Charlotte Street Partners



Chills, they're multiplying

Written by Maria Julia Pieraccioni, associate 
Edited by David Gaffney, partner
22 March 2021

Good morning,

The weather in Alaska is brutal. Temperatures from November to March range between -35 and -18 degrees Celsius, and some residents see no sunshine at all for 60 consecutive days each year, due to its close proximity to the north pole.

It might come as no surprise, therefore, that last week’s diplomatic meeting in Anchorage, between delegations from China and the United States, was somewhat chilly. The meeting was the first high-level in-person talks since President Biden took office and China’s delegation may have anticipated a return to pleasantry politics and diplomacy after four years of Trump tactics and name-calling.

However, any such expectations were shattered when Antony Blinken, the US state secretary, opened the meeting with a litany of condemnations of China’s disregard for the global “rules-based order”. From complaints about China’s human rights abuse of Uyghurs in Xinjiang, to its aggressive behaviour towards Taiwan and Hong Kong, to the economic backlash against Australia, the Americans didn’t hold back.

Yang Jiechi, China’s most senior envoy, was well prepared to respond in kind, highlighting America’s hypocrisy with the treatment of its own minorities, describing the police violence against African Americans as an outright “slaughter”. A retaliatory 16-minute-long list of complaints against the United States included a not-so-gentle reminder of America’s history of militant interference in foreign countries’ domestic politics, including in China.

So far, so frosty. However, the situation is probably not as dire as it may appear on the surface. In fact, David Rubenstein, a former US government policy advisor described that the early exchanges as a “good thing” and officials in the West have applauded Biden’s camp for being brave enough to denounce publicly their counterparts’ human rights abuses. Officials in the East also walk away content, knowing their display of force will be well received by the Politburo.

The US may have walked away from these talks empty handed, but perhaps that was always the intention. With an ace up its sleeve in the shape of Quad, a partnership with Japan, India and Australia designed specifically to counter Chinese expansion in the South Eastern Pacific, it is possible Biden’s administration was determined to demonstrate up front that it will not shy away from confrontation.

The diplomatic air between China and the US may not have cleared yet. However, officials have reported that after the opening salvos, talks behind the scenes were constructive, so there is room to hope that the somewhat frigid relations might yet warm up, by degrees.


The British prime minister, Boris Johnson, is expected to contact EU leaders ahead of their meeting on Thursday to discuss a ban on Oxford-AstraZeneca vaccine exports to the UK. Amidst growing criticism for the slow pace of their vaccine rollout, European leaders may decide to halt exports of vaccines produced in European states to the UK, arguing that the UK has yet to export its own vaccines in the opposite direction. Such a ban could delay the delivery of first doses to every UK adult to August, rather than the target date of 31 July.
The “Kill the Bill” protest against the Police, Crime, Sentencing, and Courts Bill in Bristol turned violent over the weekend, with two police officers suffering serious injuries. The bill is set to give the police more power in dealing with peaceful protest, which is seen by many as an erosion of their right to peaceful protest. (£)
Healthcare Improvement Scotland authorised the first medical cannabis clinic to provide safe access to medical cannabis for patients. This follows the legalisation of medical cannabis in the UK in November 2018, allowing for its prescription in certain situations. Sapphire Medical Clinic, located in Stirling, said it was “testament to the robust clinical governance framework [established] in evaluating patients for treatment.”

Business and economy

The UK and the EU are close to an agreement on cooperation over financial services, following many companies shifting operations to Amsterdam and other European financial hubs in the wake of Brexit. Set within growing UK-EU tensions over Northern Ireland disputes and vaccine exports, the memorandum is a welcome development in that it would establish a forum for talks aimed at creating a “stable and durable” basis for cooperation. (£)
Senior officials in Hong Kong have sought to reassure investors that theterritory will continue to remain a tax haven following a reduction in investor confidence in the city’s tax haven status. Matthew Cheung, the city’s highest-ranking bureaucrat, reassured investors that Hong Kong’s regional financial hub is extremely important and will remain protected for a very long time. (£)
The Turkish lira is plunging to record lows against the dollar, after President Erdogan’s firing of the central bank’s chief sent shockwaves through investors. Erdogan’s third appointment to the post in less than two years is a sign of instability that is continuing to weaken investor confidence in Turkey, which was recently regained thanks to a series of aggressive rate hikes.
Two of Scotland’s most successful entrepreneurs have today launched a new investment arm for their diverse and growing portfolio of investments. Paddy Burns and Chris van der Kuyl – co-founders of multiple award-winning games developer 4J Studios, best known for developing Minecraft for Microsoft, Sony and Nintendo games consoles – have established Chroma Ventures as a means of consolidating an investment portfolio focused principally on data-led businesses and those developing and deploying innovative technology.

Columns of note

John Harris in The Guardian discusses the role of the Union Jack in the fragmentation of British identity. Citing the possibility of a second independence referendum in Scotland, record-high support in Wales for independence, and anxieties surrounding the future of Northern Ireland, Harris concludes that identity politics can no longer be mobilised by a flag, or what it stands for.
Expensive housing is a long-contested topic, which Martin Wolf explores in this piece for the Financial Times. Housing prices are higher than at any time since the 1880s, except for the year before the financial crisis. Wolf explains that lower levels of owner-occupation have widened intergenerational and other forms of inequality, with higher prices driven by falling real interest rates.

Cartoon source: New Yorker


The week ahead

Today’s highly anticipated call between UK international trade secretary Liz Truss and her US counterpart, Katherine Tai, is likely to re-establish trading relationships between the two countries, disrupted in part by Brexit. The talks had been paused momentarily during the transition to Biden’s administration, and although a trade agreement is unlikely to be completed during 2021, continuous talks are seen as a successful sign for the UK government.
Attention will remain focused on the Bank of England’s reports on inflation, labour data, retail sales and PMIs. Inflation is expected to break the Bank of England’s two per cent target later in the year, but not cause significant disruption, as the consumer price index is forecast to be 0.8% for February, as a result of higher energy prices. The UK’s unemployment rate is forecast to remain at 5.1%, while there is hope that the UK’s services PMI score may move into expansion territory after four consecutive readings below 50, which represents a contraction.

Meanwhile, in the US,  treasury secretary Janet Yellen and Federal Reserve chair Jay Powell, are due to testify before the House of Financial Services Committee tomorrow, on the role of fiscal and monetary policies in the pandemic recovery.
Central bank meetings characterise the entire week, with China, Mexico, South Africa and Switzerland setting dates to discuss fiscal and monetary policies to aid recovery.

What’s happening today?

Centamin PLC
Yew Grove Reit.

Gresham Renew 1
Gresham Renew 2

Annual report
Taylor Wimpey

Etalon S

UK economic announcements
(07:00) Current Account
(12:30) Gross Domestic Product (US)

Int. economic announcements
(07:00) GFK Consumer Confidence (GER)
(08:00) IFO Current Assessment (GER)
(08:00) IFO Expectations (GER)
(08:00) IFO Business Climate (GER)
(09:00) Current Account (EU)
(13:30) Personal Consumption Expenditures (US)
(14:00) Existing Home Sales (US)

Source: Financial Times

did you know

In 2013, India’s army spent six months watching ‘Chinese spy drones’ before they discovered they were actually looking at Jupiter and Venus. [source: QI]

Parliamentary highlights

House of Commons

Oral Questions – Home Office (including Topical Questions)
Consideration of Lords message
Trade Bill
Fire Safety Bill
Counter-Terrorism and Sentencing Bill
Programme Motion
Air Traffic Management and Unmanned Aircraft Bill [Lords] – Grant Shapps
Air Traffic Management and Unmanned Aircraft Bill [Lords]: remaining stages
Membership of the Parliamentary Works Sponsor Body – Mr. Jacob Rees-Mogg
Appointment of Chair of the Electoral Commission – Mr. Jacob Rees-Mogg
Health and safety regulations and cranes – Apsana Begum
Westminster Hall debate
e-petition 570779, relating to consent for a referendum on Scottish independence – Chris Evans
e-petitions 313310, 557167, 563904, 566718, 567492, relating to the Government’s Spring 2021 covid-19 roadmap – Nick Fletcher

House of Lords 

Lord Coaker
Oral Questions
Increasing the uptake of heat pumps in domestic premises – Lord Oates
Role of British judges in courts in Hong Kong and plans to prevent such judges from participating in such courts – Lord Truscott
Assisting people with disabilities with the additional financial costs associated with standing for elected office – Baroness Jolly
Addressing the impact of the Covid-19 pandemic on the welfare, rehabilitation, sentence management and mental health of prisoners – the Lord Bishop of Gloucester
DHSC Update – Lord Bethell
Orders and regulations
Health Protection (Coronavirus, International Travel) (England) (Amendment) (No.7) Regulations 2021 – motion to regret – Baroness Thornton
Direct Payments to Farmers (Reductions and Simplifications) (England) (Amendment) Regulations 2021; Agriculture (Financial Assistance) Regulation 2021 – Lord Gardiner of Kimble
Administration (Restrictions on Disposal etc. to Connected Persons) Regulations 2021 – Lord Callanan
Care Planning, Placement and Case Review (England) (Amendment) Regulations 2021 – motion to take note – Lord Watson of Invergowrie
Independent Review of Administrative Law Update – Lord Wolfson of Tredegar

Scottish Parliament 

No business scheduled

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