U.S. Seeks Better Ties To Restrict China Investments

2023-08-10 | Commodities , Current Affairs , Forex , Futures , Precious Metals , Securities , Spot Indices

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Today’s News

President Joe Biden moves to impose limits on U.S. investments in China as a means of restricting the country’s ability to develop a new generation of military and surveillance technologies that might pose as a threat to national security.

The order was announced yesterday; it would regulate all U.S. investments in some Chinese semiconductor, quantum computing and artificial intelligence firms.

It was signed after almost two years of deliberations that saw China hawks argue for faster, tougher action while others, including the Treasury Department, sought narrower measures that would take much longer to go into effect.

While details of the new imposition still need to be ironed out, the language of the order suggested that the Treasury and those advocating a more cautious approach has won out.

The order, which will not be taken into effect until next year, will not be retroactive and will exclude sectors such as biotechnology. It may end up exempting passive investments as well as those in publicly traded securities, index funds and other assets as well.

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U.S. investors who spent years fighting strict limits on their ability to invest in China scored a victory yesterday when President Joe Biden released an order imposing only light curbs on the flow of money to the world’s second-largest economy.

Source: Mint

But many of those same venture firms disapprove of the notion and have made it known that these future restrictions — whether from the Federal government or individual states, will be far less investor-friendly.

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China slid into deflation in July, adding pressure on policymakers to step up monetary and fiscal support even as signs that the decline in prices is only temporary, it may limit stimulus.

Source: CNA

The consumer price index dropped by 0.3% last month from a year earlier, the National Bureau of Statistics said Wednesday, marking its first decline since February 2021. Surveys predicted an approximate 0.4% decline in prices.

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Source: BQ Prime

Japanese and Australian shares rose after initial declines, mainland China stocks climbed while Hong Kong and South Korean equities fell. U.S. equity futures advanced, retracing declines on underlying benchmarks yesterday. The S&P 500 fell by 0.7%, while the Nasdaq 100 dropped by 1.1%, weighed down by a 4.7% drop for Nvidia Corp., as investors rethink the artificial intelligence frenzy that has helped propel tech shares to new highs this year.

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