Caracal Daily | May 7

Caracal Daily | May 7

Xi Jinping, DEI, Ferrari, Michelin Stars, English soccer, plus 1,000 more actionable insights.

Caracal Daily is geopolitical business news + intelligence for comms pros.

Geopolitics is disrupting every business and industry. Caracal is here to help.

Always Be Communicating.

Happy Tuesday.

Here’s today’s Caracal Daily:

*** Globalization + Geopolitics ***

Xi Jinping's visit is not a normal European visit: Xi isn’t coming to Brussels — or even Berlin or Rome. Once he’s done with Macron in Paris, he’ll head straight to Serbia and Hungary, two Russia-friendly outposts. That itinerary is designed to send a clear message.

Xi is probing for cracks in the EU and NATO: China’s charm offensive in Europe has threatening undertones and is likely to fail as a result. Gideon Rachman

China’s billions help Xi make useful friends in Eastern Europe: The president is visiting Europe, and it’s no surprise his itinerary includes Serbia and Hungary. Bloomberg

Macron meets Xi: Two emperors on the edge of two wars: Amid arguments over electric cars, cognac and Ukraine, the French president’s dinner with Xi Jinping may not be much fun. Politico

France and China share 60 years of tumultuous and unbalanced diplomatic relations: President Emmanuel Macron welcomes his Chinese counterpart Xi Jinping for a state visit on May 6 and 7. It's an opportunity for Paris and Beijing to celebrate a highly political relationship and one that is increasingly tilting in China's favor. Le Monde

China is buying gold like there’s no tomorrow: The global price of gold has reached its highest levels as Chinese investors and consumers, wary of real estate and stocks, buy the metal at a record pace. NYT

Four start-ups lead China’s race to match OpenAI’s ChatGPT: Zhipu AI, Moonshot AI, MiniMax, and 01 dot ai are striving to rival the success of US counterparts. FT

China and America trade blame for a world on fire: A global contest is under way to recruit like-minded countries as supporters. Economist

US wins global leadership approval over China when a Democrat is president, Gallup analysis shows: Gallup’s report showed that in 2023, nearly half (48%) of the world’s countries leaned toward the US over China — which was favored by 21% of the more than 130 countries polled. CNBC

Joe Biden’s China probe throws lifeline to South Korean and Japanese shipyards: FT reports US president’s investigation into Chinese maritime industrial supremacy could lead to new port fees.

China ‘hacked Ministry of Defence to target military personnel’: The Times reports the alleged attack will put pressure on Rishi Sunak to take a tougher line with Beijing.

Let’s all take a deep breath about China Rory Truex

America Just Doesn’t Get China’s People vs. the CCP: It’s dangerous to see the nation’s 1.4 billion citizens solely through the prism of the Communist Party. Cracks are already appearing in Xi Jinping’s efforts to control the narrative. Karishma Vaswani

Boom in data centers challenges clean power goals in Asia: Electricity demand expected to rise as generative AI takes off. Nikkei

Japan says it will contribute about 160 billion yen, or around 1.04 billion dollars, to an Asian Development Bank fund to help low-income nations combat climate change.

Quantum computing breakthroughs draw investment back to sector: Australia’s $620mn deal with US start-up signals new hope for building commercially viable quantum computer. FT

Singapore battles to revive struggling stock market: FT reports hosting a regional exchange is one idea but critics say focus should be on improving corporate governance.

Just how dangerous is Europe’s rising far right? Anti-immigration parties with fascist roots — and an uncertain commitment to democracy — are now mainstream. NYT

Under Putin, a militarized new Russia rises to challenge US and the West WP

Russia to hold drills on tactical nuclear weapons in new tensions with West: WP reports Russian officials claimed the order was in response to comments from the West about the possibility of more direct Western involvement in the war in Ukraine.

Vladimir Putin orders nuclear drills in response to Emmanuel Macron’s ‘threats’: FT reports Russian armed forces will rehearse use of ‘tactical’ nuclear weapons in combat situations.

Georgia’s puppet master turns towards Moscow: Oligarch Bidzina Ivanishvili has sought to steer Caucasus nation back into Russia’s orbit. FT

US soldier detained in Russia and accused of stealing, officials say: NBC News reports the soldier, who was stationed in South Korea, traveled to Russia on his own to visit a woman he was romantically involved with, officials said.

Russia plotting sabotage across Europe, intelligence agencies warn: Assessments suggest Kremlin agents preparing covert bombings, arson and attacks on infrastructure. FT

Russian finance flows slump after US targets Vladimir Putin’s war machine: Washington’s crackdown shows its leverage over global banking system. FT

Russia’s war economy starves crucial oil industry of manpower: Bloomberg reports Russia’s oil and gas industry has been crucial for bankrolling the invasion of Ukraine, giving the Kremlin the funds to keep fighting even as the conflict drags on through its third year. But the industry is facing a shortage of manpower as the full mobilization of Russia’s economy for war exacerbates a longstanding demographic crunch.

Authoritarians fear transparency — liberal democracies should embrace it: There is a first-mover advantage to openness on Russian assets. Martin Sandbu

IDF strikes Hamas terror targets in East Rafah: Jerusalem Post reports the Prime Minister's Office said earlier on Monday night that the War Cabinet had agreed to continue with Israel's planned Rafah operation. 

Israel attacks Rafah, as it questions Hamas cease-fire terms: WSJ reports Israel began hitting targets in Rafah, after Hamas said it had accepted a proposal to pause the fighting that Israel said fell short of what it could accept.

Israel strikes Rafah after rejecting Hamas ceasefire offer:' The Times reports Hamas calls for a permanent end to the war in Gaza but Binyamin Netanyahu says the proposal does not meet Israel’s demands.

Israel to press attack on Rafah as it negotiates possible cease-fire deal: WP reports Hamas’s agreement to a cease-fire proposal revived hopes of an extended pause to the fighting in Gaza, even as Israel ordered a large-scale evacuation of Rafah.

India’s boom faces a pitfall: Sharing the wealth: To become an economic powerhouse like China, India urgently needs to address rising income inequality. WSJ

Chad wakes up to uncertain presidential election: Le Monde reports Mahamat Idriss Déby, who took over as transitional president after the death of his father in 2021, faces the prime minister, Succès Masra, in the vote on Monday.

No 10 ‘shelves plan for summer general election’: The Telegraph reports allies say Sunak hopes an improving economic picture and Rwanda flights finally leaving can improve his re-election chances this autumn.

Labour to target south of England at general election, campaign chief says: Pat McFadden says local election results give the party confidence it can win ‘blue wall’ seats that are ‘turning red.’ Guardian

John Swinney has become leader of the SNP after being confirmed as the sole candidate to replace Humza Yousaf.

Italian journalists strike in dispute with Meloni’s right-wing government: FT reports the public broadcaster Rai hit by labour action centred on complaints over editorial interference and work conditions.

José Raúl Mulino was declared Panama’s president after winning an election on Sunday. He joined the race just two days earlier, replacing Ricardo Martinelli, a former president who dropped out over a money-laundering conviction.

Last-minute stand-in wins Panama presidency: FT reports José Raúl Mulino pledges to try to reinvigorate economy and manage migration flows from South America.

Pierre Poilievre: Memo to corporate Canada - fire your lobbyist. Ignore politicians. Go to the people: National Post reports business leaders keep cosying up to high tax, anti-resource Liberals.

Pierre Poilievre’s Conservatives have found a winning message: Poilievre is resonating with the public because he is echoing their concerns. Regan P. Watts

Justin Trudeau didn’t start the fire. But the Prime Minister helped stoke Canada’s political polarization: Justin Trudeau led the federal Liberals into the 2015 election on a promise to give the middle ground back to Canadians. Before long, there was less middle ground. Paul Wells

The $9tn question: How to pay for the green transition: The bill for meeting climate goals will be immense. Governments worldwide are trying to figure out how to foot it. FT

Russia and China are winning the propaganda war: Autocrats in China, Russia, and elsewhere are now making common cause with MAGA Republicans to discredit liberalism and freedom around the world. The Atlantic

Biden administration rolls out international cybersecurity plan: The State Department’s international cyber strategy is aimed at setting goals for the US in leading on cyber norms at the United Nations, on AI issues, and in countering China. Politico

***  US Politics + Elections ***

Columbia cancels main graduation ceremony: WSJ reports Columbia will proceed with smaller ceremonies for its different schools, after police broke up weeks of pro-Palestinian demonstrations that disrupted campus.

Rep. Henry Cuellar (D-TX) was charged with accepting $600,000 in bribes from two foreign entities, according to an indictment released by the Justice Department on Friday.

Hope Hicks’ tears are a rare sight in Trump world: The testimony of the former’s president’s aide was in sharp contrast to the mindset of many in his orbit, who are built to leave guilt, remorse, empathy and compassion at home. Timothy L. O'Brien

Biden races to Trump-proof his agenda: Trump used a 1996 law to overturn Obama-era regulations. Biden’s aides hope to stop the Republican from doing it again if he wins. WSJ

Bingo, beaded bracelets and volunteer iPhones power Biden’s organizing effort: WP reports the nation is put off by politics and most Biden supporters want a different nominee. But the president is investing big in building a grassroots volunteer army.

Candidates for federal office can raise unlimited funds for ballot measures: NYT reports a decision by the Federal Election Commission would allow the Biden and Trump campaigns to raise money for outside groups pushing ballot measures.

‘Waste of a seat’: Manchin’s succession becomes a magnet for anti-establishment Republicans: Rep. Alex Mooney (R-WV) is unlikely to defeat Mitch McConnell’s handpicked candidate, Gov. Jim Justice (R-WV), in this month’s primary. But his fans still matter. Politico

New pod: The Campaign Managers: Launching on May 22, 2024, renowned strategists and successful Presidential campaign managers, Kellyanne Conway and David Plouffe, will delve deep into the complexities of the 2024 election. 

There's a messy battle over AI going on in DC — and there's no end in sight: The battle over AI isn't just happening in Silicon Valley among tech giants. It's also happening within the halls of Congress and the White House as lawmakers try to figure out how to rein in the technology without stalling progress. Business Insider

+ Trump and Biden's "executive orders have contributed to a bipartisan consensus that AI ought to be trustworthy," said Jason Green-Lowe, the Center for AI Policy's executive director.

+ "The ideal solution would be to empower some kind of office or regulator to update the laws as they go forward," Green-Lowe, from the Center for AI Policy, said.

+ He added that failing to implement a formal way of regulating the sector would effectively let companies play by their own rules, something he and the Center for AI Policy don't purport to be the best course of action.

If AI wrecks democracy, we may never know: Propaganda doesn’t need to go viral to sway elections anymore. That makes AI’s impact more insidious and harder to detect. Parmy Olson

Disinformation is on the rise. How does it work? Understanding it will lead to better ways to fight it. Economist

US to fund ‘digital twin’ projects for chips with $285 million: Bloomberg reports digital twin technology can leverage artificial intelligence to optimize semiconductor manufacturing, National Institute of Standards and Technology Director Laurie E. Locascio said on a call with reporters.

DEI is getting a new name. Can it dump the political baggage? Under mounting legal and political pressure, companies’ DEI tactics are evolving. WP

ABC News President Kim Godwin is stepping down: WSJ reports: ‘I have decided to retire from broadcast journalism,’ Godwin tells staff in email Sunday night.

*** Disruption + Innovation ***

Today: Apple hosts a product launch event called Let Loose with the usual secrecy around the device being unveiled, though many expect a new iPad tablet.

Apple is developing AI chips for data centers, seeking edge in arms race: WSJ reports the company is leaning on its long history of chip development in the effort, code-named Project ACDC.

Qualcomm’s smartphone future looks brighter with AI: WSJ reports AI-enabled smartphones and PCs should help the maker of wireless chips, which remains among the cheapest in semiconductor stocks.

The thingification of AI: The broken-gadget era is upon us. The Atlantic

AI’s trust problem: Twelve persistent risks of AI that are driving skepticism. Bhaskar Chakravorti

The AI music era is here. Not everyone is a fan: AI songwriting has gotten shockingly good — with big implications for the music world. Bloomberg

CNBC: AI could drive a natural gas boom as power companies face surging electricity demand

Big tech’s great AI power grab: Alphabet, Amazon, and Microsoft are on the hunt for new energy sources. Economist

How bad is AI for the climate? Tech giants are building power-hungry data centers to run their artificial intelligence tools. The costs of that demand surge are becoming clearer. DealBook

TikTok tells advertisers it won’t back down as US ban looms: WSJ reports the app’s NewFronts presentation to digital media buyers could be its last unless its owner finds a buyer—or lands a big win in court.

The secret weakness of TikTok’s all-powerful algorithm John Herrman

Chris Dixon’s campaign to overhaul crypto’s grifty reputation: Silicon Valley’s most powerful crypto investor on why the industry needs a new poster boy—who happens to be him. Bloomberg

How online shopping is saving the bricks-and-mortar store: Retailers are increasingly relying on their shops as fulfillment hubs. WSJ

Sabadell, a Spanish bank, is reportedly meeting on Monday to consider a $12.9 billion takeover bid by its larger rival Santander, which would create one of Europe’s biggest lenders.

US automakers like GM are rapidly losing ground in China, once an engine for growth: CNBC reports GM lost $106 million during the first quarter in China, marking only its third quarterly loss in the region in at least 15 years and the largest outside of the coronavirus pandemic during that time.

Ferrari hometown fights China’s electric car invasion: Modena is battling plans from the Chinese smartphone maker Xiaomi to market its debut electric car, the SU7, in Europe under the town’s name. The Times

Infineon to supply advanced power chips for Xiaomi EVs: Nikkei reports the top German chipmaker keen to tap Chinese demand for specialty semiconductors.

Shell sold millions of ‘phantom’ carbon credits: FT reports the subsidy scheme in Alberta allowed oil major to register carbon credits equivalent to twice the volume of CO₂ captured.

Boeing’s big space test: Using Starliner to ferry NASA astronauts: The spacecraft is set to take a crewed flight to the International Space Station after years of delays and falling behind SpaceX. WSJ

Boeing space capsule set to carry its first humans on ULA rocket: Bloomberg reports Boeing Co. is poised to send astronauts to orbit using its long-delayed space capsule, a first-of-its-kind test for the embattled aerospace giant and its rocket making joint venture, United Launch Alliance LLC.

*** Culture ***

How Michelin stars explain the world: The West’s relative loss of power is reflected in fine dining. Janan Ganesh

The complex issue of looted Chinese art restitution: As Chinese President Xi Jinping visits France to mark 60 years of diplomatic relations between the two countries, Le Monde takes a look back at the fate of objects stolen from Beijing by French troops during the sack of the Summer Palace in 1860. Le Monde

Megalopolis: The official 'first look' clip. Watch here.

+ Megalopolis is set to premiere at the 2024 Cannes Film Festival on May 17, 2024.

*** Sport ***

Get ready for the summer of Caitlin Clark and Lionel Messi: You thought you were done after the Eras Tour. Turns out everyone wants to see the basketball sensation and soccer legend, too. Jason Gay

When a bunch of bloody yanks came for English soccer: American investors are gobbling up the storied teams of the English Premier League — and changing the stadium experience in ways that soccer fans resent. NYT

+ @EliManning: I thought about attending the Roast of Tom Brady last night, but I did not want to Roast him for a 3rd time!!


Enjoy the ride + plan accordingly.

-Marc 

Marc A. Ross | Chief Communications Strategist @ Caracal