US-China Market Watch: Biden-Xi Summit, Didi’s Delisting from the NYSE, and US Chip Investment

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Biden-Xi holds a virtual summit to discuss bilateral cooperation

After three and a half hours of virtual talks, President Biden and Chinese President Xi Jinping committed further collaboration on bilateral relations. But neither side gave concrete initiatives. Both sides reaffirmed their top concerns in separate statements. The U.S. expressed alarm about China’s claimed human rights abuses and trade policies. At the same time, China criticized the U.S. for its perceived alliance with Taiwan as divisive.

President Biden recognized Beijing’s “one-China” policy during the call, in which the U.S. does not recognize Taiwan as a separate country from mainland China. However, in November, two bipartisan congressional delegations travelled to Taiwan to show “unanimous, resolute support for Taiwan-US relations.” The decision to strengthen ties with the island comes as the U.S. seeks to shore up support in the Indo-Pacific area as China’s influence increases.

China makes the digital yuan more connected

According to the People’s Bank of China (PBOC), China would work to “enhance the e-CNY ecosystem” by connecting the digital yuan with mobile payment apps. (e-CNY is the official name of the digital yuan). The PBOC will also create a management system for the e-CNY based on how cash and bank accounts are maintained to increase efficiency, privacy, and anti-counterfeiting capabilities.

China has been testing its digital currency since late 2020, and it is one of the pioneers in the field. According to a central bank official, 140 million people have opened “wallets” for the e-CNY, making $9.7 billion in transactions.

Didi Global to delist from NYSE

Due to national security concerns about sensitive data, Chinese regulators are reportedly urging Didi Global to delist from the New York Stock Exchange (NYSE). Didi controls China’s largest ride-hailing app. According to Bloomberg, China’s Cyberspace Administration has urged Didi executives to develop a delisting strategy that the government must approve. Didi said on Weibo in early December that it would begin delisting from the NYSE “immediately” and begin preparations for a Hong Kong listing.

Despite regulators ‘ concerns about cybersecurity, Didi had gone ahead with its initial public offering on the New York Stock Exchange in June. Beijing launched a cybersecurity examination of Didi shortly after its IPO. As part of a crackdown on its local internet firms. According to Bloomberg, if this precedent is set, the government may be forced to delist other digital businesses that handle sensitive data and have long-standing international listings. Such as Alibaba and According to Bloomberg, currently, unlisted companies hoping to list in the United States will most likely be unable to do so.

Aside from Didi, a Chinese regulatory official claims that the country collaborates with U.S. authorities to avoid Chinese businesses being delisted from U.S. stock markets. President Donald Trump signed the Holding Foreign Companies Accountable Act into law in December 2020. Intending to remove Chinese companies from stock exchanges if they fail to meet U.S. auditing standards.

The U.S. to increase investment in chip and semiconductor manufacturing

A global chip scarcity has prompted an increase in semiconductor manufacturing investment in the United States and worldwide. Among the world’s biggest chipmakers, Intel, Samsung, and Taiwan Semiconductor Manufacturing have invested in American manufacturing. The House is also considering a bill that would provide $52 billion in direct subsidies to semiconductor manufacturers. The Senate enacted the law in June 2021.

Despite accounting for almost half of the $464 billion semiconductor sector, the United States currently produces roughly 12% to 13% of worldwide semiconductor manufacturing. Taiwan, China, South Korea, and Japan make almost three-quarters of all semiconductors.

The Biden administration welcomed Samsung’s investment in Texas. Which has declared that it is working with Congress, friends, and partners to increase manufacturing capacity in the United States. A Wall Street Journal investigation contributed to some of this. Which discovered that American companies have been increasing their investment in China’s semiconductor industry from 2017 to 2020. Just as the competition for chip domination between the two countries heats up.

The future of Hollywood remains in flux in China

Sony’s “Venom: Let There Be Carnage,” another Hollywood movie, is still waiting for a Chinese release date. The absence of information about a possible release date could be due to star Tom Hardy’s past comments on China. Hundreds of Chinese forum users deemed them “rude” and “insulting.”

The upcoming fourth film of the Keanu Reeves-led Matrix trilogy, “The Matrix Resurrections,” has been approved for release in China. Though there is no set release date. There’s even talk of a Chinese release for “Spider-Man: No Way Home. And making it the first Phase Four Marvel film to hit the big screen on the mainland.

The China Film Administration unveiled its 14th Five-Year Plan for Chinese film development. Which includes raising the number of screens to 100,000 by 2025, marketing 10 domestic tentpole films each year. And becoming a “strong film power” by 2035.

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