Turf wars

A burgeoning industrial zone outside the Moroccan city of Tangier shows globalization isn’t dead. [View in browser]( [Bloomberg]( Despite being battered by the Covid-19 pandemic, rising US-China tensions and Russia’s invasion of Ukraine, globalization isn’t dead. A burgeoning industrial zone outside the Moroccan city of Tangier offers a prime example. It’s home to Africa’s biggest car-assembly factory and is powered by investment from companies from Europe, the Middle East, China, Japan and the US. Key Reading: [As West Battles China, a Trade Ally Tries to Keep Both Doors Open]( [Brendan Murray On Morocco’s Economy (Audio)]( [How China Aims to Counter US Efforts at ‘Containment’]( [Why US-China ‘Decoupling’ Prospect Is Getting Serious]( [How ‘Friend-Shoring’ Could Make US More Like China (Podcast)]( Morroco’s King Mohammed VI conceived the Tanger Med port project 20 years ago in what seems like a bygone era. China had just joined the world’s rules-based trading regime and his country was negotiating a US free-trade deal backed by American multinationals from Boeing to Intel. The idea was that Morocco would sit at the crossroads of a peaceful world teeming with trade and capital flows. Foreign investment flocked in, auto and aerospace industries took root, employing tens of thousands of young Moroccans, and local engineering schools thrived. It’s largely succeeded. Today the port rivals the oldest maritime gateways in Europe. Morocco’s security ties are firmly hitched to the US and Europe — it’s designated a “major non-NATO ally.” Along with Ghana, Senegal and Tunisia, the Muslim kingdom hosts the US and NATO forces for “African Lion” training exercises each year. At the same time, China’s presence is growing. Huawei and ZTE — two tech giants sanctioned by the US over national-security risk concerns — are aggressively recruiting engineers. Among the newer operators in the auto cluster is the fiber-optic cable producer ZTT Group, an active player in Beijing’s grand plan to crisscross the planet with Belt and Road infrastructure. Morocco is walking a diplomatic tightrope that many middle-income nations in an increasingly polarized world, from South Africa to Brazil, are struggling to navigate. Their common challenge is avoiding getting trampled, like the lesson from an African proverb: When elephants fight, it’s the grass that suffers. Morocco is betting its economy is paved with something more durable than turf. — [Brendan Murray]( Tanger Med port. Source: Getty Images [L]([isten to our Twitter Space discussion]( on the prospects for a meeting between the presidents of the US and China after Secretary of State Antony Blinken’s two-day visit to Beijing. And if you are enjoying this newsletter, sign up [here](. Global Headlines US President Joe Biden and Narendra Modi are set to [announce]( a series of defense and commercial deals during the Indian prime minister’s state visit to the White House today. They include plans for General Electric to jointly manufacture F414 engines with state-owned Indian firm Hindustan Aeronautics, as part of an effort to improve defense- and technology-sharing as China becomes more assertive in the Indo-Pacific region. Ukrainian missiles struck bridges linking a road [between]( Crimea and the occupied part of Kherson region, according to Russian officials. Ukraine’s military intelligence spokesman Andriy Yusov didn’t directly address the claim, while saying on TV that “everything happens for a reason.” An overnight barrage of six Russian missiles aimed at critical infrastructure in central Ukraine’s Dnipropetrovsk region “missed targets,” according to the Ukrainian Air Force command. - European Union countries will likely [back a proposal]( from the bloc’s executive arm for a €50 billion ($54.6 billion) financing package for Ukraine, EU Commissioner Valdis Dombrovskis told Bloomberg TV. Enthusiasm for alternatives to beef and pork surged in the aftermath of Beyond Meat’s 2019 initial public offering, and venture capitalists were willing to invest in companies that offered little more than a recipe book. But sales haven’t matched [wildly optimistic projections](, as high prices and odd tastes and textures made costly fake meat products easy to cross off shopping lists. The painstaking diplomacy US Secretary of State Antony Blinken undertook to ease tensions with China [was undermined]( by his own boss’s off-the-cuff remarks likening Xi Jinping to a “dictator” and saying he was unaware that a Chinese spy balloon was over the US when the Americans shot it down in February. Read how Biden’s comments risk wiping away the symbolic progress from talks that both sides described as constructive. - French and Chinese officials said there’s room to [deepen commercial ties](, with a focus on combating climate change and reforming global finance. Best of Bloomberg Opinion - [US Shouldn’t Forget That India Is More Than Modi: Pankaj Mishra]( - [China Wants to Buy Off Europe. The Price Is Too High: Minxin Pei]( - [Our Financial Architecture Is Failing Africa: Akinwumi Adesina]( Tensions between ultra-Orthodox and secular Israelis have never been higher, Ethan Bronner and Gwen Ackerman report. Prime Minister Benjamin Netanyahu’s far-right coalition includes a record seven ultra-Orthodox ministers. Once preoccupied solely with matters affecting their own, elected officials representing the Haredim, as they’re called, are now [advocating]( policies that affect all of society, including limits on the Supreme Court, gender segregation in public places and rollbacks on LGBTQ protections. The West Bank settlement of Modiin Illit. Photographer: Ariel Schalit/AP Photo Explainers You Can Use - [A Trader’s Guide to Japanese Policymakers’ Language on the Yen]( - [What’s the H100, the Chip Driving Generative AI?]( - [EU Banks Expand Risk Scenarios They Face Due to Climate Change]( A trial begins in Brasilia today over charges that former President Jair Bolsonaro [abused the powers]( of office by making false election claims. The case is the first of 15 he will face as a result of his frequent claims that voting was rigged against him, assertions that helped feed the polarization that resulted in riots in the capital. Bolsonaro, who retains a large support in Brazil, could be banned from office for eight years if found guilty. - Read how Brazil’s central bank threw a [bucket]( of cold water on President Luiz Inacio Lula da Silva’s economic team and its expectations of clear signs of an imminent monetary easing cycle. Tune in to Bloomberg TV’s Balance of Power at 5pm to 6pm ET weekdays with Washington correspondents [Annmarie Hordern]( and [Joe Mathieu](. You can watch and listen on Bloomberg channels and online [here](. News to Note - A gas explosion at a restaurant in northwestern China killed 31 people on the eve of a long holiday weekend, causing anger in the Asian nation and Xi to call for [better safety]( supervision. - Federal Reserve Chair Jerome Powell said policymakers expect interest rates will need [to move higher]( to reduce US growth and contain price pressures, despite holding them steady at their meeting last week. - Jose Antonio Kast, the founder of Chile’s surging right-wing party, warned that President Gabriel Boric’s plan to take control of lithium production [will damage]( the country’s investment standing. - House Republicans voted to formally rebuke US Representative Adam Schiff for [alleged misrepresentations]( in congressional impeachment investigations he led of former President Donald Trump. - US Treasury Secretary Janet Yellen said there’s a [pressing need]( to bolster the finances of the International Monetary Fund’s flagship trust that tackles poverty. And finally ... In a narrow, humid tunnel about 200 feet below the streets of Stockholm, a drill longer than the city’s tallest skyscraper [nibbles]( away at granite and gneiss. Sweden was Europe’s biggest electricity exporter last year, but its capital still suffers a common problem faced by many cities: insufficient power to handle the energy transition and the infrastructure needed to charge electric vehicles, ferries and subways. As Lars Paulsson reports, that’s driving the need to burrow a tunnel that will enable the city to overhaul its aging power grid and go fully green. Preparing a connecting tunnel to one of the six ventilation shafts. Photographer: Erika Gerdemark/Bloomberg Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. 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