JGBS AUCTION: JGBS 5yr Auction Result

A report in the FT(https://www.ft.com/content/cd1a0729-a8ab-41e1-a4d2-8907f4c01cac)claiming Nvidia an AMD will need to pay 15% of their China Chip sale revenue to the US Government is stimulating conversations, below are some various viewpoints sourced from Bloomberg and X:

• (Bloomberg) - “Reports that AMD and Nvidia will pay 15% of their China revenue to the US government should be a negative for those companies and for tech more broadly. Investors may shrug off the news or even welcome it in the short term as a sign that the companies can go on selling chips to China, but the longer-term outlook is that profit margins may narrow.”
• Otavio Costa on X: “To put it plainly: This is a government-enforced royalty and it’s a retreat from the capitalist framework that historically distinguished the US from other economies, in my view. If you think this is a one-off event, you're likely underestimating the situation. There’s nothing novel about this kind of government intervention — it’s a pattern seen repeatedly in emerging markets. This often marks the initial move toward increased government control, where private companies are effectively pressured into forming state-owned companies and similar arrangements.”
• Brad Setser on X: “Well, that's one way to seed a US sovereign wealth fund, Though the logic of export controls is that the controls are in place to protect US national security (think nuclear technology for example); not really obvious how a payment to the US government really changes the security calculus.  Strange.”
• Peter Harrell on X: “The Chinese would pay a lot for F35s and advanced US military technology, too. Regardless of whether you think Nvidia should be able to sell H20s in China, charging a fee in exchange for relaxing national security export controls is a terrible precedent.”

China's Small and Medium Enterprises Development Index was 89.0 in July, unchanged from June, China Securities Journal reported, citing data from the China Association of Small and Medium Enterprises (CASME). Based on a survey of 3,000 SMEs across eight major sectors, the index recorded gains in six sectors, including construction and transportation, while the industrial and wholesale and retail sectors declined. CASME data also showed funding conditions for SMEs improved and investment willingness edged higher, the newspaper said.

China’s CPI is likely to recover moderately following recent measures to boost domestic demand, Shanghai Securities News reported citing Wang Yunjin, chief financial researcher at the Guangkai Chief Industry Research Institute. He cited newly introduced fertility support policies, free preschool education, and loan interest subsidies for consumer and service businesses. National Bureau of Statistics data released Saturday showed CPI was flat year-on-year in July, while PPI fell 3.6% y/y. Analysts cited by the newspaper said PPI may continue to improve, supported by a lower base from the same period last year and a crackdown on excessive competition that is pushing up industrial product prices.