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China’s latest chip material export curbs to affect tech ties with US


China’s restriction of exports of some metals widely used in semi-conductors, electric vehicles and high-tech industries has ramped up a trade war with the United States and could potentially cause more disruption to global supply chains.
China’s commerce ministry said on Monday it would control exports of eight gallium products and six germanium products from August 1 to protect national security, a move analysts saw as a response to escalating efforts by Washington to curb China’s technological advances.

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Companies caught out by the abrupt news acted to secure sup-plies, with one US semiconductor wafer manufacturer saying it was applying for export permits to assure investors, and a China-based germanium producer saying enquiries from buyers came in overnight as prices surged.
“China has hit the American trade restrictions where it hurts,” said Peter Arkell, chairman of the Global Mining Association of China.
Jeffries analysts said timing of the measure raised questions about it being possibly directed at this week’s visit to Beijing by US Secretary of Treasury Janet Yellen and whether Washington would cancel the trip.
Some in the industry said they feared China could follow this with new restrictions on rare earth exports, after curbing shipments 12 years ago in a dispute with Japan. Rare earths are a group of metals used in EVs and military equipment and China is by far the world’s biggest producer.
“Gallium and germanium are just a couple of the minor metals that are so important for the range of tech products and China is the dominant producer of most of these metals. It is a fantasy to suggest that another country can replace China in the short or even medium term,” Arkell said.
China produces most of the world’s gallium and germanium. In 2022, top importers of China’s gallium products were Japan, Germany, and the Netherlands, news website Caixin said, citing customs data. Top importers of germanium products were Japan, France, Germany, and the United States, it said.

Export permits, disruption worries

US semiconductor wafer maker AXT Inc, which has manufacturing facilities in China, said on Monday its Chinese subsidiary Tongmei would apply for permits to keep exporting gallium and germanium substrate products from China.
“We are actively pursuing the necessary permits and are working to minimize any potential disruption to our customers,” said AXT Chief Executive Officer Morris Young.
A manager at a China-based germanium producer said his company had received several queries from buyers in Europe, Japan, and the United States hoping to stockpile product before the export controls take effect. The buyers were anticipating it could take as long as two months to obtain export permits.
“Offer prices in the domestic market and the export market have increased to 10,000 yuan ($1,380) per kg and over $1,500 per kg, respectively,” he said.
While the industry had expected to see some export controls for these metals, the timing had caught it by surprise, he said.
Some downstream users with long-term sales contracts “are vexed about a possible jump in raw material prices, as it raises their production costs and may cause them losses,” he said, declining to be named citing the sensitivity of the matter.
Government officials in Taiwan and South Korea, however, downplayed any disruption from the curbs. Taiwan Deputy Foreign Minister Roy Lee said he only expects a short-term impact.
South Korea’s industry ministry said in a statement the country had sufficient stockpiles of gallium while there were other sources of germanium.
Shares in some metal producers rose on Tuesday, with Yunnan Lincang Xinyuan Germanium Industry Co jumping 10 percent by the daily upper limit, and Yunnan Chihong Zinc & Germanium Co climbing 7 percent.
Shares of Australian rare earths producers also rallied as inves-tors placed bets that more curbs could be imposed. Shares in Lynas Rare Earths, the world’s largest producer of rare earths out-side of China, rose 4 percent.

Escalation risk

China’s controls come as Washington mulls new restrictions on the shipment of high-tech microchips to China, following a series of curbs in recent years.
The United States and the Netherlands are also expected to further restrict sales of chipmaking equipment to China’s chipmakers this summer, part of efforts to prevent their technology from being used by China’s military.
Beijing last made a retaliatory move against US pressure on chips in May, when it banned some domestic sectors from purchasing products from US memory chipmaker Micron.
Jefferies analysts said they saw the export controls as China’s second and bigger countermeasure after the Micron ban.
“The risk of a rapid escalation of US-China tension is not small,” they said.
“If this action doesn’t change the US-China dynamics, more rare earth export controls should be expected.”

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Abu Dhabi Overtakes Oslo for Sovereign Wealth Fund Capital in Global SWF’s First City Ranking

Today, industry specialist Global SWF published a special report announcing a new global ranking of cities according to the capital managed by their Sovereign Wealth Funds (SWFs). The findings show that Abu Dhabi is the leading city that manages the most SWF capital globally, thanks to the US$ 1.7 trillion in assets managed by its various SWFs headquartered in the capital of the UAE. These include the Abu Dhabi Investment Authority (ADIA), Mubadala Investment Company (MIC), Abu Dhabi Developmental
Holding Company (ADQ), and the Emirates Investment Authority (EIA). Abu Dhabi now ranks slightly above Oslo, home to the world’s largest SWF, the Government Pension Fund (GPF), which manages over US$ 1.6 trillion in assets. Abu Dhabi and Oslo are followed by Beijing (headquarters of the China Investment Corporation), Singapore (with GIC Private and Temasek Holdings), Riyadh (home to the
Public Investment Fund), and Hong Kong (where China’s second SWF, SAFE
Investment Corporation, operates from). Together, these six cities represent two thirds
of the capital managed by SWFs globally, i.e., US$ 12.5 trillion as of October 1, 2024.
For the past few decades, Abu Dhabi has grown an impressive portfolio of institutional
investors, which are among the world’s largest and most active dealmakers. In addition
to its SWFs, the emirate is home to several other asset owners, including central banks,
pension funds, and family offices linked to member of the Royal Family. Altogether, Abu
Dhabi’s public capital is estimated at US$ 2.3 trillion and is projected to reach US$ 3.4
trillion by 2030, according to Global SWF estimates.
Abu Dhabi, often referred to as the “Capital of Capital,” also leads when it comes to
human capital i.e., the number of personnel employed by SWFs of that jurisdiction, with
3,107 staff working for funds based in the city.
Diego López, Founder and Managing Director of Global SWF, said: “The world ranking
confirms the concentration of Sovereign Wealth Funds in a select number of cities,
underscoring the significance of these financial hubs on the global stage. This report
offers valuable insights into the landscape of SWF-managed capital and shows how it is
shifting and expanding in certain cities in the world.”

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AM Best Briefing in Dubai to Explore State of MENA Insurance Markets; Panel to Feature CEOs From Leading UAE Insurance Companies

AM Best will host a briefing focused on the insurance markets of the Middle East and North Africa (MENA) on 20 November 2024, at Kempinski Central Avenue in Dubai.
At this annual regional market event, senior AM Best analysts and leading executives
from the (re)insurance industry will discuss recent developments in the MENA region’s
markets and anticipate their implications in the short-to-medium term. Included in the
programme will be a panel of chief executive officers at key insurance companies in the
United Arab Emirates: Abdellatif Abuqurah of Dubai Insurance; Jason Light of Emirates
Insurance; Charalampos Mylonas (Haris) of Abu Dhabi National Insurance Company
(ADNIC); and Dr. Ali Abdul Zahra of National General Insurance (NGI).
Shivash Bhagaloo, managing partner of Lux Actuaries & Consultants, will his present
his observations in an additional session regarding implementation of IFRS 17 in the
region. The event also will highlight the state of the global and MENA region
reinsurance sectors, as well as a talk on insurance ramifications stemming from the
major United Arab Emirates floods of April 2024. The programme will be followed by a
networking lunch.
Registration for the market briefing, which will take place in the Diamond Ballroom at the
Kempinski hotel, begins at 9:00 a.m. GST with introductory comments at 9:30 a.m.
Please visit www.ambest.com/conference/IMBMENA2024 for more information or to
register.
AM Best is a global credit rating agency, news publisher and data analytics
provider specialising in the insurance industry. Headquartered in the United
States, the company does business in over 100 countries with regional offices in
London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.

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Future of Automotive Mobility 2024: UAE Leads the Charge in Embracing Digital Car Purchases and Alternative Drivetrains

-UAE scores show highest percentage among the region in willingness to purchase a car
completely online
– Openness to fully autonomous cars has grown to 60% vs previous 32%.
– More than half of UAE respondents in the survey intend to move to hybrid cars during
next car purchase, while less than 15% intend to move to fully electric car.
– UAE sees strong use of new mobility services such as ride-hailing (Uber, Careem, Hala
Taxi)
– The perceived future importance of having a car is not only increasing in UAE but is
higher than any other major region globally, even China

Arthur D. Little (ADL) has released the fourth edition of its influential Future of Automotive Mobility (FOAM) report, presenting a detailed analysis of current and future trends in the automotive industry. This year’s study, with insights from over 16,000 respondents across 25 countries, includes a comprehensive focus on the United Arab Emirates (UAE). The report examines car ownership, electric vehicles,
autonomous driving, and new mobility services within the UAE.

“The UAE is at the forefront of automotive innovation and consumer readiness for new mobility
solutions,” said Alan Martinovich, Partner and Head of Automotive Practice in the Middle East
and India at Arthur D. Little. “Our findings highlight the UAE’s significant interest in
transitioning to electric vehicles, favorable attitudes towards autonomous driving technologies,
and a strong inclination towards digital transactions in car purchases. These insights are critical
for automotive manufacturers and policymakers navigating the evolving landscape of the UAE
automotive market.”
Key Findings for the UAE:
1. Car Ownership:
o Over half of UAE respondents perceive that the importance of owning a car is
increasing, with the study showing the increase higher than any other major
region, including China.
o Approximately 80% of UAE respondents expressed interest in buying new (as
opposed to used) cars, above Europe and the USA which have mature used
vehicle markets

2. Shift to Electric and Hybrid Vehicles:
o While a high number of UAE respondents currently own internal combustion
engine (ICE) vehicles, more than half intend that their next vehicle have an
alternative powertrain, with significant interest in electric and plug-in hybrid
(PHEV) options. Less than 15% plan to opt for pure battery electric vehicles
(BEVs).

3. Emerging Mobility Trends:

o Ride-hailing services are the most popular new mobility option among UAE
residents, with higher usage rates than traditional car sharing and ride sharing.
The study indicates a strong openness to switching to alternative transport modes
given the quality and service levels available today.

4. Autonomous Vehicles:
o UAE consumers are among the most open globally to adopting autonomous
vehicles, with a significant increase in favorable attitudes from 32% in previous
years to 60% this year versus approximately 30% in mature markets. Safety
concerns, both human and machine-related, remain the primary obstacles to
broader adoption.

5. Car Purchasing Behavior and Sustainability:
o The internet has become a dominant channel for UAE residents throughout the car
buying process, from finding the right vehicle to arranging test drives and closing
deals. UAE car buyers visit dealerships an average of 3.9 times before making a
purchase, higher than any other region in the world, emphasizing the need for
efficient integration of online and offline experiences.
o Upwards of 53% of respondents from the region would prefer to ‘close the deal’
and complete the purchase of their car online, which is the highest for any region
in the world.
o Sustainability is a key factor cited by UAE consumers as influencing car choice.
The UAE scored among the top half of regions, highlighting the importance of
environmental considerations.

“Our study confirms the promising market opportunities for car manufacturers (OEMs) and
distributors in the UAE” commented Philipp Seidel, Principal at Arthur D. Little and co-Author
of the Global Study. “Consumers in the Emirates show a great and increasing appetite for cars
while being among the most demanding globally when it comes to latest vehicle technologies
and a seamless purchase and service experience.”
The comprehensive report, “The Future of Automotive Mobility 2024” by Richard Parkin and
Philipp Seidel, delves into global automotive trends and their impact on various regions,
including the UAE. This study is an invaluable tool for industry stakeholders seeking to navigate
and leverage the dynamic changes driving the future of mobility.

 

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