FirstFT: US ratchets up China deterrence

The US plans to deploy B-52 bombers to Australia, in Washington’s latest effort to boost military co-operation with Canberra and send a strong signal to China as tensions mount in the Indo-Pacific.

The Pentagon will deploy the B-52s, which carry nuclear or conventional weapons, to Australia’s Northern Territory as part of rotational bomber task forces that conduct exercises with allies. They will be deployed to Tindal air force base for short missions, according to a person familiar with the situation.

The US has deployed B-52s to Australia before. In 2018, two of the bombers conducted exercises with Australian forces in Darwin.

However, sending as many as six of the aircraft would mark a big increase in presence and comes as the US and Australia seek to work together more closely to counter Chinese activity, particularly near Taiwan.

Thanks for reading FirstFT Asia. Do you agree with the US decision to send B-52s to Australia? Will it help deter China? Tell me what you think at [email protected] and I may feature your response in an upcoming newsletter. — Emily

Five more stories in the news

1. More than 130 dead after bridge collapse in Gujarat Local authorities have launched a criminal investigation into the collapse of a bridge in the home state of Indian prime minister Narendra Modi. Harsh Sanghavi, the western state’s home minister, announced yesterday that at least 132 people had been killed after cables on the newly reopened Morbi bridge snapped on Sunday.

2. Hong Kong to explore legalising retail crypto trades Hong Kong is taking steps towards legalising retail trading of crypto assets, in a reversal that contrasts Beijing’s crackdown on such transactions in mainland China. The Chinese territory’s regulators are also exploring the listing of crypto exchange traded funds, Hong Kong’s financial authorities said earlier today.

3. Apple’s supply chain tested as Covid hits Foxconn Apple’s main iPhone assembler in China said it was preparing to shift production to other parts of the country amid a worsening Covid outbreak. Local officials yesterday continued to bus workers away from the Zhengzhou plant, where staff say the company has failed to provide adequate food and a safe working environment during Apple’s peak production period.

4. Lula seeks unity in Brazil as Bolsonaro remains silent Luiz Inácio Lula da Silva has pledged to govern for all Brazilians after winning a slim victory in a bitterly fought presidential election — but more than 18 hours after the official result, defeated President Jair Bolsonaro had still not conceded. Financial markets traded cautiously on Monday afternoon local time, with stocks marginally lower and the real currency slightly up against the dollar.

5. Biden to float tax penalties on oil companies US president Joe Biden will urge Congress to punish oil companies with higher taxes unless they increase output to bring down prices at the pump, as he steps up attacks on fossil fuel producers in the final stretch of the midterm election campaign.

The day ahead

BoJ monetary policy meeting minutes The Bank of Japan will release a detailed account of its most recent monetary policy meeting.

Israeli election Benjamin Netanyahu will be eager to mount a coup in Israel’s fifth election in less than four years. Leading a rightwing bloc, he is seeking to overcome a small deficit in polling to take a majority in the Knesset and return as the nation’s prime minister.

Earnings Companies reporting third-quarter earnings today include Saudi Aramco, Alibaba, Airbnb, BP, Coca-Cola, Electronic Arts, Mondelez, Nippon Steel, Pfizer, Sony, Thomson Reuters, Toyota and Uber.

US manufacturing data A national manufacturing gauge collated by the Institute for Supply Management, which is closely watched as a proxy for the strength of the world’s biggest economy, is set to be released today.

What else we’re reading

‘We must prepare for the reality of the Chip Wars’ President Biden’s recent semiconductor export bans on China have been portrayed as a US declaration of economic war, writes Rana Foroohar. But China’s Made in China 2025 programme, announced seven years ago, spelt out the country’s desire to be free of western technology, paving the way for a formal supply chain decoupling.

Chinese students are falling out of love with US universities The news that only around half as many Chinese mainlanders are coming to the US to study now as before the pandemic seems a harbinger of worse to come, writes Patti Waldmeir. International students are like unofficial ambassadors between their cultures — halving that group will do nothing to heal the rift between the superpowers.

Russia and Ukraine prepare for rigours of winter war Winter has played a big role in Russian and Ukrainian military history. It was decisive in their victories over Napoleon and Nazi Germany, and in what Kyiv-born writer Mikhail Bulgakov called that “great and terrible year” of 1918. More than a century later the weather is set to be a critical factor again as the fighting between Ukrainian and Russian forces enters its ninth month.

The nuclear threats that hang over the world Broadly speaking, there are four main scenarios to consider: nuclear normalisation, nuclear blackmail, avoidance of war, and Armageddon, writes Gideon Rachman. It is not hard to see how the use of a Russian nuclear weapon could spiral into an all-out nuclear war — leading to what President Biden himself has termed “Armageddon”.

Will Sisi take Egypt’s economy out of military hands? In part, Egypt’s woes have underscored the vulnerabilities of poorer nations to the repercussions of Russia’s war in Ukraine after it triggered capital flight from emerging markets. But economists and Egyptian businessmen say there are more fundamental issues at stake, arguing that the global crisis has magnified the fragility of Sisi’s state-driven economic model.

Life & arts

British comedian Ahir Shah lets us inside his fantasy dinner party, complete with the cast of Goodness Gracious Me, Gujarati cooking and mango lassis.