The European Union has joined forces with venture capital firms to boost investment in the region’s tech sector, aiming to compete with the more advanced industries in the US and China. The new initiative, called the “Trusted Investors Network,” involves 71 investors managing over €90 billion in assets, focused on supporting European deep-tech companies.
This collaboration follows recommendations from a report by former European Central Bank chief Mario Draghi, which highlighted the need for swift, large-scale investments in critical technologies to ensure Europe’s global competitiveness. The initiative addresses concerns that Europe is lagging behind in tech innovation, particularly compared to the US, where AI deals have significantly boosted venture capital activity.
The EU hopes that this partnership will inject much-needed funding into Europe’s tech industry, encouraging faster growth and helping the region keep pace with global competitors.
Brazil has imposed new tariffs on various imports from China, including a 35% tariff on fibre optic cables and a 25% increase on iron and steel products. The Foreign Trade Chamber Executive Committee (Gecex) justified these tariffs by citing a ‘significant increase in imports that harmed national production.’
Furthermore, most tariffs will remain in effect for approximately six months while the Ministry of Foreign Trade investigates alleged irregular trade practices. The tariff list encompasses a range of items, such as sodium chlorite, metal foils, nebulisers, tarpaulins, PVC laminates, and sewing thread, with a predominant focus on Chinese imports.
Notably, this move coincides with Chinese President Xi Jinping’s upcoming visit to Brazil to sign trade agreements as Brazil joins China’s Belt and Road Initiative. Additionally, Brazilian authorities had previously investigated possible dumping and irregular subsidies related to fibre optics and cables from China; however, the new tariffs are separate from that ongoing investigation.
Despite the significant changes in trade policy, there is uncertainty regarding China’s response to the tariffs. However, analysts suggest an aggressive reaction is unlikely, indicating a complex interplay between economic measures and diplomatic relations.
The US government is nearly finalising rules restricting American investments in certain advanced technologies in China, particularly AI, semiconductors, microelectronics, and quantum computing. These regulations are designed to prevent US know-how from contributing to China’s military capabilities following an executive order signed by President Joe Biden in August 2023. The rules are under review by the Office of Management and Budget and are expected to be released soon, possibly before the upcoming US presidential election on 5 November.
The new regulations will require US investors to notify the Treasury Department about specific investments in sensitive technologies. While the rules will ban certain investments outright, they also include several exceptions. For example, some publicly traded securities and certain types of debt financing will not fall under the restrictions. However, US companies and individuals will determine which transactions are subject to the new limits.
Earlier drafts of the rules, published in June, gave the public a chance to provide feedback and proposed banning AI investments that involved systems trained with substantial computing power. The final regulations are expected to provide additional clarity, particularly concerning the thresholds for restricted transactions in AI and the role of limited partners in such investments.
Experts like Laura Black, a former Treasury official, anticipate that the regulations will take effect at least 30 days after release. These measures reflect the US government’s growing focus on curbing China’s access to critical technologies while balancing the need for certain economic exceptions in mutual funds and syndicated debt financing sectors.
The upcoming release will be a significant step in the Biden administration’s broader effort to safeguard US technological advantage and national security interests in the face of growing competition from China.
The Cybersecurity Association of China (CSAC) has urged a security review of Intel’s products in China, alleging that the US chipmaker poses a national security risk. Although CSAC is an industry group, it has strong connections to the Chinese government, and its claims may prompt action from the Cyberspace Administration of China (CAC).
CSAC’s post on WeChat accuses Intel’s chips, including its Xeon processors used for AI, of containing vulnerabilities and backdoors allegedly tied to the US NSA. The group warns that using Intel products threatens China’s national security and critical infrastructure.
This recommendation comes amid growing US-China tensions over technology and trade. Last year, the CAC banned Chinese infrastructure operators from using products from Micron Technology after a security review, raising concerns that Intel could face a similar outcome.
Intel’s China unit responded, emphasising its commitment to product safety and quality. The company stated on its WeChat account that it will cooperate with authorities to clarify concerns. If the CAC carries out a security review, it could impact Intel’s sales in its significant Chinese market. Intel’s shares recently dropped 2.7% in US premarket trading.
A recent Microsoft report claims that Russia, China, and Iran are increasingly collaborating with cybercriminals to conduct cyber espionage and hacking operations. This partnership blurs the lines between state-directed activities and the illicit financial pursuits typical of criminal networks. National security experts emphasise that this collaboration allows governments to amplify their cyber capabilities without incurring additional costs while offering criminals new profit avenues and the security of government protection.
The report, which analyses cyber threats from July 2023 to June 2024, highlights the significant increase in cyber incidents, with Microsoft reporting over 600 million attacks daily. Russia has focused its efforts primarily on Ukraine, attempting to infiltrate military and governmental systems while spreading disinformation to weaken international support. Meanwhile, as the US election approaches, both Russia and Iran are expected to intensify their cyber operations aimed at American voters.
Despite allegations, countries like China, Russia, and Iran have denied collaborating with cybercriminals. China’s embassy in Washington dismissed these claims as unfounded, asserting that the country actively opposes cyberattacks. Efforts to combat foreign disinformation are increasing, yet the fluid nature of the internet complicates these initiatives, as demonstrated by the rapid resurgence of websites previously seized by US authorities.
Overall, the evolving landscape of cyber threats underscores the growing interdependence between state actors and cybercriminals, posing significant risks to national security and public trust.
Siemens is relying on its digital platform, Xcelerator, to drive future growth, especially in its factory automation business, which has faced slowing demand in China and Europe. Despite lowering its full-year sales forecast, Siemens reported an 82% jump in industrial software sales for the three months ending in June, mainly due to Xcelerator’s offerings, according to Peter Koerte, the company’s chief technology and strategy officer.
Xcelerator, launched in 2022, is a cloud-based platform that delivers hardware and digital services to a global customer base, boasting over a million monthly users. Siemens’ divisions, including mobility, smart infrastructure, and digital industries, leverage its offerings to enhance its operations. The platform collaborates with 400 partner companies, providing more than 900 solutions worldwide. However, Siemens has not disclosed specific financial figures for Xcelerator.
Xcelerator has achieved significant success in key markets, including China, India, Germany, and the US. Its advanced capabilities have enabled Siemens to secure major contracts, such as an order for 90 regional trains from Deutsche Bahn in August. By analysing data from these trains, Xcelerator enhances maintenance practices, boosts energy efficiency, and improves punctuality, showcasing its effectiveness in integrating digital and physical services to address customer needs.
China is calling on the United States to lift sanctions on Chinese companies in semiconductors and intelligent connected vehicles, aiming to create a more stable business environment. In a recent conversation with US Secretary of Commerce Gina Raimondo, China’s Minister of Commerce, Wang Wentao, expressed serious concerns over US trade restrictions and emphasised the need to clarify national security policies.
He argued that clear guidelines would protect the stability of global supply chains, which are essential for electronics, automotive, and pharmaceutical industries. Analysts and business leaders emphasise that strong U.S.-China trade relations reduce production delays and disruptions. Despite upcoming election challenges, experts believe cooperation is likely. US companies may advocate for balanced trade policies due to their reliance on China, underscoring the need for a stable and cooperative trade relationship.
Moreover, China’s growing appeal as an investment destination is underscored by its third-place ranking on the 2024 Kearney FDI Confidence Index. Consequently, businesses increasingly view China as a vital market and innovation hub, with companies like Dun & Bradstreet and Skechers expanding their operations in response to its strategic supply role and vast consumer base. In addition, business leaders advocate for deeper US-China trade relations, recognising collaboration’s competitive advantages.
Furthermore, recent trade data reveals that the US remains China’s third-largest trading partner, with a trade volume of 3.15 trillion yuan ($446.21 billion) in the first eight months of 2024. This robust trade relationship highlights the critical need for ongoing cooperation between the two economies, especially in an increasingly competitive global landscape.
Industry ministers from the G7 advanced democracies have agreed that non-market practices in the semiconductor industry pose an urgent challenge that requires collective action. This consensus was announced by the Italian presidency and is a response to growing concerns about China’s influence in the sector. During the G7 summit in June, leaders had previously pledged to address what they called unfair business practices by China, particularly as the country aggressively advances its semiconductor manufacturing capabilities.
The majority of global semiconductor production takes place in South Korea and Taiwan, with Taiwan’s closeness to mainland China heightening concerns about potential military conflicts that could disrupt global supply chains. Due to Taiwan’s leadership in advanced chip manufacturing, major economies such as the US and European nations have enacted legislation to enhance domestic semiconductor production. Initiatives like the US CHIPS Act and corresponding European measures have allocated substantial funding to incentivise companies to set up chip production facilities within their countries.
Alongside semiconductor issues, the newly established G7 task force will also focus on undersea cable connectivity, which has grown increasingly critical. Recent outages in major undersea cables have underscored the necessity for a stable and secure global internet infrastructure. This expansion of the G7’s agenda aims to address broader technological stability, moving beyond semiconductor concerns to encompass essential aspects of digital connectivity.
Chinese hackers reportedly accessed US broadband networks, compromising systems used for government-authorised wiretapping. The Wall Street Journal revealed that major telecom providers, including Verizon, AT&T, and Lumen Technologies, were affected by the breach.
Hackers are believed to have maintained access for months, enabling them to intercept internet traffic and sensitive communications data. US investigators, who labelled the hacking group ‘Salt Typhoon’, indicated that the breach was intelligence-focused.
China’s foreign ministry responded to the accusations, denying knowledge of the incident and condemning the US for what they called ‘a false narrative’. Beijing had previously denied involvement in similar cyber-espionage claims.
Lumen Technologies declined to comment, while Verizon and AT&T did not respond immediately. The breach follows the exposure of another Chinese hacking group earlier this year, as part of a broader campaign by US law enforcement.
Concerns are rising ahead of the US presidential election, with the latest intelligence suggesting interference from foreign nations like Russia, Iran, and China. The annual threat assessment released by the Department of Homeland Security highlights the use of AI by these countries to spread misinformation and create fake websites.
Russian actors have focused on amplifying divisive narratives, particularly around immigration. Iran has adopted a more aggressive approach, posing as activists online to encourage protests related to the conflict in Gaza. China is also seen as a potential player in efforts to undermine confidence in US democratic institutions.
The upcoming election, expected to be highly contested between Kamala Harris and Donald Trump, presents further opportunities for foreign interference. Tensions within the US could be exacerbated by these external efforts, along with potential threats from domestic extremists.
Domestic violent extremism also remains a serious concern. The report warns of the risk posed by lone actors or small cells driven by grievances related to race, religion, or anti-government views. These groups may attempt violent actions to instill fear or disrupt the electoral process.
