Finimize - 🇨🇳 China's been prepping

What’s going on here?

China’s been importing more chipmaking equipment than ever, in a bid to outsmart Western restrictions.

What does this mean?

By now it’s old news that the US is trying to put a damper on China’s tech ascent – working hand-in-hand with allies like the Netherlands and Japan to clamp down on the country’s ability to import key chipmaking equipment. And that game plan means that Chinese buyers of some key tools will have to apply for licenses in order to get their hands on the coveted tech goods. But China’s been taking steps to act before those restrictions come in: in short, it’s started stocking up. The numbers don’t lie: official customs data shows that the country’s imports of chip production tools shot up a chunky 70% in June and July from the same period last year, hitting a new record high.

Why should I care?

Zooming in: Rearguard and advance guard.

The split of unrestricted versus soon-to-be-restricted tools in China’s import haul isn’t clear, but it’s probably a decent mix of both. And that makes sense: by ramping up imports of unrestricted tools, China can double down on producing older chips, which are its mainstay and crucial for sectors like EVs and green tech. On the flip side, by hoarding the restricted tools before the ban kicks in, China’s buying time to either develop some equipment itself or, more realistically, to try and find alternative suppliers.

The bigger picture: Chip on their shoulder.

The US government might see these restrictions as necessary, but it’s American chip companies that’ll truly feel the pinch. See, China, whatever its issues, is a behemoth in the chip market – and much of that juicy business will be off-limits for US firms. Nvidia, the AI superstar, hammered this point home recently, warning about a “permanent loss” for US chipmakers in one of the world’s biggest markets.

What’s going on here?

Data out on Friday showed that British consumers regained their confidence this month.

What does this mean?

Consumer confidence is basically a fancy term for how ready folks are to open their wallets. And since consumer spending habits are a big factor in the health of the overall economy, this measure is kind of a big deal. That meant that it was an especially pleasant surprise when the UK’s consumer confidence index got a little boost this month – with households’ outlooks on their personal finances and economic prospects ticking up from July. And it stands to reason that they’re feeling chipper: after all, inflation fell to its lowest in over a year in July, meaning that wages are finally outpacing price rises. In a sentence, that means more pounds in Brits’ pockets – which is bound to put a pep in anyone’s step.

Why should I care?

The bigger picture: Not the time to count your chickens.

Besides a little blip in July, consumer confidence has been on a steady climb this year – and that chimes with the fact that the economy’s managed to dodge the recession that pesky forecasts keep predicting. But let’s hold off on the victory dance for now. Consumers are already grappling with rising rent and mortgage repayments, and it seems there’s even more to come: interest rates are expected to keep increasing, after all, with pundits predicting another hike next month.

Zooming out: No need for thermals.

Still, there will be a winter warmer for UK households: energy bills are set to drop for three months come October. That’s because the national energy price cap (which limits how much suppliers can charge for each unit) is set to fall by 7%. But – and there’s always a "but" – government support more generally is thinning out these days, so it’s anyone’s guess how households will actually fare when winter rolls around.