Aurelia Butler

The official purchasing managers’ index (PMI) fell to 47.0 from 48.0 in November, the National Bureau of Statistics (NBS) said on Saturday. Economists in a Reuters poll had expected the PMI to come in at 48.0. The 50-point mark separates contraction from growth on a monthly basis.The drop was the biggest since the early days of the pandemic in February 2020. The data offered the first official snapshot of the manufacturing sector after China removed the world’s strictest COVID restrictions in early December. Cumulative infections likely reached 18.6 million in December, UK-based health data firm Airfinity estimated.Analysts said surging infections could cause temporary labour shortages and increased supply chain disruptions. Reuters reported on Wednesday that Tesla (NASDAQ:TSLA) plans to run a reduced production schedule at its Shanghai plant in January, extending the reduced output it began this month into next year.Weakening external demand on the back of growing global recession fears amid rising interest rates, inflation and the war in Ukraine may further slow China’s exports, hurting its massive manufacturing sector and hampering an economic recovery.”Most factories I know are way below where they could be this time of year for orders next year. A lot of factories I’ve talked to are at 50%, some are below 20%,” said Cameron Johnson, a partner at Tidalwave Solutions, a supply chain consulting firm.”So even though China is opening up, manufacturing is still going to slow down because the rest of the world’s economy is slowing down. Factories will have workers, but they will have no orders.”NBS said 56.3% of surveyed manufacturers reported that they were greatly affected by the epidemic in December, up 15.5 percentage points from the previous month, although most also said they expected the situation will gradually improve.RECOVERY HOPES”While (the factory PMI) was lower than expected, it is actually hard for analysts to provide a reasonable forecast given the virus uncertainties over the past month,” said Zhou Hao, chief economist at brokerage house Guotai Junan International.”In general, we believe that the worst for the Chinese economy is behind us, and a strong economic recovery is ahead.”The country’s banking and insurance regulator pledged this week to step up financial support to small and private businesses in the catering and tourism sectors that were hit hard by the COVID-19 epidemic, stressing a consumption recovery will be a priority.The non-manufacturing PMI, which looks at services sector activity, fell to 41.6 from 46.7 in November, the NBS data showed, also marking the lowest reading since February 2020. The official composite PMI, which combines manufacturing and services, declined to 42.6 from 47.1.”The weeks before Chinese New Year are going to remain challenging for the service sector as people won’t want to go out and spend more than necessary for fear of catching an infection,” said Mark Williams, Chief Asia Economist at Capital Economics.”But the outlook should brighten around the time that people return from the Chinese New Year holiday – infections will have dropped back and a large share of people will have recently had COVID and feel they have a degree of immunity.” More

(Reuters) -For much of the global economy, 2023 is going to be a tough year as the main engines of global growth – the United States, Europe and China – all experience weakening activity, the head of the International Monetary Fund said on Sunday.The new year is going to be “tougher than the year we leave behind,” IMF Managing Director Kristalina Georgieva said on the CBS Sunday morning news program “Face the Nation.””Why? Because the three big economies – the U.S., EU and China – are all slowing down simultaneously,” she said.In October, the IMF cut its outlook for global economic growth in 2023, reflecting the continuing drag from the war in Ukraine as well as inflation pressures and the high interest rates engineered by central banks like the U.S. Federal Reserve aimed at bringing those price pressures to heel.Since then, China has scrapped its zero-COVID policy and embarked on a chaotic reopening of its economy, though consumers there remain wary as coronavirus cases surge. In his first public comments since the change in policy, President Xi Jinping on Saturday called in a New Year’s address for more effort and unity as China enters a “new phase.””For the first time in 40 years, China’s growth in 2022 is likely to be at or below global growth,” Georgieva said.Moreover, a “bushfire” of expected COVID infections there in the months ahead are likely to further hit its economy this year and drag on both regional and global growth, said Georgieva, who traveled to China on IMF business late last month.”I was in China last week, in a bubble in a city where there is zero COVID,” she said. “But that is not going to last once people start traveling.””For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” she said.In October’s forecast, the IMF pegged Chinese gross domestic product growth last year at 3.2% – on par with the fund’s global outlook for 2022. At that time, it also saw annual growth in China accelerating in 2023 to 4.4% while global activity slowed further.Her comments, however, suggest another cut to both the China and global growth outlooks may be in the offing later this month when the IMF typically unveils updated forecasts during the World Economic Forum in Davos, Switzerland.U.S. ECONOMY ‘MOST RESILIENT’Meanwhile, Georgieva said, the U.S. economy is standing apart and may avoid the outright contraction that is likely to afflict as much as a third of the world’s economies.The “U.S. is most resilient,” she said, and it “may avoid recession. We see the labor market remaining quite strong.”But that fact on its own presents a risk because it may hamper the progress the Fed needs to make in bringing U.S. inflation back to its targeted level from the highest levels in four decades touched last year. Inflation showed signs of having passed its peak as 2022 ended, but by the Fed’s preferred measure, it remains nearly three times its 2% target.”This is … a mixed blessing because if the labor market is very strong, the Fed may have to keep interest rates tighter for longer to bring inflation down,” Georgieva said.Last year, in the most aggressive policy tightening since the early 1980s, the Fed lifted its benchmark policy rate from near zero in March to the current range of 4.25% to 4.50%, and Fed officials last month projected it will breach the 5% mark in 2023, a level not seen since 2007.Indeed, the U.S. job market will be a central focus for Fed officials who would like to see demand for labor slacken to help undercut price pressures. The first week of the new year brings a raft of key data on the employment front, including Friday’s monthly nonfarm payrolls report, which is expected to show the U.S. economy minted another 200,000 jobs in December and the jobless rate remained at 3.7% – near the lowest since the 1960s. Read more:US STOCKS-Wall St ends 2022 with biggest annual drop since 2008GRAPHIC-How 2022 shocked, rocked and rolled global markets More

A third of the global economy will be hit by recession this year, the head of the IMF has said, as she warned that the world faces a “tougher” year in 2023 than the previous 12 months.The US, European Union and China are all slowing simultaneously, Kristalina Georgieva, IMF managing director, said. “We expect one-third of the world economy to be in recession,” Georgieva told US TV network CBS in an interview that aired on Sunday, adding that “half of the European Union will be in a recession” this year.The IMF cut its 2023 outlook for global economic growth in October, citing the continuing drag from the war in Ukraine as well as inflation pressures and rises in interest rates by major central banks.The rapid spread of Covid in China now that its president Xi Jinping has dropped the country’s severe containment policy means that the country faces a fresh economic blow in the short term, Georgieva said.“For the next couple of months, it would be tough for China, and the impact on Chinese growth would be negative, the impact on the region will be negative, the impact on global growth will be negative,” she said.For the first time in 40 years China’s annual growth is likely to be at or below global growth, Georgieva said, meaning it could drag down worldwide economic activity rather than propelling it. “That has never happened before.” Her comments suggest the IMF is likely to soon cut its economic forecasts for 2023 again; it usually publishes updated projections during the World Economic Forum in Davos, Switzerland, which takes place later this month.However, the US is likely to escape the worst of the downturn, thanks in part to its strong labour market, Georgieva said.The US “may avoid a recession” because its unemployment is so low, she said. “If that resilience . . . holds [in 2023], the US would help the world to get through a very difficult year,” she said. “The US economy is remarkably resilient.”US unemployment stands at 3.7 per cent and the country added a better than expected 263,000 jobs in the November non-farm payrolls. Economists at Morgan Stanley expect the unemployment rate to be unchanged in December and for the US to add 185,000 jobs.Late last month, US gross domestic product for the third quarter was revised higher to 3.2 per cent, from 2.9 per cent in November.However, economists polled by the Financial Times expect US unemployment to jump to 5.5 per cent this year and 85 per cent of economists surveyed expect a recession in 2023.Forecasters at Capital Economics have said there is a 90 per cent chance that the US is in a recession in the next six months. “While the US recession is likely to be mild, the eurozone will suffer a larger downturn due to the huge hit to its terms of trade caused by the Ukraine war,” Capital Economics said in December.Also speaking on CBS, Bank of America’s chief economist Michael Gapen said the risk of a US recession in the US was “high”, but any recession “may not be a deep and prolonged one”.“It’s not for certain,” he said, adding that 2023 could still be a difficult economic year as the Federal Reserve continues to fight inflation.Additional reporting by Reuters More

At the Bregana border crossing with neighbouring Slovenia, police took down signs at midnight and a barrier was lifted up for the last time, before a placard reading “free passage” was installed, symbolising the end of border checks.”If there are historical moments, special moments which should provide us with great honour and when we witness the achievement of strategic goals of a state — this is such a day,” Prime Minister Andrej Plenkovic said at a ceremony at the border later on Sunday.He was joined by European Commission President Ursula von der Leyen, who hailed it as “a day to celebrate”.”Today Croatia joins the Schengen Area and the eurozone, two immense achievements for the youngest member state of the European Union and both reached on the very same day. So indeed, this is a day for the history books.”Plenkovic and von der Leyen later toured the capital Zagreb where they bought coffee in a cafe using euros, which replaced Croatia’s kuna currency. After a server brought their coffees to an outdoor table, Plenkovic paid with a handful of euro notes, while von der Leyen, seated next to him, applauded.Croatia entered the EU in 2013. It becomes the 27th country to join the Schengen area, and the 20th to adopt the euro currency.Finance Minister Marko Primorac touted the advantages of using the euro to lawmakers last month, saying it would strengthen the economy, improve the investment climate and make Croatia more resistant to external shocks. More

Hello and welcome to the first working week of the year. It is now an annual tradition (well, I did it last year) to use this edition to take a long look forward to the year ahead.The one thing that 2022 made obvious was the stupidity of trying to predict the future. Russia’s invasion of Ukraine and the (related) energy crisis being just two examples. The death of Queen Elizabeth II was a possibility this time last year but I focused instead on her platinum jubilee celebrations, which (thankfully) she and the nation still managed to enjoy. I was pleased to have sufficiently caveated my US midterm prediction to say that the Republicans might only win control of one of the chambers of Congress.What we do know going into 2023 is that all these happenings from 2022 will provide news lines to look out for in the coming weeks and months.The cost and supply of gas and electricity will continue to challenge governments and complicate politics and economics in 2023. Governments became key players in energy in 2022 and they will continue in this role in the coming 12 months, as my colleagues on the Energy Source team explain.What will happen with the war in Ukraine? Russia will launch further counter-attacks, though doubts have been raised about its ability to arm its troops. Will the US, by far the biggest external provider of military and financial support, provide enough new weaponry for the Ukrainian forces to reclaim more land? What impact will Sweden — as a born-again Nato fan — have on the EU’s position now that it is taking up the revolving EU presidency?2022 was the year that workers took to the picket lines again, raising industrial disputes in the UK to levels last seen in the 1980s and encouraging workers not formally unionised in the US at Starbucks and (to a limited extent) Amazon to band together for increased rights.But so far there are few signs that this has achieved much — UK households face the steepest decline in living standards in six decades over the next two years, according to official figures from the Office for Budget Responsibility. Worker remuneration is weakening across the world with global wages falling for the first time on record in 2022, according to the International Labour Organization. Will this encourage the industrial unrest to spread?2023 will begin in the UK with more rail strikes, with RMT union members walking out on January 3, 4, 6 and 7, while members of rival Aslef — representing drivers at 15 train companies — are due to strike on January 5.Ballots will close in January for the NASUWT and Fire Brigades Union to decide whether teachers in England and Wales and firefighters strike over pay. Further action has been planned by the nurses union and airport staff.Behind the British labour disputes is a broader concern that not enough is being spent to maintain and repair the UK’s infrastructure, with crumbling courts in England and Wales as well as inadequate staffing for rail services. The zeal of the austerity drive started by the 2010 coalition government is to blame, according to the FT’s John Burn-Murdoch — and he has the data to prove it. This may well be a significant theme of British politics in 2023.Rishi Sunak’s government has so far refused to give an inch in pay demands and the unions are short of cash to maintain their industrial action, but FT political columnist Stephen Bush believes the UK prime minister will be forced to fold in 2023. This can only be bad for the Conservative party’s electoral chances (already extremely weak), but if 2022 is anything to go by, British politics is never easy to predict.Thanks to all of you who have shared your support and comments about The Week Ahead over the past year. I will be back with the regular format on January 8. Here is the rest of the 2023 corporate and economic round-up.Economic dataThe big macroeconomic themes of 2023 are going to be (much like 2022) inflation and recession, in particular whether the former can be tamed without exacerbating the latter. There is little consensus on where rates will end for different countries, or indeed what pivots will be made to cut rates as 2023 draws to a close — US markets are discounting 50 basis points of cuts by year end.There is also uncertainty about when individual countries will enter recession — the UK probably already has, but the US has not yet — and how long the period of negative growth will last. My colleague Rob Armstrong, writer of the excellent Unhedged newsletter, has predicted that the US recession will not begin until later in the year, but that this will then drag down the markets such that US stocks end the year down.Interest rates will remain high throughout the year, according to Rob. He also heavily caveats such forecasts. Click here to read his 2023 market predictions in full.CompaniesThe new year brings a changing of the guard at several major companies.Shell lifer Wael Sawan takes the helm of the oil and gas business in January with the London-based company in rude health but with some challenging decisions to make in the transition to a low-carbon economy.In the same month, Héctor Grisi will be promoted from head of Santander’s North America operations to group chief executive. Grisi joined Santander in 2015 from Credit Suisse, where he was an investment banker. His promotion draws a line under the failed appointment of Andrea Orcel more than three years ago.Last but not least, Robert Kyncl becomes chief executive of Warner Music. The former chief business officer at YouTube joins as the music industry is riding a wave of streaming revenues. It is clearly hoped that Kyncl’s grasp of the tech sector will help Warner further profit from the digitisation of tunes.Expect more headlines about the exploits of Elon Musk — not a difficult prediction given that this is the business journalism gift that keeps on giving.Key world, economic and corporate eventsHere is a more complete list of what to expect in terms of world events, company reports and economic data in the year ahead.JanuaryThe eurozone expands with Croatia becoming the 20th member of the currency union on January 1.On the same day, Sweden takes over the EU’s six-month rotating presidency.The newly Republican-controlled US House of Representatives convenes for its first session of the year on January 3.Czech presidential elections take place on January 13-14.India’s Supreme Court has given the national government until January 6 to provide its response to petitions to legalise same-sex marriage in the country.The Trump Organization’s former chief financial officer Allen Weisselberg is scheduled to be sentenced in New York in January after pleading guilty to tax fraud and testifying against the former president’s real estate company at trial.US president Joe Biden travels to Mexico City for a North American leaders summit with his Mexican counterpart Andrés Manuel López Obrador and Canadian prime minister Justin Trudeau.The World Economic Forum summit returns to Davos with the theme “Cooperation in a Fragmented World”. FT Live will host a number of in-person and digital events alongside the event, with leaders in policy, business and finance sharing insights into the issues being debated. Register for free here.FebruaryAn EU ban on Russian petroleum products comes into force on February 5, having already banned Russian crude oil on December 5 2022, backed by the UK and other G7 countries.The 65th Grammy Awards will be held in Los Angeles on February 5.Biden announces his Budget for the US fiscal year 2024 on February 6.The Super Bowl, the climax of the American football league calendar, is played on February 12.February 24 is the first anniversary of Russia’s invasion of Ukraine.The annual Mobile World Congress in Barcelona kicks off at the end of the month, bringing together key players in the telecoms and tech sector.MarchMarch 1 is the 50th anniversary of the release of Pink Floyd’s The Dark Side of the Moon, one of the bestselling albums worldwide with estimated sales of more than 50mn.The National People’s Congress annual session for China’s top legislature opens on March 4.The 95th Academy Awards — the Oscars — are held in Hollywood on March 12.UK chancellor Jeremy Hunt must beware the Ides of March as he has set March 15 as the date for his annual Budget speech, outlining tax and spending plans.AprilThis month sees the 20th anniversary of the launch of the iTunes Store. It now carries over 26mn tracks, selling an average of 15,000 songs per minute in 119 countries.The UK tax year begins on April 1 when the main rate of corporation tax rises from 19 per cent to 25 per cent on profits over £250,000.Easter Sunday falls on April 9.The next day is the 25th anniversary of the signing of the Belfast Agreement, better known as the Good Friday Agreement, which outlined plans for a Northern Ireland Assembly that shared power between Unionists and Nationalists after 30 years of conflict.MayLocal elections across district councils in England, plus unitary authorities and directly elected mayors, and all local councils across Northern Ireland will be held on May 4.The Coronation of King Charles III will be held at Westminster Abbey on May 6, with a public holiday for the UK on May 8.The Eurovision Song Contest will take place in Liverpool, UK, on May 13. Ukraine won last year’s contest but was considered too dangerous to host the event.Japan hosts the G7 Summit in Hiroshima this year, running from May 19-21.The US edition of the FTWeekend Festival returns to Washington, DC, on May 20 with speakers including Ta-Nehisi Coates, Alice Waters, Darren Walker and several FT writers. Register as a newsletter subscriber and save $20 using promo code NewslettersxFestival at ft.com/festival-us.JuneThe Ashes cricket test match series between England and Australia starts on June 16 with the hosts hoping to regain the prize the team last won in 2015.Turkey will hold presidential and parliamentary elections on June 18.JulySpain takes over the revolving EU presidency on July 1.The Nato summit begins in Vilnius, Lithuania, on July 11.UK chancellor Jeremy Hunt and Bank of England governor Andrew Bailey are due to make their annual Mansion House speeches in the City of London on July 18.The Fifa Women’s World Cup, staged in Australia and New Zealand, kicks off on July 20 at Eden Park in Auckland.AugustThe 80th Venice International Film Festival begins on August 30.The final of the Fifa Women’s World Cup will be played on August 20 in Sydney, Australia.The Jackson Hole economic policy symposium begins on August 24.SeptemberNato secretary-general Jens Stoltenberg’s term of office ends on September 1, having already been extended by a year after Russia’s invasion of Ukraine.The G20 Leaders’ Summit begins in New Delhi on September 9.OctoberThe annual meetings of the IMF and the World Bank Group begin on October 13, bringing together central bankers, ministers of finance and development, private sector executives and academics.Two big international sporting events happen this month. The ICC Cricket World Cup begins in India on October 1 and the Rugby World Cup comes to France, with the final to be played in Paris on October 28.October 19 was Scottish first minister Nicola Sturgeon’s desired date to hold an independence referendum, as announced at Holyrood in June.The 50th anniversary of the Sydney Opera House opening will be marked on October 20 with a performance of Beethoven’s Ninth Symphony. October 22 is the 60th anniversary of the National Theatre in London’s first performance under the leadership of its first artistic director Laurence Olivier.NovemberUK prime minister Rishi Sunak is due to set out his foreign policy in the annual Lord Mayor’s Banquet speech in the City of London on November 13.November 22 will be the 60th anniversary of the assassination of US president John F Kennedy.The 28th session of the Conference of the Parties to the UN Framework Convention on Climate Change, aka Cop28, begins in the United Arab Emirates on November 30.DecemberBrazil takes over the one-year presidency of the G20 from India and will host 2024’s summit.December 2023 will be a month of significant anniversaries. December 5 is the 10th anniversary of Nelson Mandela’s death. December 10 is the 75th anniversary of the UN General Assembly adopting the Universal Declaration of Human Rights. December 13 will be 20 years since Saddam Hussein was captured. December 16 is the 75th anniversary of board game Scrabble. More

“The target remains 2%. This must be a top priority for the European Central Bank and the German government,” Christian Lindner said in an interview with Bild newspaper published on Sunday.Pushed by spiking energy prices following Russia’s invasion of Ukraine and falling Russian energy exports, Germany’s year-on-year inflation has slowed slightly in November to 11.3% from a high of 11.6% the month prior.Lindner said Germany needs an “unbiased” energy policy in order to keep industry ticking, adding that domestic gas and oil fracking and nuclear energy should be considered in the energy sources mix along with renewables.”The ban (on fracking) should fall. Then private investors can decide whether the mining is economical,” he added.Production of natural gas and oil has been declining in Germany, mainly because unconventional fracking is banned and nature protection laws make it difficult to seek permission for new drilling. More

BRASILIA (Reuters) – Brazilian President Luiz Inacio Lula da Silva’s 580-day stretch behind bars imbued him with a renewed sense of social justice, the leftist’s allies and confidants said, convincing him of the need to prioritize ending poverty over boosting profits.Lula takes office on Sunday for an unprecedented third term, capping a dramatic turnaround for one of the world’s most enduring political leaders, who first ran for president in 1989. Jailed for graft in 2018 – the year right-wing former President Jair Bolsonaro was elected – Lula’s convictions were overturned in 2019, allowing him to oust Bolsonaro in October’s election. As he strives to unite a nation riven by economic woes, a bruising pandemic and Bolsonaro’s far-right populism, Lula is looking to his prison days for inspiration, allies and confidants told Reuters.He learned from three failed presidential bids to tone down his leftist ideals and make peace with Brazil’s powerful private sector during his 2003-10 presidency. But Lula 3.0 plans to double down on fighting poverty, ending hunger, and attacking racism, allies said, while also rewarding loyal Workers Party (PT) jail visitors with key cabinet positions.”Prison reinforced the sense that he has a duty above all to the poor in Brazil,” said Tarso Genro, a former PT governor of Rio Grande do Sul and a close Lula associate. “He went to prison strong and came out stronger.”The more ideological Lula who emerged from jail in 2019 should not be a cause for concern, friends and allies said. He is still the same pragmatist who honed his powers of persuasion as a union leader in the Sao Paulo auto plants of the 1970s, they added.Lula aides have encouraged comparisons with former South African leader Nelson Mandela, who spent over a quarter of a century behind bars as an opponent of the country’s apartheid.But many on Faria Lima, the so-called “Brazilian Wall Street,” who fondly recall the business-friendly Lula of the early 2000s are holding their breath, worried that increased social spending and a loyalist cabinet will damage Brazil’s fiscal credibility and usher in a new era of graft-stained statism. “The initial reaction to Lula 3.0 on Faria Lima is not favorable,” said economist Andre Perfeito, referring to the market dip after Lula’s spending proposal was announced. “Many investors bet on Bolsonaro winning and they almost got it right, so it is natural they are not happy.” Recent cabinet appointments – including PT leader Fernando Haddad as finance minister – have also troubled some investors.Lula also recently named PT stalwart and economist Aloizio Mercadante as head of national development bank BNDES, which during previous PT governments lent billions of reais to projects consumed by allegations of waste and graft, though bank officials have said they were transparent.Lula’s spokesman Jose Chrispiniano said the president supported fiscal responsibility and believes that strengthening the economy is the best way to combat poverty.”He does not see any contradiction between caring for the poorest and promoting growth. On the contrary, he thinks caring for the poor and giving them the opportunity to work and consume is what generates sustainable growth,” he told Reuters.READING BEHIND BARSLula’s new-found social awareness was ignited by reading books on race, slavery and hunger behind bars, as well as biographies of Fidel Castro and Nelson Mandela, according to his website. He also perused “Lulismo in crisis,” a critical review of his movement and its missteps by his former press secretary Andre Singer.It was augmented by his relationship with Rosangela da Silva, or Janja, a PT activist 20-years his younger whom he married on release and who looks set to be a key political player. Lula became a widower when his first wife Mariza died the year before he went to jail.Janja – who helped organize Lula’s election certification and Sunday’s inauguration, as well as advising on cabinet choices – was among hundreds of PT true-believers who camped outside his prison in the southern city of Curitiba. “Good morning, President Lula,” his devotees would chant as the day began, followed by “Good night, President Lula,” as he went to bed.From his 15-square-meter cell on the third floor of the Federal Police headquarters in Curitiba, Lula set about reorganizing the PT and managing his legal defense. It was there he planned the failed presidential campaign of Haddad, a regular visitor who lost to Bolsonaro in 2018. When he left prison, Lula was determined to set the record straight on his imprisonment and said he wanted to be re-elected to clear his name in the people’s court. He called his imprisonment a political witch-hunt, fabricated by the right to keep him from running in 2018.Another close aide, PT Senator Humberto Costa, said Lula matured politically in jail.”What drove him to run again was the need to leave his mark, not just politically but historically, by bringing lasting change to Brazil,” Costa said. More

(noun) the US campaign to strangle China’s deep-tech ambitions2022 was the year when the world’s politicians fully woke up to the computer chip industry’s critical importance to the global economy. They also realised how worryingly dependent the major powers have become on the semiconductor hotspot and geopolitical flashpoint that is Taiwan. Governments are now pumping huge sums of money into the industry to reshore chip production and restore “technological sovereignty”. To that end, China, the US, the EU, Japan and India have collectively promised $190bn in subsidies over a decade, according to New Street Research.As well as boosting its own chip manufacturing capacity, the US is trying to throttle that of its chief strategic rival: China. Since 2020, Washington has been tightening its “chip choke” on Beijing, trying to deprive the country of access to the most sophisticated, cutting-edge chips. Just as the US has wrecked the global expansion plans of Chinese telecoms equipment companies, Huawei and ZTE, so it is now targeting its chip manufacturers, SMIC and YMTC, to deprive them of access to critical technology. In October, Washington added sweeping export controls, seeking to prevent China from obtaining or manufacturing advanced computer chips. One analyst compared the move to a declaration of war on China’s ambitions in high-performance computing.Washington’s aggressive stance will certainly delay, but probably not derail, China’s efforts to produce the cutting-edge chips that power artificial intelligence models. Beijing is already moving heaven and earth to strengthen its domestic manufacturing base. But the US moves are also squeezing allied countries, including South Korea and the Netherlands, that are important strategic players in specialist chip and semiconductor equipment markets. Such countries are increasingly being forced to pick a colour as the industry divides between US-oriented “blue” supply chains and China’s “red” [email protected]

You are seeing a snapshot of an interactive graphic. This is most likely due to being offline or JavaScript being disabled in your browser. More