The Day at a Glance | October 10 2022

*Biden approves additional restrictions on chip and tech equipment exports towards China.

*The Central Bank of England will double its bond purchases to ease its liquidity problems.

*Production chains: Normalization is expected to occur in air and maritime transportation at a global level in 2023, but scarcity of raw materials could remain in place.

*Russia bombs Kyiv after Ukraine attacks bridge that connects Russia with Crimea.

Economic environment

Semiconductor trade restrictions. The Biden administration issued new rules on technology trade with China, which seeks to limit the Asian country`s capacity to develop its own industry of semiconductors, sophisticated weapons and supercomputers. The new measures will restrict the exportations of chips used to develop artificial intelligence and supercomputers in addition to more strict rules regarding the sale of chips to Chinese companies. Sales of machinery used for the production of advanced semiconductors are also banned. Additionally, the US administration added 31 Chinese companies and organizations to a list of “non verified” companies, which implies major obstacles for US suppliers to trade technology with said companies. This is the most aggressive action that the Biden administration has carried out in order to restrict Chinese technological and economic development – considered as a threat by the US. The economic and trade war between the US and China remains in place; it`s feared that these measures will not only affect China, but also global semiconductor production chains overall. China has condemned the US`s decision and it`s speculated that China will carry out retaliation measures. In September, US semiconductors company Nvidia warned that the implementation of greater restrictions could affect the company`s profits; Chinese electric vehicle company, Xpeng Inc, acknowledged that the escalation of restrictions will affect the development of the autonomous vehicle sector in China.

Facebook Comments