Japanese PM Kishida Tells Congress The U.S. Must Play Leading Role In The World

Economic

Political

Summary:

Japanese Prime Minister Fumio Kishida urged the U.S. to continue playing a leading role in the world as it faces threats to democracy and the economic order.

Japanese Prime Minister Fumio Kishida urged the U.S. Thursday to continue playing a leading role in the world as it faces threats to democracy and the economic order.

Kishida told lawmakers at a joint meeting of Congress that the world is at a pivotal moment that will define the next stage of history.

“The world needs the United States to continue playing this pivotal role in the affairs of nations,” Kishida said.

“The international order that the U.S. worked for generations to build is facing new challenges, challenges from those with values and principles very different from ours,” he added.

The speech comes a day after Kishida joined President Joe Biden for a state visit during which they outlined new military cooperation plans and projects to strengthen the U.S.-Japan alliance as they counter China and Russia.

Kishida told Congress that Japan and the U.S. must work to maintain peace and the rule of law as China, North Korea and Russia look to upend the world order.

“China’s current external stance and military actions present an unprecedented and the greatest strategic challenge, not only to the peace and security of Japan but to the peace and stability of [the] international community at large,” Kishida said.

Kishida said ongoing combat in Ukraine and warnings from Russian President Vladimir Putin of nuclear war demonstrate the importance of military cooperation between the U.S. and Japan.

“As I often say, Ukraine of today may be East Asia of tomorrow,” Kishida warned.

The prime minister pledged that Japan would not sit on the sidelines and require the U.S. to defend international order on its own.

“The U.S. should not be expected to do it all, unaided and on your own,” Kishida said. “The people of Japan are with you, side by side, to assure the survival of liberty. ... Not just for our people, but for all people.”

Following the speech, Kishida is scheduled to join Vice President Kamala Harris and Secretary of State Antony Blinken for a luncheon at the State Department.

He will then participate in the first U.S.-Japan-Philippines trilateral summit at the White House with Biden and Philippine President Ferdinand Marcos Jr.

Kishida is only the second Japanese leader to address U.S. lawmakers. Former Prime Minister Shinzo Abe, who was assassinated in 2022 after leaving office, became the first Japanese leader to speak to a joint meeting of Congress in 2015.

Source：CNBC

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Ukadike Micheal

Economic

Forex

In early April, US consumer sentiment saw a sharper decline than anticipated, alongside an increase in inflation expectations, highlighting Americans' discontent with rising prices. The University of Michigan's preliminary consumer sentiment index dropped to 77.9 from last month's 79.4, marking the highest since mid-2021, with economists expecting a more moderate decrease to 79.

Expectations of annual price increases rose to 3.1% over the next year, up from the previous month's 2.9%, reaching the highest level this year. Over the next five to 10 years, consumers anticipate a 3% rise in costs, hitting a five-month peak.

Despite these inflationary concerns, consumers do not yet express significant worry about a resurgence in high inflation, according to Joanne Hsu, the survey's director. However, they remain dissatisfied with the current pace of disinflation despite acknowledging the substantial decrease in inflation since 2022.

This decline in sentiment coincides with soaring gasoline prices, reaching a six-month high, and recent data indicating persistent inflationary pressures. Elevated prices, coupled with high borrowing costs, continue to weigh on sentiment, which remains well below pre-pandemic levels.

As long as inflation remains above the Federal Reserve's target, policymakers are unlikely to rush into lowering interest rates. Fed Bank of Boston President Susan Collins expressed no urgency in reducing borrowing costs, suggesting a cautious approach until inflation moves closer to the Fed's goal.

The proportion of consumers attributing the erosion of their living standards to high prices increased to 39% in April from 33% in March, according to the Michigan survey. Additionally, consumers' perception of their current financial situation dipped to a four-month low, while views on buying conditions for durable goods softened.

The current conditions gauge dropped to 79.3, its lowest point this year, from 82.5, while expectations also saw a slight decline. Despite these challenges, consumers remain cautiously optimistic about the economy's trajectory, albeit with lingering concerns about inflation and its impact on their purchasing power.

The decline in consumer sentiment and the uptick in inflation expectations underscore the challenges facing the US economy as it grapples with persistent inflationary pressures. Policymakers will need to tread carefully to address these concerns while supporting economic recovery and maintaining financial stability.

Source: Bloomberg

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Samantha Luan

Economic

China is experiencing a different kind of nuclear race as everyone from government labs to private sector giants and startups seek to develop next-generation fusion energy.

It comes as the nation’s broader nuclear sector grows, with an installed capacity of 57 gigawatts (GW) by the end of 2023, according to the China Nuclear Energy Association. The country’s 55 operating nuclear reactors — which use conventional fission technology — contributed 4.86% of total power generation last year, the association’s data show, and that figure is expected to rise to 10% by 2035.

Fusion is a different beast. Unlike mature fission approaches, which echo an atom bomb, the process of fusing atomic particles to provide energy promises to be safer and less polluting. But its development is still in its infancy.

Chinese engineers and businesspeople working in the fusion space are now tapping private capital in China and the U.S. as they buckle down for the years — or decades — of research it could take to turn it into a viable electricity source.

A cream-colored plant in the north of Xi’an houses one such hopeful developed by Chinese startup Shaanxi Startorus Fusion Technology Co. Ltd. The “tokamak,” a sort of artificial sun inside a donut-shaped magnetic bottle, is one type of fusion reactor.

This year the company hopes to use magnetic superconductors to elevate the interior temperature of the device to a staggering 17 million degrees Celsius — hot enough to fuse atomic nuclei and unleash a massive burst of energy.

The startup, founded more than two years ago, hopes rather optimistically to bring the device to market by around 2032. But it will need to solve many elusive problems of nuclear physics before it does.

The startup world rarely sees decade-long development pipelines outside of the pharmaceutical industry. But the stakes are high. Nuclear fusion, the physical process which powers stars like our sun, holds promise as a future source of relatively clean and affordable energy.

It can potentially produce four times more energy per kilogram of fuel than fission and almost 4 million times more than burning oil or coal, according to the International Atomic Energy Agency, an intergovernmental body under the U.N. which promotes the peaceful use of nuclear energy.

An infant technology

Scientists have been experimenting with nuclear fusion for around a century. But they only achieved a fusion reaction that produced more energy than was fired into it for the first time in December 2022 at the Lawrence Livermore National Laboratory in California.

Experts cautiously hailed the feat — known in the field as “ignition” — but said the experiment had resulted in a net loss of energy when factoring in the power used to charge the laser. One professor pointed out the energy produced was only enough to boil a kettle.

Commercialization of such technology could be decades away given the complex issues left to solve. “To go from [that experiment] to a commercial nuclear fusion reactor could take at least 25 years,” said Mark Diesendorf, a physicist who researches sustainable and nuclear energy at the University of New South Wales in Australia, at the time. “By then, the whole world could be powered by safe and clean renewable energy, primarily solar and wind.”

But in China, many appear undaunted. “Realizing controlled nuclear fusion will change the global energy landscape. The dominance in the energy market will shift from countries that control resources to those that control the technology,” said Jin Zhijian, director of the High-Temperature Superconducting Materials and Systems Research Center in Shanghai.

China’s ambitious dual climate goals announced by President Xi Jinping in September 2020 have buoyed the field. The nation is the world’s largest energy importer and biggest burner of coal — the most polluting fuel source in terms of the carbon emissions that cause climate change. Fusion was even namechecked in the National Development and Reform Commission’s annual work report to the National People’s Congress, delivered last month as part of the “Two Sessions” in Beijing.

The money is starting to follow.

Funding mushrooms

Global investment in fusion technology hit $6.2 billion in mid-2023, up 31% from mid-2022, according to a report by the Fusion Industry Association, an international lobby group pushing the commercialization of fusion. More than 95% of that came from the private sector, it said.

The number of startups in the field increased to 43 in the first half of 2023 from 33 in 2022, the report said. Twenty-five of those startups told the association they think the world’s first fusion plant will be hooked up to a grid between 2025 and 2035.

Chinese companies of all shades — from startups and listed firms to government-backed enterprises — are exploring the field.

Startorus Fusion closed a 2 billion yuan ($281.6 million) angel round in June 2022. Twelve institutional investors, including venture capital (VC) giant HongShan, committed funding. Seven months later the company installed its Xi’an reactor, which fired for the first time in July. The firm announced on March 27 it had closed a multi-million yuan Pre-A round of funding.

Founded in October 2021 by CEO Chen Rui, Startorus Fusion comprises a team of nuclear physicists from Tsinghua University, one of China’s most competitive science institutions. Yet, Chen told Caixin that national research funding alone was not sufficient to develop nuclear fusion technology.

“Europe and the United States have begun to commercialize [this technology], and if we don't do it, we may not have a chance to compete,” Chen said.

Energy Singularity, another nuclear fusion startup, concluded a nearly 400-million-yuan angel round in February 2022. The investment was led by MiHoYo and Nio Capital, with participation from HongShan and Lanchi Ventures. The company closed another nearly 400-million-yuan Pre-A funding round in April 2023, again with MiHoYo joining.

MiHoYo is the developer of the hit action mobile game Genshin Impact, and Nio Capital is an investment firm founded by William Li, CEO of Chinese electric-vehicle maker Nio Inc.

Ye Yuming, the chief operating officer of Energy Singularity, said he noticed a growing number of fusion startups in the U.S. drawing backing from mainstream institutional investors since 2021, which he said signaled potential.

Large private firms are also exploring the field. Chinese gas giant ENN Group fired its nuclear fusion device Xuanlong-50U for the first time on Jan. 24 this year. The group has been exploring nuclear fusion devices since 2018.

Public-private links

State-supported research institutions and enterprises are often behind the tech. In May 2023, Neo Fusion was established in Hefei, Anhui province, with a registered capital of 5 billion yuan. Shareholders include Nio Capital and state-backed Anhui Province Energy Co. Ltd. It plans to build a nuclear fusion device called BEST.

The chairman and general manager of Neo Fusion is Yang Xiaofeng, a former manager at China General Nuclear Power Corp.’s technology department with about 40 years of experience in nuclear fission.

One of the company’s technology backer, the Institute of Plasma Physics under the Chinese Academy of Sciences (CAS) in Hefei, has been researching in the field of fusion for around the same time. In April 2023, its Experimental Advanced Superconducting Tokamak (EAST) set a world record for generating and holding plasma — a hot, ionized gas consisting of nuclear fuel — when it ran for 403 seconds, a key step for the team to develop a fusion demonstration reactor.

This approach, known as magnetic confinement fusion, is also used by Startorus. It represents an alternative fusion path from the laser fusion approach used at Livermore.

China National Nuclear Corp. (CNNC) has also begun to make plans. In November, CNNC signed a strategic cooperation agreement with the Jiangxi government, planning to start a nuclear fusion project in the province with expected investment of more than 20 billion yuan.

On Dec. 29, led by CNNC, 25 state-owned enterprises, scientific research institutes and universities announced they were establishing a nuclear fusion innovation consortium in Sichuan province.

Upstream surge

Magnetic confinement fusion, in which hydrogen plasma is heated and squeezed in a magnetic bottle, requires the use of magnetic superconductors with little resistance that can withstand high pressures and temperatures.

Superconducting magnets could account for 40-50% of the cost of these devices, said Jin of the High-Temperature Superconducting Materials and Systems Research Center. Superconducting magnets are to fusion reactors as batteries are to electric vehicles, he said.

In June 2022, Jin founded superconductor startup Shanghai Yixi Technology Development Co. Ltd., which took in 50 million yuan in seed funding led by CAS Star.

“Controlled nuclear fusion will raise the consumption of superconducting strips by two times,” Jin predicted. He believes scale will bring down the costs.

In June 2023, Shenci Technology, another startup focusing on superconducting materials, secured angel round financing from CAS Star, which also staked Startorus.

The founding partner of CAS Star, Mi Lei, said superconducting materials are a significant upstream investment opportunity.

In October 2023, Shenci Technology received funding from Lenovo Capital & Incubator Group and China Aerospace Investment Holdings Ltd., the investment arm of China Aerospace Science and Technology Corp.

Shanghai Superconductor Technology Co. Ltd., a Chinese manufacturer of the materials, is preparing for an uptick in demand, with the company’s chief engineer Zhu Jiamin telling a conference in November that the firm plans to accelerate production of the superconductive strips.

Miles to go

A number of investors who spoke to Caixin compared the development of nuclear fusion to the private satellite industry, which emerged on the back of the commercialization of nationally-funded research.

The difference, says Yang Runxin, vice president of VC firm K2VC, is that firms like Elon Musk’s Space X entered a mature rocket industry with an established commercial model and large-scale operations, whereas nuclear fusion technology is in its infancy. Nobody knows whether pathways like laser-fusion, magnetic confinement fusion and others, with all their various approaches, will ultimately prove a winning formula.

Wang Guangxi, a partner at Lenovo Capital, emphasizes the high costs associated with nuclear fusion due to the extremes of physics involved. The continuous need for exploration and improvement further escalates funding requirements in later stages. Addressing the various challenges across the industry supply chain is crucial, and uncertainties extend to how governments will regulate the field, potentially influencing whether national dominance will be a requirement.

In its report, the Fusion Industry Association warns that, amid a worsening global financing environment, venture capital has tended to limit funding to seed and Series A rounds for fusion startups, which could see them perish in the “valley of death” — where companies struggle to find the continued funding that allows them to scale up projects.

That means, with paths to market that could last decades, the only thing many fusion hopefuls may end up burning is cash.

Source：Caixin

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Alex

Economic

Commodity

Investors looking to weather a volatile market may want to opt for physical gold over gold stocks.

That’s according to George Milling-Stanley, one of the world’s experts in gold and the chief gold strategist at State Street Global Advisors.

“One of the reasons I own gold bar(s) is that I believe it offers me some protection against potential weakness in the equity market,” Milling-Stanley told CNBC’s “ETF Edge” this week. “When the equity market goes down, gold mining stocks remember that they’re equities, and they tend to go down with the general level of the equity market. So, they’re not offering me that extra level of protection.”

Milling-Stanley’s firm runs two exchange-traded funds that track the performance of the spot price of gold: the SPDR Gold Shares ETF (GLD) and SPDR Gold MiniShares Trust (GLDM).

They’re differentiated by their gross expense ratios — 0.40% for GLD and 0.10% for GLDM — and it’s this key distinction that also differentiates the type of investor they attract, according to Milling-Stanley.

“If you are someone who wants to trade ... or if you want to be a tactical player — that means you need to be able to move very, very quickly — then GLD’s liquidity after 20 years now means that that has very, very low trading costs compared to any other gold ETF,” he said. “If you have a million dollars and you want to put a million dollars into gold and leave it out there, then GLDM with its lower expense ratio makes more sense for you.”

As of Thursday’s close, GLD and GLDM were both up 15% year to date.

Bullion, bitcoin and boomers

The notion that gold is a “fuddy-duddy” investment no longer rings true, according to Milling-Stanley. State Street’s 2023 Gold ETF Impact Study found that millennials had greater portions of their portfolios allocated in gold than older generations.

The metal’s popularity among younger investors comes as bitcoin continues to attract assets from both millennials and Generation Z. A Policygenius survey published this week found that millennials were more likely to own bitcoin than any other generation, and Gen Z was more likely to own bitcoin than stocks, bonds or real estate.

But Milling-Stanley pushed back on the idea that gold and bitcoin are competing for assets across the board.

“Bitcoin may well be some competition for the people who want to take a tactical position in gold and just wait for the price to go up and sell. I think that bitcoin may well offer competition there,” he said. “But I don’t think that bitcoin really competes in terms of a long-term strategic allocation, and that’s where I think gold really comes into its own.”

Source：CNBC

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Alex

Economic

Political

President Joe Biden said he was committed to “deepening maritime and security ties” with Japan and the Philippines as he sought to assure allies worried about increasingly assertive Chinese actions in disputed waters.

“The United States defense commitments to Japan and to the Philippines are ironclad,” Biden said Thursday before a meeting with Japanese Prime Minister Fumio Kishida and Philippines President Ferdinand Marcos Jr. at the White House for the first trilateral summit among the nations.

“Any attack on Philippine aircraft, vessels or armed forces in the South China Sea would invoke our mutual defense treaty,” Biden added.

The Philippines under Marcos has adopted a more assertive footing to the growing number of Chinese patrols in the South China Sea, where both nations have competing maritime claims. Tensions are centered around the Second Thomas Shoal, where the Philippines maintains a grounded World War-II era ship. Chinese vessels have used water cannons to block Philippine military missions that rotate and resupply troops on the ship.

The leaders agreed to step-up military exercises, including plans for Philippine and Japanese Coast Guard members to patrol aboard a US Coast Guard vessel in the Indo-Pacific, according to a statement released Thursday evening. The nations also plan to conduct more training exercises at sea.

Maritime security topped the summit agenda following a series of incidents, including Chinese Coast Guard ships firing water cannons last month at a civilian Filipino boat. The three countries joined Australia on Sunday for military drills in the South China Sea.

“We steadfastly oppose the dangerous and coercive use of Coast Guard and maritime militia vessels in the South China Sea, as well as efforts to disrupt other countries’ offshore resource exploitation,” the three leaders said in the joint statement.

At the White House earlier, Kishida said that “as the world faces a complex crisis, it is important that we work in a multi-layered effort with like-minded countries and allies to maintain and strengthen a free and open international order based on the rule of law.”

Biden and Kishida have striven to demonstrate unity with the Philippines, part of a broader US strategy to bolster partnerships in the Indo-Pacific and encourage allies to strengthen their own ties amid growing alarm over China’s military and economic influence. A joint statement issued after Biden met Kishida at the White House on Wednesday for bilateral talks mentioned China repeatedly.

The US sees China increasing the use of coercive tactics and a growing number of countries pushing back, according to senior administration officials who briefed reporters Wednesday before the official announcements.

Biden and Chinese President Xi Jinping discussed the sea confrontations on a phone call last week and reiterated their respective positions, and the Chinese understand that the timing of Thursday’s meeting is keyed to those recent incidents, a senior administration official said in an interview earlier this week.

Biden said the leaders would also discuss cooperation on technology, clean energy, securing semiconductor supply chains and telecommunications.

Those wide-ranging infrastructure commitments speak to efforts by the US and allies to offer an alternative to Chinese investments in developing countries through Xi’s signature Belt and Road Initiative. With the Philippines, there’s an opening for the US to offer more investment and security cooperation to a Marcos administration that is re-working its ties with China.

In an address to the US Congress earlier Thursday, Kishida pointed out “growing cases” of economic coercion and debt-trap diplomacy, in an apparent reference to China. He also nodded at further US-Japan work on emerging technologies, including in sensitive areas like quantum computing.

Marcos is back in Washington less than a year after his last White House visit, showcasing how the Philippines has become an important focus for the US as it seeks to improve its diplomatic footing in Southeast Asia.

“We seek to identify ways of growing our economies and making them more resilient, climate-proofing our cities and our societies, sustaining our development progress,” Marcos said.

The US is in early-stage talks with Manila to help develop its critical minerals industry, including nickel deposits, but there is no official announcement pending, a senior administration official said earlier this week. China is a major presence in the Philippine mining industry.

In the conclusion of the joint statement, the three leaders said: “A new trilateral chapter between our three nations begins today.”

Source：Bloomberg

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Devin

Economic

The continuing conflicts in the Middle East are expected to have a contained effect on the region's trade activity and would only have "really severe" implications if they escalate, the World Trade Organisation has said.

Global trade is forecast to rebound in 2024, but this would be limited by geopolitical tensions and economic policy uncertainties, setting the stage for flat growth over the next two years, the Geneva-based body said at the launch of its Global Trade Outlook and Statistics 2024 report on Wednesday.

The Middle East, however, is expected to hold steady despite the Israel-Gaza war and attacks in the Red Sea, WTO's chief economist Ralph Ossa said in a press conference from Geneva.

"One thing that we see so far [is that] tensions in the Red Sea of course directly affect international trade … particularly between Asia and Europe," he said in response to a question from The National.

Talks between Hamas and Israel to end the war in Gaza are taking place in Cairo, but have hit a stumbling block as the militant group has reportedly raised several objections to proposals raised this week.

"However, so far our analysis suggests that this effect is not so severe. And for it to become really severe, what would have to happen is the crisis would have to escalate and really start to affect energy markets. So we would have to see price spikes in oil for this to unfold," Mr Ossa said.

Global trade volumes fell 1.2 per cent in 2023, but are expected to bounce back to a 2.6 per cent growth this year, the WTO said.

The decline in 2023 was driven by high energy prices and inflation, which heavily weighed on demand for trade-intensive manufactured goods, according to the WTO, which held its 13th Ministerial Conference in Abu Dhabi in February.

However, this was "relatively small" and above pre-pandemic levels throughout 2023, it said, adding that growth is expected to recover gradually over the next two years as inflationary pressures ease and household incomes improve. Middle East Conflicts Do Not Have Severe Effects on Region's Trade Activity_1

Middle East Conflicts Do Not Have Severe Effects on Region's Trade Activity_1

It also obscures strong regional variation, as import demand fell sharply in Europe, declined in North America, remained flat in Asia and increased in major fuel-exporting economies, the WTO said.

"Weak demand reduced export volumes in Europe and prevented a stronger recovery in Asia, while the picture in other regions was mixed. If the forecast is realised, Asia will make a bigger contribution to trade volume growth in 2024 and 2025," the report said.

Global gross domestic product growth, on the other hand, also slowed down in 2023, albeit not as much as trade volume growth, the WTO said.

Real GDP growth, weighted at market exchange rates, dropped to 2.7 per cent in 2023 from 3.1 per cent in the previous year. It is projected to remain mostly stable in the next two years, inching down to 2.6 per cent in 2024 before returning to 2.7 per cent next year, it said.

Although global trade has been "remarkably resilient" in recent years despite a number of major economic shocks, risks to the forecast are on the downside because of geopolitical tensions and policy uncertainty.

These include the Russia-Ukraine and Israel-Gaza wars, as well as the conflict in the Red Sea, where shipments have been forcibly diverted as a result of Yemeni Houthi rebel attacks on shipping.

"It's imperative that we mitigate risks like geopolitical strife and trade fragmentation to maintain economic growth and stability," Ngozi Okonjo-Iweala, director general of the WTO, said in a statement.

Trade is one of the key pillars of the global economy as it contributes to efficiency and promotes competitiveness, allowing countries to access goods and labour forces.

But while geopolitical tensions have affected trade patterns, these have had a "marginal" effect and "have not triggered a sustained trend towards deglobalisation", the WTO said.

Wednesday's WTO report also confirms its forecast in February, in which it said global trade growth would be likely to miss its target this year.

On October 5, the WTO forecast a 3.3 per cent expansion in global trade for 2024, but this was made before the Israel-Gaza war that began two days later. Still, the new forecast is a marked rebound from the 0.8 per cent growth recorded in 2023.

However, a high degree of uncertainty remains with the current outlook, "due to the large number of risk factors present in the global economy", the WTO said on Wednesday.

Inflation, meanwhile, is expected to decline this year and would lead to a rebound in consumption of manufactured goods, which in turn should boost trade volume growth in 2024 and 2025.

Inflation, which had spiked at the start of the Russia-Ukraine war in February 2022, remained well above pre-pandemic levels by the first quarter of 2024, the WTO said.

Global energy prices, on the other hand, were down about 41 per cent on average from their peak in the first two months of 2024, but remained 30 per cent higher than in 2019, the report said.

Oil prices had recorded a strong gain in the first quarter of the year amid Opec+ output cuts and rising fears of supply disruption caused by conflict, rising about 13 per cent in the first three months of 2024.

Any consistency in the drop of inflation levels would lead policymakers to eventually cut interest rates, the WTO said. The US Federal Reserve is expected to start cutting rates at its June meeting, which would prompt other major central backs to follow suit.

Central banks in advanced economies raised interest rates beginning in 2022 to mitigate inflationary pressures, but that resulted in eroded incomes and reduced consumption of goods, the WTO said.

Cutting rates "should stimulate investment spending [albeit with a lag], which is intensive in capital goods trade," it added.

"Tighter monetary policy has largely succeeded in bringing down inflation, but correctly timing the relaxation of these policies will be challenging for policymakers."

The WTO also said that trade will not be dictated solely by the US presidential elections this year, even with presumptive Republican candidate and former president Donald Trump threatening more tariffs, particularly on China, in the event he returns to the White House.

"It's not just the US; something like 50 countries this year have elections, which of course adds to trade policy uncertainty," Mr Ossa said.

Source: The National News

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Cohen

Economic

Political

President Joe Biden has added more Chinese companies and individuals to an export blacklist than any US administration, as growing frictions between the world’s biggest economies continue to complicate global trade.

The Commerce Department added six Chinese companies to its entity list on Thursday, bringing the tally of new targets during the Biden administration to 319. That compares to the 306 entities added during Donald Trump’s time in the White House, when he oversaw a trade war with Beijing that hurt both countries’ economies.

The milestone exemplifies how the US government is increasingly using economic tools to achieve foreign policy goals, as Biden tries to kneecap China’s access to cutting-edge chips and technology, citing national security concerns. President Xi Jinping’s growing assertiveness toward Taiwan, which he claims as part of China’s territory, has increased concerns in Washington that Beijing will use American technology to advance its military prowess. Biden Surpasses Trump’s Record For Blacklisting Chinese Entities_1

Biden Surpasses Trump’s Record For Blacklisting Chinese Entities_1

“Being tough on China, including through the restriction of its access to technology, is a theme that has bipartisan agreement,” said Alfredo Montufar-Helu, head of the Conference Board’s China Center. With a US election in November, both sides “have incentives during these months of campaigning to show themselves as being as strong on China,” he said.

Biden has left in place Trump’s tariffs while adding to those measures, with a specific focus on curbs that block Beijing’s access to innovations capable of a wide swathe of applications, including those in the critical artificial intelligence sector.

In February, the US added eight companies to the entity list, quietly taking Biden past Trump’s record, with six more added this week. The entity list has increasingly become one of Washington’s main weapons for sanctioning and punishing people, companies or other organizations in China and elsewhere on national security grounds.

Beijing has branded that policy an attempt to thwart its development. Imposing export controls on Chinese companies “is typical economic coercion and unilateral bullying behavior,” He Yadong, spokesman of the Chinese Ministry of Commerce, said at a briefing in Beijing on Thursday when asked about the latest US actions.

“The US should immediately correct its wrongdoings and stop the unreasonable suppression of Chinese companies,” He said. “China will take all necessary actions to defend the lawful rights and interests of Chinese companies.”

In a seemingly tit-for-tat move, China sanctioned two US companies on Thursday, announcing that all the assets of the defense contractors in China would be frozen and their executives denied visas. That marked the latest in a series of largely symbolic sanctions against American companies involved in sales of weapons to Taiwan, with such measures to have little effect as the firms likely have no assets in China.

Once added to the US list, entities are rarely removed, although in an unusual concession, the Biden administration withdrew a Chinese government laboratory as part of a deal to combat the fentanyl crisis, around the time of last November’s summit between Biden and Xi.

Four of the firms added to the entity list this week were included for buying US-origin goods to support China’s military modernization efforts, the Department of Commerce said in statement. Another was targeted for supporting Russian military procurement, while the sixth firm had tried to help Iran buy components for unmanned aerial vehicles, according to the statement.

There is a “presumption of denial” for applications to export to the four companies, according to the statement, meaning they will likely be unable to purchase US-origin items in the future. The companies are involved in providing AI chips to the Chinese military, according to a Reuters report of comments from Kevin Kurland, an export enforcement official.

“The US will do whatever is necessary to maintain its technological competitive advantage, especially on technologies that are considered dual use,” said Montufar-Helu, expressing skepticism over the “small yard, high fence” description officials have used to defend that policy.

“Over the past months it seems that the yard has expanded a little bit,” he said.

Source：Bloomberg

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Japanese PM Kishida Tells Congress The U.S. Must Play Leading Role In The World

Source：CNBC

Consumer Sentiment in the US Dips Due to Worsening Perception of Inflation Outlook

Source: Bloomberg

Fusion Sector Heats Up As China Pursues Next-Gen Nuclear Power

An infant technology

Funding mushrooms

Public-private links

Upstream surge

Miles to go

Source：Caixin

Physical Gold Offers More Protection Than Mining Stocks, Says State Street’s George Milling-Stanley

Bullion, bitcoin and boomers

Source：CNBC

Biden Vows To Back Japan, Philippines As China Jolts Allies

Source：Bloomberg

Middle East Conflicts Do Not Have Severe Effects on Region's Trade Activity

Source: The National News

Biden Surpasses Trump’s Record For Blacklisting Chinese Entities

Source：Bloomberg

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