FirstFT: China says it’s in a dangerous ‘deadlock’ with US

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China accused the US of treating it as an “imaginary enemy” and said relations were mired in a dangerous “deadlock”, as the two countries held their second top-level meeting since President Joe Biden took office.

Xie Feng, vice foreign minister, said Washington wanted to “reignite a sense of national purpose by establishing China as an imaginary enemy” and urged it to change what he called its “extremely dangerous China policy”.

His comments came during meetings with Wendy Sherman, US deputy secretary of state, in the first face-to-face encounter between top US and Chinese officials since their respective top officials sparred in Alaska in March. Sherman also met Wang Yi, the Chinese foreign minister.

“China-US relations are currently at a deadlock and face serious difficulties,” Xie said, according to the Chinese foreign ministry.

Five more stories in the news

1. China cracks down on its education sector Beijing has launched a sweeping crackdown on its $100bn private education industry that threatens to wipe out billions of dollars of investment from groups such as BlackRock, Baillie Gifford, Tencent, Sequoia and SoftBank’s Vision Fund. Global investors sold $2bn worth of Chinese stocks on Monday on the news.

2. US real yields hit record low on growth concerns The returns investors expect to earn after inflation on the world’s most important government bonds have reached a record low in a fall that has had sweeping implications across global markets.

  • More markets news: The price of Bitcoin surpassed $40,000 on speculation that Amazon is exploring accepting cryptocurrency as a payment option. (Bloomberg)

3. Aon-Willis Towers Watson deal collapses Aon and Willis Towers Watson have abandoned a $30bn tie-up that would have created the world’s biggest insurance broker after the US government sued to block the combination. Aon’s chief executive Greg Case said the companies had reached an “impasse” with the US Department of Justice.

4. Tesla boosts profit margins Tesla overcame severe supply chain problems in the latest quarter, boosting its profit margins and pushing its revenue above Wall Street expectations, according to figures released late on Monday.

5. Turmoil in Tunisia The country’s nascent democracy is facing its biggest crisis in a decade after the president sacked the prime minister and suspended parliament amid anger over a surge in coronavirus cases. President Kais Saied’s opponents described the sackings as a coup and a breach of the constitution in the Arab world’s only democracy.

Tokyo Olympics round-up

  • Momiji Nishiya of Japan, a 13-year-old skateboarder, became the first female Olympic champion in the sport after winning the women’s street event.

  • Adam Peaty won the men’s 100-metre breaststroke on Monday to capture Britain’s first gold medal of the Tokyo Games.

  • France handed the Americans their first Olympics basketball loss in 17 years, winning 83-76 in the first game of the group stage.

  • Australia’s Ariarne Titmus beat US legend Katie Ledecky in the women’s 400-metre freestyle. See below for the epic celebration from Titmus’ coach.

Add ‘Tokyo Olympics’ to myFT for all our coverage from the Games, and don’t miss our “alternative medals table”.

The days ahead

Antony Blinken arrives in India The US secretary of state will begin his first official trip to India, where he will discuss the security situation in Afghanistan and Indo-Pacific engagement with officials. He will also have a call with prime minister Narendra Modi before heading to Kuwait. (Times of India)

Tech earnings Apple, Alphabet and Microsoft report earnings on Tuesday. The latest quarterly figures will underline an uncomfortable truth for regulators: as leading US tech companies cash in on their digital dominance coming out of the pandemic, they are registering their strongest growth rates for years.

Ariane 5 launch The EU-backed Ariane 5 spacecraft will return to flight after being grounded for almost a year. Success will be greeted with relief — the European project has been struggling of late to maintain its position as a leader in space exploration — and perhaps talk about moving forward with Ariane 6.

Coronavirus digest

  • Malaysia’s stock market, which saw a boost last year on the back of glove manufacturers’ pandemic success, is now one of Asia’s worst performing markets.

  • The US will maintain its Covid-related travel bans for the foreseeable future owing to the spread of the more transmissible Delta variant.

  • A sharp fall in the number of people in the UK testing positive for Covid-19 over the past six days has surprised and delighted scientists.

  • France ratified a watered-down version of a proposed law to make Covid-19 vaccination compulsory for healthcare workers and to require a “health pass. (Nikkei Asia Review, FT)

Sign up for our Coronavirus Business Update newsletter and get the latest on our live blog.

What else we’re reading and watching

Carlos Ghosn: the rise and fall of a superstar CEO A new FT film tells the story of how Ghosn went from a globetrotting titan of the carmaking industry to an international fugitive. Interviews with industry executives and FT journalists shed light on the dizzying rise of “le cost cutter” and his stupendous fall.

Video: Carlos Ghosn: the rise and fall of a superstar CEO

Joe Biden’s Afghan pullout could end in tragedy Biden may believe that drawing a line under the Afghan war will allow the US to concentrate on more urgent problems, writes Gideon Rachman. Sadly, he may just have created a new Afghan crisis that will come back to haunt him.

Fed divided over reducing economic support The chair of the US Federal Reserve is facing a growing rift among top central bank officials over when to start withdrawing the injection of Covid-19 monetary stimulus. The debate is expected to intensify at this week’s rate-setting meeting. Here’s an introduction to the Fed’s doves and the hawks.

Can a new commodities boom revive Brazil? The South American nation is now riding a rally in commodity and raw material prices, as Covid-19 restrictions lift and worldwide growth returns. Yet how the commodities upswing plays out will have an important bearing for the population of 213m Brazilians who have seen policymakers squander the opportunities of previous commodity booms.

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