CX Daily: Chinese Chip Firms Play Down Impact of New U.S. Export Curbs
TOP STORIES
Chips /
Several companies in China’s semiconductor supply chain said new U.S. export restrictions aimed at crippling the country’s ability to produce advanced chips would have limited impact on their operations.
The U.S. Department of Commerce on Monday added 140 companies, including 136 Chinese firms, to its Entity List, effectively banning them from accessing U.S. advanced chip and AI-related technology. The new rules also restrict exports of high-bandwidth memory, a core component for AI development.
Batteries /
“The frantic expansion of Chinese battery plants in Europe is over,” lamented a person close to SVOLT Energy Technology Co. Ltd., after the Chinese battery-maker closed its German office in late October. “The local electric vehicle (EV) market’s outlook is unclear.”
From early next year, China’s seventh-largest battery manufacturer will shutter its European business and stop work on two battery factories it has been building in Germany.
FINANCE & ECONOMY
Stocks /
While foreign holdings of Chinese stocks likely expanded in the third quarter, when Beijing made efforts to stimulate the economy, the expansion may have been modest and the prospect for further increases is unclear amid policy and geopolitical uncertainties, according to analysts.
The value of Chinese stocks held by foreign-owned asset management institutions amounted to $776.1 billion at the end of the third quarter, up 24.3% from a quarter earlier, according to a Nov. 25 report published by investment bank China International Capital Corp. Ltd. (CICC).
PMI /
Growth in China’s services sector slowed in November as deflationary pressure intensified, according to a Caixin-sponsored survey published Wednesday.
The Caixin China General Services Business Activity Index, which provides an independent snapshot of operating conditions in industries such as retail and tourism, came in at 51.5 in November, down 0.5 points from the previous month.
The Caixin China General Composite PMI, which tracks both manufacturing and services, came in at 52.3 in November, up 0.4 points from the previous month.
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Quick hits /
Finance Movers and Shakers /
BUSINESS & TECH
ESG /
Chinese clean-energy companies should increasingly look to Southeast Asia for its abundant resources and growing electric-vehicle (EV) market, experts said, as their prospects in Europe dim amid tighter regulations.
Chinese companies’ overseas expansion was a key focus at the 2024 ESG and Sustainable Business Ecosystem Conference in Beijing on Friday, where entrepreneurs, investors, scholars and industry experts also explored how artificial intelligence (AI) could help China meet its dual-carbon goals, among other issues.
BRIEFING
A rundown of the news making headlines in and around China:
Yuan depreciation: The offshore yuan weakened beyond 7.3 against the U.S. dollar Tuesday. Multiple factors are acting on the exchange rate, including widening interest rate differentials between China and the U.S. and Trump’s looming tariff hikes. A Standard Chartered Bank economist suggested that China’s central bank may allow moderate depreciation but will not rely on currency devaluation to offset the impact of the potential U.S. tariff increases. The onshore yuan also depreciated against the dollar to close Tuesday at 7.2791.
Trade tensions: China has banned the export to the U.S. of various critical materials used in semiconductor production, including gallium and germanium, after Washington expanded its chip export restrictions to include more Chinese companies.
Solar duties: Longi Green Energy Technology Co. Ltd., New York-listed JinkoSolar Holding Co. Ltd. and a handful of their solar manufacturing peers are suspending or shutting down plants in Southeast Asia, as they face a new round of anti-dumping duties on solar cells and modules from Cambodia, Malaysia, Thailand and Vietnam announced by the U.S. on Friday. The tariffs are a major blow for the countries, which have seen many Chinese firms set up local manufacturing bases in part to circumvent U.S. import taxes and restrictions levied on Chinese goods. This move will shake up the supply chain structure of the global solar industry, with countries outside the region that have solar production capacity, including the U.S., expected to benefit. Indeed, some of the Chinese firms shutting up shop in Southeast Asia already have or are planning to relocate manufacturing to the U.S.
Novelist dies: Chen Che, one of the most prolific and popular romance novelists in the Chinese-speaking world, committed suicide at her home in New Taipei, Taiwan, on Wednesday. She was 86. Chen, better known by her pen name Chiung Yao, was discovered by her secretary. Her son revealed that she left a suicide note. Chen had been vocal about euthanasia, publishing in 2017 an open letter to her children on Facebook declaring that, no matter what happened in the future, she did not want major surgery or other life-sustaining care — which was experienced by her husband, who died in 2019. She made a rare online post on Nov. 28 expressing her longing for her husband. Chen was born in the Chinese mainland city of Chengdu in 1938. Many of her novels were adapted into movies or TV series, including “My Fair Princess” and “Romance in the Rain.”
Long Read /