Russia-China gas pipeline deal hits snag

Good morning. We start the week with exclusive news about Russia’s stalled attempts to conclude a major gas pipeline deal with China.

Moscow’s efforts have stalled over what it considers to be unreasonable Chinese demands on price and supply levels, according to three people familiar with the matter. China wants to be paid closer to Russia’s heavily subsidized domestic prices and has pledged to buy only a tiny fraction of the pipeline’s planned annual gas supply of 50 billion cubic meters, they said.

Beijing’s hardline stance on the “Power of Siberia-2” pipeline underscores how Russia’s invasion of Ukraine has made President Vladimir Putin increasingly reliant on Chinese President Xi Jinping for economic support.

The pipeline deal was one of three main demands made by Putin when he and Xi met last month, the others being expanded Chinese banking activity in Russia and China ignoring a peace conference that Ukraine is hosting this month, according to people familiar with the matter. Here’s what’s at stake for Moscow, and why Beijing is taking a tough stance.

• Ukraine Peace Summit: President Volodymyr Zelenskyy has accused China of helping Russia pressure countries not to attend a peace summit planned for this month in Switzerland.

• China-Russia relations: A Chinese trade group last month explored purchasing drone jamming equipment for a Russian buyer, amid Western concerns about Beijing’s supplies of dual-use technology to Russia.

• Chinese investment: As trade tensions with the United States rise, Chinese companies are increasingly favoring countries such as Vietnam and Mexico.

What I’m focusing on today is:

• Economic data: Manufacturing Purchasing Managers’ Index figures are due for Canada, France, Italy, Germany, Russia, the EU, the UK and the US. Turkey will release its May CPI.

• UK Elections: Prime Minister Sir Keir Starmer is set to announce 14 ex-military personnel as Labour candidates, a day after Diane Abbott confirmed she would stand in opposition in a London constituency after days of wrangling.

• Hunter Biden: The son of the US president is on trial on firearms charges brought by the Department of Justice.

• Aviation: The International Air Transport Association will hold its annual general meeting and World Air Transport Summit in Dubai.

Stephen Bush predicted this in Inside Politics last Friday: Labor will nominate Mr Abbott If she wants. If you’re looking for more prescient commentary on the election, sign up For newsletters.

Five more top stories

1. Exclusive: Creandum, an early investor in Spotify, Klarna and Depop, today announced a €500 million fund. The firm is the latest Europe-focused private technology investor to secure new funding for startups this year. The funding follows similarly sized deals in the past few months after a two-year investment dryup that has some venture capitalists seeing “signs” in European deals.

2. Tens of thousands of Tesla’s key retail investors outside the U.S. may not be able to vote at the annual meeting. The investment platform has failed to put in place proper cross-border systems. The company is encouraging investors to support a resolution at its June 13 shareholder meeting regarding CEO Elon Musk’s $56 billion compensation and plans to reincorporate the company in Texas. Here’s how that close vote could be affected.

3. Harley-Davidson is suing Next in London’s High Court Claims are spreading that a “motorcycle-inspired” T-shirt being sold by a UK retailer is stealing its logo. The US motorcycle manufacturer claims that the garment, which features biker angel wings, flames and the words “Rise and Roar” across the chest, infringes on its trademark. The design looks like this:

4. Shane plans to file privately for a London listing soon. The online fashion giant had been leaning toward a London listing after U.S.-China tensions stalled plans for a New York initial public offering, according to people familiar with the matter. Here’s more on the big U.K. IPO plans.

• opinion: Has Citi regained its attractiveness as a fundraising venue? The short answer is no, writes Craig Coben, former global head of equity capital markets at Bank of America.

5. Prime Minister Benjamin Netanyahu is shying away from U.S.-backed plans to end the war with Hamas. Israeli Prime Minister Benjamin Netanyahu is seeking space to quell the rebellion within his ruling coalition, and despite pleas from the White House, officials close to him made clear yesterday that any deal to permanently end the fighting in Gaza would be unacceptable.

Big Lead

Radical advances in neurotechnology could help the disabled walk and bring about a connection between humans and artificial intelligence. Computerized implants that interact with the brain and central nervous system could circumvent the neurological disorders that prevent people severely disabled by accident or illness from moving their limbs, and allow people who cannot speak or operate a keyboard to communicate.

We also read and listen.

• US interest rates 🎧: In the latest version Economic ShowA top Federal Reserve official told Soumaya Keynes that interest rates should remain on hold for an “extended period.”

• UniCredit: Italy’s second-largest bank has been the best-performing of Europe’s big banking stocks since Andrea Orsel took the helm, but the CEO now must decide how to expand elsewhere and exit Russia.

• consulting: With AI capable of taking over low-level jobs and increasing competition at the top, the field is facing what has become a cult favorite: disruption, writes Rana Forouhar.

• Javier Millay: Nearly six months on, with no bill approved by Congress, Argentina’s president is turning to members of the establishment he has sworn to purge.

Today’s Chart

Nvidia made a surprise move yesterday by unveiling its next-generation AI processor, less than three months after its latest announcement. The chipmaker has added $350 billion to its market cap amid volatile trading since reporting its first-quarter earnings just over a week ago.

Take a break from the news

What would Shakespeare’s songs have sounded like? Which version of Hamlet is correct? These are just two of the 28 greatest Shakespearean mysteries we’re trying to solve as part of a special edition of FT magazine on the playwright’s enduring power.

Additional contribution from Benjamin Wilhelm