Yellens visit to China this week: the three major theme worthy of attention

Source: Wall Street Journal

Author: chris matthews

Janet Yellen, US Treasury Minister, will visit China this week to meet with senior Chinese government officials to try to repair US -China relations.Cracks are still the most important cooperative relationships in the global economy.

Yellen's trip is the latest operation of the Joe Biden government to strengthen the communication of the United States and China. Previously, the US President Biden and the Chinese President Xi Jinping held a meeting in November 2022.Yue also visited China.

For Yellen's visit to China on Thursday to Sunday, investors need to pay attention to the following three themes.

Semiconductor dispute

After the Wall Street Journal reported that the Bayeng government might expand its export ban on artificial intelligence (AI) technology, the company's previous surge in stock price was hit last week.

The above export ban may affect the chip specially created by Nvidia to comply with the previous chip export restrictions, and may also affect the sales of chips produced by some competitors such as ultra -micro -semiconductor (AMD) and Intel.

Collette Kress, chief financial officer of Nvidia, said last week that given the strength of Nvidia products overseas, the move will not have a direct substantial impact on the company's financial performance, but she said that in the long run, such limits in the long run, such restrictions"It will cause the US chip industry to permanently lose the opportunity to compete and lead one of the world's largest markets."

Beacon Advisors analyst Owen Tedford said in a recent report to customers: "Recently reported that the Chinese obtained related chips by smuggling and leased through cloud leases.Effectiveness. "

chip company Meiguang Technology will also become the focus of attention.The company said last month that about half of the income from Chinese customers may face risks after the Chinese government prohibits the country's key infrastructure operators from using Meiguang products.

In addition, the Biden government is considering new restrictions on investment in US companies. Some motivations come from the legislative operations of the two parties. The new bill may require the U.S. Department of Commerce to establish a censorship mechanism to identify that it may damage the United States.National Security Overseas Investment Transactions.

BTIG Policy Research Director Isaac Boltansky said that the Bayeng government's move marked the "significant steering" of US economic policies.He wrote in a research report on Sunday: "This will be born a new set of censorship procedures and continuous monitoring, so it may constitute a disadvantage, especially for the technology industry."

He also said that although the plan was initially targeted at the semiconductor industry, "our feeling is that over time, these preliminary restrictions will be used to build a broader investment framework."

At the same time, as a countermeasure, China has taken its own export restriction measures.The Ministry of Commerce of China announced on Monday that export control has been implemented from August 1st.These two minerals are semiconductor manufacturing and other advanced technology products.

Former Deputy Minister of Commerce Wei Jianguo said in an interview with China Daily on Tuesday that if the United States and other countries continue to pressure China with trade restrictions, the export control of 镓 and 锗 and related items "is just anti -anti -China anti -anti -export control.The beginning of the system ".

U.S. Industrial Policy

In a speech in April this year, Yellen criticized China to abandon the "market reform" that promotes the country's "amazing rise" in recent decades, and has adopted the policy of "more government -led by the government.This approach has weakened neighboring China and other countries around the world. "

But at the same time, the Bayeng government has preached its own economic policy. According to Bayeng last week, this is equivalent to making a "fundamental break" with the economic policy of the United States over the past 40 years.The government plays a greater role in economic development.

The chip bill (Chips) reached by the Democratic Party and the Republican Party and the Inflation Reduction Act in last year have helped the United States to create a new era of industrial policy. The US federal government has become the main partner among them.For semiconductor and electric vehicle manufacturing, investment subsidies are regarded as important industries that are significant to national security.

Yellen's visit to China may help to explain more clearly that the Bayeng government believes what is the limitations of this approach, and where is the boundary between the necessary investment and unfair industry subsidies.

Fix Sino -US relations

Although the US -China relations are tight, according to the data from the US Department of Commerce, last year, the trade trade between the two countries set a record of US $ 690 billion (S $ 933.9 billion), and the economy of the two countries was so closely intertwined.Solve all important cruxes through a visit.

22V Research's Chinese research director Michael Hirson stated in a report on Monday that controversial issues such as trade tariffs in Trump's era are matters determined by Congress and the Ministry of Commerce, so Yellen may not touch such typesquestion.

He wrote: "Yellen has a relatively low -key but still very important goal, that is, establish communication channels with a new team in the Chinese economy."

"Such dialogue will help reduce the possibility of misjudgment and misunderstandings. For example, in terms of providing economic and technical support to Russia in China, once China crosses the United States, it may bring major sanctions and export controls.Risk. "

He also believes that these communication channels between the United States and China may be "very beneficial" for the global economy and market, especially in the case of major macroeconomic impact.

He wrote: "If the pressure on China's economy will exacerbate in the future, the existence of these communication channels can make Yellen call (Chinese Deputy Prime Minister) to call (Chinese Deputy Prime Minister) He LifengYellen, it will be very important for reducing uncertainty in the global market. "