FirstFT: Western brands tap private equity partners in China

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

• Global brands seek private equity partners in China

• Oil prices tumble on hopes for peace in Ukraine

• Peter Navarro on the reordering of global trade

• And the 10 best video games of the year

We start today in China where western companies are hunting for local private equity partners as they grapple with an increasingly competitive market, a sluggish economy and volatile US-China relations.

Which companies are looking for partners? The owners of sports retailer Decathlon, ice cream brand Häagen-Dazs, coffee houses Peet’s and Costa, convenience store operator Lawson and GE HealthCare are all weighing options for their China operations. “People are realising again that it’s worth it to have a local partner,” said a private equity executive in China. Nimble Chinese challengers have transformed a once highly profitable market into a fiercely competitive battlefield.

Why it matters: Many foreign-owned companies are downbeat about their prospects in China. A recent survey by the American Chamber of Commerce in Shanghai reported that the proportion of respondents optimistic about their business outlook hit a historic low of 41 per cent in September. “The market is both changing rapidly and hyper-competitive, so it’s a difficult time for foreign brands,” said Frank Tang, chair of FountainVest Partners. “If they don’t adapt, their China business might not be around for long.” Read the full story.

Here’s what else we’re keeping tabs on today:

• Economic data: The US Labor Department is set to release November employment data, update the unemployment rate and release average hourly earnings. Meanwhile, the Commerce Department will report retail sales for October and business inventories for September and S&P Global releases manufacturing PMI figures for December. In Latin America, Argentina’s national statistics agency is expected to release third-quarter GDP data.

• Interest rates: Chile’s central bank will announce its latest interest rate decision. The Central Bank of Chile’s policy rate is currently 4.75 per cent.

• Companies: Pfizer is expected to release a full-year earnings forecast and housebuilder Lennar publishes annual results.

Five more top stories

1. Oil prices slid to their lowest levels since May earlier today as traders began to price in the potential impact of a Russia-Ukraine peace deal. The price of Brent crude, the international benchmark, fell to $59.70 a barrel in early trading while West Texas Intermediate, the US benchmark, closed at $56.82 a barrel yesterday, its lowest since February 2021.

• Ukraine talks: Donald Trump said yesterday that talks with Russian President Vladimir Putin had brought a peace deal in Ukraine “closer now than we have ever been” as he signalled the US was close to agreeing a security guarantee for Ukraine.

• Drone shooting: Turkey has shot down an uncontrolled drone that was approaching its airspace over the Black Sea, in a rare military intervention by the Nato member.

2. The alleged perpetrators of Sunday’s terror attack on a Jewish event in Sydney were inspired by Isis and had travelled to the Philippines last month for military training, according to Australian authorities. Prime Minister Anthony Albanese told a press conference that there was evidence the attack was “inspired” by Isis.

3. The US has suspended implementation of a technology deal it struck with the UK during Donald Trump’s state visit to Britain, amid growing frustrations in Washington over the progress of trade talks with London. One Trump administration official told the FT the US was pushing the UK for concessions of trade outside the tech partnership.

• Trump sues the BBC: The lawsuit was filed yesterday and accuses the UK public broadcaster of publishing “a false, defamatory, deceptive, disparaging, inflammatory, and malicious depiction of President Trump”.

4. Some of Wall Street’s biggest rainmakers are vying for a windfall as the Paramount-Netflix bidding war for Warner Bros Discovery reaches a climax. The takeover battle bookends a banner year for M&A. Bankers are bracing themselves for a frenzied final stretch of the year.

5. Shell’s chief executive and his top lieutenant quashed an internal proposal to buy rival BP this year, after which the company’s head of mergers and acquisitions left the business. Read more on Greg Gut’s departure and the shelved takeover.

• More energy news: US investment group Kimmeridge has submitted a $6bn offer to buy Ascent Resources, the gas driller at the centre of a legal dispute in which a Middle Eastern sovereign wealth fund accused a US private equity group of self-dealing.

Today’s Big Read

How does diplomacy work in Trump’s Washington? Rather than use the traditional policy process, foreign governments are dealing with the handful of envoys who appear to have the president’s ear.

We’re also reading . . . 

• Trump’s trade template: Mexico’s move shows tariffs are no longer a US outlier but the global model, writes White House adviser Peter Navarro.

• US politics: Convoluted messaging and conflicting policies have been hallmarks of the president’s year, writes Oren Cass.

• AI: Transparency about the technology’s use won’t be straightforward. Do we need a “Made by Humans” label, asks Sarah O’Connor.

• Chile: José Antonio Kast’s victory adds another Latin American president to a growing column of Trump-friendly leaders across the region.

Chart of the day

Donald Trump in recent weeks has hosted a lavish Great Gatsby themed party at his Mar-a-Lago resort — complete with dancers spinning in giant cocktail glasses — touted his newly gilded toilet on social media and sped up entry for billionaires into the US. Now the man who rode to the White House last year on a promise to fix America’s cost-of-living crisis is struggling to convince voters that he even thinks it is a real issue.

Take a break from the news . . . 

The year in gaming delivered thrills, breathtaking scenery — and a hysterical walking simulator. Tom Faber lists the 10 best video games of 2025.