US and Russia hold first high-level talks on Ukraine war

Good morning. We begin in Riyadh, where the US and Russia held their first high-level talks on the Ukraine war since Vladimir Putin’s invasion. Also in today’s newsletter:

• Singapore’s Wong unveils budget giveaways

• Apple’s push into India

• Xi’s olive branch to Chinese tech leaders

Russia and the US have agreed to “lay the groundwork” for ending the Ukraine war and a speedy normalisation of relations, in a rapprochement that has sparked fears in Kyiv and European capitals that President Donald Trump wants to settle the conflict on Moscow’s terms.

Following several hours of negotiations in Riyadh yesterday, the US state department said the two sides would appoint “high-level teams” to seek to end the war and establish a diplomatic channel to resolve bilateral issues.

The talks marked an extraordinary turn of events after Trump called Putin last week in an effort to end the war — without consulting Ukraine or its European allies.

“The practical reality is that there’s going to be some discussion of territory and there’s going to be discussion of security guarantees, those are just fundamental basics,” said US national security adviser Mike Waltz.

Ukrainian President Volodymyr Zelenskyy said he had rescheduled a visit to Saudi Arabia after the US-Russian talks, describing yesterday’s meeting as a “surprise”. Here are more details on the US-Russian negotiations.

Read more about Europe’s rapidly shifting security landscape:

• Rheinmetall CEO: European nations have been left at the kids’ table in talks over the future of Ukraine because of decades of under-investment in defence, the chief of Germany’s largest defence contractor has warned.

• Ukraine’s mineral riches: Trump has the country’s vast estimated deposits of lithium, titanium and rare earths in his sights, but these have yet to be developed.

• Sanctioned Russian ship sails for Europe: A notorious vessel under sanctions for transporting arms from North Korea is set to enter the Mediterranean via the Suez Canal, in a fresh challenge to the western sanctions system.

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

• Economic data: China publishes the house price index for January.

• Monetary policy: Indonesia and New Zealand announce their interest rate decisions.

• Europe crisis talks: French President Emmanuel Macron is planning an emergency meeting of European leaders today, the second so far this week, amid US-Russia talks on ending the Ukraine war.

• Results: HSBC, Hang Seng Bank, United Overseas Bank, Rio Tinto and Santos report 2024 full-year results.

Five more top stories

1. The Philippines’ top diplomat has said he is “deeply disturbed” by a close encounter between a Chinese military helicopter and one of the south-east Asian country’s fisheries aircraft over a disputed shoal in the South China Sea. In an interview with the FT yesterday, foreign secretary Enrique Manalo accused China’s military of being “reckless” and “unprofessional” during the incident earlier in the day.

2. Singapore’s Prime Minister Lawrence Wong has promised a package of cash handouts in his final budget before the country goes to the polls this year in an election likely to be fought largely on the issue of high living costs. Wong warned that Singapore would suffer from rising tensions between the US and China, both big trading partners for the city-state.

3. Exclusive: Honda is willing to resume merger talks with Nissan if the rival carmaker’s chief executive Makoto Uchida steps down, according to people with knowledge of the deliberations. Uchida has indicated his desire to stay until 2026, but faces pressure to depart from board members and partner Renault after botching negotiations for a $58bn mega-deal.

4. US gas exports are the most likely beneficiaries of a pledge by Donald Trump and Narendra Modi to make India a leading buyer of American energy, analysts said. “Gas will be the real deal. India is one of the last untapped markets for gas globally which has scale,” said Rajeev Lala, director of upstream solutions at S&P Global. Read the full story.

5. Mira Murati, OpenAI’s former chief technology officer, has launched a rival artificial intelligence start-up focused on making the technology widely accessible. Thinking Machines Lab has poached several senior former OpenAI employees as well as researchers and engineers from competitors including Google and Meta.

The Big Read

Mobile phones have now surpassed diamonds as India’s biggest product export and Apple is key. About 15 per cent of iPhones are currently made in India and that is expected to rise to 25 per cent by 2027, analysts say. The production shift has not gone unnoticed in Beijing, where it is treated with suspicion. The FT spoke to current and former executives and employees at the company’s suppliers, Indian government officials, and analysts to piece together Apple’s growing footprint in India.

We’re also reading . . . 

• China’s tech industry: Xi Jinping’s outreach to leading entrepreneurs showed how quickly “political winds” can change for Chinese business, after a government crackdown on the sector.

• Peter Navarro: The China hawk was thwarted in Trump’s first term but is now putting his vision of US trade protectionism into action.

• Musk’s wrecking ball: The world’s richest man is taking a torch to the American state on behalf of Trump, writes Edward Luce.

Chart of the day

Australia’s central bank yesterday cut interest rates for the first time in more than four years, as inflation pressures began to show signs of easing more quickly than expected.

Take a break from the news . . . 

Photographer Valentin Hennequin is constantly mistaken for Serbian tennis player Novak Djokovic — on the Eurostar, in bars, on holiday, it happens everywhere, he says. But what would he do if he met his doppelgänger?