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US adds Chinese chip maker to trade blacklist

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2 months ago

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The Biden administration is set to put chipmaker Yangtze Memory Technologies on a trade blacklist, in the latest US effort to target Chinese technology companies it believes threaten its security.

The US Department of Commerce will YMTC and other Chinese companies on its “entity list” as early as this week, according to three people familiar with the plan. US groups are barred from selling technology to companies on the list unless they have a hard-to-obtain export license.

The move comes two months after the United States He unveiled strict export controls That made it difficult for China to obtain and produce the latest semiconductors.

The Financial Times reported this year that YMTC appeared to have breached US export controls by supplying Nand memory chips to Chinese telecoms equipment maker Huawei for its smartphones.

US lawmakers have been for months pressure on the Biden administration To put the company on the entity list. Lawmakers have also warned Apple that it will face intense scrutiny if it goes ahead with a plan to buy YMTC chips.

When the United States introduced export controls on Oct. 7, it also placed more than 30 Chinese companies, including YMTC, on an “unverified list” of entities for which the United States could not conduct end-user checks to ensure that American technology was not being processed. Diverting it for unauthorized uses. At the time, it set a 60-day window for the companies to allow the US to conduct investigations or risk being on the Entity List.

Alan Estevez, the Commerce Department’s top export control official, said last week that China had relented and allowed inspections of some companies after a long period of non-cooperation. He said the United States wasSee better behaviourFrom the Chinese Ministry of Commerce, which oversees end-use examinations for Chinese companies. But the US Commerce Department at the time refused to say how many cooperating companies.

YMTC’s move is likely to spark protests from Beijing, which were lifted this week The dispute with the World Trade Organization on export controls on October 7. The White House called YMTC a “national hero”.

In addition to concerns about YMTC violating US law, the Biden administration is also concerned that the company will sell memory chips below cost and put pressure on US competitors such as Micron as well as companies in allied countries.

In October, the Financial Times reported that YMTC was Storage of foreign chip making equipment For months in anticipation, the Biden administration was preparing to take action that would hurt the company.

The US Department of Commerce and YMTC did not comment.

This action marks another escalation in the technology war between the US and China. Washington is trying to make it difficult for China to develop technologies with military applications such as artificial intelligence, modeling nuclear weapons, and developing hypersonic weapons. China is also taking steps to boost its domestic technological capabilities as it comes under increasing pressure from the United States and its allies.

The United States is currently negotiating with Japan and the Netherlands on a Triple deal To prevent Japanese and Dutch chip tool companies from selling advanced equipment to China. The US hopes the agreement will complement a similar ban on US tool makers that was part of the October 7 export controls.

The move against YMTC and other companies also follows the first in-person meeting between President Joe Biden and President Xi Jinping at the G-20 summit in Bali, Indonesia, last month.

The two countries are trying to find ways to prevent their relationship from deteriorating further, but the Biden administration has stressed that it will not pull punches in areas related to national security.

In an unrelated move targeting another Chinese technology company, the US Commerce Department is also targeting Tiandy Technologies, a Chinese maker of surveillance cameras, according to two people familiar with the discussions inside the White House.

Human rights activists have raised concerns about the group, which is one of several Chinese surveillance camera makers accused of using facial recognition technology to help Beijing persecute the Uighurs, an ethnic minority in the Xinjiang region.

Craig Singleton, a China expert at the Foundation for Defense of Democracies, recently wrote a report on Tiandi that called it “the most dangerous Chinese company most people have never heard of.” He said the US government had the tools to put the company out of business and just needed the political will to take action.

Singleton noted that the company has sold surveillance equipment to Iran’s security services, police and military, which has raised concerns among US lawmakers such as Senator Marco Rubio.

It is not clear whether the Commerce Department will put Tiandy on the entity list or take other action. The department declined to comment.

The NSC said: “We do not review sanctions. We will continue to hold persons and entities accountable for supporting human rights abuses by the People’s Republic of China and Iran.”

In May, the Financial Times reported that the administration was moving in Heavy penalties imposed on Hikvision, the largest manufacturer of security cameras in China. The White House is grappling with how to take action given that Hikvision sells cameras to more than 180 countries, including the US and UK.

Follow Dimitri Sevastopoulou on Twitter

Additional reporting by Keaner Liu in Hong Kong



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We need to pay more attention to skewed economic signals

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3 weeks ago

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January 11, 2023

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The writer is chair of Queen’s College, Cambridge and advisor to Allianz and Gramercy

Inflation was the dominant economic and financial issue of 2022 for most countries around the world, especially for advanced economies that have a consequential impact on the global economy and markets.

The effects have been seen in declining living standards, increasing inequality, increasing borrowing costs, stock and bond market losses, and occasional financial mishaps (fortunately small and so far contained).

In this new year, recession, both actual and feared, has joined inflation in the driving seat of the global economy and is likely to replace it. It’s a development that makes the global economy and investment portfolios subject to a wide range of possible outcomes — something that a growing number of bond investors seem to be aware of more than their equity counterparts.

International Monetary Fund iYou will likely review soon Her economic growth forecasts again, predicting that “a third of the world will be hit by recession this year”. What is particularly notable to me about these worsening global prospects is not only that the world’s three major economic regions – China, the European Union and the United States – are slowing down together, but also that this is happening for different reasons.

In China, a chaotic exit from the wrong Covid-19 policy is undermining demand and causing more supply disruptions. Such headwinds to domestic and global economic well-being will continue as long as China fails to improve the coverage and effectiveness of its vaccination efforts. The strength and sustainability of the subsequent recovery will also require that the country more vigorously renew a growth model that can no longer rely on greater globalization.

The European Union continues to deal with energy supply disruptions as the Russian invasion of Ukraine continues. Strengthening inventory management and reorientation of energy supplies is well advanced in many countries. However, it is not yet sufficient to lift immediate constraints on growth, let alone resolve long-term structural headwinds.

The United States has the least problematic view. The headwinds to growth are due to the Fed’s struggle to contain inflation after mischaracterizing rate increases as fleeting and then initially being too timid to adjust monetary policy.

The Fed’s shift to an aggressive front-load of interest rate hikes came too late to prevent the spread of inflation in the services sector and wages. As such, inflation is likely to remain stubborn at around 4 percent, be less sensitive to interest rate policies and expose the economy to greater risk for accidents from additional policy errors that undermine growth.

The uncertainties facing each of these three economic areas suggest that analysts should be more careful in reassuring us that recessionary pressures will be “short and shallow”. They need to be open, if only to avoid repeating the mistake of prematurely dismissing inflation as transient.

This is especially important because these diverse drivers of recessionary risk make financial fragility more threatening and policy shifts more difficult, including potentially Japan. Get out of interest rate control Policy. The range of possible outcomes is extraordinarily large.

On the one hand, a better policy response, including improving the supply response and protecting the most vulnerable populations, can counteract the global economic slowdown and, in the case of the United States, avert a recession.

On the other hand, additional policy errors and market turmoil can lead to self-reinforcing vicious cycles with rising inflation and rising interest rates, weakening credit and compressed earnings, and stressing market performance.

Judging by market prices, more bond investors are better understanding this, including by refusing to follow the Fed’s interest rate guidance this year. Instead of a sustainable path to higher rates for 2023, they believe recessionary pressures will lead to cuts later this year. If true, government bonds would provide the yield and potential for badly missed portfolio risk mitigation in 2022.

However, parts of the stock market is still weakly bearish pricing. Reconciling these different scenarios is more important than investors. Without better alignment within markets and with policy signals, the positive economic and financial outcomes we all desire will be no less likely. They will also be challenged by the risk of more unpleasant outcomes at a time of less economic and human resilience.

Video: Divided Markets: The Great Threats to the Financial System

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Macro hedge funds end 2022 higher, investors say, while many others take big losses By Reuters

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3 weeks ago

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January 10, 2023

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© Reuters. FILE PHOTO: Traders work on the trading floor of the New York Stock Exchange (NYSE) in New York City, US, January 5, 2023. REUTERS/Andrew Kelly

By Svea Herbst Baylis

NEW YORK (Reuters) – Some hedge funds betting on macroeconomic trends have boasted of double and even triple-digit gains for 2022, while other high-profile companies that have long been on technology stocks have suffered heavy losses in volatile markets, investors said.

Rokos Capital, run by Chris Rokos and one of a handful of so-called global macro companies, gained 51% last year. Fund investors this week, who asked not to be identified, said Brevan Howard Asset Management, the company where Rokos once worked, posted a gain of 20.14% and Caxton Associates returned 16.73%.

Haider Capital Management’s Haider Jupiter Fund rose 193%, an investor said.

Data from hedge fund research showed that many macro managers have avoided crumbling stock markets that have been rocked by rapid interest rate increases and geopolitical turmoil, including the war in Ukraine, to rank among the best performers in the hedge fund industry. The company’s macro index rose 14.2% while the general index of hedge funds fell 4.25%, its first loss since 2018.

Equity hedge funds, where the bulk of the industry’s roughly $3.7 trillion in assets are invested, fared worse with a loss of 10.4%, according to HFR data. And while that beat the broader stock market’s loss of 19.4%, some high-profile funds posted even bigger losses.

Tiger Global Management lost 56% while Whale Rock Capital Management ended the year with a 43% loss and Maverick Capital lost 23%. Coatue Management ended 2022 with a loss of 19%.

But not all companies that bet on technology stocks suffered. John Thaler JAT Capital finished the year with a 3.7% gain after fees after a 33% increase in 2021 and a 46% gain in 2020.

Sculptor Capital Management (NYSE::), where founder Dan Och is fighting the company’s current CEO in court over his salary increase, posted a 13% drop.

David Einhorn’s Greenlight Capital, which bet that Elon Musk would be forced to buy Twitter, ended the year up 37% while Rick Sandler’s Eminence Capital rose 7%.

A number of so-called multi-manager companies where teams of portfolio managers bet on a variety of sectors also boast positive returns and have been able to deliver on their promise that hedge funds can deliver better returns in distressed markets.

Balyasny’s Atlas Fund (NYSE: Enhanced) gained 9.7%, while Point72 Asset Management gained 10%. Millennium Management gained 12% while Carlson Capital ended the year with a 7% gain.

Representatives for the companies either did not respond to requests for comment or declined to comment.

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German automakers point to easing supply chain problems

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3 weeks ago

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January 10, 2023

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Sales at BMW and Mercedes-Benz jumped in the final months of 2022 as the German premium auto brands indicated supply chain problems plaguing the industry were abating.

Automakers around the world have experienced parts shortages since the pandemic, especially semiconductors, leaving many of them with large fleets of incomplete vehicles that can’t be delivered to customers.

BMW and Mercedes each said their full-year vehicle deliveries fell last year by 4.8 percent and 1 percent, respectively, due to Suppliers Bottlenecks as well as lockdowns in China and the war in Ukraine.

But supply pressures eased in the last quarter of the year, as BMW recorded a 10.6 percent jump in sales, with 651,798 vehicles delivered, and Mercedes fulfilling 540,800 orders, up 17 percent from the same period in 2022.

BMW He said the main effects of supply chain bottlenecks and continued lockdowns were felt in the first six months of the year, adding that “sales were steadily picking up in the second half.”

Mercedes boss Ula Kallenius told the Financial Times last week that the list of problems in the auto supply chain was declining, but added that long waits for cars would continue into 2023.

“One chip is enough to be vital [ . . .] Missing, and then you can’t finish the car, even if you have everything else.

Both brands recorded strong sales growth electric car. Mercedes, which last week announced a plan to build 10,000 charging docks, said EV shipments grew 124 percent to 117,800 last year compared with its predecessor.

Similarly, BMW reported strong growth in electric vehicle sales, with deliveries of fully electric vehicles doubling last year to 215,755.

Analysts at Bank of America said that sales of electric vehicles, including hybrid cars, reached a historic peak last November, with 1.1 million units sold. They attributed this largely to the upcoming phase-out of customer subsidies in Germany.

Participate in Mercedes BMW and BMW prices held steady Tuesday morning as investors priced in an image of an improving showing.

Rolls-Royce, a subsidiary of BMW, announced Monday that sales have hit a 119-year record, driven by strong demand in the United States, its largest market.

The luxury brand has been largely unaffected by the semiconductor pressure, mainly because it makes relatively few compounds and therefore needs fewer chips.

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