Taiwan to boost civil defence amid China threat

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Good morning. Today we’re covering:

But first, we have an exclusive story on Taiwan’s plans to prepare public services and infrastructure to function in wartime as China’s increasingly aggressive stance fuels concerns about the risk of open conflict.

The reform agenda includes proposals to boost civil defence manpower, build up food and energy stockpiles, emergency medical capacity and strengthen communication infrastructure, according to several government officials familiar with the discussions.

The plans are set to be submitted for approval today to President Lai Ching-te.

One proposal would earmark school halls as shelters if people living nearby are made homeless in an attack. Officials are also exploring ways to implement a food rationing system, including the possible use of Taiwan’s ubiquitous 24-hour convenience stores to distribute supplies.

Here’s what else I’m keeping tabs on today:

  • Monetary policy: South Korea and Malaysia’s central banks announce their rate decisions.

  • Economic data: The US and Germany report June inflation figures. The UK publishes its May GDP estimate.

  • Biden at Nato: The military alliance’s summit in Washington concludes. US President Joe Biden will hold a press conference in another high-stakes test of his fitness for office.

Five more top stories

1. Exclusive: Indonesia’s incoming president Prabowo Subianto will allow the national debt to increase to 50 per cent of GDP to fund his ambitious spending programmes, provided the government can boost tax revenue, one of his closest advisers has said.

2. Hong Kong’s audit regulator said it had not found evidence to support many of the explosive allegations against PwC made in an apparent whistleblower report over the firm’s work for collapsed Chinese property developer Evergrande. However, the Accounting and Financial Reporting Council said it was still investigating PwC Hong Kong’s work for Evergrande itself.

3. China’s consumer price growth slowed in June while factory prices eased but remained in deflationary territory. The new data prompted hopes for stronger efforts to spur the economy at an important Communist party policy gathering next week.

4. Joe Biden’s quest to keep his re-election bid alive suffered twin blows yesterday. Veteran Democratic lawmaker Nancy Pelosi said he had a “decision” to make about his future while actor George Clooney — who hosted a huge fundraiser for Biden last month — said he needed to be replaced as the party’s presidential candidate.

  • How bad are Biden’s post-debate poll numbers?: On the day of the June 27 debate, national polling averages between the US president and Donald Trump were tied. Since then, they have sharply diverged.

5. The US will apply national security tariffs to some steel and aluminium imports from Mexico in a bid to stop Chinese metal entering the US across the southern border. The move comes as the Biden administration tries to shore up support in former industrial heartlands ahead of the November election.

News in-depth

Elon Musk and Narendra Modi
The cancelled trip sparked speculation in India about Elon Musk’s commitment to Tesla investments in the country © FT montage/Bloomberg/WireImage via Getty Images

Elon Musk blindsided Narendra Modi in April when he cancelled a trip to India, where he was supposed to scout a location for Tesla’s new $3bn electric vehicle “gigafactory”. Employees close to Musk had persuaded him to call off his visit because of an unmissable opportunity in China, said people with knowledge of the discussions. But the billionaire remains “obsessed” with India for its long-term potential.

We’re also reading . . . 

Chart of the day

The type of Russian missile that destroyed a Kyiv children’s hospital — the Kh-101 — relies on western-designed components, according to experts and Ukrainian officials. To evade sanctions, the Kremlin has turned to microprocessors and other technology not intended for military use.

Dot plot showing the supply chain of 16 components found in Kh-101 missile fired in January

Take a break from the news

Renovating your home? FT Weekend columnist Luke Edward Hall recommends asking yourself what stories you want your house to tell — taking into consideration its style, age and layout — then let them run wild.

Luke Edward Hall’s home: comfort, colour and ‘slightly dishevelled country chaos’ © Elliot Sheppard

Additional contributions from Tee Zhuo and Gordon Smith

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