When words matter

The best hope for peace is maintaining the status quo, however confusing it may be. [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Anyone struggling to stay on top of the dispute over Taiwan can take comfort: U.S. President Joe Biden is having trouble keeping things straight. After reassuring Chinese leader Xi Jinping on Monday that the U.S. isn’t taking a position on Taiwan’s sovereignty, Biden later described the democratically-governed island as “independent” to reporters before quickly walking it back. He said he was only referring to Taiwan’s need to make its own decisions, rather than seeking to violate a red line for China that could prompt an invasion. Key Reading - [Biden’s Taiwan Gaffes Risk Real-World Consequences]( - [Biden Sparks Fresh Confusion Over U.S. Policy Toward Taiwan]( - [Singapore Sees ‘Complications’ in Taiwan Bid to Join Trade Deal]( - [Paulson Warns of ‘Dangerous’ World If China-U.S. Tensions Worsen]( - [End Trump’s Trade War? Easy Inflation Win Could Backfire on Biden]( - [China Nuclear Buildup Spurs U.S. to Seek Talks With Beijing]( The delicate dance reflects both Taiwan’s complicated international status and the high stakes involved: It remains the biggest flashpoint that could spark a military conflict between the world’s largest economies. Speaking at the Bloomberg New Economy Forum yesterday, Singapore Prime Minister Lee Hsien Loong said a war was unlikely soon, but the risks of miscalculation were increasing. China has alarmed the U.S. by bolstering its nuclear and missile capabilities while regularly sending fighter jets near the island. Those sorties activate Taiwan’s defenses, increasing the chances of a plane going down and a crisis erupting. A survey touted by Taiwan’s government today found more than 80% of the public want authorities to bolster the military. Apart from Biden’s gaffes, the message his administration is sending to China is clear: Don’t even think about invading. But for Xi, unification is one thing the Communist Party can’t back away from. At the moment, the best hope for peace is maintaining the status quo, however confusing it may be. — [Daniel Ten Kate]( Fighter jets in Taiwan today, as the Air Force officially put 64 upgraded F-16Vs into service. Photographer: I-Hwa Cheng/Bloomberg Click [here]( to see our Bloomberg Politics website and share this newsletter with others too. They can sign up [here](. Global Headlines Nuclear worries | The U.S. is seeking ways to discuss issues of “strategic stability” with China, sources say, as concerns rise over Beijing’s burgeoning [nuclear]( arsenal. [Peter Martin]( and [Jenny Leonard]( report exclusively on how talks might be framed. - The Philippines accused China of firing water cannons to stop its boats resupplying a South China Sea outpost. [Read more]( about the build-up of Chinese vessels near the disputed Second Thomas Shoal. - China is releasing oil from its strategic reserves days after the U.S. invited it to take part in a joint sale, suggesting the oil consuming giants are willing to work together to keep a lid on [energy]( costs. New summit | Canadian Prime Minister Justin Trudeau and Mexican President Andres Manuel Lopez Obrador visit Biden at the White House today in their first in-person meeting since he took office. [Dig]( into the key issues they’ll be discussing. European countries are increasingly forcing companies to let employees work from home as they tackle a rapidly spreading fourth Covid-19 wave. While vaccination rates are relatively high in many countries, governments are also [restricting]( access to public places for those who aren’t inoculated. In limbo | With the Northern Ireland Protocol that underpinned the U.K.’s Brexit deal now in jeopardy, companies in the region feel they’re in a precarious position. [Morwenna Coniam]( outlines [here]( why firms are worrying about rising tensions and possibly losing the benefits of being part of both the U.K. and European single markets. - Read [here]( what British Prime Minister Boris Johnson privately conceded to members of his Conservative Party over his handling of an ethics scandal. Best of Bloomberg Opinion - [Putin Would Rather Sell Gas Than Wage War: Leonid Bershidsky]( - [The Ethics of Twisting Unvaccinated Arms: Lionel Laurent]( - [Chile’s Problems Won’t Be Solved at Ballot Box: Clara F. Marques]( Public spat | A U.S. effort to show unity between two of its closest allies [backfired]( yesterday, after Japanese and South Korean officials walked out of a news conference, leaving Deputy Secretary of State Wendy Sherman to face reporters solo. The public dust-up came as a long simmering dispute over an islet that both neighbors claim resurfaced. Rising scandal | Chinese state media broke its [silence]( today on the whereabouts of tennis star Peng Shuai by posting a letter attributed to her on its Twitter account saying she was resting at home and “fine.” But the attempts to knock down her allegations of an affair with a former Communist Party leader ignited [outcry]( just as China prepares to host the Winter Olympics in February. Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - The boss of HSBC Holdings, the biggest bank in Hong Kong, said he won’t do anything to put the city’s efforts to open up [travel]( to mainland China at risk, despite criticism of the financial hub’s zero-Covid policy. - Republicans are [optimistic]( about retaking control of the U.S. House and picking up state governors’ seats in next year’s midterm elections, but some see former President Donald Trump as a possible impediment. - Take a [look]( at how the electoral showdown between Chile’s hard right and far left this weekend may be the most divisive and consequential since the dictatorship of Augusto Pinochet. - The high price of ocean shipping could translate into a 1.5% increase in global consumer prices in 2023, according to the United Nations. [See]( which countries would be most affected. - Indian Prime Minister Narendra Modi urged democratic nations to cooperate in regulating crypto currencies, to prevent them from ending up in the “[wrong hands](.” And finally ... The Russian missile test that shattered a dead satellite into at least 1,500 pieces hurtling around the Earth at up to 17,000 miles an hour shows the growing threat of [space debris](, even as firms like SpaceX and Boeing plan to launch thousands of commercial craft in coming years. “It’s not like the movie ‘Gravity’ where one thing happens and everything goes ‘boom,’” says Brian Weeden from the Secure World Foundation. There is “a tipping point where it starts to accelerate” and the orbital environment deteriorates over decades. A SpaceX Falcon 9 rocket and Dragon spacecraft launch from NASA’s Kennedy Space Center on Sept. 15. Photographer: Eva Marie Uzcategui/Bloomberg Like Balance of Power? [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. [Unsubscribe]( | [Bloomberg.com]( | [Contact Us]( [Ads Powered By Liveintent]( | [Ad Choices]( Bloomberg L.P. 731 Lexington, New York, NY, 10022