“China Bans Nvidia Chip Sales, Fueling Alibaba and Huawei’s AI Push, As Tensions with The US Escalate Into a High-Stakes Proxy Trade War.”, – WRITE: www.fxempire.com
Recent Private Sector Pmi Surveys have Revealed Two Critical Themes, Pressuring Beijing to Introduce Fresh Policy Measures to Bolster the Economy. Private Sector Firms Face Intensify Competition Amid Rising Costs. FIRMS Are Cutting Selling Prices, Despite Rising Input Costs, SQueezing Margins. Margin SQueezes Are Forcing Companies to Cut Staff to Protect Profitability.
Private Sector Firms Cut Staffing Levels in August, With Manual Manualurs Reducing HeadCount for the Fifth Consecutive MONT. Notably, Manufacturars Reported Weaker External Demand for the Fifth Month in A Row. Service Sector Firms Also Reported Margin Pressures, Leading to Job Cuts.
Labor Market Concerns Mount August’s Job Cuts Pushed Unemployment Higher, Weighting On Private Consumption. UNEMPLOYMENT ROSE FROM 5.2% IN JULY TO 5.3% IN AUGUST, WHILE RETAIL Sales Increased 3.4% Year-on-Year (March: 6.4%). Crucialyly, Youth Unemployment (16-24 Year-Olds, Excluding College Students) Increated From 17.8% in July to 18.9%, The Highest Level Since December 2023. 7.2%.
Despite The Doom and Gloom, Goldman Sachs Raised ITS 2025 Growth Forecast for China from 4.6% to 4.8%, Edging Closer to the 5% GDP Growth Target.
WHY IS GOLDMAN SACHS UPBEAT About China’s Economic Outlook?
US Tariffs and Levies on Transhipments Through Third Countries have not Deterred China from Testing the Trump Adminstation’s Limits.
Beijing escalates Proxy Trade War On Wednesday, September 17, Beijing Targetd US Chip Manualurars, Causion A Market Stir. CN Wire Reported:
“China’s Internet Regulator Has Ordered The Country’s Largest Tech Firms to Halt All Purchases of Nvidia’s AI CHIPS and CANCELSEL Existing Orders Industry and compete with the us. […] The Ban is Stricter than Prior Guidance, WHICH TARGETED NVIDIA’s H20 CHIP, ALSO USED WIDELY FOR AI IN CHINA. Beijing is Pushing Chinese Tech Companies to Reduce Reliance On Nvidia to Achiev An Independent Semicondent Supple Suppply Cain for Ai Competitiveness. ”
NVIDIA (NVDA) Shares Ended The Wednesday SESSION DOWN 2.62% Compared with The Nasdaq composite index’s more modest 0.33% loss. The PullBack Underscored the Potential Impact of Zero Demand from China on Earnings. Furthermore, China Could Introduce Lower-Cost Chips and Erode Nvidia’s Global Market Share.
Brian Tycangco, Editor at Stansberry Research, Commented:
“That’s $ 100 Billion in Lost Market Value Following China’s Move to Halt NVDA Chip Purchases. A SMALL AMALUnt in Percentage Terms. But It Could Be The Prelude to Worse Things to come.
Alibaba and Huawei – Contenders to Replace Nvidia The Chip Ban Opens the Door for Chinese Tech Firs, Including Alibaba (HK: 9988), to Dominate the Domestic Market. Alibaba Reportedly Closed A Deal with China Unicom, The Country’s Second-Largest Wireless Carrier, on September 17, to Suppply IT-HAD AI CHIPS.
Access to cn wire, alibaba is investing 380 Billion Yuan ($ 53.5 Billion) Over Three Years in AI Infrastructure to Redu ReduCe on NVIDIA CHIPS, WHICH ARE BANNED INFORM.
Alibaba ClimBed 1.18% in Early Trading on Thursday, September 18, After The Previos Day’s 5.28% Rally. Year-To-Date (YTD), Alibaba Has Gained 98%, Dwarfing Nvidia’s 26.8% YTD GAIN. On Thursday, September 18, Huawei Announced Plans to Launch The Ascend 950PR Chip in the Fourth Quarter of 2026, with Further Chip Launches in Q4 2026, 2027, and 2028.
The US Administration Has Potentilly ‘Pokked The Bear,’ Escalating A Proxy Trade War. In July, The Us Rolled Out Tariffs on Transhipments and Recently Pressured China’s Key Trading Partners, Including the EU, To Hike Tariffs to Force Beijing Into.