Italy quits China’s Belt and Road Initiative

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Good morning. Italy has informed Beijing of its decision to withdraw from President Xi Jinping’s flagship Belt and Road Initiative, ending months of speculation over a relationship that had irritated Rome’s western allies.

The formal decision to quit comes three months after Prime Minister Giorgia Meloni publicly confirmed that her rightwing government was considering a pullout. 

Rome’s 2019 decision to join China’s ambitious international trade and infrastructure investment scheme had dismayed its western allies, as it was the only one of the G7 major economies to do so. 

Stefano Stefanini, Italy’s former ambassador to Nato, said Rome’s continued participation in the initiative was untenable now, given the west’s deteriorating relations with Beijing and its efforts to reduce dependence on China, particularly in strategic areas. 

“There is now an official G7 policy called de-risking. The US had made it clear to the present Italian government that participation was incompatible with Italy’s position in the G7.” Here’s more on Italy’s BRI exit and its plan to maintain “mutually beneficial” relations with Beijing

And here’s what else I’m keeping tabs on today:

  • Economic data: China releases November trade balance figures, while the EU releases third-quarter gross domestic product and employment data.

  • EU-China summit: EU leaders will stress their rising concerns about Chinese industrial overcapacity when they meet President Xi Jinping for a summit in Beijing.

  • Russia-Iran relations: Following a visit to the Gulf region, Vladimir Putin will host President Ebrahim Raisi of Iran, an important ally and provider of military equipment for his forces in Ukraine.

Five more top stories

1. US President Joe Biden accused Republicans in Congress of being willing to give Russian President Vladimir Putin the “greatest gift he could hope for” as a vote to provide more aid to Ukraine appeared doomed to fail in the Senate. Biden’s comments reflected growing fears within the administration that Congress would be unable to reach any deal on Ukraine aid before the end of the year.

2. Google has launched “Gemini”, a new set of generative artificial intelligence models that will run directly on mobile phones for the first time. The AI system is a breakthrough in the tech company’s efforts to take on rivals such as ChatGPT-maker OpenAI — and could help answer an economic problem with the technology.

3. ByteDance is tapping a cash pile of more than $50bn accumulated from its popular short-video apps to buy back up to $5bn worth of shares from investors. The owner of the viral apps TikTok and Chinese version Douyin aims to purchase shares from investors at an approximate $260bn valuation, according to three people familiar with the matter.

4. Oil prices have fallen to their lowest level in five months as investors grow increasingly sceptical that production cuts announced by Opec+ last week will be enough to offset rising supply from countries outside the cartel and waning global demand. The declines mark a five-day losing streak for global crude prices.

5. Venezuela’s President Nicolás Maduro has ordered state companies to exploit oil deposits and mines in territory run by Guyana after boasting of an “overwhelming” people’s mandate to pursue a longstanding claim to two-thirds of its neighbour’s land. Maduro’s bellicose speech has increased fears in Guyana that Venezuela might use force to seize the remote territory of Essequibo, which controls access to a rich oilfield.

News in-depth

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Japan’s Ginza district is a magnet for luxury shoppers © Mauritius Images/Alamy

Japan, a desirable tourist destination whose 126mn population includes many affluent consumers, has always been a reliably strong market for luxury brands. But a weak currency combined with a resurgent wave of Chinese visitors are turbocharging growth, just as shoppers in the US and Europe rein in spending.

We’re also reading . . . 

Chart of the day

Apple wants batteries for its latest generation of iPhones to be made in India, as part of the US tech giant’s efforts to diversify its global supply chain and move manufacturing out of China.

Take a break from the news

FT film critic Danny Leigh reviews Wonka, the lavish origin story of Roald Dahl’s chocolatier, enriched by Hugh Grant as an Oompa Loompa, and sugar-dusted with many, many songs.

Timothée Chalamet as Willy Wonka in the film Wonka
Timothée Chalamet leads the cast as a young, down-on-his-luck Willy Wonka

Additional contributions from Grace Ramos and Gordon Smith

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