What we can learn. The annual G-20 summit opens in Buenos Aires today, an event that’s strangely similar to an all-star game: The main event is almost always meaningless, but on a good year, the drama, the rumors and the salacious speculation about what’s being said behind closed doors can be instructive. (Who will give Mohammed bin Salman the cold shoulder? Will Donald Trump take the China hawks or the China doves to his high-stakes dinner with Xi Jinping? Was foul play to blame for the problems with late-arriving Angela Merkel’s plane?) Recent events – Trump’s myriad trade wars, the fallout from the Khashoggi murder, the Ukraine-Russia standoff in the Kerch Strait – have made 2018 one of the good years. Of course, there’s only so much we can learn from parsing leaders’ canned statements and noting who met with whom. Still, getting adversaries in a room together is probably a good and useful thing, even if few of them alone have the freedom to decide how to shape the course of international events.

Xi and Trump meeting. The two presidents will have more to talk about than trade when they meet on Saturday. On Thursday, a U.S. guided missile cruiser conducted a freedom of navigation operation, or FONOP, in the South China Sea, sailing near one of the contested Paracel Islands held by China. This comes two days after a U.S. guided missile destroyer and a naval support ship sailed through the Taiwan Strait. As is tradition, China condemned both moves, and according to CNN, a Chinese warship shadowed the USS Chancellorsville during its passage. As a reminder, FONOPs do little to deter China’s expansion in the waters. They assert a narrow legal point about U.S. views on China’s sweeping territorial claims and remind everyone that the U.S. Navy is still top dog. The U.S. conducts scores of FONOPs each year around the world, including in waters claimed by allies and partners, and typically only acknowledges them either at the end of the year in a vague report or through leaks to the media. So what’s notable about the latest FONOP is that it was quickly publicized by the U.S. Pacific Fleet – the day before the G-20 kicked off. It’s unlikely that anything about China’s maritime claims will be put on the table in the trade talks; China won’t compromise on something it sees as critical to national security, and the White House cares far more about trade than it does about the South China Sea. But there’s a PR battle underway, and both sides want to shore up support for their respective positions. In this context, it’s clear that the U.S. is increasingly trying to paint China as a threat to global stability on multiple fronts.

The global economy. The main focus of the G-20, of course, will be the looming global slowdown, from which has emanated a palpable sense of unease among the summit’s participants. They are right to worry. Yesterday, we highlighted new signs of shakiness in Europe. But as more governments have released third-quarter results in the past 24 hours, things have gotten uglier. Italy’s economy contracted in the third quarter for the first time since 2014, according to the Italian statistics agency. China’s official Purchasing Managers’ Index, which measures sentiment among large manufacturing and service sector firms, hit the lowest level since the index was introduced in early 2017. This comes as official figures show Chinese industrial profit growth slowed for the sixth consecutive month, and as Chinese media report a surge in private sector bankruptcies. Japan posted its strongest monthly industrial profit growth since 2015, suggesting it may recover from its own contraction in the third quarter. (To be fair, natural disasters helped caused the downturn.) But sectoral exports data showed that Japan is already getting hit by the trade war and China’s slowdown, and the Bank of Japan is signaling that it may abandon plans to scale back its monetary stimulus program.

Honorable Mentions

  • The European Union will extend its existing economic sanctions on Russia next month, a top official with the bloc said Friday.
  • Ukrainian President Petro Poroshenko said the EU had given Kiev an addition 500 million euros ($566 million) in assistance.
  • Kiev has banned Russian men aged 16 to 60 from entering Ukraine.
  • The U.S. State Department approved the sale of 20 High Mobility Artillery Rocket System launchers to Poland.
  • The Pentagon released new evidence Thursday of weapons given to Yemen and Afghanistan by Iran.
  • Russian state-owned oil giant Rosneft announced a pair of energy deals with Chinese firms, including one to sell some 2.4 million tons a year of crude oil to China National Chemical, or six percent of Rosneft’s exports to China in 2017.
  • China said it has created a standby force of thousands of peacekeepers available for U.N. missions.
  • China announced new IP protections.