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America’s Asian allies condemn storming of Capitol Hill

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US allies across the Asia-Pacific region condemned “distressing” scenes in Washington on Wednesday as Donald Trump supporters storming Capitol Hill and delaying the Electoral College’s confirmation of Joe Biden’s presidential election victory.

“What is happening is wrong,” Jacinda Ardern, New Zealand’s prime minister, said on Thursday morning. “The right of people to exercise a vote, have their voice heard and then have that decision upheld peacefully should never be undone by a mob.”

Ms Ardern said she was “devastated” by the clashes, but added: “I have no doubt democracy will prevail”.

In a warning usually reserved for nations wracked by domestic strife, Canberra updated travel advice to Australian nationals in the US, urging them to avoid areas in Washington DC where “protests are occurring and there is an ongoing potential for violence”.

Scott Morrison, Australia’s prime minister, told reporters that the riots and protests in Washington were “incredibly distressing”.

“This is a difficult time for the US clearly,” Mr Morrison said. “They are a great friend of Australia and they’re one of the world’s greatest democracies . . . Our thoughts are with them and we hope for that peaceful transition to take place.”

New Zealand and Australia are members of the “Five Eyes” intelligence-sharing alliance, along with the US, Canada and UK. This year, senior officials from the five allies have repeatedly expressed concerns about the increasingly assertive behaviour of China, Washington’s principal geopolitical rival.

“Distressed to see news about rioting and violence in Washington,” Narendra Modi, India’s prime minister, said of the events. “Orderly and peaceful transfer of power must continue. The democratic process cannot be allowed to be subverted through unlawful protests.”

The swift statements of concern from Australia, New Zealand and India stood in stark contrast to official silence in Beijing, where the scenes of chaos in Washington could be a propaganda coup for President Xi Jinping’s administration.

Chinese officials have hailed their effective containment of the coronavirus pandemic as evidence of the “superiority” of its political system vis-à-vis the US, where the outbreak has continued to spread unchecked.

Communist party propaganda organs often do not react to events abroad until an government comment and media directives have been drawn up. On Thursday, China’s official Xinhua news agency led its website with pictures of Mr Xi meeting villagers and expressing concern about a virus outbreak in central China.

Other state media outlets carried brief dispatches about the developments in Washington and published dramatic photos and videos.

But Chinese social media platforms were awash with sardonic comments that compared the unrest in Washington to the Arab Spring and “colour revolution” protests as well as last year’s often violent pro-democracy protests in Hong Kong.

The social media account of the Chinese Communist party’s Youth League posted a picture of Trump supporters surrounding the Capitol and called it a “global masterpiece” — an apparent reference to House speaker Nancy Pelosi’s comment last year that a large pro-democracy candlelight vigil in Hong Kong was “a beautiful sight”.

Katsunobu Kato, Japan’s chief cabinet secretary, said Tokyo was watching the situation in Washington with concern.

“We hope that American democracy can overcome this difficult situation and that there will be a peaceful and democratic transition with a return to social peace and harmony,” he said.

The foreign ministry in Taiwan, the self-ruled island that Beijing claims as part of China’s sovereign territory, “expressed regret for the clashes inside and outside the Capitol Building”.

Some Taiwan officials and analysts are concerned that Mr Biden’s administration will take a less aggressive stance against China than Mr Trump and be less willing to authorise arms sales and official visits to Taipei.

Tom Mitchell in Singapore, Jamie Smyth in Sydney, Benjamin Parkin in Mumbai, Kathrin Hille in Taipei, Qianer Liu in Shenzhen and Xinning Liu and Christian Shepherd in Beijing



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Emerging Markets

NYSE to suspend trading of China’s Cnooc next month

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The New York Stock Exchange is to start delisting proceedings against China National Offshore Oil Corporation to comply with an executive order from Donald Trump that bans Americans from investing in companies with ties to the Chinese military.

The NYSE on Friday said it would suspend trading in Cnooc’s American depository shares on March 9, after determining that the company was “no longer suitable for listing” following the order that the former US president signed in November.

The order banned investing in several dozen Chinese groups that were last year put on a Pentagon blacklist of companies that are accused of working with the People’s Liberation Army and threatening US security. Trump set a January 28 deadline for the ban to take effect, but President Joe Biden pushed the deadline back to May 27.

The NYSE move comes as Biden evaluates a number of assertive actions that Trump took against China during his last year in office. The commerce department last year put Cnooc on a separate blacklist — called the “entity list” — that makes it hard for US companies to sell products and technology to the Chinese oil group.

The Biden administration has not made clear whether it intends to keep Trump’s executive order in place. But the new president and his officials have so far adopted a tough stance towards China over everything from its economic “coercion” to concerns about its clampdown on the pro-democracy movement in Hong Kong to the repression of more than 1m Uighur Muslims in the northwestern Chinese province of Xinjiang.

Earlier this month, Biden used his first conversation with Chinese president Xi Jinping since assuming office to raise concerns about Hong Kong and Xinjiang, and aggressive Chinese actions towards Taiwan. Antony Blinken, secretary of state, also described the detention of Uighurs in labour camps as “genocide”.

Jen Psaki, White House press secretary, has said the administration was conducting a number of “complex reviews” of the China actions that Trump took. The former president put dozens of other Chinese companies on the Pentagon and commerce department blacklists, including Huawei, the Chinese telecoms equipment group.



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Bond sell-off roils markets, ex-Petrobras chief hits back, Ghana’s first Covax vaccines

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The yield on the benchmark 10-year Treasury exceeded 1.5 per cent for the first time in a year and the outgoing head of Petrobras warns Brazil’s President Jair Bolsonaro against state controlled fuel prices. Plus, the FT’s Africa editor, David Pilling, discusses the Covax vaccine rollout in low-income countries. 

Wall Street stocks sell off as government bond rout accelerates

https://www.ft.com/content/ea46ee81-89a2-4f23-aeff-2a099c02432c

Ousted Petrobras chief hits back at Bolsonaro 

https://www.ft.com/content/1cd6c9fb-3201-4815-9f4f-61a4f0881856?

Africa will pay more for Russian Covid vaccine than ‘western’ jabs

https://www.ft.com/content/ffe40c7d-c418-4a93-a202-5ee996434de7


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Petrobras/Bolsonaro: bossa boots | Financial Times

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“Brazil is not for beginners.” Composer Tom Jobim’s remark about his homeland stands as a warning to gung-ho foreign investors. Shares in Petrobras have fallen almost a fifth since President Jair Bolsonaro said he would replace the widely respected chief executive of the oil giant.

Firebrand Bolsonaro campaigned on a free-market platform. Now he is reverting to the interventionism of leftist predecessors. It is the latest reminder that a country with huge potential has big political and social problems.

Bolsonaro reacted to fuel protests by pushing for a retired army general to supplant chief executive Roberto Castello Branco, who had refused to lower prices. This is politically advantageous but economically short-sighted.

Fourth-quarter ebitda beat expectations at R$60bn (US$11bn), announced late on Wednesday, a 47 per cent increase on the previous quarter. This partly reflected the reversal of a R$13bn charge for healthcare costs. Investors now have to factor the cost of possible fuel subsidies into forecasts. The last time Petrobras was leaned on, it set the company back about R$60bn (US$24bn at the time). That equates to 40 per cent of forecast ebitda for 2021.

At just over 8 times forward earnings, shares trade at a sharp discount to global peers. Forcing Petrobras to cut fuel prices will make sales of underperforming assets harder to pull off and debt reduction less certain. Bidders may fear the obligation to cap prices will apply to them too.

A booming local stock market, rock bottom interest rates and low levels of foreign debt are giving Bolsonaro scope to spend his way out of the Covid-19 crisis. But the economy remains precarious. Public debt stands at 90 per cent of gross domestic product. The real — at R$5.40 per US dollar — remains near record lows. Brazil’s credit is rated junk by big agencies.

Rising developed market yields will make financings costlier for developing nations such as Brazil. So will high-handed treatment of minority investors. It sends a dire signal when a government with an economic stake of just over a third uses its voting majority to deliver a boardroom coup.

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