11/08/2025

BIZ & FINANCE MONDAY | AUG 11, 2025

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China’s July factory-gate prices miss forecast

Beijing wants Washington to relax semicon

export controls: FT LONDON: China wants the United States to ease export controls on chips critical for artificial intelligence as part of a trade deal before a possible summit between Presidents Donald Trump and Xi Jinping, the Financial Times reported yesterday. Chinese officials have told experts in Washington that Beijing wants the Trump administration to relax export restrictions on high-bandwidth memory chips, the newspaper reported, citing unnamed people familiar with the matter. The White House, State Department and China’s Foreign Ministry did not immediately respond to requests for comment on the report. HBM chips, which help perform data-intensive AI tasks quickly, are closely watched by investors due to their use alongside AI graphic processors, particularly Nvidia’s. The FT said China is concerned because the US HBM controls hamper the ability of Chinese companies such as Huawei to develop their own AI chips. Successive US administrations have curbed exports of advanced chips to China, looking to stymie Beijing’s AI and defence development. While this has impacted US firms’ ability to fully address booming demand from China, one of the world’s largest semiconductor markets, it still remains an important revenue driver for American chipmakers. – Reuters Nvidia H20 chips not safe for China, state media claims BEIJING: Nvidia’s H20 chips pose security concerns for China, a social media account affiliated with China’s state media said yesterday, after Beijing raised concerns over backdoor access in those chips. The chips are also not technologically advanced or environmentally friendly, the account, Yuyuan Tantian, which is affiliated with state broadcaster CCTV, said in an article published on WeChat. “When a type of chip is neither environmentally friendly, nor advanced, nor safe, as consumers, we certainly have the option not to buy it,” the article concluded. Nvidia did not immediately respond to a request for comment. H20 artificial intelligence chips were developed by Nvidia for the Chinese market after the US imposed export restrictions on advanced AI chips in late 2023. China’s cyberspace watchdog said on July 31 that it had summoned Nvidia to a meeting, asking the US chipmaker to explain whether its H20 chips had any backdoor security risks – a hidden method of bypassing normal authentication or security controls. Nvidia later said its products had no “backdoors” that would allow remote access or control. In its article, Yuyuan Tantian said Nvidia chips could achieve functions including “remote shutdown” through a hardware “backdoor”. Yuyuan Tantian’s comment followed criticism against Nvidia by People’s Daily, another Chinese state media outlet. In a commentary earlier this month, People’s Daily said Nvidia must produce “convincing security proofs” to eliminate Chinese users’worries over security risks in its chips and regain market trust. – Reuters

0.8% in July from a year earlier, the highest in 17 months. Food prices fell 1.6%, following a 0.3% decline in June. Extreme weather added to the economic strain, with sweltering heat gripping much of China’s eastern seaboard last month and heavier-than-usual downpours lashing the country with the East Asian monsoon stalling over its north and south. On a monthly basis, the CPI edged up 0.4%, against a 0.1% drop in June and exceeding forecasts for a 0.3% rise. “Nonetheless it is still unclear if this is the end of deflation in China,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “The property sector has not stabilised. The economy is still supported more by external demand than domestic consumption. “The labour market remains weak,” he said. – Reuters

Xing Zhaopeng, senior China strategist at ANZ, pointed to improvements in month-on-month PPI and year-on-year core CPI. He expects “anti-involution” policy measures – aimed at curbing disorderly competition in sectors like autos – to begin lifting year-on-year PPI from August. Still, other analysts remain cautious, noting that without demand-side stimulus or reforms to improve people’s welfare, the measures may have limited impact on final demand. A prolonged housing downturn and fragile trade relations with the US also continue to weigh on consumer spending and factory activity. China’s consumer price index (CPI) was flat year-on-year in July, compared with a 0.1% rise in June, NBS data showed, beating a Reuters poll forecast of a 0.1% slide. Core inflation, which excludes volatile food and fuel prices, was

o Domestic demand needs to pick up, analysts say

BEIJING: China’s producer prices fell more than expected in July, while consumer prices were unchanged, underscoring the impact of sluggish domestic demand and persistent trade uncertainty on consumer and business sentiment. Factory-gate prices have been declining for more than two years, and Saturday’s data suggest early-stage efforts to tackle price competition have yet to yield significant results. Deflationary pressures have prompted Chinese authorities to address overcapacity in key industries. However, the latest round of industrial restructuring appears to be a pared-down version of the sweeping supply-side reforms

launched a decade ago that were pivotal in ending a deflationary spiral. The producer price index (PPI) fell 3.6% year on year in July, National Bureau of Statistics (NBS) data showed on Saturday, missing economists’ forecast of a 3.3% slide and matching the near two-year low recorded in June. Extreme weather and global trade uncertainties contributed to price declines in some industries, NBS chief statistician Dong Lijuan said in a statement. However, on a month-on-month basis, PPI shrank 0.2%, improving from June’s 0.4% drop. Despite the headline figures, some analysts see signs of easing deflationary pressure.

Chinese-made cars are seen on the dock before being loaded onto a ship at the port in Lianyungang yesterday. – AFPPIC

Best Buy weighs boosting India headcount

CHENNAI: US retailer Best Buy is weighing the expansion of its India headcount to primarily add more digital and technology roles, Nithya Subramanian, senior director, data & AI COE, told Reuters. Best Buy employs around 350 people at its global capability centre in Bengaluru, better known as “India’s Silicon Valley”. That headcount could grow to approximately 500 over the next few months, Subramanian said on

Best Buy operates more than 1,000 stores in the US and Canada, where it employs over 85,000 people. It does not have retail operations in India. Another US retailer, Costco Wholesale, is gearing up to open its first India GCC, sources told Reuters. India’s GCC market is expected to reach between US$99 billion and US$105 billion by 2030, from US$64.6 billion in fiscal 2024, a report by industry body Nasscom and consulting firm Zinnov said. – Reuters

functions,” Subramanian said. Best Buy, known for selling electronic items such as laptops, kitchen appliances and cameras, is looking to hire AI engineers, software engineers and product managers in India, according to its LinkedIn page. “Even if you look at the global strength, I think we are growing leaps and bounds in India,” Subramanian said, noting that the Bengaluru office is Best Buy’s largest tech hub.

the sidelines of an event in Chennai. Many global companies have been setting up offices or boosting their presence in India to tap its growing talent pool. GCCs have been evolving into high-value innovation hubs from low-cost back offices in recent years. They now support their parent firms in vital functions including operations, finance, and research and development. “We will be hiring across the