Washington and Beijing just fired up the diplomatic hotline. Defense Secretary Pete Hegseth and Secretary of State Marco Rubio dialed in to their Chinese counterparts. The messages? The U.S. says it isn’t gunning for conflict, China says Taiwan isn’t negotiable, and both sides says the conversations were “constructive.” 

The timing couldn’t be trickier. A tariff truce is due to expire in November, Trump is dangling fresh trade penalties over Beijing’s ties to Moscow, and Xi just paraded long-range missiles alongside Vladimir Putin and Kim Jong Un. In the middle of this swirl, China’s foreign minister waxed nostalgic about fighting “side by side” with America in World War II.

Now, with both leaders expected at next month’s South Korea summit, the stage is set for a possible Xi-Trump face-to-face. For now, the world’s two biggest powers are back at the table.—Jui Chakravorty

What You Need to Know Today

Taiwan has rolled out an $18.1 billion “national resilience” package aimed at fending off China and shoring up the home front. Funds will go to defense — think new patrol ships, drones, and tougher reserve training — as well as support for industries bruised by US tariffs. President Lai Ching-te has made preparing for conflict a hallmark of his tenure, driving up military spending and expanding military drills, though the plan now heads to a legislature where opposition lawmakers hold a razor-thin edge.

Taiwanese flags in Taipei. Photographer: An Rong Xu/Bloomberg

China is moving to clear a mountain of unpaid bills that local governments owe to private companies — a backlog some have estimated at more than $1 trillion. Beijing is weighing a plan that would have big state banks lend money to local authorities so they can pay off at least $140 billion in arrears in the first phase, with the goal of finishing the cleanup by 2027. President Xi Jinping has warned the delays threaten trust in the government and could cripple struggling firms, but shifting the burden to banks raises new risks for lenders already dealing with thin margins and rising bad loans.

Indonesia’s new finance minister wasted no time making his mark, announcing a $12 billion cash injection just two days into the job. Purbaya Yudhi Sadewa said half of the government’s idle reserves at the central bank will be shifted to state-owned lenders to spur credit growth, part of President Prabowo Subianto’s push to accelerate the economy. He urged banks to channel the funds into loans, not government debt, arguing the system suffers from a “drought” of money despite recent rate cuts. Markets ticked up on the news, though global jitters linger after the replacement of his predecessor, Sri Mulyani Indrawati.

The operator of a top Hong Kong school that offers an American-style education is being sued by its US-based founder and threatened with possible eviction. The dispute over Hong Kong International School centers on the Lutheran Church-Missouri Synod’s allegation that the institution is being run “seemingly only for the rich.” The synod, which founded HKIS in 1966 and appointed Hong Kong International School Association Ltd. to operate it, has accused the association of breaching the operating agreement that it be open to all and run as a community school with Christian values. If the two sides can’t reach an agreement, the synod will move to evict the association so it can run a new school on the same site, according to Christian Preus, chair of the synod’s board of directors.

Jack Ma-backed Ant Group has muscled into China’s humanoid robot race, unveiling its R1 model in Shanghai against rivals like Unitree and global players such as Tesla. Built by Ant’s Robbyant unit, the humanoid can guide tourists, sort medicine, consult with patients or cook dinner — but the company’s real play is brains over brawn. Ant is betting it can outthink competitors by making robots smarter, not just stronger. Still in testing and not yet priced, the R1 underscores Ant’s ambition to move beyond fintech and stake a claim in one of tech’s fiercest new battlegrounds.

Ant R1 model humanoid Source: Ant Group

Apple is nearing the $2,000 barrier with its iPhone 17 Pro Max, offering a 2-terabyte model priced at $1,999 — the first time an iPhone has hit that level. While most of this year’s lineup saw only modest $100 bumps, with the iPhone 17 Pro starting at $1,099 and the new iPhone Air at $999, the move signals where Apple is headed. A foldable iPhone is expected next year, with features rivaling those of Samsung and Google, whose foldables already sell for $1,799 to $2,400. And a radical “iPhone 20” overhaul is in development, pointing to a future where the $1,000 iPhone looks like a bargain.

South Korean President Lee Jae Myung said a US immigration raid that led to the detention of more than 300 Korean workers has unsettled companies pouring billions into America. He called the incident “baffling” and warned it could deter future commitments, even as the workers prepare to return home. Images of them in shackles have fueled outrage in Seoul and rattled Lee’s young presidency, casting a shadow over his recent summit with Donald Trump to reaffirm economic ties.

What You’ll Need to Know Tomorrow

For Your Commute

Holders of boxes at Mexico City’s iconic Estadio Banorte, previously known as Estadio Azteca, won a standoff against FIFA over who gets to control those spaces during the 2026 World Cup.

The use of the boxes and VIP seating has become an issue in the lead-up to the soccer tournament as the stadium had signed contracts that spanned 99 years of box access in order to fund a 1966 renovation, according to a spokeswoman at Ollamani SAB, the company that owns the stadium. The boxes include 12,500 individual spaces out of the 90,000 the stadium will have following the current renovation. Click here to read more.

Mexico City stadium. Photographer: Hector Vivas/Getty Images South America

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