Russia demands inclusion in any Ukraine security guarantees

Good morning and welcome back to FirstFT Asia. In today’s newsletter:

• Ukraine peace effort falters

• The Chinese military’s huge military parade

• How China imports Russian oil

• The Japanese city recruiting immigrants

We start with the talks to end the Ukraine war, after Russia poured cold water on US efforts to broker a peace deal yesterday.

What to know: Russia said it will only agree to security guarantees for Ukraine that give Moscow an effective veto over any future effort to defend Kyiv. Foreign minister Sergei Lavrov said that “really secure” guarantees for Ukraine would have to involve Russia and its biggest ally China alongside the US, UK and France. However, Ukraine has previously said it would not accept Moscow being given the right to thwart other countries coming to its defence.

‘WTF moment’: Lavrov’s remarks, which also cast doubt on whether Russian President Vladimir Putin would attend a summit with his Ukrainian counterpart Volodymyr Zelenskyy, marked a contrast with recent optimism expressed by US officials over the likelihood of a peace deal. An EU diplomat described Russia’s insistence on involving China, which is allied with Moscow, as a “WTF moment”. Read the full story.

Here’s what else we’re keeping tabs on today:

• Economic data: South Korea publishes July producer prices and Hong Kong reports consumer prices for the month.

• Chinese diplomacy: Beijing’s top diplomat Wang Yi visits Afghanistan, where he will attend a trilateral foreign ministers’ meeting that will also include Pakistan. (Reuters)

• Jackson Hole symposium: This year’s gathering of central bankers, which begins today in Wyoming, will be an apprehensive affair with Federal Reserve chair Jay Powell under attack by US President Donald Trump.

Five more top stories

1. China will show off a range of new hypersonic missiles and uncrewed weapons at a huge military parade early next month. The September 3 event will be closely watched for signs of the increasing strength of the People’s Liberation Army, which in recent years has expanded exercises that simulate blockading and attacking Taiwan and denied US forces’ ability to operate in the region.

2. Indian banking billionaire Uday Kotak has called on Prime Minister Narendra Modi’s government to channel more budgetary support to small and medium-sized businesses as the economy grapples with Donald Trump’s punishing tariffs. Kotak joins a recent chorus of tycoons pushing New Delhi to help the country withstand the impact of Trump’s 50 per cent tariffs. Read his interview with the FT.

• Trump’s India tariffs: India is not the only country trading with Russia, so why is the US president singling out New Delhi? Ashok Malik explains.

3. Federal Reserve governor Lisa Cook has defied calls from Trump to resign, saying she has “no intention of being bullied to step down” after one of the president’s allies accused her of breaching mortgage rules. The allegations against Cook are the latest in a multipronged attack from the Trump administration on the central bank and its staff.

4. Israel will call up about 60,000 reservists in the coming weeks as it pushes ahead with plans to take control of Gaza City, the Israel Defense Forces said yesterday. It coincided with Israel’s granting of final approval of a controversial settlement project in the so-called E1 area near Jerusalem, which will in effect split the occupied West Bank in two.

5. Citigroup has stood by wealth management boss Andy Sieg after hiring law firm Paul Weiss to investigate complaints into his behaviour since he arrived as a high-profile recruit of chief executive Jane Fraser. The investigation, which has concluded, centred around accusations of bullying, intimidation and unfairly sidelining employees, said two people familiar with the details.

The Big Read

A Chinese ghost fleet, ship-to-ship transfers and shell companies. The FT has uncovered techniques used by international networks of brokers and shipowners that enable them to circumvent sanctions and export oil from countries such as Iran, Venezuela and Russia. Tom Wilson delves into the trading of banned oil.

We’re also reading . . . 

• AI colonialism: It is easy to see how tech can become an even greater bargaining chip in US foreign policy, writes Marietje Schaake.

• Dismantling Assad’s narco-state: Syria’s new rulers are trying to destroy the drug empire that financed the former regime in Damascus. Can they succeed? Raya Jalabi investigates.

• Trump-whisperer: Far-right influencer Laura Loomer has no official role in the White House, but many find her impact baffling.

Chart of the day

Hamamatsu, a city located 250km west of Tokyo, has spawned companies like Honda that have defined Japan to the outside world. But a shrinking workforce has gnawed at city authorities and key employers, and Hamamatsu’s mayor is betting on a strategy that Japan has often been hesitant to do: actively recruit immigrants to bolster its dwindling stock of residents and workers.

Take a break from the news . . . 

What does your work bag say about you behind your back? Carl Wilkinson reviews a range of backpacks. The aim: to find a bag big enough for carrying the modern ephemera of the office commute with spare capacity, without being cumbersome.