Hello from Tokyo. As the U.S.-China trade war intensifies, Beijing has imposed export restrictions on certain rare-earth minerals, prompting automakers like Suzuki Motor to halt production of specific models last month. By controlling the export volume of these critical minerals, China has effectively demonstrated to the rest of the world that it can hold massive industries in Japan, the U.S. and Europe “hostage.”
Meanwhile, Chinese automakers — who enjoy a rapidly growing presence in the electric vehicle market — still rely on the U.S. and other countries for cutting-edge semiconductors needed for self-driving capabilities and smart cockpit functions. However, a scoop by our reporters in Hong Kong and Taipei revealed that Chinese players such as SAIC Motor and BYD are preparing to launch vehicles equipped with 100% domestically made chips.
According to that Nikkei Asia exclusive, the project is shepherded by China’s Ministry of Industry and Information Technology. The latest target is highly ambitious: By 2027, all automotive semiconductors are to be developed and manufactured domestically. If Chinese automakers succeed in boosting domestic semiconductor procurement, Beijing’s bargaining power with countries like the U.S. will be significantly strengthened.
The rivalry between the two superpowers is also intensifying in another high-tech automotive battlefield: robotaxis. These autonomous vehicles are already being deployed in certain cities in both countries. Chinese companies are actively seeking to expand their robotaxi systems overseas. Although still in its early stages, the race between the U.S. and China’s auto and tech sectors for dominance in the global robotaxi market is set to intensify. Follow Nikkei Asia’s coverage for the latest insights on how technology is impacting the global geopolitical balance.
My suggested reads
1. U.S.-China trade tensions have prompted Chinese producers to divert more consumer goods to Southeast Asia or accelerate parts of their production there. While there have been suggestions, particularly from Washington, that this is just a transshipment ploy to avoid higher tariffs, there is substance to the regional growth story.
2. A teacher hiring scandal in India has cast a spotlight on the frenzied race among the country’s younger people to grab government jobs, offering what they hope will be lifelong employment. The scramble also underlines a growing headache for the government — can it create enough good, well-paid jobs for the world’s most populous country?
3. Asian insurers and other businesses with large holdings of U.S. bonds and other securities felt little urgency to hedge when the dollar was strong. But as U.S. exceptionalism wanes and the dollar weakens, they are now increasing their hedge ratios to protect against further declines. The result is that currencies across the region have been appreciating.
4. Even as Chinese President Xi Jinping has championed a traditional vision of marital motherhood as the answer to growing worries about China’s tumbling birth rate, demographic aging and a declining population, there are growing signs that single motherhood is becoming more widely accepted in the country.
5. The Osaka Expo is definitely worth going to. But any visit will be greatly enhanced by planning as far in advance as possible, targeting the pavilions you want to prioritize. Be prepared for long queues and expensive food. Here are our tips to get the most out of your trip.
Through the lens
This week’s top photo pick: This view shows dwellings near railway tracks in New Delhi’s Wazirpur neighborhood being demolished on June 16. The takedowns in Wazirpur and other neighborhoods are part of a larger drive to redevelop slums across the city, authorities said. (Photo by Sanchit Khanna/Hindustan Times/Getty Images)
Check out more of our photo coverage here
Wishing you a wonderful weekend!
Akito Tanaka
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