China’s export curbs on chip materials stoke output fears

Good morning. We begin in China, where export controls on crucial semiconductor materials are hitting supply chains and stoking fears of shortfalls in western production of advanced chips and military optical hardware.

Beijing’s curbs on shipments of germanium and gallium, which are used for semiconductor applications and military and communications equipment components, have led to an almost two-fold increase in the minerals’ prices in Europe over the past year.

China introduced the restrictions, which it says safeguard its “national security and interests”, last year in response to US-led controls on sales of advanced chips and chipmaking equipment.

The curbs and subsequent export controls have highlighted Beijing’s dominance of global supply of dozens of crucial resources. The country produces 98 per cent of the world’s supply of gallium and 60 per cent of germanium, according to the US Geological Survey.

“The situation with China is critical. We are depending on them,” said a person who works at a large consumer of semiconductor materials. Harry Dempsey and Edward White have the full report.

• Canada tariffs: Ottawa plans to impose steep duties on Chinese electric cars, steel and aluminium, in a move replicating recent US measures.

• ‘Two bowls of poison’: Policymakers in Beijing are weighing whether a Kamala Harris presidency would be preferable to a second Trump term.

Here’s what I’m keeping tabs on today:

• Economic data: Germany releases second-quarter GDP figures, while Gfk publishes results from its German consumer confidence survey.

• Companies: Shareholders of UK drinks maker Britvic vote on a takeover by Carlsberg.

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Five more top stories

1. French President Emmanuel Macron yesterday ruled out a leftwing alliance forming France’s next government as he doubled down on his efforts to cobble together a coalition involving moderate politicians. A new round of consultations is set to begin, while pressure to install the next government is mounting.

2. The EU is poised to put a fierce advocate of emissions reduction in charge of its climate agenda just as critics are saying the plans are weakening the bloc’s competitiveness. Spanish Socialist Teresa Ribera is the frontrunner to become the next environment commissioner after the Greens and Socialists in the European parliament said they would back her for the job.

3. Apple’s chief financial officer Luca Maestri will step down from the role at the beginning of next year, ending a more than decade-long stint as the iPhone maker’s top finance executive. During his tenure, Apple’s share price increased from about $20 at the start of 2014 to $227 today. Here’s more on the person who will replace him.

• More US business news: Billionaire Edgar Bronfman Jr has withdrawn a $6bn bid to take control of Paramount, clearing the way for Skydance to complete the merger of Hollywood studios.

4. The UK government is set to extend a key hardship fund to help struggling households in England as chancellor Rachel Reeves comes under growing pressure to soften her plan to axe winter fuel payments for millions of pensioners. Ministers are set to announce in coming weeks that the household support fund will be rolled over beyond September 30. Read the full report.

5. Banks, insurers and accounting firms should be braced to pay for the retraining of millions of employees whose jobs could be displaced by artificial intelligence, UK unions will warn at the Trades Union Congress next month. The call comes amid a report that said half of banking jobs were at risk from automation.

The Big Read

Ahead of US elections in November, immigration remains hugely controversial. But a number of places in Republican-dominated areas are eager for an influx of workers as a way to reverse deteriorating demographics. Here are the Midwest cities searching for new migrants.

We’re also reading . . . 

• Cracking cancer: The $1tn race for treatments has bypassed some forms of the disease, but novel therapies are on the horizon. The first part of a Financial Times series looks at the revived energy behind the fight for new cures.

• Warsaw stock market: The bourse’s new CEO is upbeat that it can recover from a lost decade in which it failed to keep pace with Poland’s booming economy.

• Middle East conflict: In spite of de-escalatory signals from Hizbollah and Israel following Sunday’s exchange of fire, conditions remain for a full-scale war.

• Immigration policy: Working from purely economic or electoral motives neglects the key to integration, writes Stephen Bush.

Chart of the day

Turkey’s influence in Africa has boomed over the past two decades. Forging strong political, commercial and security alliances has allowed Ankara to position itself as a power player when many nations, such as China and the US, are seeking to project their own influence on the region.

Take a break from the news

Abu Dhabi is encouraging toned-down weddings amid long-simmering anxieties about the rising extravagance of ceremonies. The modesty initiative offers a rare insight into the tensions between tradition and modernity that permeate Emirati society, writes Chloe Cornish.

Additional contributions from Benjamin Wilhelm and Sarah Ebner