Biden, Xi, Henry VIII and all that glitters

Plus: Israel is spending $260 million a day and more [Bloomberg]( This is Bloomberg Opinion Today, a diplomatic packet of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Must-Reads - Watch out! [Falling knife](! - They left their heart in [San Francisco](? - Suddenly, it’s a contest in [Taipei](. - How the [Global South]( wasn’t won. - Look who are [biding their time]( in the Middle East. - The sin of [irrational undervaluation](. - Singapore’s got [talent]( but so does Hong Kong. When Empires Make Nice As meetings between great powers go, Xi Jinping and Joe Biden’s San Francisco huddle was no Field of the Cloth of Gold. That summit of the young kings of England and France occurred more than 500 years ago, when Henry VIII and Francis I — 29 and 25 years old, respectively — were the rising political personalities — and egos — of early 16th-century Europe. The opulence of their two-week get-together just south of English-held Calais reflected that: so much fabric of spun gold was used in the tents and drapery of both contingents that the convocation is known by the textile. But there was skin in the game, too: As part of the diplomatic show, the kings tussled in a wrestling match. In San Francisco for the summit of the Asia-Pacific Economic Cooperation forum this week, 80-year-old Biden held his smartphone up to 70-year-old Xi, displaying a photo of the Chinese leader during a tour of the US four decades ago, the Golden Gate Bridge in the background. “[Do you know this young man?](” the American president asked. “Oh yes,” Xi responded. No Golden Gate in sight: Henry VIII arrives at the Field of the Cloth of Gold Credit: Royal Collection Trust But there’s skin in this game here, too. As Hal Brands [explains](: “Both sides understand the importance of high-level diplomacy at this moment. Biden wants to show that America is responsibly managing a critical relationship; he needs calm in Asia amid violent crises in Europe and the Middle East. Xi is trying not to spook the electorate in Taiwan ahead of presidential elections in January; he could use a break from international tensions as China’s economy stagnates. He presumably hopes more soothing rhetoric, and more moderate diplomacy, will undercut momentum toward tougher policies by the US.” A few small comforting things were agreed to. They were enough to make military strategists relax slightly and retreating corporate investors give China a second look. Meanwhile, developments in Taiwan were edging Xi’s way. Under Xi, Beijing has dispatched harassing military exercises to the periphery of its so-called rebel province, which is governed by the Democratic Progressive Party, which has many adherents advocating full nationhood for what is officially the Republic of China, an entity that claims the entire mainland (and more). The DPP was the favorite to win the vote, but, as Karishma Vaswani [says](: “Taiwan’s two key opposition parties standing for January’s presidential election have decided to [team up](, potentially paving the way for smoother cross-strait relations.” Both organizations favor warmer ties with the People’s Republic. A DPP loss will make life easier for China’s leader. “Coerced but peaceful unification is Xi’s preferred option because he knows what existential dangers war can bring,” Hal [said](on Nov. 5. Here’s Karishma on TikTok discussing what happened in San Francisco — including Biden once again calling Xi a dictator, an irritant that Chinese media has decided to ignore this time — and why it matters. [TikTok: Here’s what China makes of the #Biden and #Xi #APEC meeting](  Relations may be looking up for now, but overlooked factors may have a way of causing havoc. Back in 1520, the two young kings ignored one important element: a third young king named Charles V of Spain and Holy Roman Emperor, then 20 years old. He’d become Henry’s implacable enemy when the English monarch divorced his wife — Charles’ aunt — and fractured Western Christendom in 1533. Charles would also defeat Francis I and take him prisoner after the battle of Pavia in 1525 (their rivalry woven into the beginning of Marcel Proust’s À la Recherche du Temps Perdu, among other things). And that Anglo-French wrestling match? It was meant to be amicable but Henry came off the worse for it — receiving a bruised ego and bearing a grudge. For now, the looming trump card is, as Minxin Pei [says](, the potential return of Donald Trump to the White House. In 1988, he sailed his freshly refurbished yacht the “Trump Princess” into New York and showed it off to the press. I got to go along as the writer of Time magazine’s “People” page and got to hear the future president of the US declaring of the fixtures, “Anything that looks like gold is gold.” Indeed. All that glitters. Israel’s Other Crisis Prime Minister Benjamin Netanyahu’s government has had to find an extra [$260 million a day](  to fund Israel’s war against Hamas. But, according to the head of research of the country’s central bank, the proposed budget from his finance minister Bezalel Smotrich — which will boost borrowing by an extra $8.25 billion — cuts spending in the wrong places and may just drive up the cost of credit for Israel. The central bank, [says]( Marc Champion, is clear about where the cuts should come from: state subsidies for “Smotrich’s settler voters in the occupied West Bank, whose actions before Hamas’ Oct. 7 attack did so much to distract the attention of Israel’s security agencies away from Gaza. They also pay for backers of his ultra-orthodox allies — already exempt from military service — not to have to work, so they can pray and study the Torah unimpeded. Still more goes to the private religious schools their kids attend, and where their sons in particular don’t get taught the core subjects needed to become employable.” Israel Democracy Institute’s Gilad Malach told Marc that the subsidies encourage behaviors that make the ultra-orthodox community poor, technologically backward and, in general, “under-developed.’’ Netanyahu has approved the budget. It must now get through the cabinet and Israel’s parliament. Bellwether in Plain Sight South Korea has become a soft power juggernaut in the last few years. K-pop bands have conquered the world even as the country’s cuisine is giving neighboring Japan a run for its money in the hearts and bellies of global gourmands. But, [says]( Daniel Moss, Seoul is often overlooked as a bellwether for the world economy. He wants the secret to be out. “South Korea's economy doesn't get the respect it deserves,” writes Daniel, “which is a pity because the news has been good recently: Crucial exports are recovering, the labor market is resilient, and the expansion is still very much alive.” A lot of that comes from trade (see chart). Daniel adds: “The won reflects this reasonably robust picture. It’s one of only two Asian currencies to have gained against the dollar in the past six months. Since the middle of October, it leads advancers versus the greenback, climbing almost 2%. The yen is the worst performer.” So stop looking at Japan, the EU and China for global signs of recovery (or the opposite). Daniel says: “it’s about time we looked at some indicators in other corners of the world in addition to US payrolls, retail sales and industrial production.” Keep your eyes on Seoul. Telltale Charts “Entering 2023, China had all the momentum ... however, whatever revenge spending investors had hoped for fizzled out quickly. While US retail sales grew by 17% year-on-year nine months after its reopening in March 2021, China’s rose by only 5.5%. … The Chinese do not lack the money to spend. They are just not willing, and prefer saving for rainy days. It is a sharp contrast to Americans, who are still spending even though many may not have much in their bank accounts and are facing the threat of a possible recession.” — Shuli Ren in “[China Should Just Accept US Exceptionalism](.” “China’s high-speed rail is now a 26,000-mile network and supports a top speed of 220 miles per hour. Meanwhile, Vande Bharat Express, India’s newest and fastest passenger locomotive, is unable to accelerate to its full potential — most parts of the existing tracks won’t even allow 80 miles an hour. … What has local train travel got to do with exports?… A one-standard-deviation increase in geographic integration leads to a 4% rise in a firm’s export revenue, driven by a 5% reduction in the unit price of exported products and a 9% increase in export volume.” — Andy Mukherjee in “[To Be the Next China, India Needs Faster Trains](.” Further Reading This town [ain’t big enough]( for two top chefs. — Howard Chua-Eoan Humanity’s [dirtier](than that Icelandic volcano. — Mark Gongloff [Target’s](aim needs to be sharper. — Andrea Felsted India and the UK are [scaredy cats](. — Mihir Sharma Sticky [wicket]( in the desert? — Adam Minter David Cameron versus Sunak’s [China hawks](. — Matthew Brooker Walk of the Town: Copenhagen Edition I cross the aerodynamically streamlined Lille Bro — literally, little bridge — on the 2-½ miles from my Airbnb in Copenhagen to Restaurant Koan, which is just a few minutes beyond where the Little Mermaid sits by the city’s gorgeously clean harbor. The Danish capital is one of my favorite food destinations. It is a remarkable city — modern yet possessing beautifully preserved, centuries-old architecture; relaxed yet disciplined; serious yet ebullient. However, for this last trip, I must turn to the overused Shakespeare line: “Something is rotten in the state of Denmark.” The view on the Lille Bro crossing Photograph by Howard Chua-Eoan/Bloomberg Nothing stinks, literally. But instead of finding a city enjoying the largesse of its world-class companies (AP Moller-Maersk A/S, Orsted A/S, Novo Nordisk A/S and Vestas Wind System A/S), locals were feeling angst. To be sure, a lot of money has gone into infrastructure but that only compounded the anxiety. My walk to Koan was disrupted by construction, including a new Maersk building going up by the harbor. On Nov. 3, just as I was preparing to leave for Denmark, the giant shipping company — which reported $8.7 billion in third-quarter operating profits last year — announced it was laying off 10% of its workforce. “The speed and magnitude of the earnings collapse has been astonishing,” [said]( my colleague Chris Bryant. “Maersk signaled its’ battening down the hatches for a grim couple of years.” The wind power giant Orsted is facing a funding gap after giving up huge projects in the US — and may be contemplating staff cuts as well. Turbine maker Vestas fared better in the third quarter but some analysts are saying offshore wind may not regain its competitive edge until 2030. Novo Nordisk’s diabetes treatment — now famous for being an appetite suppressant — Ozempic is still enjoying its miracle drug status but that’s little comfort for Denmark’s world class restaurants. So, as winter approaches, think warmly of the Danes. They could use some hygge. Drawdown Thanks for getting through all that superpower diplomacy. Here’s a reminder that obsession about [imperium]( goes way back. “Men! Always thinking about the Roman empire.” Illustration by Howard Chua-Eoan/Bloomberg Notes: I will take both empirical observations and imperious feedback at hchuaeoan@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Opinion Today newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](