Top News
US Fed cuts interest rates for the first time this year
The US Federal Reserve cut interest rates by a quarter of a percentage point, citing softness in the jobs market and moderating economic activity. The central bank signaled two more cuts this year. The first lower of borrowing costs since last December takes the key rate down to a range of between 4 percent and 4.25 percent. The decision indicates that central bank's concerns about Trump administration tariffs fueling inflation appear to have abated.
President Donald Trump has been browbeating the Fed to lower rates, and tensions between the Fed and administration carried into the board room. Governor Lisa Cook attended the meeting after a court temporarily stayed Trump's decision to fire her. Stephen Miran, a Trump-friendly appointment sworn in just before the meeting to fill a vacancy, was the only one of the 12-member board to dissent in the rate cut after arguing it should be larger.
US stocks markets were mixed after the rate cut was announced. The Dow rose 0.6 percent, the S&P 500 slipped 0.1 percent, and the Nasdaq lost 0.3 percent. The yield on the 10-year government Treasury bond edged higher, and gold prices eased from record highs.
Canada also lowered its prime lending rate to a three-year low of 2.5 percent on a weak employment market
China confirms basic consensus with US on TikTok
Chinese officials acknowledged that a basic consensus was reached with the US earlier this week on the issue of TikTok operations in the US. Wang Jingtao, deputy director of the Cyberspace Administration of China, said both sides reached basic consensus to resolve the TikTok issue through methods such as entrusted operation of TikTok's US user data and content security business, and licensing for the use of parent ByteDance's TikTok algorithm and other intellectual property rights.
The US Congress enacted a law last year banning the TikTok short-video platform in the US if it remains in the ownership of China's ByteDance, citing security concerns. President Donald Trump has delayed implementation of the law for a fourth time to allow for talks on a possible resolution.
Israeli tanks encircle Gaza City, EU proposes sanctions on Israel over the war
Israeli tanks flanked the perimeter of Gaza City on the second day of a new ground offensive to take over the territory's largest city. Some residents reported tanks approaching their homes. Tens of thousands of Palestinian residents have been fleeing south on a clogged coastal exit route, causing Israel to temporarily open a second evacuation road. The Palestinian health ministry said 98 people were killed across Gaza in 24 hours, taking the death toll since the start of the war to over 65,000.
The European Commission proposed suspension of free-trade arrangements related to Israeli goods in response to the continuing war in Gaza, as well as sanctions on two Israeli ministers, violent Israeli settlers in occupied territory and Hamas. The measures, however, are not believed to have enough support among EU member nations to pass.
Top Business
Baidu shares surge in HK as tech rally continues unabated
Shares in Chinese tech giant Baidu surged 16 percent in Hong Kong on Wednesday after the company stepped up the expansion from its core search engine business into artificial intelligence. Baidu this week said it signed a major AI-applications deal with China Merchants Group and announced it will sell 4.4 billion yuan (US$56.2 billion) in offshore bonds to finance AI expansion. The Hang Seng Tech Index surged 4.2 percent on Wednesday. Besides Baidu, Alibaba, JD.com and Meituan shares climbed about 5 percent. Tencent, which said it raised US$1.27 billion in a yuan-denominated, offshore bond sale for AI development, rose over 2 percent, pushing its market cap back above HK$6 trillion( US$771 billion). Chip stocks were also strong, with SMIC up over 7 percent.
China Unicom's new data center powered by domestic AI chips
China Unicom, the second-largest of the big three state-owned Chinese telecom companies, is building a US$390 million data center powered by domestically developed artificial intelligence chips from Alibaba and other companies. Alibaba is suppling 72 percent of the chips for the new center, located in the far western province of Qinghai, with the rest coming from companies like Meta X and Biren Tech. China has been encouraging the development of the domestic chip industry to end reliance on US suppliers, with reports that Nvidia chips are now receiving lukewarm response in China.
Hillhouse, Pudong Venture Capital to finance new 'AI town' in Shanghai
Chinese private equity firm Hillhouse Capital and state-owned Pudong Venture Capital have set up a 2 billion yuan (US$281.4 million) fund for an "AI town" in Shanghai to house 1,000 companies doing work in advanced digital technology. The center, to be located in Zhangjiang Science City in Pudong, aims to create an ecosystem where innovation flourishes and startups are nurtured. Shanghai last year created three industry funds totaling 100 billion yuan to accelerate the development of pillar industries, including integrated circuits, biomedicine and AI.
Europe cites bottlenecks in rare-earth exports, China says shipments have surged
European manufacturers that need critical rare earth minerals may have to slow production because of bottlenecks in Chinese export licenses for the elements, the European Union Chamber of Commerce in Beijing said. Rare earths is a broad group comprising about 17 elements critical in production of electric autos, wind turbines, smartphones, nuclear submarines and other advanced manufacturing, and despite their name, global deposits aren't particularly rare. China mines and refines 90 percent of the world's supply. Chinese customs data showed rare earth exports in July surged 69 percent to 6,422 tons.
Economy & Markets
China unveils more initiatives to encourage consumer spending
Amid a slowdown in retail sales, China is expanding its campaign to get consumers to spent more, focusing on sectors such as sports, healthcare and culture. The Ministry of Commerce and nine other government departments released a 19-point plan that includes channeling more money to cultural works and keeping museums open for longer hours, introducing more global sports events, and reducing impediments to foreign and private investment in advanced medical care. The measures also propose adjusting school holidays to allow more time for travel and leisure activities. Consumer spending accounts for about 40 percent of gross domestic product.
China drafts safety rules for L2 cars
China's Ministry of Industry and Information Technology issued a draft national standard setting safety requirements for Level-2 driver-assistance systems, aiming to close a regulatory gap in product safety for the fast-growing sector. The draft clarifies that L2 systems are not autonomous driving technologies and require drivers to stay engaged at all times. The move seeks to curb industry use of misleading marketing terms that suggest cars are self-driving, giving motorists a false sense of security. The standard requires cars to include an alert system detecting when drivers take their hands off a steering wheel. If drivers fail to respond, the system must disengage and, in cases of repeated violations, remain disabled for at least 30 minutes.
Hong Kong pushes market reforms
Hong Kong Chief Executive John Lee unveiled policy measures aimed at bolstering stock settlement times, easing rules for dual-class shares and making secondary listings for companies more attractive. He also pledged to expand access to Hong Kong's yuan-stock trading counter via the Stock Connect system. The Hong Kong Monetary Authority plans to use its currency swap line with the People's Bank of China to launch a new, long-term yuan funding facility, lowering financing costs for corporations and boosting yuan liquidity.
Japan, Singapore exports fell in August, with steep drops to US
Japan's exports in August slipped 0.1 percent from a year earlier, their fourth consecutive month of decline but an improvement over July's 2.6 percent drop. Shipments to the US fell 13.8 percent on the year, worsening from July's 10.1 percent drop, as US import tariffs slowed trans-Pacific trade. Exports to Europe gained 7.7 percent, while shipments to other Asian countries were up 1.7 percent. Imports in August fell 5.2 percent.
Singapore's non-oil exports tumbled 11.3 percent in August from a year earlier. Exports to the US plunged 28.8 percent, improving from a 42.8 percent drop in July. Exports to Indonesia and China also were down, but shipments to the EU and South Korea rose.
Corporate
Huawei launches AI help for smaller companies, cuts phone prices
Huawei's eKit, the company's distribution division, announced a plan to offer China's 58 million small and medium-size companies help in transitioning to artificial intelligence technologies. It seeks to develop 10,000 engineering contractors to assist the companies, which together account for more than 80 percent of urban employment and 60 percent of gross domestic product.
Separately, Huawei cut the price of three flagship phones, reducing the cost of the Mate X6 to a starting price of 10,999 yuan (US$1,550), the Pura 80 series to 5,199 yuan and Mate 70 series by up to 1,000 yuan. The reductions come a week after Apple unveiled its new iPhone 17 series in China.
Chery Auto seeking up to US$1.2 billion from IPO in Hong Kong
Chinese carmaker Chery Auto said it will issue 297.4 million shares, aiming to raise up to HK$9.1 billion (US$1.2 billion) from an initial public offering in Hong Kong. It said a final price within the range of HK$27.75-HK$30.75 a share will be announced next week. The stock is scheduled to begin trading on September 25. Cornerstone investors, including Hillhouse Investment, have subscribed for up to US$587 million in stock, according to the prospectus. The company, which markets under its brand names Chery, Jetour and iCAR, and assembles Jaguars and Land Rover in China, said about a third of the sale proceeds will go toward research and development, and 25 percent will be earmarked for its next-generation vehicle, to be introduced within three years.
Huawei and BAIC's Stelato S9T station wagon makes China debut
Stelato, the premium electric vehicle brand formed under a partnership between tech giant Huawei and automaker BAIC, launched its first station wagon model, the S9T, in China. The new vehicle is priced from 309,800 (US$43,000). The S9T is powered by Huawei's HarmonyOS operating system, and integrates Huawei's ADS 4 advanced driver-assistance system.
Xpeng 'flying cars' collide mid-air
Two electric low-flying cars developed Xpeng Motors crashed into each other at a rehearsal for the Changchun Air Show in Jilin Province, injuring at least passenger. Xpeng unit Aeroht said one of the vertical take-off and landing vehicles landed safely and the other caught fire on landing. The passenger wasn't seriously injured, it added. The company's eVTOL model can make up to six flights on a full charge and flies at an altitude of 300-500 meters. It's part of China's efforts to development a low-flying vehicle industry. Xpeng has received over 4,000 orders for the vehicle, which costs about 2 million yuan (US$281,000).
Lenovo chairman's education fund celebrates 10th anniversary
Jiao Tong University in Shanghai celebrated the 10th anniversary of the Yang Yuanqing Education Fund, founded by the namesake chairman of Lenovo, the world's biggest personal computer vendor. It is the first education fund at a Chinese university to be operated through crowdfunding and was initiated by a personal donation of 10 million yuan (US$1.4 million) from Yang. The fund has since bestowed 6.3 million yuan in awards, benefiting 136 students and 11 faculty.