FirstFT: Belgian intelligence monitors Alibaba’s Europe logistics hub

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Belgium’s intelligence service has been monitoring Alibaba’s main logistics hub in Europe for espionage activities following suspicions Beijing has been exploiting its growing economic presence in the west.

European governments have been increasing scrutiny of the alleged security risks posed by Chinese companies as part of a wider reassessment of the EU’s traditional openness to trade with China.

In specific reference to Alibaba’s logistics arm at the cargo airport in Liège, Belgium’s security services told the Financial Times they were working to detect “possible espionage and/or interference activities” carried out by Chinese entities “including Alibaba”.

Alibaba, which denies any wrongdoing, signed an agreement with Belgium in 2018 to open the hub in Liège, Europe’s fifth-largest cargo airport, ploughing €100mn of investment into the ailing economy of the French-speaking Walloon region. Nearly two years after its opening, here’s how the country’s intelligence service has continued to monitor the site.

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

• UK politics: The Labour party faces a test in its former stronghold of Scotland with a by-election for the Rutherglen and Hamilton West constituency.

• Economic data: France reports industrial production data, Germany publishes trade balance figures and S&P Global/Cips publishes its construction purchasing managers’ index for the UK.

• EU: The third meeting of the European Political Community will be held in Granada, Spain. Migration is likely to dominate the discussion. For more analysis of the news driving the European agenda, sign up to Europe Express here if you’re a premium subscriber or upgrade your subscription here.

Join us today and tomorrow as chief executives from the world’s biggest mining companies discuss the future of critical minerals at the FT’s Mining Summit in London or online. Register here.

Five more top stories

1. Russia is scrambling to cover the ballooning cost of its war in Ukraine, with Vladimir Putin’s cabinet turning to increasingly irregular revenue-raising measures. The Kremlin has said it aims to spend Rbs10.8tn ($108bn) on defence next year, three times the amount allocated in 2021, before the invasion. Here’s how Moscow plans to cobble together the staggering sum.

2. Rishi Sunak axed the northern leg of the HS2 high-speed rail line to Manchester yesterday, claiming he could save £36bn to be used for better-value transport projects. The prime minister also unveiled a series of “radical” policies to change Britain including education reforms and a smoking crackdown. George Parker has more details from the Conservative party conference.

3. Exclusive: JPMorgan Chase has stepped up the pace at which it is securitising billions of dollars of its loan portfolio in anticipation of proposed new US capital requirements for large banks, according to people familiar with the matter. The largest US bank by assets had $1.3tn in loans at the end of June. Here’s where it is focusing its efforts.

4. Oil prices plunged by more than $5 yesterday in the biggest one-day drop in more than a year, surprising investors. Brent crude, the global benchmark, settled at $85.81 a barrel yesterday but edged slightly higher early this morning. Prices came close to $100 a barrel last week following production cuts from Saudi Arabia and Russia. Here’s why there was a sudden decline.

5. Republicans on Capitol Hill have begun their search for a new leader after a historic rebellion by hardline party members unseated US House Speaker Kevin McCarthy and plunged Washington into turmoil. The race is likely to be dominated by allies of Donald Trump. Here’s more on the potentially messy fight for the Speaker’s gavel.

News in-depth

A sell-off in global bond markets has pushed borrowing costs to their highest levels in a decade or more, raising fears that the recent sharp moves could inflict severe damage on various parts of the financial system. This includes potentially heavy losses for banks, insurers, pension funds and asset managers that own trillions of dollars of sovereign and corporate debt after loading up in recent years. Here’s how they will be affected.

We’re also reading . . . 

Chart of the day

Prime Minister Rishi Sunak’s decision to cancel the northern leg of the HS2 railway has ended the UK’s ambition to build a high-speed line linking northern and southern cities along the spine of the country. Backers argue that the line would have sped up journey times, but others say connectivity can be improved by fare changes and other moves.

Take a break from the news

Racehorse Frankel retired in 2012 following an undefeated 14-race career — in all likelihood, “the best there’s ever been”, according to the British thoroughbred’s trainer. Today, Frankel lives happily at Banstead Manor Stud, the world’s most successful stud farm, and where the horse was born. The FT received an exclusive tour.

Additional contributions from Benjamin Wilhelm and Gordon Smith