Your Weekend Reading: China Makes Its Displeasure Known

China launched its most provocative military drills near Taiwan in decades, reacting to US House Speaker Nancy Pelosi’s visit to the island democracy. It’s arguable that neither Xi Jinping nor US President Joe Biden have an interest in triggering a wider conflict, but after some bellicose rhetoric, the Chinese leader is under pressure to deliver a strong response to secure an expected third term. So far, China has surrounded much of the island with ships and fired off missiles—reportedly for the first time over Taiwan itself—and imposed sanctions. But what next? Beijing could launch cyberattacks, try to take control of Taiwan’s airspace and adjacent seas or even seize one of its islands. But for all the tension surrounding Pelosi’s visit and its aftermath, the crisis may nevertheless spur new dialogue, Minxin Pei writes in Bloomberg Opinion. “The alternative,” he warns, “is too bleak to contemplate.”

While a recession in the UK appears to be a foregone conclusion, US job growth and wages surged past forecasts in July, with rock-solid labor demand tempering downturn fears and suggesting the Fed will continue steep interest-rate hikes to thwart inflation. A post-inflation “new normal could look a lot like the low-growth hole the US was in for years,” Eduardo Porter writes in Bloomberg Opinion.