Finance

A sign hangs above a Dollar General store in Chicago on Aug. 31, 2023.
Scott Olson | Getty Images

Dollar General shares tumbled Thursday after the discount retailer slashed its sales and profit guidance for the full year, suggesting its lower-income customers are struggling in this economy.
Shares of the retailer, which caters to more rural areas, tumbled 25% in premarket trading after the earnings report.

The company now expects fiscal 2024 same-store sales to be up 1.0% to 1.6%, lower than prior outlook for a 2% to 2.7% increase. Earnings per share for the year are expected to be in the range of just $5.50 to $6.20, versus the prior forecast of $6.80 to $7.55 per share.
“While we believe the softer sales trends are partially attributable to a core customer who feels financially constrained, we know the importance of controlling what we can control,” said CEO Todd Vasos in a statement.
Dollar General also reported disappointing numbers for the latest quarter. EPS of $1.70 per share came in below an LSEG estimate of $1.79 per share, while revenue of $10.21 billion was also lower than the analyst expectation of $10.37 billion.
Competitor Dollar Tree was falling in sympathy, off by more than 9% in premarket trading.

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U.S. national security advisor Jake Sullivan said he raised concerns about the country’s focus on economic security in meetings with Chinese officials.
Earlier Thursday, a statement from Chinese President Xi Jinping said he told Sullivan that Beijing hopes Washington will find “a right way” to get along.
Tensions between the world’s two largest economies have escalated in recent years spilling over from trade into finance and technology.

US National Security Advisor Jake Sullivan shakes hands with China’s President Xi Jinping (R) during their meeting at the Great Hall of the People in Beijing on August 29, 2024. 
Trevor Hunnicutt | Afp | Getty Images

BEIJING — U.S. national security advisor Jake Sullivan said he raised concerns about the country’s focus on economic security in meetings with Chinese President Xi Jinping and other officials this week.
Just as the U.S. has cited national security concerns for its own restrictions on Chinese tech imports, China has increasingly emphasized the need to protect its economic security.

Foreign businesses in China have complained of vague data rules and preferential treatment for local players, as well as subsidies that allow Chinese businesses to sell at far lower prices.
Sullivan told reporters Thursday that he had discussed the impact such issues have on Western businesses and supply chains.
“We had a vigorous give and take on the issue, obviously didn’t come to agreement,” Sullivan told reporters during a press conference at the end of the trip.
Sullivan, advisor to the outgoing Biden administration, said his trip to China was part of an effort to manage the bilateral relationship ahead of the inauguration of a new U.S. president in January.

U.S. National Security Advisor Jake Sullivan attends a press conference at the U.S. embassy in Beijing, China August 29, 2024. 
Tingshu Wang | Reuters

It comes just over a month after U.S. President Joe Biden dropped out of the presidential race and endorsed his Vice President Kamala Harris as the Democrat nominee.

Sullivan said he told Chinese officials how Harris has been a “central member” of Biden’s foreign policy team, and is known to China’s top leaders, including having had a meeting with Xi.
The security advisor said Harris “shares” Biden’s view for responsibly managing competition so that it doesn’t veer into confrontation, and that high-level communication is the way to manage that.

Xi-Biden meeting?

Sullivan arrived in Beijing Tuesday for two days of meetings in his first trip to China as national security advisor. He is scheduled to depart China later Thursday.
Sullivan met with Chinese President Xi Jinping, China’s top diplomat Wang Yi, and Zhang Youxia, vice chairman of the Chinese Communist Party’s Central Military Commission on his visit.
Biden and Xi are planning to speak by phone in “coming weeks,” the White House said Wednesday, and Sullivan indicated to reporters that the leaders would likely meet in person later this year on the sidelines of a multilateral conference.
Earlier Thursday, a statement from Xi said he told Sullivan that Beijing hopes Washington will find “a right way” to get along.

Zhang Youxia, Vice Chairman of the CPC Central Military Commission holds a meeting with White House national security adviser Jake Sullivan, at the Bayi building in Beijing, Thursday, Aug. 29, 2024. 
Ng Han Guan | Via Reuters

“While great changes have taken place in the two countries and in China-U.S. relations, China’s commitment to the goal of a stable, healthy and sustainable China-U.S. relationship remains unchanged,” Xi said, according to an English-language release shared by China’s Ministry of Foreign Affairs.
Tensions between the world’s two largest economies have escalated in recent years, spilling over from trade into finance and technology.
The Chinese leader said Thursday that he hopes the U.S. would view China’s economic growth “in a positive” light and “work with China to find a right way for two major countries to get along with each others,” according to Beijing. China surpassed Japan in 2010 to become the world’s second-largest economy, behind the United States.

The last official trip to China by a U.S. president’s national security advisor was in 2016, when Susan Rice traveled to Beijing under the Obama administration.
While the outcome of November’s U.S. presidential election remains unclear, being tough on Beijing is a rare issue that both U.S. political parties agree on.
Harris’ current national security advisor, Phil Gordon, said in May at a Council on Foreign Relations event that the “China challenge” is much greater than Taiwan, and requires ensuring that Beijing “doesn’t have the advanced technology, intelligence and military capabilities that can challenge us.” More

Visitors to Tokyo in the 1990s arrived in a city that looked like the future. A megalopolis of high-rise buildings, neon lights and new technology left a mark on those who witnessed it. But the city has not changed all that much since. Today some travellers joke that Tokyo still looks like a vision of the future—just one planned in 1990. More

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U.S. President Joe Biden and Chinese President Xi Jinping are set to speak over the phone in “coming weeks,” the White House said Wednesday.
The announcement came amid U.S. national security advisor Jake Sullivan’s trip to Beijing this week to meet with Wang Yi, China’s top diplomat.
The last official trip to China by a U.S. president’s national security advisor was in 2016, when Susan Rice traveled to Beijing under the Obama administration.

China’s Foreign Minister Wang Yi (R) shakes hands with US National Security Advisor Jake Sullivan at Yanqi Lake in Beijing on August 27, 2024. 
Ng Han Guan | Afp | Getty Images

BEIJING — U.S. President Joe Biden and Chinese President Xi Jinping are set to speak over the phone in “coming weeks,” the White House said Wednesday.
The announcement came amid U.S. national security advisor Jake Sullivan’s trip to Beijing this week to meet with Wang Yi, China’s top diplomat.

Both sides said their military leaders would also hold a call in the near future.
Chin added that plans for the second round of U.S.-China talks on artificial intelligence are underway. The White House noted John Podesta, senior advisor to the president for international climate policy, would soon travel to China, without specifying a date.
In official readouts of Sullivan’s trip, the two nations maintained their positions on tech restrictions, Taiwan, the South China Sea and Ukraine.

Biden is not running for reelection in November after this summer, ceding the nomination to his vice president, Kamala Harris. The White House statement did not name the presidents, instead it noted plans for a “leader-level call.”
The Chinese side’s statement used its typical language of “two heads of state,” and said both sides were discussing “a new round of interaction,” according to a CNBC translation of the Chinese.

Biden and Xi held a nearly two-hour phone call in early April, after the two leaders had met in November 2023 on the sidelines of a summit in Woodside, California.
High-level communication between the world’s two largest economies hasn’t been easy in recent years amid heightened tensions and Covid-19 restrictions.
Then-U.S. Speaker of the House Nancy Pelosi’s trip to Taiwan in August 2022 and a high-profile “balloon incident” in February 2023 had further strained their relationship, suspending some planned talks.

First U.S. security advisor visit since 2016

Sullivan arrived in Beijing Tuesday, wrapped up two days of meetings with Wang on Wednesday and is set to depart Thursday. This is his first trip to China as national security advisor, despite multiple meetings with Wang in recent years.
The last official trip to China by a U.S. president’s national security advisor was in 2016, when Susan Rice traveled to Beijing under the Obama administration.
While the outcome of November’s presidential election remains unclear, being tough on Beijing is a rare issue that both U.S. political parties agree on.
Harris’ current national security advisor, Phil Gordon, said in May at a Council on Foreign Relations event that the “China challenge” is much greater than Taiwan, and requires ensuring that Beijing “doesn’t have the advanced technology, intelligence and military capabilities that can challenge us.” More

Price wars aside, Chinese electric car companies are now competing on driver-assist and other tech powered by semiconductors.
“It’s hard to point to your product being superior when your competitors use the exact same silicon to power their infotainment and intelligent driving systems,” said Tu Le, founder of consulting firm Sino Auto Insights.
Over the last few years, Nvidia has already built a $300 million business in automotive chips, with many of the major Chinese electric car companies as partners.

Shaoqing Ren, vice president, autonomous driving development, at Nio speaks about the electric company’s 5nm chip at its tech day in Shanghai on July 27, 2024.
CNBC | Evelyn Cheng

BEIJING — Chinese electric car companies that are already engaged in an intense price war are turning up the heat on another front: Chip-powered tech features such as the driver-assist function.
Nio and Xpeng have announced that their in-house designed auto chips are ready for production. So far, many of the major Chinese electric car makers have relied on Nvidia chips, with the company’s automotive chips business over the past few years bringing in more than $300 million in revenue a quarter.

“It’s hard to point to your product being superior when your competitors use the exact same silicon to power their infotainment and intelligent driving systems,” said Tu Le, founder of consulting firm Sino Auto Insights, explaining why EV makers are turning to in-house chips.
Le said he expected Tesla and Chinese electric car startups to compete on designing their own chips, while traditional automakers will likely still rely on Nvidia and Qualcomm “for the foreseeable future.”
Nvidia reported a 37% year-on-year increase in automotive segment revenue to $346 million in the latest quarter.
“Automotive was a key growth driver for the quarter as every auto maker developing autonomous vehicle technology is using NVIDIA in their Data Centers,” company management said on an earnings call, according to a FactSet transcript.

“I think the main reason why Chinese [automakers] pay attention [to] self-development system-on-chip is the success of Tesla in full-self driving,” said Alvin Liu, a Shanghai-based senior analyst for Canalys.

In 2019, Tesla reportedly shifted from Nvidia to its own chip for advanced driver-assist functions.
By designing their own chips, Chinese automakers can customize features, as well as reduce supply chain risk from geopolitical tensions, Liu said.
Liu does not expect significant impact to Nvidia in the short-term, however, as Chinese automakers will likely test new tech in small batches in the higher-end of the market.

Leveraging latest tech

Nio in late July said it had finished designing an automotive-grade chip, the NX9031, that uses a highly advanced 5 nanometer production technology.
“It is the first time that the five-nanometer process technology has been used in the Chinese automotive industry,” said Florence Zhang, consulting director at China Insights Consultancy, according to a CNBC translation of her Mandarin-language remarks. “It has broken through the bottleneck of domestic intelligent driving chip research and development.”
Nio, which had teased the chip in December, plans to use it in the high-end ET9 sedan, set for delivery in 2025.
The 5 nanometers technology is the most advanced one for autos because the 3 nanometer tech is mostly used for smartphone, personal computer and artificial intelligence-related applications, CLSA analyst Jason Tsang, said following the Nio chip announcement.
Xpeng at its event on Tuesday did not disclose the nanometer technology it was using for its Turing chip. The company’s driver-assist technology is widely considered one of the best currently available in China. 
While Xpeng revealed its chip on Tuesday, Brian Gu, Xpeng president, emphasized in a CNBC interview the day before that his company will primarily partner with Nvidia for chips.
The two companies have a close relationship, and Xpeng’s former head of autonomous driving joined Nvidia last year.
Giants in China’s electric car industry are also recognizing the importance of chips for autos.
If batteries were the foundation for the first phase of electric car development, semiconductors are the basis for the industry’s second phase, as it focuses on smart connected vehicles, BYD’s founder, Wang Chuanfu, said in April at a press conference held by Chinese driver-assist chip company Horizon Robotics.
Wang said more than 1 million BYD vehicles use Horizon Robotics chips.
BYD on Tuesday announced its Fang Cheng Bao off-road vehicle brand would use Huawei’s driver-assist system.
U.S. restrictions on Nvidia chip sales to China haven’t directly affected automakers since the cars haven’t required the most advanced semiconductor technology so far.
But with increasing focus on driver-assist tech, which relies more on artificial intelligence — a segment at the center of U.S.-China tech competition — Chinese automakers are turning to in-house tech.
Looking ahead to the next decade, Xpeng Founder He Xiaopeng said Tuesday the company plans to become a global artificial intelligence car company.
When asked about the availability of computing power for training driver-assist tech, Xpeng’s Gu told reporters Monday that prior to the U.S. restrictions the company had been working with Alibaba Cloud. He claimed that access now probably gives Xpeng the largest cloud computing capacity among all car manufacturers in China.

Creating new tech and standards

Government incentives, from subsidies to support for building out a battery charging network, have helped electric cars take off in China, the world’s largest auto market.
In July, penetration of new energy vehicles, which includes battery-only and hybrid-powered cars, exceeded 50% of new passenger cars sold in China for the first time, according to industry data.
That scale means that companies involved in the country’s electric car development are also contributing to new standards on tech for cars, such as removing the need for a physical key to unlock the door. Instead, drivers can use a smartphone app.
How that app or device securely connects drivers to their cars is part of the forthcoming set of standards that the California-based Car Connectivity Consortium is working on, according to president Alysia Johnson.
A quarter of the organization’s members are based in China, including Nio, BYD, Zeekr and Huawei. Apple, Google and Samsung are also members, Johnson revealed.
She said the organization is looking to enable a driver of a Nio car that uses a Huawei phone to securely send the car “key” to a partner who uses an Apple phone and drives a Zeekr car, for example.
“Digital key tech is becoming a lot more accessible than people would think,” she said. More