Економіка

The Biden administration on Friday published a sweeping set of export controls, including a measure to cut China off from certain semiconductor chips made anywhere in the world with U.S. tools, vastly expanding its reach in its bid to slow Beijing’s technological and military advances. 

The rules, some of which go into effect immediately, build on restrictions sent in letters earlier this year to top toolmakers KLA Corp., Lam Research Corp. and Applied Materials Inc., effectively requiring them to halt shipments of equipment to wholly Chinese-owned factories producing advanced logic chips. 

The raft of measures could amount to the biggest shift in U.S. policy toward shipping technology to China since the 1990s.  

If effective, they could set China’s chip manufacturing industry back years by forcing American and foreign companies that use U.S. technology to cut off support for some of China’s leading factories and chip designers.

Cooperation needed 

In a briefing with reporters on Thursday previewing the rules, senior government officials said many of the measures sought to prevent foreign firms from selling advanced chips to China or supplying Chinese firms with tools to make their own advanced chips. They conceded, however, that they have not yet secured any promises that allied nations will implement similar measures and that discussions with those nations are ongoing. 

“We recognize that the unilateral controls we’re putting into place will lose effectiveness over time if other countries don’t join us,” one official said. “And we risk harming U.S. technology leadership if foreign competitors are not subject to similar controls.” 

The expansion of U.S. powers to control exports to China of chips made with U.S. tools is based on a broadening of the so-called foreign direct product rule. It was previously expanded to give the U.S. government authority to control exports of chips made overseas to Chinese telecom giant Huawei Technologies Co. Ltd. and later to stop the flow of semiconductors to Russia after its invasion of Ukraine. 

On Friday, the Biden administration applied the expanded restrictions to China’s IFLYTEK, Dahua Technology and Megvii Technology, companies added to the entity list in 2019 over allegations they aided Beijing in the suppression of its Uyghur minority group. 

The rules published on Friday also block shipments of a broad array of chips for use in Chinese supercomputing systems.  

The rules define a supercomputer as any system with more than 100 petaflops of computing power within a floor space of 6,400 square feet, a definition that two industry sources said could also hit some commercial data centers at Chinese tech giants. 

U.S. Senate Democratic leader Chuck Schumer welcomed the announcement, arguing the rules would “protect our country’s innovations from China’s predatory actions.” 

The Semiconductor Industry Association, which represents chipmakers, said it was studying the regulations and urged the United States to “implement the rules in a targeted way – and in collaboration with international partners – to help level the playing field.” 

‘Unverified list’

Earlier on Friday, the United States added China’s top memory chipmaker YMTC and 30 other Chinese entities to a list of companies that U.S. officials cannot inspect, ratcheting up tensions with Beijing and taking aim at a firm that has long troubled the Biden administration. 

The “unverified list” is a potential precursor to tougher economic blacklists, but companies that comply with U.S. inspection rules can come off the list. On Friday, U.S. officials removed nine such firms, including a unit of China’s Wuxi Biologics, which makes ingredients for AstraZeneca Plc’s COVID-19 vaccine. 

The new regulations will also severely restrict export of U.S. equipment to Chinese memory chip makers and formalize letters sent to Nvidia Corp. and Advanced Micro Devices Inc. restricting shipments to China of chips used in supercomputing systems that nations around the world rely on to develop nuclear weapons and other military technologies. 

Reuters was first to report key details of the new restrictions on memory chip makers, including a reprieve for foreign companies operating in China and the moves to broaden restrictions on shipments to China of technologies from KLA, Lam, Applied Materials Nvidia and AMD.
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The tumultuous saga of Elon Musk’s on-again, off-again purchase of Twitter took a turn toward a conclusion Tuesday after the mercurial Tesla CEO proposed to buy the company at the originally agreed-on price of $44 billion. 

Musk made the proposal in a letter to Twitter that the company disclosed in a filing Tuesday with the U.S. Securities and Exchange Commission. It came less than two weeks before a trial between the two parties was scheduled to start in Delaware. 

In a statement, Twitter said it intends to close the transaction at $54.20 per share after receiving the letter from Musk. 

Trading in Twitter’s stock, which had been halted for much of the day pending release of the news, resumed late Tuesday and soared 22% to close at $52. 

Musk’s proposal is the latest twist in a high-profile saga involving the world’s richest man and one of the most influential social media platforms. Much of the drama has played out on Twitter itself, with Musk — who has more than 100 million followers — lamenting that the company was failing to live up to its potential as a platform for free speech. 

A letter from Musk’s lawyer dated Monday and disclosed by Twitter in a securities filing said Musk would close the merger signed in April, provided that the Delaware Chancery Court “enter an immediate stay” of Twitter’s lawsuit against him and adjourn the trial scheduled to start October 17. 

By completing the deal, Musk essentially gave Twitter what it was seeking from the court — “specific performance” of the contract with Musk, meaning he would have to go through with the purchase at the original price. The contract Musk signed also has a $1 billion breakup fee. 

Eric Talley, a law professor at Columbia University, said he’s not surprised by Musk’s turnaround, especially ahead of a scheduled deposition of Musk by Twitter attorneys starting Thursday that was “not going to be pleasant.” 

“On the legal merits, his case didn’t look that strong,” Talley said. “It kind of seemed like a pretty simple buyer’s remorse case.” 

If Musk were to lose the trial, the judge could not only force him to close the deal but also impose interest payments that would have increased its cost, Talley said. 

What did surprise Talley is that Musk doesn’t appear to be trying to renegotiate the deal. Even a modest price reduction might have given Musk a “moral victory” and the ability to say he got something out of the protracted dispute, Talley said. 

Neither Twitter nor attorneys for Musk responded to requests for comment Tuesday. 

Musk has been trying to back out of the deal for several months after signing on to buy the San Francisco company in April. Shareholders have already approved the sale, and legal experts say Musk faced a huge challenge to defend against Twitter’s lawsuit, which was filed in July. 

Musk claimed that Twitter undercounted the number of fake accounts on its platform, and Twitter sued when Musk announced the deal was off. 

Musk’s argument largely rested on the allegation that Twitter misrepresented how it measures the magnitude of “spam bot” accounts that are useless to advertisers. Most legal experts believe he faced an uphill battle to convince Chancellor Kathaleen St. Jude McCormick, the court’s head judge, that something changed since the April merger agreement that justifies terminating the deal. 

Legal experts said Musk may have anticipated that he would lose. Things haven’t been going well for him in court recently, with the judge ruling more frequently in Twitter’s favor on evidentiary matters, said Ann Lipton, an associate law professor at Tulane University. The judge denied several of Musk’s discovery requests, Lipton said. 

It’s also possible that Musk’s co-investors in the deal were starting to get nervous about how the case was proceeding, she said. 

Musk’s main argument for terminating the deal – that Twitter was misrepresenting how it measured its “spam bot” problem – also didn’t appear to be going well as Twitter had been working to pick apart Musk’s attempts to get third-party data scientists to bolster his concerns. 

Mysteriously, neither Musk nor Twitter CEO Parag Agrawal have written anything about the deal on Twitter. 

If the deal does go through, Musk may be stuck with a company he damaged with repeated statements denouncing fake accounts, Susannah Streeter, senior markets analyst for Hargreaves Lansdown in the United Kingdom, wrote in an investor note. 

“This is an important metric considered to be key for future revenue streams via paid advertising or for subscriptions on the site, and his relentless scrutiny of Twitter’s figures over the last few months is likely to prompt questions from potential advertising partners,” she wrote. 

 
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Google has ended its Google Translate service in mainland China, citing “low usage” of one of its flagship products by mainland China users.

The move surprised users, who said they first noticed not being able to access the function over the weekend.

“The Google Translate mobile app was also discontinued a year ago in 2021,” a Google spokesperson told VOA on Monday in response to a request for further details on the company’s decision.

The translation service had been available to mainland Chinese users since 2017.

While The Associated Press reported Monday that “it is not clear how many users were using Google Translate in China,” the South China Morning Post cited an international data tracking company’s figure of 53.5 million visits to the platform in the month of August alone.

AP noted that “the translation feature built into the Google Chrome browser also no longer functions for users in China.”

Wei Jingsheng, a leading Chinese dissident living in exile in the United States, told VOA in a phone interview Monday that in his view, Google has been trying to put on a “balancing act” — maintaining its reputation and credibility as a global internet giant operating around the world while finding a space to operate in the highly restrictive environment in China.

“It is safe to anticipate that the company is constantly under pressure from the Chinese government to meet its demands,” Wei told VOA.

“We don’t know what exactly lay behind Google’s decision to pull its translation service from China. Fifty-three-point-five million is not a small number,” he said, referring to the figured quoted by South China Morning Post.

Difficult foothold

Google said its mission is to “organize the world’s information and make it universally accessible and useful.” But as various media have reported, the California-based internet giant’s path to spreading its wings in mainland China over the past two decades has not been smooth.

The company pulled its search engine from the Chinese market in 2010 after the company became unwilling to abide by China’s censorship rules, AP reported on Monday.

Chinese platforms must “strictly” abide by Chinese authorities’ censorship rules and “censor keywords and topics the authorities deem politically sensitive,” AP said.

AP added that China later moved to block other Google services such as Gmail and Google Maps and noted that Google was not alone in being blocked or otherwise restricted. Chinese users are also not allowed to have Facebook accounts.

Media outlets including TechCrunch — which was the first to report Google’s shutdown of the translation platform — noted that Google’s decision came two weeks before the 20th National Congress of the Chinese Communist Party, scheduled to begin on October 16.

“The Chinese government has previously blocked Google services around major political events and politically sensitive anniversaries like that of the Tiananmen Square massacre,” the online publication of high-tech news said.

Google did not respond to VOA’s question about any potential connection between the translation service being discontinued and the Communist Party Congress.

Although China boasts the world’s largest internet market, when it comes to political topics, Chinese authorities are known to impose strict limitations as to what information Chinese citizens can access or have the freedom to discuss.

Official versions of political events like the upcoming Communist Party Congress are routinely disseminated from national media down to provincial, city, county, township and village levels through a vast network of state media.

Wei explained that Chinese citizens often turn to foreign sources to get a fuller picture of what goes on behind the scenes at the Congress and other news about their own country, due to a lack of trust in official media.

“They can just copy and paste foreign-language text” and get it translated into their native language with Google Translate, he said.

“People often feel that there’s better privacy protection when they use Google and other foreign companies’ products,” Wei added, since Chinese domestic companies are uniformly obligated to comply with government requests for user information.

State institutions taking notice

Although Google Maps and now Google Translate are not accessible to ordinary Chinese users, Chinese state institutions, including state media, have been paying attention to Google’s capacity.

On April 18, two months into Russia’s invasion of Ukraine, People’s Daily Online, one of China’s leading state media, posted on Weibo — a Twitter- and Instagram-like social platform — a China Central Television report that Google Maps provided satellite imaging of “all of Russia’s military and strategic assets with the highest definition.”

That post received 123,000 “likes,” and was reposted more than 5,200 times. A commentator under the name of “boyfriend of the nation” wrote, “Look everyone, this is what we will encounter later on.”
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