FirstFT: US wants allies to cut Chinese chip-related exports

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Good morning. The United States is pushing allies in Europe and Asia to tighten restrictions on exports of chip-related technology and tools to China, amid growing concerns over Huawei’s development of advanced semiconductors.

Washington wants Japan, South Korea and the Netherlands to use existing export controls more aggressively, including preventing their countries’ engineers from maintaining chipmaking tools at manufacturing plants of advanced semiconductors in China, according to five people familiar with the conversations.

The Biden administration introduced drastic export controls in 2022, which included banning “American persons” – American nationals and companies – from providing direct or indirect support to certain advanced chip factories in China. But the restrictions preventing Chinese groups from hiring allied engineers are much fewer.

The United States is increasingly concerned about the speed at which Chinese groups are developing advanced chips despite stricter American controls. Huawei’s latest smartphone, the Mate 60 Pro, included an advanced chip that surprised U.S. government export control experts.

Here’s more on Washington’s concerns – as well as our latest coverage on tech tensions between the two rival powers:

• Notice: The US government has now spent more than half of its $39 billion on Chips Act incentives, which have been surprisingly successful so far, writes Chris Miller.

• Tic Tac: Insiders at the viral video app say there is a growing cultural conflict between its Chinese owners and their American staff.

And in other US-China news, Antony Blinken is speaking with Chinese Foreign Minister Wang Yi in Beijing today and will likely meet with President Xi Jinping.

The US secretary of state met yesterday with Shanghai’s powerful Communist Party chief Chen Jining, who warned that Washington and Beijing must choose between “confrontation or cooperation”.

Here’s what I’m keeping an eye on today and this weekend:

• Japan’s monetary policy decision: The Bank of Japan is expected to refrain from raising rates today. But analysts expect the central bank to raise its core inflation outlook for fiscal 2025, and investors will focus on whether the BOJ will take a hawkish tone on future rate hikes .

• Economic data : Singapore releases its industrial production index, Malaysia releases its producer price index for March and monthly trade data is due in Thailand.

• Elections in India: The second phase of marathon voting begins in the country. Voting will take place in 13 states, but keep an eye on Kerala and Karnataka in the south, where voters have long resisted Narendra Modi’s Bharatiya Janata Party.

• Election in Japan: The country holds by-elections on Sunday for three seats in the lower house of the Diet, the country’s parliament.

How closely have you followed the news this week? Take our quiz.

Five other headline news

1. Australian company BHP has offered to buy rival Anglo American in a £31 billion deal. this provoked a backlash from the South African government and major shareholders. This unsolicited approach sent shock waves through the global mining sector, stoking the prospect of a bidding war. Some of Anglo’s major shareholders have criticized the offer, which comes after a period of weak share price performance.

2. Alphabet’s first-quarter revenue jumped 15% and the company announced its first dividend. – by 20 cents per share – alongside a $70 billion share buyback, supported by rising profits across all of its major business segments. The board said it “intends to pay quarterly cash dividends in the future”, a symbolic policy change for the tech giant, which previously relied solely on share buybacks .

3. The head of Indian IT company Tata Consultancy Services said artificial intelligence would lead to a “minimal” need for call centers. in just a year, with rapid advances in AI set to disrupt a vast industry in Asia and beyond. TCS chief executive K Krithivasan told the FT that chatbots would soon be able to do much of the work done by call center agents.

4. Joe Biden’s hopes for a pre-election rate cut were dealt a blow yesterday after inflation and growth data caused investors to push back on expectations of a Federal Reserve decision. Futures show investors are no longer fully convinced the Fed will make its first quarter-point cut by September.

• More US news: New York’s highest court has overturned Harvey Weinstein’s conviction for sex crimes and rape and ordered a new trial for the once-powerful movie mogul whose reported abuse of women fueled the #MeToo movement.

5. Goldman Sachs has named Hidehiro Imatsu as the new president of its Japan operations, after five months of striving to occupy one of the most powerful positions in Tokyo’s financial sector. The appointment of Imatsu, a Goldman Sachs veteran currently based in Hong Kong, follows the abrupt departure in November of Masanori Mochida, the nearly 70-year-old banker who had led the group for more than 20 years.

The big read

China’s BYD is rivaling Elon Musk’s Tesla to become the world’s most dominant electric vehicle maker, but its ambitions go far beyond cars. As the world attempts to transition away from fossil fuels, the company has positioned itself as a global manufacturing powerhouse in a range of green technologies, from solar modules to complex transportation systems. But is he trying to do too much?

We also read. . .

Card of the day

Nuctech, the Chinese security equipment supplier raided by European authorities, has long been criticized for its close ties to Beijing. Despite this, the group once led by the son of former Chinese President Hu Jintao has won more than 160 public tenders in Europe over the past decade, according to an FT analysis.

Take a break from the news

Here are our six films to watch this week, including Challengersa lusty new date film that’s “so much fun you suspect it must be illegal”, writes FT film critic Danny Leigh.

Additional contributions from Tee Zhuo and Gordon Smith