FirstFT: Biden bans US investment in Chinese tech sectors

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Good morning. The Biden administration has unveiled a ban on US investment into quantum computing, superior chips and synthetic intelligence sectors in China, because it ratchets up efforts to make sure that the Chinese army doesn’t profit from American know-how and capital.

President Joe Biden on Wednesday issued an government order establishing the prohibitions, which can largely have an effect on non-public fairness and enterprise capital companies in addition to US traders in joint ventures with Chinese teams.

A senior US official mentioned it might create a “very targeted” programme that may deal with the three sectors that the Biden administration has additionally marked out in a collection of different technology-related measures aimed toward China.

The newest transfer threatens to harm persevering with efforts to resurrect top-level engagement between the US and China. Washington has mentioned the rule, which is not going to take impact till subsequent yr, will defend US safety. But Beijing has countered that earlier US actions are designed to crimp its technological progress.

Meanwhile, Republicans criticised the order for not tackling extra sorts of investment. “To stop funding China’s military, we have to stop all US investment in China’s critical technology and military companies, period,” mentioned Nikki Haley, one of many GOP presidential contenders.

However, one other US official mentioned non-public fairness and enterprise capital had been focused as a result of they might introduce Chinese teams to different know-how firms and specialists. “What we are trying to get at here is the intangible benefits,” the official mentioned. “Ultimately, China doesn’t need our money.” Read the full story.

Here’s what else I’m conserving tabs on as we speak:

Economic information: US inflation numbers launched as we speak are anticipated to indicate consumer prices rising to 3.3 per cent yr on yr in July, up from 3 per cent in June. Meanwhile, Opec points its August Oil Market Report and the European Central Bank publishes its Economic Bulletin.
Monetary coverage: The Reserve Bank of India is predicted to hold benchmark rates steady when it makes its financial coverage choice as we speak. (Reuters)
Results: Alibaba, Rakuten and Eneos Holdings report earnings.
India: Prime minister Narendra Modi is predicted to deal with a no-confidence movement over the persevering with battle in the north-eastern state of Manipur. While the movement is for certain to be defeated, Modi might be compelled to talk on a safety disaster that he has proven “brazen indifference” towards, based on India’s opposition.

Five extra high tales

1. Consumer costs in China have declined for the primary time since early 2021 because the world’s second-largest economic system continues to buck the worldwide development of excessive inflation. The shopper value index fell 0.3 per cent yr on yr in July, based on official statistics launched earlier as we speak. Read more on the Chinese economy’s slide into deflation.

2. European pure fuel costs surged nearly 40 per cent on Wednesday because the potential for disrupted international liquefied pure fuel provide from Australia spooked merchants betting on additional value declines. The improve was triggered by experiences that staff at necessary LNG crops in Australia have been planning strike motion. Here’s what a cut in Australian supply could mean for Asia.

3. DelicateBank is in talks to convey in Amazon as an anchor investor in Arm’s forthcoming preliminary public providing as a part of a widening search to seek out prospects keen to take a long-term stake in the UK-based chip designer. Discussions have additionally expanded to Google, Apple, Amazon and corporations in different industries closely depending on semiconductors. Here are more details.

4. Elon Musk’s X, previously generally known as Twitter, was fined $350,000 after lacking a deadline for complying with a secret search warrant for Donald Trump’s account as a part of the January 6 investigation. The US Department of Justice’s search warrant directed X to provide information and information associated to Trump’s @realdonaldtrump Twitter account. Here’s how X responded.

More Trump information: The former president admitted that he could also be compelled off the marketing campaign path to defend himself in opposition to what he called “bullshit” criminal charges and predicted that he might be dealing with a fourth indictment as early as subsequent week.

5. WeWork has warned for the primary time that it faces “substantial doubt” about its capability to proceed as a going concern. The US workplace house firm, as soon as valued at $47bn, mentioned its outlook trusted a collection of plans together with additional restructuring and a seek for further capital over the subsequent 12 months. Read more on WeWork’s struggle to survive.

The Big Read

China dominates the provides of many of the key building blocks for clean energy technology. Its management has drawn comparisons to the excessive stage of affect that Saudi Arabia enjoys in the oil market — and probably complicates the world’s transition to renewable vitality.

We’re additionally studying . . .

Chart of the day

Column chart of Monthly net flows to Indian equity ETFs ($bn) showing Indian summer

Indian fairness alternate traded funds took in a web $1.5bn in July, based on BlackRock’s information, the second-highest month-to-month determine for India on report, crushed solely by the $2.3bn witnessed in March this yr. The inflows suggest investor enthusiasm for India, which is broadly anticipated to take the baton from China because the world’s fastest-growing massive economic system in the a long time to return.

Take a break from the information

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