China News - 11 August
International
White House unveils ban on US investment in Chinese tech sectors. The Biden administration has agreed to a new “very targeted” programme to ban some US investments into China’s quantum computing, advanced chips and AI sectors. The Executive Order will come into force next year and will support US efforts to stop the Chinese military from accessing American tech and capital. Demetri Sevastopulo. Financial Times, 9 August
Rishi Sunak weighs following Joe Biden on curbing tech investment in China. In June, Sunak promised Biden that Britain would “respond effectively” to the risk that British capital and expertise could help rival countries develop a military or intelligence threat. There are reports that the UK government is consulting business before responding to Washington’s new restrictions. George Parker and Michael O’Dwyer. Financial Times, 10 August
EU to analyse US tech curbs in China, says issue also key to Europe. A Commission spokesperson said, “we will be analysing the Executive Order closely. We are in contact with the US administration and look forward to continued cooperation on this topic”. Foo Yun Chee. Reuters, 10 August
Beijing gives up on plan for Chinese “super embassy” near Tower Bridge. The 700,000 sq ft plans for a Chinese embassy on the site of the old Royal Mint were refused by Tower Hamlets Council, residents and MPs. Although Beijing was furious with this result, the six month window to appeal the decision has now passed without any action. Riua Makwana. Telegraph, 10 August
Beijing claims to arrest Chinese national over spying for US. China has declared it is prosecuting a Chinese national, Zeng, employed by a military industrial group spying for the US. This highlights espionage activities between the two countries. Edward White and Demetri Sevastopulo. Financial Times, 11 August
China lifts bans on group tours to US, Japan and other key markets. Beijing has finally lifted Covid-era restrictions on group tours. With the aim to increase the tourism industry key markets such as the US, UK, Japan, South Korea, Germany and Australia will be allowed to conduct group tours immediately. Casey Hall, Sophie Yu and Joyce Lee. Reuters, 10 August
Economy & Tech
Chinese deflation is hard to report. Ed Yardeni of Yardeni Research suggests that Chinese deflation may matter to US inflation, and how closely the two co-varied before the pandemic. Robert Armstrong and Ethan Wu. Financial Times, 10 August
Global law firm Dentons’ retreat exposes China risks. The largest global law firm quietly left China on Monday telling clients that “new mandates and requirements relating to data privacy, cyber security, capital control and governance” made it difficult to conduct business from there. Beijing’s newly tightened anti-spying rules are already restricting international businesses. Joe Miller. Financial Times, 9 August
China’s internet giants order $5bn of Nvidia chips to power AI ambitions. Worried that the US may impose further export controls, Baidu, ByteDance, Tencent and Alibaba have made orders for around 100,000 A800 processors from the US chip maker. Qianer Liu and Hannah Murphy. Financial Times, 9 August
Alibaba’s quarterly revenue beats despite China’s sputtering economy. The Chinese e-commerce giant reported its strongest quarterly revenue growth in almost two years, 234.16bn yuan, which is an increase of 14%. Casey Hall and Yuvraj Malik. Reuters, 10 August
Opinion & long-reads
Your business in China may be uninsurable. A recent survey by the European Union Chamber of Commerce in China found that multinationals are shifting investments and headquarters out of China. With changing geopolitical tensions, political risk coverage is becoming more difficult to find. Elisabeth Braw. WSJ, 7 August
Spats are just part and parcel of the strong Russia-China relationship. Cino-Russian relations are strong enough to withstand the occasional spat, their shared interests in geopolitics outweigh any minor disagreements. Rafaello Pantucci. South China Morning Post, 10 August
China warns of disease outbreaks in flood-hit areas as death toll rises. Authorities have warned that crop and animal diseases have broken out as floodwaters retreated. Some cities are still struggling to restore drinking water supplies after the worst flooding in 60 years. The Guardian, 9 August