Economy

BEIJING (Reuters) – U.S. Treasury Secretary Janet Yellen on Saturday urged closer communication between China and the United States to improve economic decision-making, and challenged China to join global initiatives to help poorer nations address climate change. Despite bilateral tensions, record high U.S.-Chinese trade last year showed there was “ample room” to engage in trade and investment, and it was critical to focus on areas of common interest and address disagreements through dialogue, Yellen told Chinese Vice Premier He Lifeng at the start of a meeting.The talks lasted for about five hours, followed by a formal dinner, according to a Treasury official. Chinese state media described the meeting as “in-depth, candid and pragmatic”. Treasury said the meeting was “candid, constructive, and comprehensive.” Yellen is due to hold a news conference in Beijing early on Sunday.State-run Xinhua news agency said the talks were “constructive”, but the Chinese side expressed concern about U.S. sanctions and restrictive measures against China.China also believes that generalising the concept of national security does no good for normal economic and trade exchanges, Xinhua reported.Treasury said Yellen also conveyed that “even when the United States and China have disagreements, it is vital that the two countries find ways to work together on issues of shared – and global – concern, including debt distress in low-income and emerging economies and climate finance.”Yellen also met with the People’s Bank of China’s Communist Party chief Pan Gongsheng on Friday, discussing global macroeconomic and financial developments, including the disproportionate impact of recent economic shocks on low-income countries, Treasury said.Yellen’s visit through Sunday is Washington’s latest attempt to repair ties between the world’s two biggest economies, battered over issues from Taiwan to technology that have drawn their allies into their rivalry, having an impact on companies and trade ties.Like U.S. Secretary of State Antony Blinken, who visited last month for the first time in Joe Biden’s presidency, Yellen is seeking a delicate balance between conciliation and continuing to push Beijing to halt practices Washington says are harmful to U.S. and Western companies. Both sides have downplayed expectations for breakthroughs, while hailing the opportunity for candid, face-to-face diplomacy.”Amid a complicated global economic outlook, there is a pressing need for the two largest economies to closely communicate and exchange views on our responses to various challenges,” Yellen told He, China’s recently appointed economy czar.Doing so could “help both sides more fully understand the global economic outlook and make better decisions to strengthen our economies”, she said.At the same time, Yellen reiterated Washington wanted to ensure healthy competition with a “fair set of rules” that would benefit both countries over time.Meeting her at the Diaoyutai state guest house where foreign dignitaries are often received, He said he stood ready to work with Yellen. Yellen told a group of female economists on Saturday that she was “in Beijing at this critical time because, for all the disagreements between our nations, President Biden and I believe it is in the best interests of our peoples to put our relationship on a better track and to maintain open and honest lines of communication”.”I strongly believe that the relationship between our two countries is rooted in the solid ties between the American and Chinese people. It is important that we keep nurturing and deepening these ties, especially as China reopens after three years of COVID lockdowns.”‘MEET CHINA HALFWAY’As the U.S. seeks to re-engage at all levels, Beijing has repeatedly told Washington to match words with action, pointing to continued U.S. moves to curb Chinese access to technologies including semiconductors. Beijing has also refused to resume bilateral military ties, while tariffs imposed on Chinese products during a trade war under Biden’s predecessor, Donald Trump, remain intact. China this week abruptly announced export controls on two metals widely used in semiconductors and electric vehicles in the name of protecting its national security and interests. Still, recently appointed Premier Li Qiang left the door open to further dialogue, urging Yellen on Friday to “meet China halfway” as both sides inject “positive energy” into bilateral ties. Despite talk of U.S.-China economic decoupling, which both countries oppose, data show a fundamentally solid trade relationship, with two-way trade hitting $690 billion last year. The United States would continue to communicate directly its concerns about specific economic practices, and would take targeted actions to protect its national security, Yellen said. She urged China not to allow any disagreements to “lead to misunderstandings, particularly those stemming from a lack of communication, which can unnecessarily worsen our bilateral economic and financial relationship.” Yellen told government officials and climate experts on Saturday that China had the capacity to help the world tackle the “existential threat” of climate change.Beijing and Washington must take the lead in helping poor nations meet their climate goals and cope with the impact of climate change, she told a roundtable.Cooperation on climate finance was a “critical” responsibility of “the world’s two largest emitters of greenhouse gases and the largest investors in renewable energy”, she said.China, classified as a developing country by the United Nations, has long said it was the responsibility of developed nations to help poor countries pay to address climate change. But Beijing says it could contribute to “loss and damage” due to climate change on a voluntary basis. More

SAN FRANCISCO (Reuters) – Venture capital firm Headline used to be in one of San Francisco’s most eye-catching skyscrapers: the pyramidal Transamerica building that has defined the skyline for decades. Employees enjoyed the views from the 43rd floor and the convenience of being downtown.Then came the pandemic.As the tech industry shifted to work-from-home or downsized, a city center that was already struggling with drugs and homelessness slipped further into urban decay. Businesses closed and visitors were scared off, creating a vicious cycle that coincided with changes already happening in the city’s real estate market.With Headline’s lease ending, the company decided to look elsewhere. The executives considered building an office on a boat or moving to a residential house. Eventually, they took their operation managing $4 billion to the bucolic – and secure – Presidio, a former military base-turned-national park next to the landmark Golden Gate Bridge.And they are not alone. Venture capital firms are increasingly joining retailers and other businesses in finding homes outside downtown San Francisco. Westfield, for example, said last month it was giving up its downtown shopping mall after 20 years, as foot traffic fell by 43% from 2019.Where venture capital firms end up could have implications for the broader tech industry, as such companies usually help form a gravity center for startup founders and communities.”Presidio really represented what we thought the future of work should be,” said Mathias Schilling, Managing Partner at Headline, on a recent sunny afternoon. Nearby, a dozen employees were sitting at a long wooden communal table in the bright kitchen, eating lunch against a backdrop of lush greenery, palm trees and panoramic views of San Francisco Bay.”It’s a very calm and quiet space, something that I think instills creativity and stimulates people,” said Schilling. “We take meetings outside and we walk around the big lawn here.”Other venture capitalists – including Felicis Ventures, which backed Shopify (NYSE:SHOP) and Fitbit (NYSE:FIT), as well as Forerunner Ventures and venture studio Atomic, have filled the directories in the Letterman Building, one of the biggest office complexes in the Presidio. Converted from a former military base, the Presidio is located at the tip of San Francisco’s peninsula, several miles west of the financial district. As a national park, it is patrolled by federal police. “It 100% feels safer than downtown. There’s no open drug use in the Presidio. There are no homeless encampments. There are very few homeless wandering around and that is because it’s the federal land and the federal police is a big part of it,” said Rex Salisbury, who runs VC firm Cambrian Venture and has been living and working from the Presidio since 2017.SHIFTS IN TECH ECOSYSTEMVenture capital firms play an integral part in the tech ecosystem in the San Francisco Bay Area, where startups captured about 35% of all U.S. venture capital funding in 2022. Since the 1990s internet boom, the VCs have physically clustered in hotspots that are close to the startup founders – including Sand Hill Road in Silicon Valley and South Park in downtown San Francisco.Now some firms say they feel less obligated to stay downtown because startup founders have become more scattered since the pandemic, while the Presidio is a convenient location for firm partners who live in the northern part of the city or Marin, the county across the Golden Gate Bridge from San Francisco.”Presidio was too far, before COVID, for any founders to want to really come. Founders are not in downtown anymore, so we don’t have to be there anymore. We felt like it wasn’t going to be a burden for our founders to come here. They’re actually really excited,” said Eurie Kim, whose venture firm Forerunner left downtown for the Presidio in early 2022.Although there are no statistics on the locations of VC firms by neighborhood, the Presidio vacancy rate is about 5%, compared to an overall commercial real estate vacancy rate in San Francisco of 35%, up from 4% pre-pandemic, according to real estate firm CBRE and the Presidio Trust, the federal agency that manages the area.That is despite commercial real estate in the Presidio being on average 20% more expensive than downtown, according to CBRE data.Lisa Petrie, a spokesperson at Presidio Trust, said there had been broad interest in moving from downtown since 2020. “They all cite the amenities and the beautiful surroundings of this urban national park as the number one reason for locating here,” she added.The Presidio has long attracted non-profit organizations and entertainment firms. Lucasfilm has had its headquarters here since 2005, and the Walt Disney (NYSE:DIS) Family Museum opened in the park in 2009.Some VCs say they are still committed to downtown, however. When General Catalyst outgrew its office in South Park in San Francisco earlier this year, they moved to another downtown building a few blocks away. “We found a convenient location that’s close to public transportation, downtown hotels, and restaurants,” said Jon Rehagen, chief technology officer at General Catalyst, adding that the firm was partnering with local restaurants and service providers. “Hopefully, that will help to revive the downtown tech corridor that is still recovering after the pandemic.” Employees in Presidio also hoped for downtown’s recovery – but said for now they were happy they no longer needed to commute there.”That part of town just hasn’t evolved in so long,” said Molly Martell, vice president of Brand at Headline. She said she hoped the attention being focused on its problems would be a catalyst for change. “It’s just tragic to see what’s happening,” she added.A spokesperson for the office of San Francisco Mayor London Breed said the government wanted to support businesses of all types in all neighborhoods in the city. “Mayor Breed continues to implement strategic initiatives to help stabilize existing businesses and recruit new ones as part of her Roadmap to Downtown San Francisco’s Future plan. We will continue to emphasize efforts to support the revitalization of Downtown, but we also welcome investments in all parts of our City,” the spokesperson said in an email. Colin Yasukochi, executive director of CBRE’s Tech Insight, compared the Presidio to Sand Hill Road, the historic address for VCs in Silicon Valley.”We do have this phenomenon that we call ‘flight to quality’ in real estate here,” he said. “The Presidio has evolved as the Sand Hill Road of San Francisco.” More

A surge in US real yields — the return that bond investors can expect once inflation is taken into account — has reawakened investors’ concerns that shifts in the Treasury market are undermining one of the crucial supports for riskier assets like stocks.The yield on 10-year inflation-protected securities, known as Tips, rose to 1.82 per cent on Friday, the highest level since 2009, as investors became increasingly convinced that the Federal Reserve would have to hold interest rates at a high level for longer to tame inflation.Real yields are closely followed as a gauge of borrowing costs across the economy and a way to judge the relative value of risky assets. For investors, higher real yields on ultra low-risk government debt make other assets relatively less attractive. This week’s surge took 10-year inflation-adjusted borrowing costs past the levels of last October, when bonds sold off sharply and the outlook for US inflation was far more uncertain.“There’s a big risk that this real yield rise starts to damage the corporate sector,” said Salman Ahmed, global head of macro and strategic asset allocation at Fidelity International. When debt that was borrowed in an environment where interest rates were at or close to zero needed to be refinanced at much higher rates today, “that’s where the problem starts”, he said.Ahmed added that a typical high yield company that raised money at about 4 per cent during the pandemic would now have to pay more than 12 per cent. “It’s a huge shock if you are refinancing right now,” he said. Analysts say that many companies took out loans when rates were slashed to help support the economy during pandemic lockdowns, and the effect of higher borrowing costs would probably be felt more acutely in the second half of next year and into 2025. But lending is already slowing down this year. Figures from Fidelity show that US banks have issued new loans and leases at an annualised rate of $279bn so far this year, down from an average level of $481bn between 2015 and 2019.With financial conditions tightening, investors are also increasingly nervous about US equity valuations. “Theoretically equity prices should be going down because the return for beating Tips is much higher,” said Jon Day, fixed income portfolio manager at Newton Investment Management. “Five years ago a 5 to 7 per cent return on equities should be good — now it’s not, it should be a 10 or 15 per cent return on equities just to keep the same gap.” That logic is one reason why a sharp rise in real yields following Wednesday’s Fed minutes sparked a stock sell-off. Still, equities have nevertheless run up sizeable gains this year, driven largely by excitement around the possibilities of artificial intelligence prompting investors to rush in to a handful of large technology companies. Some investors say a buoyant stock market and gloomier bond investors cannot both be right.“What [stocks] are pricing in is that ultimately real rates will come off quite strongly in the next year,” said Arun Sai, a senior multi-asset strategist at Pictet. “But if real yields stay high it will be damaging to equities.” More

US manufacturing employment has hit its highest levels since George W Bush’s presidency, but its growth has slowed significantly this year and continues to lag behind the rest of the labour market.The data on industrial jobs presents a mixed picture for President Joe Biden, who is banking on a manufacturing rebound to sustain the economy and boost his prospects in the 2024 presidential election. Since Biden took office, US manufacturing employment has grown by slightly less than 800,000 positions, contributing to the more than 13mn jobs created as the country’s economy bounced back quickly from the pandemic. Last month, close to 13mn were employed in the US manufacturing sector, which is the highest monthly tally since late 2008. However, the 6.5 per cent job growth in manufacturing under Biden is still slower than the overall increase in employment since January 2021, of about 9.3 per cent — as other sectors have experienced a more rapid rebound. While nearly 1.2mn jobs have been created since January this year across the economy, there has been virtually no change in manufacturing jobs.

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Biden administration officials — and many economists — believe manufacturing employment will be buoyed by the passage of three pieces of legislation worth hundreds of billions of dollars to boost government support for domestic infrastructure, semiconductor production, and clean energy development. “Policy has really been an increasingly powerful tailwind to the manufacturing base,” said Mark Zandi, chief economist at Moody’s Analytics, saying it will help the sector both in the near term given the tight monetary policy and beyond. “It is arguably among the most rate sensitive and cyclical parts of the economy and yet it’s weathering the storm here very very well,” Zandi said.Biden has been promoting his economic plans as a way of boosting the fortunes of middle class households in towns and communities that have been falling behind in recent years. But a state-by-state breakdown of industrial employment gains shows the biggest increases have occurred in western and southern states where job growth is generally fastest anyway, compared to traditional rustbelt manufacturing hubs in the Midwest and Great Lakes regions. Some of the biggest beneficiaries are still politically significant: Nevada, Arizona and Georgia are key swing states where Democrats have recently performed strongly. “All of a sudden manufacturing has come on stage,” said Tom Harris, a professor of economics at the University of Nevada, Reno, pointing to the fact clean energy-related production was spreading in a state that is mostly reliant on hospitality and gaming.

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In areas that are deeply conservative, Biden has been needling Republican lawmakers who have been taking credit for plant openings and new industrial projects while criticising the administration’s subsidies. “One of the biggest [new solar investments] is in Dalton, Georgia. You may find it hard to believe, but that’s Marjorie Taylor Greene’s district,” Biden said this week, referring to the firebrand conservative lawmaker. “I’ll be there for the groundbreaking.” The manufacturing boom is not being felt uniformly, however.On an aggregate level, employment growth across the durable goods sector, which includes products that do not wear out easily, can be used repeatedly and typically have a shelf life of at least three years, have exceeded that for the nondurable goods sector. Employment has grown 7.2 per cent in the former category since the start of the Biden administration, compared to 5.3 per cent for the latter group. And since June of last year, all of the growth in manufacturing jobs has originated from the durable goods sector, with employment gains flat for the nondurable-related products.The transportation industry has emerged as a clear bright spot. Nearly 200,000 jobs have been added in the past three years, representing a roughly 12 per cent jump. The bulk of that has stemmed from motor vehicles. Food-related manufacturing and those tied to other machinery have had about 90,000 new jobs respectively in that same period.

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Lagging behind is the petroleum and coal industry, where employment is flat. Furniture and textile manufacturing jobs have dipped slightly. There are also concerns the manufacturing resurgence could be cut short should the US economy buckle under the weight of the Federal Reserve’s historic monetary tightening campaign as it battles stubbornly high inflation. The world’s largest economy has proven resilient in the face of rapidly rising borrowing costs, but the fear is it will start to weaken as the year progresses and ultimately result in higher unemployment.Manufacturing activity has started to ebb. According to David Rosenberg, chief economist and president of Rosenberg Research, the latest data from the Institute for Supply Management this week confirmed a “recession in the industrial sector”.

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However, other economists are more optimistic about the outlook in light of the support provided by the Biden administration. “Historically, these manufacturing industries are more interest-rate sensitive than services sector industries, but I think there is enough going on with policy support and private sector investments that will be [supportive] regardless of what is going on in these areas,” said Adam Hersh, senior economist at the Economic Policy Institute, a Washington-based think-tank. “It’s really creating the demand to drive this forward.”Construction spending for manufacturing facilities, once adjusted for inflation, has experienced what the Treasury department recently described as a “striking surge”, having doubled since the end of 2021. Among the biggest booms have been in computer, electronics and electrical manufacturing, where spending has quadrupled since the beginning of 2022.Treasury officials and other government authorities, including the central bank, maintain the economy will skirt a painful contraction later this year or next, even though they expect growth to slow. Zandi is among those to bet against a recession, in large part because the manufacturing sector is now on a “more solid, long-term fundamental ground”.“This time may be different because manufacturing is just in a very different place than it typically is coming into an economic downturn,” he said. More

Janet Yellen says there is “ample room” for US and Chinese companies to boost trade and investment, despite security tensions, during a trip to Beijing aimed at easing friction between the two powers.Speaking at the Diaoyutai State Guest House in Beijing at the opening of her meeting Chinese economic tsar He Lifeng on Saturday, the US Treasury secretary said a “wide swath” of the two countries’ economies should be able to interact in ways that were “uncontroversial to both governments”.“The fact that despite recent tensions we set a record for bilateral trade in 2022 suggests there is ample room for our firms to engage in trade and investment,” Yellen said. When she addressed He and his economic team in a cavernous room in the guest house, Yellen repeated her call for Beijing and Washington to enhance communication, including on macroeconomic and financial stability.“Amid a complicated global economic outlook, there is a pressing need for the two largest economies to closely communicate and exchange views on . . . various challenges,” Yellen said.Yellen was visiting Beijing just weeks after secretary of state Antony Blinken became the first Biden administration cabinet official to travel to China. The trips are part of an effort to stabilise relations, which have fallen to their lowest level in decades. An earlier attempt was derailed after China flew a suspected spy balloon over North America.Yellen has attempted to tread a fine line, calling for enhanced communication while urging Beijing not to overreact to security measures that the Biden administration has taken to prevent American technology being used to help the Chinese military. “The United States will take targeted actions to protect our national security. While we may disagree on these actions, we should not allow that disagreement to lead to misunderstandings, particularly those stemming from a lack of communication, which can unnecessarily worsen our bilateral economic and financial relationship,” she said.Earlier on Saturday Yellen met Chinese climate finance experts. In her meeting, she said the US and China — the world’s two largest emitters of greenhouse gases and the largest investors in renewable energy — had “a joint responsibility . . . to lead the way”.“If China were to support existing multilateral climate institutions like the Green Climate Fund and the Climate Investment Funds alongside us and other donor governments, we could have a greater impact than we do today,” Yellen said. John Kerry, President Joe Biden’s special envoy for climate change, is expected to be the next senior American official to travel to China.Yellen’s meeting with He is widely viewed as the most consequential of her four-day trip.In addition to being the longest meeting, it gave her team a chance to learn about He, a protégé of President Xi Jinping who is relatively unknown outside China. He has kept a low profile in Chinese state media coverage since assuming the role in March.He, who was appointed as vice-premier, succeeded Liu He as China’s economic tsar. While Liu was respected abroad for overseeing technocrats at the central bank and finance ministry, He’s experience was at the National Development and Reform Commission in charge of state planning.He has advocated for greater openness to foreign investment but there are concerns that as a Xi loyalist he would be unlikely to push back against Beijing’s tendency to consolidate more control in the hands of state-owned enterprises.The meeting also included Pan Gongsheng, the incoming head of China’s central bank. More

BEIJING (Reuters) – U.S. Treasury Secretary Janet Yellen, a trailblazer in the field of economics, met with six female economists in Beijing on Saturday, an effort to spotlight gender diversity following meetings with China’s largely male government leaders.Yellen, the first woman to head the U.S. Treasury, has made women’s contributions and importance to economies a focal point of her tenure, often meeting with women economists and entrepreneurs during her travels, and hailing the benefits of boosting women’s participation in the workforce and leadership.A senior Treasury official said the lunch with the Chinese economists would give Yellen, who was also the first woman to head the U.S. Federal Reserve, a chance to “interact with a number of people kind of outside the normal policy structure.” Treasury did not name the women participating.Yellen, 76, told the women she had seen China’s adoption of market-based economic policies transform the country and lift hundreds of millions of people out of poverty since she began her career in the 1970s.”It is my hope for the benefit of both China and the United States, as well as for the broader global economy, that those policies are carried out moving forward,” Yellen said, echoing comments on Friday to Chinese Premier Li Qiang, in which she urged China to adopt more market-based reforms.Yellen told the women – one of whom described herself as a feminist economist – she was curious to learn more about their backgrounds and research.”I’m sure we share similar stories and experiences about what a career in economics is like, and the challenges you can face,” Yellen said. “I see it all the time when I’m almost the only woman in the room, and I’m sure many of you have that same experience at decision-making tables.”Treasury said Yellen and the participants discussed the Chinese economy and opportunities to increase the representation of women in the workforce, including in leadership positions.”The Secretary underscored that women’s participation in the workforce is one of the major drivers of creating inclusive growth,” Treasury said. “She also noted that women’s contributions to economics, in particular, are important to help ensure that economic research and policymaking appropriately reflect society’s priorities.”Chinese President Xi Jinping’s decade as the ruling Communist Party’s general secretary has seen the number of women in politics and top government roles decline and gender gaps in the workforce widen, with the government emphasizing more traditional roles for women.A June report by the United Nations urged China to adopt statutory quotas and a gender parity system to boost women’s representation in government.The U.N. Committee on the Elimination of Discrimination against Women found that women comprise just over 26% of deputies to China’s 14th National People’s Congress and since October have had no representation in the 24-member Politburo of the Communist Party, a first in 20 years.China’s top female politician is Shen Yiqin, appointed in March as one of five state councillors. She ranks higher than a minister and oversees social welfare, veteran affairs and sports.President Joe Biden’s 25-member Cabinet, by contrast, is the most gender-diverse in U.S. history, with Yellen being one of 13 female members.One-quarter of the U.S. Senate and 28.7% of the House of Representatives seats are held by women, according to Rutgers University’s Center for Women in Politics.China also lags in terms of women’s representation in the top echelons of industry, a recent study showed.Bain & Co and leadership advisory firm Spencer Stuart reported in March that women account for only 19% of top business executives, compared to an average of 25% in leading countries. More

Chipmakers are finding it increasingly hard to operate in China but say doing business in the country is still key to their survival.In May, Micron Technologies, the Idaho chipmaker, suffered a serious blow as part of the U.S.-China technology war. The Chinese government barred companies that handle crucial information from buying Micron’s chips, saying the company had failed a cybersecurity review.Micron said the change could destroy roughly an eighth of its global revenue. Yet in June, the chipmaker announced that it would increase its investments in China — adding $600 million to expand a chip packaging facility in the Chinese city of Xian.“This investment project demonstrates Micron’s unwavering commitment to its China business and team,” an announcement posted on the company’s Chinese social media account said.Global semiconductor companies are finding themselves in an extremely tricky position as they try to straddle a growing rift between the United States and China. The semiconductor industry has become ground zero for the technology rivalry between Washington and Beijing, with new restrictions and punitive measures imposed by both sides.U.S. officials say American products have fed into Chinese military and surveillance programs that run counter to the national security interest of the United States. They have imposed increasingly tough restrictions on the kind of chips and chip-making equipment that can be sent to China, and are offering new incentives, including grants and tax credits, for chipmakers who choose to build new operations in the United States.But factories can take years to construct, and corporate ties between the countries remain strong. China is a major market for chips, since it is home to many factories that make chip-rich products, including smartphones, dishwashers, cars and computers, that are both exported around the world and purchased by consumers in China.Overall, China accounts for roughly a third of global semiconductor sales. But for some chipmakers, the country accounts for 60 percent or 70 percent of their revenue. Even when chips are manufactured in the United States, they are often sent to China for assembly and testing.“We can’t just flip a switch and say all of sudden you have to take everything out of China,” said Emily S. Weinstein, a research fellow at Georgetown’s Center for Security and Emerging Technology.The industry’s reliance on China highlights how a close — but extremely contentious — economic relationship between Washington and Beijing is posing challenges for both sides.Those tensions were reflected during Treasury Secretary Janet L. Yellen’s visit to Beijing this week, where she tried to walk a fine line by faulting some of China’s practices while insisting the United States was not looking to sever ties with the country.Ms. Yellen criticized punitive measures China has recently taken against foreign firms, including limiting the export of some minerals used in chip making, and suggested that such actions were why the Biden administration was trying to make U.S. manufacturers less reliant on China. But she also affirmed the U.S.-China relationship as strategic and important.“I have made clear that the United States does not seek a wholesale separation of our economies,” Ms. Yellen said during a roundtable with U.S. companies operating in China. “We seek to diversify, not to decouple. A decoupling of the world’s two largest economies would be destabilizing for the global economy, and it would be virtually impossible to undertake.”The Biden administration is poised to begin investing heavily in American semiconductor manufacturing to lure factories out of China. Later this year, the Commerce Department is expected to begin handing out funds to help companies build U.S. chip facilities. That money will come with strings: Firms that take funding must refrain from expanding high-tech manufacturing facilities in China.The administration is also weighing further curbs on the chips that can be sent to China, as part of a push to expand and finalize sweeping restrictions it issued last October.These measures could include potential limits on sales to China of advanced chips used for artificial intelligence, new restrictions for Chinese companies’ access to U.S. cloud computing services, and restrictions on U.S. venture capital investments in the Chinese chip sector, according to people familiar with the plans.The administration has also been considering halting the licenses it has extended to some U.S. chipmakers that have allowed them to continue selling products to Huawei, the Chinese telecom firm.Japan and the Netherlands, which are home to companies that make advanced chip manufacturing equipment, have also put new restrictions on their sales to China, in part because of urging from the United States.China has issued restrictions of its own, including new export controls on minerals used in chip manufacturing.Amid tighter regulations and new incentive programs from the United States and Europe, global chip companies are increasingly looking outside China as they choose the locations for their next major investments. But these facilities will likely take years to construct, meaning any changes to the global semiconductor market will unfold gradually.John Neuffer, the president of the Semiconductor Industry Association, which represents the chip industry, said in a statement that the ongoing escalation of controls posed a significant risk to the global competitiveness of the U.S. industry.“China is the world’s largest market for semiconductors, and our companies simply need to do business there to continue to grow, innovate and stay ahead of global competitors,” he said. “We urge solutions that protect national security, avoid inadvertent and lasting damage to the chip industry, and avert future escalations.” More

(Reuters) – California Governor Gavin Newsom on Friday announced he would give up trying to deny parole to one of Charles Manson’s murderous “family” of followers, clearing the way to let Leslie Van Houten out of prison after more than 50 years.In May a California appeals court overruled Newsom and found Van Houten, 73, was entitled to parole from her life sentence. The governor could have appealed the decision to the California Supreme Court.”The governor is disappointed by the Court of Appeal’s decision to release Ms. Van Houten, but will not pursue further action as efforts to further appeal are unlikely to succeed,” Erin Mellon, the governor’s communications director, said in a statement.Van Houten’s attorney, Nancy Tetreault, said she would be paroled in weeks, NBC News reported.Van Houten was 19 when the murders were committed, making her the youngest of Manson’s devotees. The parole board recommended her for early release five times since 2016, but she was denied three times by Newsom and twice by his predecessor, fellow Democrat Jerry Brown.Manson died in prison in 2017 at age 83, having become one of the 20th Century’s most notorious criminals for directing a killing spree that terrorized Los Angeles in the summer of 1969. Manson directed his mostly young and female followers to murder seven people, including actress Sharon Tate, in August 1969 in what prosecutors said was part of a plan to incite a race war.Van Houten was convicted of fatally stabbing grocery owner Leno LaBianca and his wife, Rosemary, in their Los Angeles home on Aug. 10, 1969. The words “Death to Pigs” and “Healter Skelter” – a misspelled reference to a Beatles song – were found scrawled in the victims’ blood on the walls and refrigerator.The previous night, members of Manson’s cult broke into the Los Angeles hillside home that Tate shared with her husband, filmmaker Roman Polanski, who was away in Europe at the time.Tate, who was 26 and eight months pregnant, was slain along with four friends of the celebrity couple, including coffee heiress Abigail Folger and hairstylist Jay Sebring. (Reporting Daniel Trotta in Carlsbad, California; Editing by Kim Coghill) More