China investigates son of former vice-premier Liu He

Good morning and welcome back to FirstFT Asia. In today’s newsletter:

• China investigates a ‘princeling’

• Trump officials vow to press ahead with tariffs

• Why more political turbulence lies ahead for South Korea

Chinese authorities are investigating the financier son of Liu He, a former vice-premier and confidant of Xi Jinping, according to people familiar with the probe.

Who is Liu Tianran?: He is the son of Liu He, who served as China’s economic tsar and negotiated a trade deal with the first Trump administration. One of the many “princeling” children of top party officials, Liu Tianran founded an investment firm called Skycus Capital in 2016 and served as its inaugural chair. He is now being investigated by Chinese authorities, according to seven people familiar with the probe.

What to know about the investigation: Two people familiar with the probe said it was connected to suspected financial-related corruption. One former colleague of Liu Tianran said he had been “under investigation for a while” and “might have lost his freedom”, meaning he may have been arrested. A second person said he had already been detained.

One of the people who said the probe was over suspected corruption said Chinese authorities had first looked into Liu Tianran in connection with the planned $37bn initial public offering of Ant Group, which was set to become the world’s biggest IPO until Beijing stopped it from going ahead. During the probe, authorities found unrelated cases of corruption, according to the person who added that Xi, China’s president, had been given a report on the claims.

Xi’s crackdown on the finance industry: The probe comes as China’s leader has cut pay for bankers and scrutinised the fundraising and dealmaking of many top funds. Some high-profile Chinese venture investors have been questioned, and even detained, over their fundraising

The investigation also suggests Liu He might face problems, said Dennis Wilder, former head of China analysis at the CIA. Liu regularly met foreigners after retiring in 2023, including with then-Treasury secretary Janet Yellen last April. But his meetings have been severely curtailed over the past year.

“Given Liu He’s political problems and his lack of access to Xi Jinping, he no longer has the political clout to protect his son,” said Wilder.

Read more about the investigation.

Here’s what else I’m keeping tabs on today:

• Chinese markets: Investors are bracing for an “ugly” day when China’s markets return from a long weekend and react to Beijing’s retaliation to US tariffs. (Bloomberg)

• Meetings: Asean finance ministers and central bank governors begin a four-day meeting in Kuala Lumpur, Malaysia. EU trade ministers meet in Luxembourg to discuss trade relations with the US and China.

• Samsung: The South Korean tech giant reports first-quarter pre-earnings guidance.

Five more top stories

1. Donald Trump’s top economic officials have vowed to press ahead with bruising tariffs on imports from around the world. In a blitz of television interviews yesterday, the US treasury and commerce secretaries defended Trump’s ultra-protectionist trade policies and rejected fears of a looming recession.

• Related news: Trump’s tariff blitz has sparked the biggest sell-off in the US junk bond market since 2020.

• Private equity pain: Large institutional investors are studying options to shed stakes in illiquid private equity funds after the rout in global financial markets pummelled their portfolios, according to top private capital advisers.

2. Marine Le Pen denounced a conviction that risks blocking her from the next presidential election as a “witch-hunt” and vowed to appeal in order to “defend democracy and the rule of law”. Thousands of people rallied in Paris yesterday in support of the far right leader who was found guilty last week of embezzling EU funds.

3. Trump risks making a “historical mistake” if his negotiations to end the war in Ukraine result in the US recognising Russia’s claims to Crimea and other occupied territory, says the Polish government’s adviser on Ukraine. Paweł Kowal told the FT that a “red line” would be crossed for Poland and the rest of central Europe if expanded Russian borders were legally recognised as a result of the invasion of a neighbouring country.

4. The Israeli military has backtracked after video footage contradicted its account of its killing of 15 Palestinian emergency workers in Gaza last month, an incident that has provoked international outrage. Israeli forces shot dead 15 paramedics and first responders near the southern Gazan city of Rafah in the early hours of March 23, before burying their bodies in a shallow grave where the crushed remains of their vehicles were also found. Read the full story.

5. Starbucks has sharply slowed its ambitious expansion in India as hard-pressed middle-class consumers cut spending at the coffee chain’s stores. “We saw traffic dropping,” Sunil D’Souza, chief executive of its Indian joint venture partner Tata Consumer Products, told the FT. D’Souza said he was still optimistic about reaching the joint venture’s 1,000-store goal by 2028.

News in-depth

A court verdict that removed Yoon Suk Yeol from South Korea’s presidency last Friday offered hope that the crisis sparked by his attempt to impose martial law was finally drawing to a close. But while South Korea’s democratic institutions withstood Yoon’s martial law gambit, analysts said the episode had exposed troubling weaknesses in the nation’s body politic — and that more turbulence lies ahead.

We’re also reading . . . 

• China’s ‘brutal’ car wars: With a new model released on average every two days in China, keeping pace with cutting-edge technology has become crucial for survival.

• India’s divide: An FT Big Read looks at the deep-rooted tensions between the country’s more populous north and wealthy south, and how they may inflame politics.

• How Gatsby foretold Trump’s America: A century after it was published, F Scott Fitzgerald’s masterpiece is more relevant than ever, writes Sarah Churchwell.

Chart of the day

Vietnam has become the global centre of athletic shoe manufacturing — and it is subject to some of the most punishing US tariffs imposed by US President Donald Trump this week. That’s a big problem for Nike, for which Vietnam accounts for half of the company’s shoe production.

Take a break from the news . . . 

Black Mirror star Paul Giamatti discusses the process of playing a man delving into his past in the new series of the Netflix sci-fi show. Plus his thoughts on artificial intelligence in the film and TV industry: “AI is creepy and scary, but it’s inevitable.”