The White House is preparing to take unprecedented action to limit US investments in China’s tech sector, POLITICO reported on Tuesday.
The action would come in the form of an executive order signed by President Biden that would require American companies to notify the government of new investments in Chinese tech. It would also prohibit some investments altogether, such as deals involving Beijing’s microchip sector.
The report said that the order has been years in the making as some officials in the Biden administration have been at odds over how hard to go after new US investments in China.
Biden administration officials insist they are not seeking an economic decoupling with China and say the restrictions are about preventing US investment in technology that can be used by China’s military. But the order would mark a significant scaling down of the US-China trade relationship that has grown since the two countries formally established relations in 1979.
Last year, the administration enacted export restrictions on semiconductors and chip-making equipment aimed at decimating China’s semiconductor industry. The US has also pressured the Netherlands and Japan, two countries that export the technology needed for advanced chip-making, to follow suit.
The POLITICO report said the executive order is expected to be signed at the end of April. Administration officials have already briefed industry groups on the contents of the order, although the details could still change.
Besides limiting US investment in China, the administration is considering hiking Trump-era tariffs on China and banning TikTok, the video-sharing app owned by the Chinese company ByteDance. A bill supposedly designed to ban TikTok that was introduced in the Senate would give the Commerce Secretary sweeping powers to crack down on tech.
Hmmmm………….. Is this the first salvo?
It is at least the second.
https://www.theverge.com/2022/10/7/23392860/biden-semiconductor-chips-intel-micron-china-ohio-science
https://www.bloomberg.com/news/articles/2023-03-10/biden-poised-to-further-tighten-us-chipmaking-exports-to-china#xj4y7vzkg
Thanks for the links Michael64.
Thank you for that information.
He has to. Deficit battle is looming. Cannot continue importing or investing globally. China us just a convenient target. With impkrts cisting more, Walmarts are closing stores in poorer areas as prices rise, sales and profits drop. Chinese sales to other markets are rising. Asia, Africa and South America. These are growing markets and US and Europe oversaturated.
This will hit poor snd muddle income population. Wealthy do not care.
The handful of Walmart closings (20 in 2023, bringing the number of Walmarts down to “only” 4,717) seems to be not in “poorer” areas, but in relatively affluent areas where people can afford to shop elsewhere.
“poor performing” … Bianca’s right, down market retail is feeling it, … along with Apple.
Allowing a pack of Thugs to loot businesses in major cities without consequences obviously makes the decisions to close much easier I would imagine.
Where we live, there was supposed to be a second Walmart constructed near a new high school. It has been put on hold now for about three years. There are 2 withing 10-15 minute driving distance.
Not all WalMart stores are the same. They vary greatly in size and in what they carry. They have varying formulas, for varying markets. What failed is formulas used for some market segments.
Nearest me for example, their formula seems to have been “replace K-Mart and Sears.” They did. Both went under. Then they expanded groceries and are taking on that competition.
But that store is very different from the much larger one out by my daughter’s place.
The subject of WalMart and Sam’s Club is huge, complex, and does not easily prove any one point about our economy.
Ahhh Mr (what day is it) Biden Sir…….If China retaliates and Limits China’s Investments in the US, who will buy your bonds?
And Mr (what day is it) Biden Sir…….what will happen to your investments in China? Oh you do not mean those corrupt investments….Gotya.
Smart move from Biden… NOT! But don’t worry. The Democrats are with him…. and so are the Republicans!
https://www.reuters.com/markets/asia/china-slips-away-treasuries-sticks-with-dollar-bonds-2023-02-22/#:~:text=Meanwhile%2C%20China's%20holdings%20of%20U.S.,the%20decline%20in%20Treasuries%20holdings.&text=%22Every%20holder%20of%20U.S.%20Treasuries%20in%202022%20saw%20significant%20valuation%20losses.
Oh happy day….
Ban TikTok? From Scheerpost: https://scheerpost.com/2023/04/17/tiktok-chinese-trojan-horse-is-run-by-state-department-officials/ We shall see.
He’s just worried about the upcoming BRIC currency that’s likely will be announced in August at their Durban meeting. We are going to “sanction” and reduce our investments in our usual futile attempts to stop the inevitable.
If you are interested there is an article her on why (so far at least) no one have managed to create/act as an alternative to the USD as a reserve currency.
And importantly:
https://carnegieendowment.org/chinafinancialmarkets/86878
All in all I’d say it’s an interesting read.
It appears to delve into the argument on the replacement of the dollar and an discussion of economic blocs. I can agree with parts (this discussion is evolving rapidly given BRICS) but this upcoming proposed currency seems to be planned as a competitor, not as an replacement.
There’s actually a lot of supposition that this may be a boon to domestic manufacturing given the dynamics of having China and India trading in a strong currency that isn’t being manipulated nearly as much as is China’s currency is (to make their products have an advantage).
This is a very fair point, I believe we exchanged some thoughts about the ECU/EURO yesterday – that is an example of a currency that has effectively partially replaced the USD as ‘reserve’ currency in trade between the members and to some degree in their trade with other countries which know that they will need the Euro to buy other things from EU.
The interesting bit as I saw it was the notion of ‘sucking’ up trade surpluses – not to mention the idea of which parties benefits and which pays for the USD to play this role.
Not completely sure that I understand what you are aiming at here, but if it is that having a common currency between the BRICS will benefit them through increasing the trade between them then I absolutely agree. Though to reap the full benefits of this they would need to either dispense with their own currency or peg them fairly fixed to the common currency.
If one creates a new currency, especially when it will involve several nations, you don’t manipulate its value as one would do to your own currency as China currently does.
This new currency sounds more like it will be more for trade than domestic use. Just removing the cost of conversion to trade in the dollar will see benifits for them and despite the obligatory upcoming “the sky is falling” stories it won’t be like that at all.
In fact it will likely lessen China’s economic power in some ways while raising India’s and Russia’s.
Quite right – to maximize the exchange between the participating countries they would do better by pegging their domestic currencies to the new one – like EU countries did to the ECU.
The benefits will be primarily by removing the risk of currency fluctuations – there is as I understand it very little cost of converting to USD, not more than there would be from e.g. Ruble to the new currency – each exchange costs a fee – thus to gain an advantage over the USD the new currency has to be accepted as legal tender in the participating countries – or have I missed some point about holding USD which would be different from holding the new currency?
How would this work if they did not peg the Renminbi to the new currency?
How would not being part of a new currency that many nations may trade in instead of turning towards just the Yuan not raise one’s stability in regards to their own currency?
With that increased “stability” does it not raise one’s status/power within a group such as BRICS especially when China’s currency has been the only real alternative to the dollar up to possibly the very near future?
As to “peg(ging)”; who knows? Communist money systems are just as sketchy as the Western ones in their own ways.
Those in charge will do whatever is best….
…..for themselves.
OK – I see how you meant it would work.
That need not be the case, if the new currency means that it is easier to move money about then it might very well lead to capital flight – as capital will seek out the place where there is the best return on investment.
Without a peg and if the new currency is not legal tender in the participating countries then the majority of the advantages of introducing a new currency is not realized – you may be able to spot what I’m missing, but the only advantage I see of such a currency would then to be potentially free of USD fluctuations and effectively the common holders of IoU – that benefit I guess split between the participating countries.
Why would it not be legal currency within these countries for trade? It will be “backed” just as modern currencies are.
You really are over thinking this while ignoring the myriad of stuff on the net that postulates how this may work
Lula Backs BRICS Currency to Replace Dollar in Foreign Tradehttps://www.bloomberg.com/news/articles/2023-04-13/lula-supports-brics-currency-to-replace-dollar-in-foreign-trade#xj4y7vzkg
Can BRICS De-dollarize the Global Financial System? https://www.cambridge.org/core/elements/can-brics-dedollarize-the-global-financial-system/0AEF98D2F232072409E9556620AE09B0
Analysts Weigh In on BRICS Currency as Tool to Face US Dollar-Based Sanctions https://news.bitcoin.com/analysts-weigh-in-on-brics-currency-as-tool-to-face-us-dollar-based-sanctions/
“Legal currency” and “legal tender” are not the same thing. You’re permitted to accept the former, and required to accept the latter.
Doesn’t matter.
Either you use what is available or you barter.
Arguing over definitions doesn’t really concern anyone at the store.
Michael64 mentioned whether or not X would be legal tender. You then asked why X wouldn’t be legal currency.
It’s like me suggesting that a car is blue, and you asking why it wouldn’t be a Toyota. It’s not “arguing about definitions,” it’s just noting that you seemed to have missed what he said and thought he said something else.
No it’s more you being hung up on language.
I’m sure he understood what I was attempting to say and he doesn’t seem to be getting hung up on tender vs. currency like you are. He uses “currency” in the discussion so it appears he muddles through himself without using tender all the time.
After all we are speaking about a possible competeing currency and what it may mean not whether “tender” or “currency” is the correct word to use in certain points in the disscussion.
That’s really what I’m interested in instead of this.
And you’re free to be interested in whatever you like, and to ignore what you’re not interested in.
For a common currency, “legal currency” versus “legal tender” would be an important distinction. If it was the latter, it would not just be permissible for use in trade but legally required to be accepted in trade.
Really, I don’t care.
He was asking if the new proposed currency would be like the Euro was in displacing the local currency and I replied, “Why would it not be legal currency within these countries for trade?” sure I could have added an “an” prior to legal to make it flow better but honestly to argue over word usage as you want to do is silly and not interesting compared to the one about a possible competitor to the dollar.
Don’t you have anything to offer on that topic other than correct word usage?
For the love of Pete.
You post pretty much anything you want to post here.
I post pretty much anything I want to post here.
If you don’t want to read what I post, why not just not read what I post instead of whining every time you don’t like what I post?
I do not come here to argue with someone acting like an editor who seems to want to focus on words instead of the topic I am discussing with others.
You are a smart guy and I would like to believe you have something more substantial to add to conversations than this.
What is your opinion on this upcoming conference in Durban and all this talk of a competing currency?
You have to have an opinion how that would impact sanctions to the bigger topics of how if Mexico along with Brazil starts conducting some or all of their trade not in the dollar nor their individual currencies.
I don’t just act like an editor, I am one, and have been one for several decades. But not here. Here I’m a commenter (and, only where the site’s rules are involved, moderator).
I don’t have an opinion on the Durban conference specifically.
I’m all for competing currencies. That will negatively impact ordinary Americans … but ordinary Americans have been living on the sugar high of “the dollar as global reserve currency” for decades at the expense of ordinary people elsewhere.
My strong preference would be for a competing non-government-controlled currency to carve out a role as a global reserve currency. But competing fiat is better than nothing.
Non-governmental controlled is more an academic discussion because “they” are not allowing it like it was invisioned (they are just chomping at the bit to track bit coin and the like aren’t they?)
But right now with this push away from the dollar into another currency is just another natural occurence just like as the British empire had the sun set on it and the Sterling lost it’s preeminence just like it’s happening to the dollar as we speak.
Fortunately, governments don’t have the choice of “allowing” or “not allowing” cryptocurrency. They’re as likely to be able to control it as they are to be able to snuff out the cultivation, exchange, and use of cannabis.
That’s the “theory” but not the practice. Perhaps the politicians won’t be successful in the quest to regulate but they sure want to.
US politicians are chomping at the bit to regulate and tax it and I’m pretty sure Putin’s new toy, the Bank of Russia’s central bank digital currency (CBDC), the digital ruble is going to be regulated quite intensely as only the Russians can do.
You can read stories in their news about people getting fines for buying more stuff than what the paycheck is able to (it’s assumed there is a revenue stream that taxes were avoided on) so despite them calling the fears that “real” rubles will be replaced with digital as “urban legends” you can safely assume they’ll not let it become a digital wild west without tracking and the like. https://www.coindesk.com/business/2023/02/17/bank-of-russia-to-pilot-cbdc-in-april/
So that is all you have to contribute….
Stuff we all learned years ago. Thank you for your help and I’ll try to use the correct word in the future because that is so important.
It’s of relatively little importance to those who don’t care. Which is why it’s fine if you just ignore it instead of perpetually whining about it.
Lol
Nothing about BRICS….
I took econ 101 decades ago
I’m really past definition discussions but if that is what you are into, go for it.
I’ve mentioned BRICS before in the context of emerging trade blocs and their implications. So? I don’t have to be obsessed with your obsession of the moment any more than you have to obsess over mine.
So you admit word usage is an obsession with you….
Got ya…lol.
Yes, clear and correct use of language does tend to be an obsession with me.
If you don’t like that, no problem. You’re perfectly free to ignore me and go on about your merry business. Or to continue doing what you’ve claimed multiple times now you “didn’t come here to do.” If you do the latter, you’re even free to blame me instead of yourself for your decision. No skin off my nose either way.
Sure if you want to play editor could you also watch out for punctuation too?
It really seems like small potatoes to worry about but I guess it’s important to you.
I’m on my phone sometimes, like now, and it’s hard to self edit a good screed at times….thanks
Because that is very seldom the case – you can in general only pay with the domestic currency – if there is no (believable) peg you otherwise run a very high risk of people ‘dumping’ the national currency (and capital flight).
Thanks for the links will look into it 🙂
Do you really believe BRICS is appearing to be going forth with this but their populations’ local currencies will be harmed in some manner?
That really does not seem to be a concern with those in charge nor is there anything but from the usual State Department funded hacks who will “report” what their sources give them.
That depends, EU went ahead with the Euro and many claimed that it did/does hurt some members, for the record I’m not one of those people, but I recognize that there are such opinions – part of the reasoning behind Brexit was that the Euro was benefitting the Germans at the cost of e.g. the Italians.
I guess what I am saying is that it is less straight forward and that there will (like in the US) be beneficiaries and people who are hurt (have to pay) – as it stands currently the Russians have severely limited access to financial movements across borders (currency control) so while that is in place they would not be joining a currency at least not in a way, which would allow their people free movement of capital.
I have not yet read the concerns from others on the project yet – I was reacting on the idea based on the difficulties experienced by other groups of nations having launched such projects. There has been talks about replacing the USD (completely or partially) since the 1970’ties – I’ve not been keeping up with these for a good long while, but acknowledging the situation is very different now, I am going to look into this idea.
The BRICS may have learned from these prior project and found a way that minimizes the costs for each participating member – but what is for sure is that such fairly dramatic projects with such large potentials do come with winners and losers – as in each member could win, but within each member there will be winners and losers.
This is not a critique of neither the BRICS nor the idea, it was merely me reflecting on the difficulties that this idea posed for any group of countries wanting to implement it. I think that the Euro has so far been a fairly beneficiary project for its members – not only increasing trading amongst members but also for trade between members and non members – I think that the BRICS could easily if they manage to handle the issues, face similar rewards – with other countries like e.g. Argentine and other (South American countries) wanting to join the arrangement.
Big government (of course) wants to get bigger.
, , . from NYTimes, Feb 9:
I used to respect this country. Even though there were actions taken against other nations by my government which I found reprehensible, there were at the same time political leaders who advocated peaceful resolution of conflicts and diplomacy instead of war. Today there is no evidence of belief in peaceful coexistence remaining in either political party.
Today both parties have adopted violence and intimidation as the first resort in what passes for foreign relations. I’m ashamed of these people and will not vote for anyone from either party again.
Ditto that OB1, count me in. These warmongering sons-a-btches can count me out!
Same here. It’s third party or nothing.
I came to the same conclusion …….. in the 1980’s.
Biden wants to destroy the West. He doesn’t want to go alone into the dark night. He wants to take us along.
Is Biden a closet Nazi?
Trump championed the idea of enforcing US sanctions on Iran by imposing secondary sanctions on businesses outside of Iran that did not 𝘢𝘭𝘴𝘰 impose sanctions on Iran. Biden put that idea on steroids by issuing edicts that impact trade with Russia, Syria, China, etc. Some of these edicts cause serious harm to foreign businesses. Biden doesn’t seem to care and, as far as I know, has not made any efforts to compensate them for lost sales.
What he’s doing here takes it a step further. He’s forbidding US companies from trading or investing in other foreign opportunities. The message is that American Business must answer to the State before they answer to their stockholders. That describes Fascism from an economist’s perspective.
It may already be too late. But the Constitution gives Congress the authority to regulate trade, not the President. Congress ought to take it back. There is also the matter of due process. This President, who is always talking about the rule of law, is behaving as if he, and he alone, shall decide who buys and who sells, without judicial oversight, or even the need to explain himself.
Yes.
He really does not seem to know that. Like many Nazis of the past, he does not see himself for what he is.
See the 1972 film Cabaret, with its song “Tomorrow Belongs to Me”. That’s Biden.
Because this is fascism. The Democrats are trying to sell us benign fascism: no individual freedoms, employers and property rights are inviolable. Speech is carefully controlled and censored to promote the State (in this case, the benign un-racism and respect of identity as brand of the Democrats as they let everything degrade.)
The Republicans are simply the slightly more fascist threat that the Democrats use to buy our consent in removing our rights and freedoms in exchange for the rights and freedoms of carefully cultivated identities that serve their politics first and foremost. The two parties thus work together to achieve a (relatively) bloodless control over a cowed people who are being taught that defending our own interests and rights is actually institutional racism.
All Biden knows or remembers is the cold war, which is why his sycophants have so little difficulty conning him into one clumsy tactic after another.
Meanwhile our nation and the world around us continues on its trajectory into oblivion as basic human needs and the state of the planetary catastrophe continue to worsen.
Abysmal but well said OB1.
Yeah, I don’t get these Democrats at all. Past Dems were limited by being the “honest”, lesser evil party that had to respond to popular disasters, even those effecting the poor.
These clowns have been open proponents of wealth concentration. Their handling of COVID and the economy and this war have all massively benefited the few at the expense of the many, and very openly.
The banks got bailed out and the Dems made sure big Pharma’s intellectual property bore maximal fruit while letting Covid run rampant through developing nations. They shut us all down in a way that mostly benefitted the already rich, and bailed out the average citizen to the absolute minimum. They passed “LANDMARK” environmental laws that accomplish almost nothing except more tax breaks for new cars for the rich (while making the grid they charge from even dirtier). Their Fed is openly antagonistic towards full unemployment WHICH IS ONE OF THEIR TOP MANDATES, trying to crash the employment market. At no point has this administration tried to seriously reduce the pain of working class Americans; giving one the sense that they view most poorer Americans as a threat or enemy – deplorable.
They used Covid as a political tactic, then declared it over as thousands still die every day. And their efforts to force the world into either financial hegemony or nuclear conflict is perhaps the most breathtakingly cynical political position I’ve ever witnessed.
I can’t vote for lesser evil if they aren’t going to be the lesser evil anymore!
Ditto that ZM, ditto that. I’m sick of all the bs. Either we, the American people, have true representation or we will need to figure something else out…
Our neocons think they won the Cold War, when in fact they only showed up to lose (waste from their own greed and egos) the potential advantages of the end of that era.
The opportunity cost wasted is beyond measure, and is all a post cold war failure.
Biden is a neocon of this sort. He is to the Cold War what Hunter Biden is to his Daddy.
Here is the plot. A evil villain realizes that he is near the end of his days.
Since he will not be alive to participate in the world and life, he does not want anyone else to exist after he passes on.
He recruits minions to help him destroy his empire and all other nations.
If it is a Hollywood feel good scrips; a hero should arises to battle the evil emperor and save America. Whoops, I mean the world.
For decades, China has been re-investing its “savings” into infrastructure and production. For a considerable period, its domestic savings rate was near 40%, as opposed to consumer spending on consumption.
As with the period of Stalin’s Five Year Plans, a key component was re-investment of domestic capital, rather than profit taking for consumption or export to foreign providers of capital.
US “investment” might be nice in some ways, but it is far from vital to Chinese success. We rate the US role too highly, an ego-centric error. The US role was never to be the major source of capital. In fact, limits on profit taking by US capital were a major sore point.
Apart from US capital investment, can the US keep the knowledge itself out of China?
Well, how did that work out with the far more specific, protected, and “vital” secrets of The Bomb and Stalin?
Amorphus “technology” knowledge of the whole sector of rapid advance worldwide seems far less likely to be kept secret from the big money of the organized state investor that is China.
Note, even the US still hopes to have China manufacture things of which it is kept ignorant. Yet much knowledge flows from the factory floor, back to the design team, in the most successful design work.
It won’t work. Investment is out of desire and need, not emotions. Biden is confused.