China’s military builds massive wartime command centre

Today’s agenda: Trump’s crypto embrace; OpenAI’s new funding round; Canada warns on tariffs; Big Tech earnings; and Linklaters’ US foray

Good morning. We begin in China where the country’s military is building a massive complex in western Beijing that US intelligence believes will serve as a wartime command center far larger than the Pentagon, according to current and former American officials. Here’s what we know:

Massive military complex: Satellite images obtained by the Financial Times that are being examined by US intelligence show a roughly 1,500-acre construction site outside the Chinese capital with deep holes that military experts assess will house large, hardened bunkers to protect Chinese military leaders during any conflict — including potentially a nuclear war.

US officials said the intelligence community is closely monitoring the site, which would be the world’s largest military command center — and at least 10 times the size of the Pentagon.

Why does it matter: The People’s Liberation Army is rapidly expanding its nuclear weapons arsenal and working to better integrate its branches. Lack of integration is among its biggest weaknesses compared with the US armed forces, military experts say.

If confirmed, the military bunker “signals Beijing’s intent to build not only a world-class conventional force but also an advanced nuclear war-fighting capability”, one China analyst said. Read the full report and view a satellite image of the site.

Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: France and Germany release inflation data. Germany also has labor market and retail sales figures.

• UK: Brexit safety and security declarations for EU imports come into force. Here’s how Brexit reshaped Britain, five years today since it left the bloc.

• US: Marco Rubio travels to Central America, including Panama, in his first trip as US secretary of state.

• Results: Aon, Baker Hughes, Chevron, Colgate-Palmolive, ExxonMobil, and Novartis report.

Five more top stories

1. The Trump administration’s embrace of cryptocurrencies is helping fuel a speculative mania that could cause “havoc” when prices collapse, the hedge fund Elliott Management has warned. In its investor newsletter, it also said supporting digital assets that could marginalize the dollar was “profoundly dangerous”. Read more on the fund’s comments on crypto.

• Trump’s good start: A series of early moves has breathed fresh life into the business community, writes Michael Strain of the American Enterprise Institute.

2. OpenAI is targeting a $300bn valuation in a massive new SoftBank-led funding round. The Japanese group is set to invest between $15bn and $25bn into the ChatGPT maker, an investment that will be the centerpiece of a wider funding round which could lead to the artificial intelligence company raising as much as $40bn. Read more on the plans.

3. Exclusive: The US would be forced to buy oil from geopolitical rivals such as Venezuela if it disrupted trade with Canada, Ottawa’s foreign minister has warned. Trump’s threat to impose levies of 25 per cent on Canadian imports would hit “real people” if ties between the two countries fester into a trade war, she warned. Read the interview with Mélanie Joly.

• Oil exemption: Trump has said he is considering excluding oil imports from planned tariffs on Canada and Mexico, in a sign the US president might offer relief for crucial industries.

4. Apple’s quarterly profits and revenue crept past Wall Street forecasts, despite lower iPhone sales as it faced mounting competition in China. The group reported revenue of $124.3bn for its December quarter yesterday, above analysts’ estimates. Net income climbed about 7 per cent to $36.3bn, also above expectations. Read the full report.

5. Exclusive: Linklaters has hired a team of litigation partners in New York in the latest attempt by the UK’s “magic circle” group of law firms to take on US rivals on their home turf. British elite firms have long struggled to make inroads in the world’s most profitable legal market but there are signs that some of the strategies are starting to pay off.

The Big Read

Late-night trading sessions have fueled a growing interest in setting up round-the-clock mainstream operations. The New York Stock Exchange is now looking to offer much longer trading windows, widening to 22 hours a day. But the development is raising thorny questions about how equity markets work.

We’re also reading . . . 

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Chart of the day

Substantial revisions in UK and US immigration data don’t just change our understanding of population size and growth rates. They influence economic indicators too, not least labor market statistics, writes John Burn-Murdoch.

Take a break from the news

Mohammad Rasoulof is one of many Iranian filmmakers who have battled censorship at home. He even faced jail time and flogging for his work and views. As his latest film gets an Oscar nod, he and other directors explain why they have a duty to join the country’s youth protest movement.