🌍 The countries competing over corporations

🗺️ AROUND THE WORLD

1. 🇰🇷 South Korea: President Yoon Suk Yeol and German Chancellor Olaf Scholz have agreed to strengthen their defence supply chains with a military secret protection agreement. Scholz is the first German chancellor to make a bilateral visit to South Korea in 30 years.

2. 🇩🇪 Germany: The German economy has entered a recession as persistent inflation drives down consumer demand. Economists were hoping for a quarter of zero rather than negative growth for the EU’s largest economy.

3. 🇧🇩 Bangladesh: Bangladeshi authorities pledged to prevent and address any electoral interference in the future, a day after the US announced it would ban visas for individuals undermining Bangladesh’s democratic processes. In 2022 the US issued just over 9,000 immigrant visas to Bangladeshi citizens.

4. 🇨🇦 Canada: Canada and Saudi Arabia will soon resume diplomatic relations after five years of deep freeze. The two countries fell out in 2018 after Canada criticised the arrest of several Saudi human rights activists.

5. 🇷🇼 Rwanda: The most wanted Rwandan genocide suspect was arrested in South Africa on Wednesday after two decades on the run. Former police chief Fulgence Kayishema has been charged for his role in the murder of over 2,000 people in a church in 1994.

🇰🇾 CAYMAN ISLANDS | GEOECONOMICS

Competition for the ultra-wealthy and their cash

Briefly: The Cayman Islands plans to open its first office in Asia in either Singapore or Hong Kong to entice hedge funds and high-net-worth folks to the territory.

The Cayman Islands has long been legendary as an offshore financial hub. But during the pandemic, both Singapore and Hong Kong saw an opportunity to attract funds and high-net-worth individuals by approving new tax-friendly investment structures:

• 🇸🇬 In Singapore, nearly 900 variable capital companies have been set up since the scheme was launched in 2020

• 🇭🇰 In Hong Kong, the number of open-ended fund companies nearly doubled between 2021 and 2022

Now, as ultra-wealthy folks in China continue to grow wary of Beijing’s crackdowns on the home front, they’re looking to move their cash (and often families) to more ‘friendly’ environments abroad.

And that yuan-rush has Hong Kong and Singapore licking their lips, hence the Caymanian decision to open a new Asian office and defend its market share.

Intrigue’s take: The Cayman Islands has one big advantage over both Hong Kong and Singapore – it’s further from the all-seeing eye of Beijing. On the other hand, ultra-wealthy folks from China are likely to be more comfortable holding their money in cities with closer economic and cultural ties to the mainland.

That’s why Cayman officials are reminding high-net-worth individuals in Asia that, unlike other johnny-come-lately jurisdictions, “Cayman funds represent the ‘old faithful’ of the investment world — tried, tested and trusted.”

Also worth noting:

• The Cayman Islands is on the Financial Action Task Force global anti-money laundering grey list.

• Folks from China’s mainland made up nearly a quarter of the buyers of last year’s 425 luxury homes sold in Singapore.

Today’s briefing is sponsored by Todoist

🇨🇳 CHINA | GEOPOLITICS

Who is China’s new ambassador to the US?

Briefly: China’s new ambassador to the US, Xie Feng, arrived in Washington on Tuesday (23 May). Xie replaces Qin Gang, who was elevated to foreign minister last December.

As tensions between the US and China ballooned earlier this year, China left its colossal Washington DC embassy without an ambassador for several months. It’s not clear whether China delayed Xie’s arrival to send an intentional message of displeasure to the US.

Xie’s a career diplomat and is well-versed in the complexities of the US-China relationship. He’s negotiated sensitive prisoner swaps with the US and Canada, and coordinated a high-profile virtual meeting between Presidents Biden and Xi in 2021.

Intrigue’s take: Xie’s arrival might be a signal that Beijing is open to ‘a reset’ just days after President Joe Biden foreshadowed a possible ‘thaw’ in relations.

Within a few hours of landing in New York, Xie released a statement in which he said there were “serious difficulties and challenges” in China-U.S. relations but the relationship was “too important for us to let it fail”.

The new ambassador’s stated good intentions notwithstanding, it’s hard to see a single career diplomat being able to influence the relationship much himself.

Also worth noting:

• Xie served as Vice Foreign Minister before his appointment as ambassador to the US.

• A State Department spokesperson welcomed Xie and signalled an interest in “maintaining channels of communication.”

👀 EXTRA INTRIGUE

We’re feeling particularly diplomatic this Friday.

• Ambassador

• Attaché

• Consulate

• Diplomacy

• Embassy

• Mission

🗺️ MAP OF THE DAY

Turkey’s election on 14 May was the closest President Recep Tayyip Erdoğan has come to losing power since he became the country’s leader in 2002. But after missing a first round victory by only 0.5%, Erdoğan has a solid advantage heading into the second round on Sunday.

🗳️ QUIZ TIME!

Answers: 1-c, 2-d, 3-a: they are Suriname, Panama and Bhutan.