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China Slams U.S. as “Surveillance Empire” Over Chip Shipment Trackers

China’s state-run media Xinhua criticized the United States on Friday for secretly placing location trackers in shipments of advanced chips at risk of diversion to China, calling the practice indicative of the “instincts of a surveillance empire.” Reuters had reported earlier that U.S. authorities embedded these devices to monitor shipments subject to export restrictions aimed at curbing China’s access to advanced semiconductor technology.

In a commentary titled “America turns chip trade into a surveillance game,” Xinhua accused Washington of running “the world’s most sprawling intelligence apparatus” and treating trade partners as rivals to be undermined. The piece warned that if U.S. chips are perceived as potential surveillance tools, global customers may seek alternatives.

The commentary reflects ongoing tensions between the two tech superpowers. The U.S. government has imposed strict limits on exports of advanced chips and related equipment to China, while Washington and its allies have previously accused China of embedding potential surveillance capabilities in exported products, ranging from telecom gear to vehicles.

In recent moves, China has asked U.S. chipmaker Nvidia to clarify whether its H20 chips contain hidden backdoors and has cautioned domestic tech companies about their use, amid heightened scrutiny of foreign technology for security risks.

Ant Group Says Bright Smart Acquisition on Track Despite Delay Reports

China’s Ant Group has confirmed that procedures for its acquisition of Bright Smart Securities & Commodities Group (1428.HK) are proceeding as planned, following reports suggesting the deal could face delays due to increased regulatory scrutiny.

Shares of Bright Smart fell as much as 26.2% to HK$10.26 on Friday after the Wall Street Journal reported that mainland Chinese regulators might review the transaction more closely. In a filing, Bright Smart said it had observed media reports of a potential delay but reaffirmed that discussions with the relevant authorities are moving forward.

Under the agreement, Ant will acquire a 50.55% controlling stake in Bright Smart Securities for HK$2.81 billion ($359.37 million), according to a filing in April. Ant, founded by billionaire Jack Ma and 33% owned by Alibaba, operates China’s widely used mobile payments platform Alipay.

The deal comes after Chinese regulators blocked Ant’s $37 billion IPO in 2020 and imposed a nearly $1 billion fine following a speech by Ma criticizing financial oversight. Ant is currently working to obtain a financial holding company licence, a step that could support its long-term IPO ambitions.

Applied Materials Cuts Forecast Amid China Slowdown and Export-Restrictions

Applied Materials (AMAT.O) forecasted fourth-quarter revenue and profit below analyst expectations on Thursday, citing weak demand in China and uneven orders from customers impacted by tariff uncertainty. Shares fell nearly 13% in after-hours trading.

The ongoing U.S.-China trade tensions and export restrictions on advanced semiconductor equipment have complicated forecasting, weighing on orders for chipmaking tools suppliers like Applied Materials. China accounted for 35% of Applied’s total sales in the July quarter, making it a critical market.

CFO Brice Hill said the company expects a revenue decline in the fourth quarter due to both the absorption of recently added capacity in China and non-linear demand from leading-edge customers. Tightened export controls prevent sales of the most advanced chipmaking equipment to Chinese clients. Meanwhile, Chinese chipmakers are pausing new orders for older-generation chips used in automotive, industrial, and consumer electronics.

Applied projected fourth-quarter revenue of $6.70 billion, plus or minus $500 million, below the $7.33 billion analysts had anticipated. Adjusted profit per share is expected at $2.11, compared with estimates of $2.39. The forecast assumes no approvals for pending U.S. export license applications.

The company’s third-quarter results exceeded expectations, with revenue up 8% to $7.30 billion and adjusted earnings per share at $2.48, above analyst estimates of $2.36.