FirstFT: Thousands cross Hong Kong-China border

Good morning. Tens of thousands of travellers crossed in both directions between the Chinese mainland and Hong Kong yesterday, in a border reopening that ended almost three years of separation caused by Beijing’s strict zero-Covid regime.

China’s removal of cross-border quarantine requirements, replaced by the need for just a negative Covid test, was the final step in a dramatic unwinding of an approach that had included frequent lockdowns, mass testing and tough restrictions on leaving the country.

Pre-Covid, Chinese visitors represented the largest source of outbound tourism globally, but international travel ground to a halt after the pandemic began in early 2020 and the border with Hong Kong’s Special Administrative Region was in effect sealed as well.

An expected rush of mainlanders into Hong Kong is being seen as a much-needed boost for the territory’s battered economy, which is projected to have shrunk by 3.2 per cent in 2022. Analysts forecast retail sales growth of between 10 and 20 per cent this year.

Local authorities said about 28,800 people had crossed the three main land border crossings with neighbouring Shenzhen in both directions as of 4pm yesterday.

Five more stories in the news

1. Bolsonaro supporters invade Brazil’s congress Thousands of supporters of Brazil’s defeated rightwing president Jair Bolsonaro stormed the country’s Congress, supreme court and presidential palace on Sunday, creating a crisis for leftist leader Luiz Inácio Lula da Silva just a week into his presidency. Social media footage showed crowds vandalising the interiors of the three institutions in Brasília in scenes reminiscent of the US Capitol invasion two years ago by supporters of former president Donald Trump.

2. Jack Ma cedes control of Ant Group The Chinese billionaire is to relinquish control of Ant Group, the fintech company revealed on Saturday, as its founder continues his withdrawal from his online businesses following Beijing’s tech crackdown. Ma’s voting rights will shrink from above 50 per cent to 6.2 per cent, according to calculations based on a statement from the online payments and loans provider.

3. EY earmarks $2.5bn for consulting arm M&A splurge EY is setting aside $2.5bn to fund an acquisition spree for its consulting arm following its planned separation from the Big Four firm’s audit business, as it presses ahead with preparations for the historic split. The war chest will allow the new company, which EY is aiming to float in New York, to double the pace of dealmaking, according to people familiar with the plan.

4. Netanyahu defends judiciary reforms in Israel after protests Israel’s prime minister Benjamin Netanyahu has hit back at criticism of his plans for a sweeping overhaul of the country’s judiciary, branding claims that it would spell the end of democracy as “without foundation”. Thousands of people took to the streets in the liberal bastion of Tel Aviv on Saturday night to protest against Netanyahu’s new government — widely regarded as the most rightwing in Israeli history.

5. Alphabet’s Verily seeks to eradicate dengue in Singapore The city-state could become the first dengue-free country in the tropics, according to Alphabet’s life sciences unit Verily — if the government decides to use its technology across the city state to tackle the mosquito-borne disease.

The day ahead

Japan’s Coming of Age Day Markets will be closed for today’s public holiday as the nation celebrate those turning 20 in the 12 months to April 1 this year.

Emmanuel Macron hosts Fumio Kishida The French president will host the Japanese prime minister for a working dinner at the Élysée Palace — Kishida’s first stop on his five-nation tour through France, Italy, Britain and Canada. (ABC News)

International Conference on Climate Resilient Pakistan Prime Minister Muhammad Shehbaz Shari and UN secretary-general António Guterres will co-host the conference in Geneva today. (Guardian)

Cornwall space satellite launch Virgin Orbit will conduct the first space satellite launch from mainland Britain today when nine satellites will be shot into orbit using a rocket launched from a repurposed Boeing 747.

Returning to its regular January schedule, the World Economic Forum’s 2023 annual meeting will bring together global leaders in Switzerland next week. Join FT Live at Davos for in-person and digital events January 16-20. View the events and register for free here.

What else we’re reading

North Korea’s evolving nuclear threat In spite of tough international sanctions and extreme self-imposed isolation during the coronavirus pandemic, experts warn that North Korea has made such rapid progress with its military goals that existing arrangements for the defence of South Korea, Japan and the US could soon be rendered obsolete.

“I think there is a serious risk that a North Korean crisis could erupt while we are all focused on China potentially invading Taiwan,” says Sue Mi Terry, a former CIA analyst who heads the Asia programme at the Wilson Center think-tank in Washington.

From obscurity to a $240bn valuation in 3 years International Holding Company’s extraordinary transformation has largely gone unnoticed outside the United Arab Emirates, and is little understood — even by bankers based in the region. IHC’s chief executive insists there are simple reasons for the company’s growth, but his account explains only part of the story.

Ukrainian engineers’ fight to maintain the power grid As Moscow has launched relentless volleys of cruise missiles and drones that aim to destroy Ukraine’s electricity grid and plunge millions of civilians into freezing winter darkness, Ukraine has developed a three-pronged strategy to keep the lights on.

2023 investor guide: from peak dollar to better TV The end of the era of easy money and return of inflation shook up the global financial system last year, clearing the way for new winners to emerge. Ruchir Sharma picks the 10 trends that will shape 2023.

Taiwan to create domestic satellite champion to resist China Taiwan is in talks with a number of domestic and international investors to help its space agency establish its own satellite communications provider. Inspired by the role Elon Musk’s Starlink has played in the war in Ukraine, Taipei is expanding efforts to fortify itself against a potential assault from China.

Take a break from the news

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