Good morning. Today we’re covering:
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Nongfu Spring’s water bottle dispute
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South Korea’s nuclear weapons debate
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Whopper luxury discounts in China
But first: Guo Wengui, the businessman and self-exiled Chinese Communist party critic, has been convicted in US court for conducting a $1bn fraud on his online followers.
The entrepreneur in 2014 fled China and arrived in the US, allying himself with overseas dissidents and prominent China hawks, including Donald Trump and Steve Bannon.
But in a unanimous verdict yesterday, Ho Wan Kwok, who is known by a string of pseudonyms including “Guo Wengui” and “Miles Guo”, was found guilty of racketeering, fraud and money laundering charges by a Manhattan jury. He was acquitted on three other charges.
Damian Williams, the US attorney for the southern district of New York, whose office brought the case, said Guo, once a social media personality, fleeced his “loyal followers out of their hard-earned money so that [he] could spend his days in his 50,000 square foot mansion, driving his $1mn Lamborghini, or lounging on his $37mn yacht”. Read the full story.
Here’s what I’m keeping tabs on today:
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Economic data: New Zealand releases second-quarter inflation figures and Singapore reports June non-oil domestic exports data.
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Monetary policy: Indonesia’s central bank is widely expected to leave rates unchanged when it announces its decision today. (Wall Street Journal).
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Companies: Australian miner BHP’s June Quarter Operational Review is due.
Five more top stories
1. Chinese beverage group Nongfu Spring has demanded that a Hong Kong watchdog apologise after it said the company’s bottled water hit the EU’s limit for bromate content. Shares in Nongfu, founded by China’s wealthiest person, closed almost 3 per cent lower in Hong Kong yesterday after the territory’s Consumer Council released a report on the quality of 30 bottled water samples.
2. Exclusive: Intel’s venture capital arm has emerged as one of the most active foreign investors in Chinese AI and semiconductor start-ups, raising alarm in Washington. Intel Capital owns stakes in 43 China-based technology start-ups, at a time when the $147bn chipmaker receives billions of dollars from Washington to fund a technological arms race with Beijing.
3. Donald Trump’s selection of JD Vance as his running mate has cemented Europe’s fears that a second Trump term would drastically weaken transatlantic security ties. Vance has dismissed US security guarantees as a crutch that has allowed Europe “to ignore its own security” and argued that US aid for Ukraine is unnecessary.
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Trump and Ukraine: Donald Trump will quickly demand peace talks between Russia and Ukraine if he wins November’s US presidential election, Hungary’s Viktor Orbán has claimed after private discussions with the Republican candidate.
4. The UK has indicated it is not planning to follow the EU’s lead in imposing tough tariffs on Chinese electric vehicle imports. But trade secretary Jonathan Reynolds told G7 trade ministers that the UK would remain “vigilant”.
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More UK-China news: China is among the countries that pose a “deadly” threat to Britain, declared former Nato secretary-general Lord George Robertson, who is leading the UK government’s strategic defence review.
5. Elon Musk said yesterday that two of his companies, X and SpaceX, will move their headquarters from California to Texas as a response to a new gender identity law in California, dealing a blow to Silicon Valley amid the billionaire’s long-running dispute with the state’s governor, Gavin Newsom.
News in-depth
Public support is growing in South Korea for the country to develop its own nuclear arsenal, amid rising concerns about North Korea and Russia’s deepening ties and the possibility of a second Donald Trump presidency. While Pyongyang has its own nuclear arsenal, Seoul relies upon its US ally for “extended deterrence”. But Kim Jong Un’s burgeoning relationship with Vladimir Putin and Trump’s open hostility to the US-South Korea alliance have shaken confidence in Washington’s security guarantees.
We’re also reading . . .
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Artificial intelligence: The EU says its pioneering legislation will protect humans from AI’s dangers. But critics say it is undercooked and will stifle innovation.
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The doom loop of modern politics: Anti-politician culture is wrong in and of itself, writes Janan Ganesh. But more than that, it is self-reinforcing.
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‘Magic circle’ expansion: A hiring spree of “top-notch” talent has helped the London-based firm Freshfields break into New York’s legal elite.
Chart of the day
China’s domestic luxury market doubled in size between 2019 and 2021 as travel restrictions during the pandemic forced shoppers to purchase goods at home. But the country’s once-voracious middle-class consumers have become more frugal, and luxury brands such as Burberry and Versace have responded with discounts as high as 50 per cent.
Take a break from the news
From gothy pop to witchy reads, 20 tastemakers share their favourite literary, musical and podcast recommendations for the summer.
Additional contributions from Irwin Cruz and Gordon Smith
Read the full article here