The final days of the Trump presidency are being marked by both a challenge to the US from within by the far right and the administration’s efforts to combat perceived external threats from China.
Our Washington bureau reports the US commerce department has just finalised new rules to make it easier for the federal government to block Americans from importing technology from China and other US adversaries that it decides could threaten national security.
The rules cover software, such as that used in critical infrastructure, and hardware that includes drones and surveillance cameras. It gives new powers to the commerce secretary to issue licences or block imports.
“President Trump has been committed to protecting the national security of all Americans, and the implementation of this rule is a pivotal moment in this administration’s efforts to put America First and hold bad actors accountable,” said Wilbur Ross, US commerce secretary.
The Pentagon is also preparing to add more Chinese companies to a list of firms with suspected ties to the Chinese military, but as we reported overnight, the US Treasury has blocked an attempt by the Pentagon and State department to put some of China’s largest tech companies on a blacklist that would have banned US investors from holding their stock. Both had pushed hard to add Alibaba, Tencent, and Baidu to a list of companies thought to be linked to the Chinese military.
In an FT opinion piece, Jesse Fried, Dane professor at Harvard Law School, says US interests are being sacrificed for anti-China grandstanding, citing the delisting of China’s three leading telcos.
“The idea that barring purchases of these telecom companies’ stock will affect China’s military is laughable, but their US investors are not laughing,” he says. “The purchase bans and delistings have temporarily depressed prices as American stockholders run for the exits. Hong Kong and other foreign traders are buying up these shares on the cheap. American investors lose; China’s investors win — and its military continues to grow unimpeded.”
1. Lenovo and Megvii plan China offeringsAs US exchanges close to some Chinese companies, two big tech groups are set to give a shot in the arm to the market for Chinese depositary receipts (CDRs). The planned offerings on Shanghai’s tech-focused Star Market for artificial intelligence start-up Megvii and computer maker Lenovo would mark the first big companies to list via CDRs since they were launched to fanfare nearly three years ago.
2. TSMC says auto chips are a priorityTaiwan Semiconductor Manufacturing Company has said rectifying a shortage of automotive chips was a “top priority”. The world’s largest contract chipmaker has been flat out meeting demand from consumer electronics companies. Lex says the surge in orders that pushed the Taiwanese giant’s fourth-quarter net profits up 23 per cent to NT$143bn ($5.1bn) is broadly based and will not be shortlived. Elsewhere, Richard Waters assesses the chances of incoming CEO Pat Gelsinger getting Intel back on track.
3. Tesla US recall as China boomsTesla has been asked to recall 158,000 Model S and Model X vehicles over concerns about possible safety risks from their touchscreen displays not working. The Model 3 is faring better, particularly in China. Lex says Elon Musk’s dream there has become a reality ahead of schedule, with Tesla now claiming a fifth of all electric car sales in China.
4. Tech groups work on vaccine passportHealth and technology groups are working to create a Covid-19 digital vaccination passport in the expectation that governments, airlines and other businesses will require proof people have been immunised. The Vaccination Credential Initiative, a coalition of organisations including Microsoft, Oracle and the US healthcare non-profit Mayo Clinic, aims to establish standards to verify whether a person has had their shot.
5. Grab grabs $300m, Affirm doublesGrab, the south-east Asian ride-hailing and food delivery app, has raised $300m from investors for its financial services arm, valuing the three-year-old unit at $3bn. Affirm, the consumer lender led by PayPal co-founder Max Levchin, almost doubled in value after its US public debut on Wednesday.
This week saw dramatic moves in the world of fintech as online payments company Checkout.com became Europe’s most valuable privately held after raising money at a $15bn valuation. The company had nearly tripled its worth since June, when it raised money at a $5.5bn valuation. In another sign of the fintech sector charting new waters, the founder of digital bank Starling, Anne Boden, said that she was hunting for acquisition targets in the lending market. Speaking to Sifted, Boden said the company was now actively searching “for lending businesses to buy”, with Europe’s non-bank lenders (including P2P firms) in its sights.
There was also fierce debate on the continent this week about the move by the European Commission to start investing directly in start-ups through its EIC fund, with some VCs and founders saying that start-ups should beware of taking the money. Sifted also looked at the top German start-ups to watch in 2021.
Samsung struck earlier in the year than usual with its Galaxy Unpacked online event today unveiling its three new flagship smartphones — the S21, S21+ and S21 Ultra at $799 (£769) $999 (£949) and $1,199 (£1,149) respectively. A faster processor, improved screens and better cameras — particularly on the Ultra with its four rear cameras — stood out as hardware features. On the software side, a Single Take feature that helps you capture the best shots and AI that can easily erase objects and people when editing looked impressive. The Ultra comes with a trendy Vantablack-like option and can use the S-pen stylus from Note models. The handsets are available from January 29.