Foreign chipmakers, militaries, and investors don’t want anything to do with China

Here’s what else you need to know about China today:

Germany blocked two sales of domestic chipmakers to Chinese investors at a cabinet meeting today, as Berlin waffles between deepening economic ties with Beijing and tightening up on its sensitive technologies. The two deals included a takeover of a semiconductor plant operated by Dortmund-based Elmos to Silex, a Swedish subsidiary of Chinese group Sai Microelectronics, and the blocked investment in Bavaria-based ERS Electronic.

• “We’re seeing a conscious, strategic approach to exerting influence and gaining knowledge,” Germany Economy Minister Robert Habeck said after confirming the decision.

More from The China Project:

• Will Germany let China have its chips?
• Scholz’s controversial trip wins Germany more business deals with China.
• Can Germany ‘reduce lopsided dependencies’ on China?
• A deal to sell a sizeable stake in Germany’s biggest port to a Chinese company throws Berlin into discord

Australia is investigating some former air force pilots amid reports that some of them had been recruited to train China’s People’s Liberation Army, after an initial probe by the nation’s defense department found “enough evidence” to call for a deeper review into the issue, Deputy Prime Minister Richard Marles told reporters in Canberra on Wednesday.

China markets lost over $8 billion in October from foreign investors fleeing with their cash, according to a new report from the Institute of International Finance (IIF), amid growing geopolitical tensions and Beijing’s adherence to its COVID-zero policy.

• Outflows from China’s equity market reached $7.6 billion, while $1.2 billion was removed from bond markets, the estimates show.
• Meanwhile, rich Chinese are scrambling for visas out of concern to protect their assets, despite Beijing’s recent pledges to support more private investment.
• Earlier on The China Project: Stocks jump on rumors that China may end COVID zero, but investors really don’t know what to make of Xi’s China.

Xí Jìnpíng 习近平 wore camouflage yesterday as he inspected the Central Military Commission joint operations command center in Beijing, where he once again emphasized ideology and the need for the People’s Liberation Army to be ready to fight and win wars.

Government to promote outdoor sports: On Monday, the General Administration of Sport of China and several other departments released a new plan to increase the scale of the outdoor sports industry to 3 trillion yuan ($415.25 billion) by 2025, including by opening up facilities for outdoor sports in forests, grasslands, deserts, lakes, and coastal areas. See today’s Business briefs from the Chinese media, with more links and info on these stories:

• Gap offloads its China operation.
• BYD launches a new high-end brand.

Consumer inflation, manufacturer deflation: China’s producer price index (PPI) declined 1.3% in October from a year earlier after gaining 0.9% the previous month, according to the National Bureau of Statistics. Meanwhile the consumer price index (CPI) rose 2.1% year-on-year, slowing from a 2.8% rise in September.

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