the largest US technology groups.

2. EU freezes 10 banks out of bond sales The EU has excluded 10 of the heaviest-hitting banks in the debt market from running lucrative bond sales as part of its €800bn recovery fund, over historic breaches of antitrust rules.

3. PwC to boost headcount by 100,000 over five years The audit and consulting group will increase its global headcount by more than a third over the next five years as part of a $12bn investment in recruitment, training, technology and deals designed to capture a booming market for environmental, social and governance advice. 

4. EU and US end Airbus-Boeing trade dispute The EU and US agreed to end the 17-year dispute over aircraft subsidies, lifting the threat of billions of dollars in punitive tariffs on their economies in a boost to transatlantic relations. 

5. UK and Australia agree post-Brexit trade deal The trade deal is expected to become a model for Britain’s post-Brexit commercial policy and pave the way for the UK to join the Comprehensive and Progressive Trans-Pacific Partnership. If the trade deal can be signed before the end of the year, it would mark the first big bilateral agreement entirely negotiated by the UK since it left the EU in January 2020.

Coronavirus digest

• India’s catastrophic Covid-19 wave has undermined a US plan for New Delhi to play a leading role in countering Chinese influence in the Indo-Pacific region.

• Malaysia prime minister Muhyiddin Yassin unveiled a national pandemic exit plan ahead of a meeting of the country’s monarchs that could determine his political future.

• New York state lifted nearly all remaining Covid-related restrictions, 15 months after America’s biggest city was forced into an unprecedented lockdown.

• It’s too soon to worry about post-pandemic wage inflation, or to predict a shift in the balance of power between labour and capital, writes Sarah O’Connor. (FT, Straits Times)

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The day ahead

China’s retail sales May figures will be released today. In April retail sales grew 17 per cent year on year, missing expectations. (CNBC)

Biden and Putin meet in Switzerland As Joe Biden prepares to meet Vladimir Putin in Geneva, efforts by Russia-linked groups to discredit Covid-19 vaccines are part of what the US sees as an intensified disinformation campaign. But few believe Moscow is likely to back off its cyber activities.

Interest rate decisions The Federal Reserve will announce its interest rate decision on Wednesday as it faces pressure from investors urging the central bank to act to prevent negative rates taking hold in parts of the US financial markets. Brazil’s central bank is expected on Wednesday to raise interest rates by 75 bps for third time in a row.

What else we’re reading

What tech investors are looking for in China After two years of struggling to raise money, Chinese start-ups are seeing interest from venture capitalists pick up again, as the boom in the US crosses over the pacific. The number of venture deals in China rose 56 per cent in the first quarter from a year earlier, the fourth consecutive quarter of rising activity.

• More on Chinese investment: The country has approved record amounts of investment to flow out of the country through an official scheme as authorities liberalise the local financial system against a backdrop of a rallying renminbi.

The US should spurn the false promise of protectionism Protectionism is back, above all, in the US, writes Martin Wolf. The driving forces behind it are xenophobia and nostalgia. Arguments can be made for a degree of self-sufficiency, for reasons of national security. But those arguments need meticulous assessment.

Who is Peru’s president in waiting? With his huge straw hat and giant yellow pencil, Pedro Castillo has emerged from nowhere to become one of the most recognisable figures in Latin American politics. He is poised to become Peru’s next president. But what will he do in government? No one knows.

Why is Wall Street’s fear gauge so low? After inflation fears shocked investors in the first few months of 2021, markets have switched into a different mode: a deep slumber. Analysts say the quiet period partly reflects the wait-and-see tactics of the Federal Reserve. But some investors are growing nervous that complacency is setting in.

China repackages its history Ahead of the Chinese Communist party’s 100th anniversary this summer, President Xi Jinping and Gao Xiang, a historian turned propaganda official, are leading the largest mass-education drive since the Mao era. It’s reimagining much of the country’s history in support of President Xi’s vision for China. (WSJ — paywall)

Climate Capital

Environmental activists are pushing a European court to rule that Norway’s drilling for oil in the Arctic breaches their and future generations’ human rights in the latest legal challenge to fossil fuel exploitation.

Read more on our Climate Capital hub.