Less than straightforward

The Olympics could get complicated for China’s President Xi. [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( If there’s one Chinese sports star President Xi Jinping wouldn’t want in the Olympic spotlight next week, it’s Peng Shuai. The former women’s tennis world doubles No. 1 lit a political firestorm in November after alleging an affair with a retired top Communist Party official in a social media post that raised concerns she’d been coerced into sex. She briefly disappeared from public view, leading the White House, the Women’s Tennis Association and some of the sport’s biggest stars to express concerns for her safety. Key reading: - [Peng Shuai Case Threatens China’s Goal of Protest-Free Olympics]( - [Australian Open Flips Peng Shuai T-Shirt Ban After Criticism]( - [China Olympians Pledge Victory for Xi Using Title Saved for Mao]( - [Why China’s 2022 Party Congress Will Be a Landmark: QuickTake]( - [China’s American-Born Olympic Star Is Being Very, Very Careful]( Even though China’s propaganda machine erased mention of the scandal from the internet in the country, the political risk facing Xi from rights protests can’t be so easily managed with thousands of athletes from democracies descending on Beijing’s Olympic bubble. Australia, Canada and the U.K. have joined a U.S.-led diplomatic boycott over alleged abuses of the Uyghur Islamic minority in China’s western Xinjiang region that President Joe Biden’s administration has called a genocide. While pandemic curbs mean foreign spectators won’t be at the Winter Games, athletes could take the baton from governments. The erosion of democracy in Hong Kong is another potential flashpoint. Xi has a lot riding on holding a showcase Olympics ahead of a twice-a-decade leadership congress at which he’s expected to secure a third term in office. China has warned athletes that speaking out comes with consequences, suggesting it will take a restrictive interpretation of the Olympic Charter that bans “political, religious or racial propaganda.” Still, International Olympic Committee Chief Thomas Bach plans to meet with Peng during the Games. The “simple, splendid” Olympics Xi promised may get rather complicated. — [Jenni Marsh]( Peng Shuai serves at the Australian Open in Melbourne on Jan. 21, 2020. Photographer: Xinhua News Agency/Getty Images Click [here]( for this week’s most compelling political images. And share this newsletter with others too. They can sign up [here](. Global Headlines Some progress | Russia [sees]( “rational elements on secondary issues” in security proposals from the U.S. this week, even though Moscow’s key points were ignored, Foreign Minister Sergei Lavrov said, calling the offer “at least something.” The European Union’s top trade official said the bloc may target the energy sector with sanctions if Russia were to invade Ukraine. Lavrov said there’ll be no war if it depends on Russia. Crowded waters | India is conducting more warship [patrols]( than ever as concerns grow about preserving its reach in the Indian Ocean as China’s naval power rapidly increases. As [Sudhi Ranjan Sen]( reports, while Indian officials are confident they can manage the risk for now, a lack of funding threatens the country’s ability to keep pace with China and other nations. Justice Stephen Breyer’s retirement announcement gives Biden the chance to fulfill his campaign promise to put the first Black woman on the U.S. Supreme Court. Above are some of the leading [contenders](. Timely growth | Emmanuel Macron received a [boost]( ahead of April’s presidential elections with France’s economy growing more than expected. Rising consumer spending and investment helped gross domestic product increase 0.7% in the fourth quarter. The resilience of the euro-area’s second biggest economy contrasts with Germany, the largest, which shrank by 0.7% over the same period. Explainers you can use - [How Russia Risks New Wave of Sanctions Over Ukraine]( - [What’s at Stake in Portugal’s Snap Election]( - [How a Country Joins NATO (and Why Putin Cares)]( ‘Partygate’ pause | A U.K. civil service report commissioned by Prime Minister Boris Johnson into alleged rule-breaking parties in Downing Street could be [stripped]( of key details following a request by London’s police. Discussions between the Cabinet Office and detectives center over what can now be published in order to “avoid any prejudice” to the criminal probe, the Metropolitan Police said. Best of Bloomberg Opinion - [Ukraine Is a Test of Britain’s Diplomatic Mojo: Martin Ivens]( - [India’s Budget Equation Faces a Job Crisis: Andy Mukherjee]( - [Biden Faces a Democracy Test in Sub-Saharan Africa: Bobby Ghosh]( North Korea confirmed launches of four missiles this week, as Kim Jong Un ramped up weapons-testing to a [record]( pace to signal anger with the U.S. over economic sanctions. If the state news agency’s report is true, [Iain Marlow]( writes, the 1,120 miles two cruise missiles traveled Tuesday would represent North Korea’s longest flight by the weapon. Paying back | Argentina and the International Monetary Fund reached an [understanding]( on when the South American nation will achieve a balanced primary budget, sources say, a key step to renegotiating more than $40 billion of debt. 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 - U.S. Vice President Kamala Harris greeted her Taiwanese counterpart William Lai at the inauguration of Honduran President Xiomara Castro, a brief encounter that may [exacerbate]( tensions between Washington and Beijing. - Biden administration officials are attempting to stem Republican [opposition]( to legislation aimed at bolstering U.S. competitiveness with China and aiding domestic semiconductor production. - South African President Cyril Ramaphosa is considering [enlisting]( a woman as his running mate in a bid for a second term as ruling party leader, sources say. - European Commission President Ursula von der Leyen is under pressure to [reveal]( details of any vaccine supply negotiations conducted via phone text message with Pfizer Chief Executive Officer Albert Bourla at the height of the pandemic. - Italy’s parliament will vote twice today in the effort to elect a new president, as the lack of progress after four days of inconclusive ballots adds to [pressure]( to end a process that’s left the country in limbo. Pop quiz, readers (no cheating!). Which company plans to offer cocoa farmers in Ivory Coast cash incentives to help reduce child labor in the chocolate industry. Send your answers to balancepower@bloomberg.net. And finally ... China and Russia will sign an agreement to build a research station on the moon, aiming to complete basic infrastructure by 2035. It’s the latest sign of closer cooperation, with Russian President Vladimir Putin expected to visit Beijing next week. It also feeds into a new moon race among [space powers](. The U.S. has scheduled a major test of the Artemis program, an effort to return astronauts to the moon later this decade. Astronaut Liu Boming steps out of China’s new space station on July 4, 2021. Photographer: Jin Liwang/Xinhua 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. 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